mb0044 slides unit 02

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MB0044-Production and Operations Management

Unit-2 Operations Management

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Program : MBA

Semester : II

Subject Code : MB0044

Subject Name : Production and Operations Management

Unit number : 2

Unit Title : Operations Management

Lecture Number : 2

Lecture Title : Operations Management

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Production & Operations Management

Objectives:

After studying this unit, you should be able to:

Describe operations management

Outline the different strategies used in operations management

Explain strategic decision making

Explain implementation of operations

List the types of benchmarking

Explain the steps involved in benchmarking

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Lecture Outline

Introduction

Operations Management and Strategy

Links between Factors

Operations Strategy

Strategic Management Process

Strategic Decision Making

Core Processes

Implementation of Operations

Benchmarking

Steps in Benchmarking

Summary

Check Your Learning

Activity

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Introduction

Operations management is the systematic design, direction, and control of the processes that transform inputs into services and products for the customers. It starts with the suppliers and ends with the customers. It covers the entire value chain. Operations management encompasses all management activities using resources such as:

Plants

People

Parts

Processes

Planning and Control

In this session, you will learn about the various functions involved in

operation management and their significance.

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Operations Management and Strategy

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Operations provide the deliverables by utilising the resources and producing

the same. All equipment, facilities, technology, information, human resources,

and finance should be tuned to make operations most efficient to derive the

maximum advantage and be competitive. Operations function should,

therefore, be guided by strategies which are consistent with the organisation

strategy.

Formulation of a strategy depends on the following:

Assessment of strengths

Understanding of the weaknesses

Nature of external environment

Resilience of the internal environment




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Links between Factors

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Operations strategy is formulated to

leverage the advantages, absorb the

consequences of the variable nature of

various functions, and provide a

dependable implementation

programme.

Effective and timely communication is a

vital factor to involve and coordinate

people at various stages and monitor

the progress.

The figure depicts the links between

the factors of operations management.

Links between factors of Operation management




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Operations Strategy

Operations Strategy

Quality

Time Flexibility

Quality is the driving factor for any organisation Time aspect considers that deliveries are made on time to meet the

customers expectations Flexibility enables a firm to meet the changing demands of the

customers

Phases of Operation Strategy




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Strategic Management Process

Strategy formulation is influenced by the situational forces and the core practices like value addition, customer focus, total quality, and concern for environment.The objective of an operations strategy is to achieve the long-term goals established by the business strategy. The operations strategy would consider the following constraints:

Subcontracting or including additional machinery

Improving productivity using different methods

Revamping assembly lines

Motivating the employees

Promoting existing employees or hiring new ones

Identifying and developing new suppliers

Looking for opportunities to reduce costs as scaling up provides scope




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Data Gathering

Analysis

Predicting Outcomes

Decisions commit the organisation and its members to activities which have financial repercussions and affect the functioning of other departments or divisions. Therefore, decisions are taken after lots of deliberations which involve the steps: Data gathering Analysis Predicting outcomes.




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Core Processes

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Core processes of an organisation are determined by the core competencies. The four main core processes are:

Customer relationship

New product/Service

development

Supplier relationship

Order fulfilment




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Implementation of Operations

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Planning

Estimating

Routing

Scheduling

Controlling Function

Dispatching

Expediting

Implementation is the process of executing the planned operations. Implementation of operations involves planning and controlling functions.




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Benchmarking

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The types of benchmarking considered by various firms are:

Benchmarking

Process Benchmarking

Financial Benchmarking

Performance Benchmarking

Product Benchmarking

Strategic Benchmarking

Functional Benchmarking




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Steps in Benchmarking

The steps which are necessary for conducting a benchmarking operation

are:

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Action

Integration

Analysis

Planning




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Summary

Operation management is the systematic design, direction, and control of

the processes that transform inputs into services and products for the

customers.

Operations strategy includes Quality, Time, and Flexibility.

Decisions commit the organisation and its members to activities which

have financial repercussions and affect the functioning of other

departments or divisions.

Implementation of operations involves planning and controlling functions.

Benchmarking is a process of comparison with a superior performer

anywhere in the world to improve quality.

The steps which are necessary for conducting a benchmarking operation

are Planning, Analysis, Integration and Action.

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Check Your Learning

1. What is operations management?

Ans: Operations management is the systematic design, direction, and

control of the processes that transform inputs into services and

products for the customers.

2. What are the resources used for management activities in operation

management?

Ans: The resources used for management activities are:

a. Plants

b. People

c. Parts

d. Processes

e. Planning and control

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Assume that you own a textile company in India. Your company has a competitor which produces textiles which are in high demand. In such a situation which process would you follow to improve the quality of the textiles produced in your company so that the demand increases?

Activity

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