unit 1 o mba tri,ps1 4

Unit-1 OM,mba2Trim, p1 Business organisations: Classification: A.Private enterprises 1) sole proprietership2)Joint Hindu Family firm

3)Parternship firm4) Joint Stock Company5)Cooperative societies

B.State/Public enterprises 1)Departmental organisations2)Public

corporations3)Government Company Business(B): Engaged in economic activities B=Industry(I)+ Commerce( C)

Unit-1 OM,mba2Trim, p2 B=Industry(I)+ Commerce( C) Industry(I)= 1)Growing(Genetic)

(Organic),2)Extraction(Agri,Mining..),3)Manufacturing(Analytical:a=b+c+d..,;Synthetic,a+b+c…=d;Processing,Raw Materials processed,eg:Shirt,fertilizer..;Assembling,eg:Car..(4)Construction(Dams..)

Industry(I) classification by products:a)Primary products,eg: from natural resources ,wheat,ore..

b)Semi manufactured goods,eg:cotton yarn,pulp..c)Manufactured goods,ready for use

Another classification:,a)Capital or Producer’s goods,eg:Mc tool,Boiler..b)Consumer’s goods

Unit-1 OM,mba2Trim, p3 B=Industry(I)+ Commerce( C) (C):Buying,selling,exchanging,Distibuti

ng.. C)=Trade(a)Internal(b)International:Im

ports,Exports,Entrepot) + Aides to

Trade(eg:Advertising&Publicity,Banking,Insurance,Packaging,Transport,warehousing..)

Unit-1 OM,mba2Trim, p4 Production Function:’O’ = F(I1,I2,…In) Production, in a manuf orgn is making of a

physical object (Using inputs) Production, in a Service orgn is discharging

of a function ,which has a utility to consumer(Using inputs)

In short, Production Management is tranforming activity. It uses decision making processes for managing production system subject to Quality,Quantity at minimum cost,as per demand.

Unit-1 OM,mba2Trim, p5 Production Management can also be

stated as use of principles, techniques to discharge production function.

Operations Management is process of converting or using inputs(Input Resources) into useful Output/Product(Goods Or services)

Importance:Gives competitive edge, improves standard of living

Unit-1 OM,mba2Trim, p6

Production system configuration: Inputs conversion output process:

Other component

Unit-1 OM,mba2Trim, p7 C A S E S T U D Y Production system configuration: Inputs conversion output process: Primary resources: Physical(Mfg,mining..) Men, Locating services(Transport)

Goods/ Materials,Machines, Exchange services(R/Whole sale)

Services Supplies Storage services(W/Hing) Capital assets/Money Other services(Ins, Fin,B/services, Utilities personal services,Real estate…) Govt Services (Local,S,Centre)

Other component Control System

Unit-1 OM,mba2Trim, p8 Production/Operations management, is a

functional management. It involves Decision making in 3 tiers; Strategic,Operating(Shop Floor level) and

Control decision. Production/Operations management

Production/Operations management is application of management principles to production function in terms of factory,Large corporation & scientific management


Operations management is in thing and uses tactics of scheduling,Resorce utilisation,Quality & process planning

Operations management produces tangibles (Goods) & Intangible Services(Banking,Airlines,Supbazar chains,Education,consultancy,Health,Leisure…)

Unit-1 OM,mba2Trim, p10 OM: Scope : Large, Used in deciding Location,land,building

plan,machinery planning,purchase & storage of raw materials, conversion process,QM,Mntce Mgt,, ppc,work study..

Modern OM: Cometitive advantage,Service orientation,Pollution free mfg,small size organisation..

Unit-1 OM,mba2Trim, p,11 Duties of Operations Manager: Plant Location,Plant layout Design production system Product design Work study application Capacity planning PPC Materials management,including supply chain management QM Maintenance management Productivity enhancement IR,Health,Safety& Staff selection& management Interaction with other functional management Budgetting…..


Automation And Scientific computer Industrial management Integrated

Handicraft Revolution Systems Era ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

^^^^^^^^^ 1750 1800 1850 1900 1950

2000 * Colonial * Industrial * Financial &Marketing * * Infrmn Expansion

Expansion Expansion Expansion Dn & Global comptn

Unit-1 OM,mba2Trim, p13 Mile Stones: 1)Handicraft Era : James Watt,1764, : Steam Engine Adam Smith,1776,: Division of Labour American Constitution: 1789 Eli whitney,1790, :Interchangeable parts

2)Industrial Revolution: Charles Babbage,1832: Economic analysis

of work & pay based on skill requirements.

Unit-1 OM,mba2Trim, p14 Mile Stones:

3)Scientific Management: Frederic Taylor,1890,: Father of Scientific

Management,Training,Time study, Production standards Frank & Lilian Gilbreth,1910,:Motion Economy & Human

Factors Henry Ford,1913, : Assembly - Line Mass production Henry Gantt,1913,:Scheduling systems W.Shewart,1913,;Statistical Quality Control(S.Q.C) F.W.Harris,1915,:Economic Ordering Quantity(E.O.Q)

model, for Inventory management (Part of Materials Management)

Elton Mayo,1933,: Attention to behavioural factors L.H.C.Tippett,1935 : Work Sampling

Unit-1 OM,mba2Trim, p15 Mile Stones:

4)Automation & Computer Integrated Systems: Individual contributions :

Dantzig, Deming, Juran, Buffa, Hertzberg, Wight, Skinner, etc. Organisational contributions :

AT&T,GM,DUPONT, IBM,VOLVO,GE, SIEMENS,TOYOTA, INTEL,PHILIPS, etc.

Unit-1 OM,mba2Trim, p16 Post 1950’s:

Operations Research(O.R) Techniques,Comutreised Information Systems & Age of Automation commenced (Logic units provided in equipments)

Current Status: Robotisation in 70s, C.I.S(Computer Integrated Systems) in 80s, And Production became capable of responding to on line

information. F.M.S(Flexible Manufacturing Systems in 90s for

customization & Volumes. Extensive usage of I.T & C.T is the order of day. GLOBALISATION ERA OF OPERATIONS(FOR MARKETS)

ACCELERATED DURING 1990S. Welcome to the GLOBALISATION ERA.

Unit-1 OM,mba2Trim, p17 Duties of Operations Manager:

Plant Location ,Plant layout Design production system Product design and Development Work study application (Method Study &Work measurement) Capacity planning Production Frecasting & PPC Materials management, including supply chain management

(S.C.M) QM Maintenance management Productivity enhancement IR, Health,Safety& Staff selection& management Interaction with other functional management Budgetting…..


Types of Manufacturing systems: Production process involved is

categorized as (a)Flow or Continuous Production &(b) Intermittant Production.

Unit-1 OM,mba2Trim, p19 Types of Production System (Process): Flow or Continuous production

&Intermittent production Flow or Continuous production:

(Standard set of processes & Sequence of processes is adopted)

Mass production/Process production/Assembly line production

Unit-1 OM,mba2Trim, p20 a)Flow or Continuous Production : Repeated production,Work moves from

one stage to next stage as per set sequence, standard procedures& sequence,Inputs standardized

Egs: Medical tablets,Fertiliser, car. to C (b) A to B to D to

E to C

Unit-1 OM,mba2Trim, p21 ( c) Varieties of Flow production: (c.1) Mass production , eg: tablets,

F.M.C.Gs (c.2) Process Production: Analytical :One Raw material into many

products, eg. Crude oil into petrol,diesel,kerosene,tar….

Synthetic: 2 or more Raw materials into one product, eg: Iron ore & others into steel, many chemicals into soap…

Unit-1 OM,mba2Trim, p22 Assembly production: (Notation: I, inputs, P

parts , F.P is finished product) I1 into P1 I2 I3 into P2 into F.P I4 I5 into P3 I6 Line balance method is used. Eg: Automobile,

TV…

Unit-1 OM,mba2Trim, p23 a)Flow or Continuous Production : Characterictics : use of special purpose

machines, high capital for equipment,Machines capacity to be balanced,Fixed material handling equipments like Cranes, fork lifts …,online inspection, Less inventory, less space requirement per unit production,% of man power costs less in total cost,less control,product layout,

Demerits: Disruptions are critical Requirements:Constant demand for

product,inputs of good quality,Preventive maintenance, high investment


(b) Intermittant Production. Production not continuous & made

only when required. Facilities(Equipment,people..) flexible

to handle a variety of products and specifications.

Unit-1 OM,mba2Trim, p25 Intermittant Production. Characterictics: No single

procedure,production of a product non uniform & intermittent,frequent changes in product design, usage of general purpose machines,Functional or Process Layout, Components are made for in process inventory and then assembled,small volume per product,low capital,Specialised labour,PPC is critical, Labour costs high, Material handling in varying paths,All similar machines at one location.

Unit-1 OM,mba2Trim, p26 Varieties of Intermittant Production. : JOB PRODUCTION: single complete unit made by a group of people.eg:

ship,Building,Dam.. Work completed individually on each productEg: printing

press jobs:operate printing machine for printing,folding,page setting,stapling,trimming,binding,packing&transporting.

BATCH PRODUCTION: Increased production quantities for repeatition, Due to non uniform demand in the year, switching to other

products becomes essential. All processes are done for one batch of a product&

repeated. Eg: Export products,Motors,Boilers… BATCH PRODUCTION may be considered as a combination

of Job+Mass production


MULTI PURPOSE PRODUCTION: System starts in the form of BATCH

PRODUCTION and then grows into MASS PRODUCTION. This is the current trend.

Unit-1 OM,mba2Trim, p28 (Recommended Reading : POM ,Chap 4, production

processe,Manufacturing and Service operations,Aswathappa,Sridhar Bhatt(2008)(PP41 to 42,49 to 53))

Mfg operations :These convert inputs into tangible items .Mfg processes

may be categorized as Forming Processes, Casting, forging, stamping, embossing,.. (changeing shape without adding/removing material), Machining processes(Metal removal by turning, drilling,milling, grinding,shaping,boring..,& chipless methods such as Electro Discharge Machining,Electro Spark Erosion,Electro Chemical Machining,LASER DRILLING etc,,,) and Assembly processes(welding,brazing,soldering,riveting,fastening,use of adhesive…),

Unit-1 OM,mba2Trim, p29 SERVICES: Services are those economic activities, which

produce generally intangible product such as health ,education,entertainment,hospitality,fovernment,finance,transportation …..services. similarly,repair and maintenance,restaurants,hotels,tourism,transportation,telecom,banking,insurance,trade,financial,real estate,…

In many DEVELOPING COUNTRIES,50% OF GDP IS FROM SERVICE SECTOR.

“Any major economy that is not competitive in the service sector is not competitive internationally”

Unit-1 OM,mba2Trim, p30 Primary characteristics of services:

1)Intangibility(Education,but tangible is college furniture..Purchasing does not give ownership),2)Perishability(Service can not be inventoried eg., seat in air plane,3)Inseperability,simultaneous production & consumption,Variability(different levels of service quality,due to human element)

Difference between goods and services: Goods can be resold/inventoried/ some of the

quality measurable/production & selling different/Location is important/easy to automate/

Unit-1 OM,mba2Trim, p31 Difference between Manufacturing and

services: Exists in respect of ; customer contact (Less

,More) ,uniformity of input(Less ,More),%Labour content(Less ,More), variability in output quality (Less ,More),Location of facility (over all economics ,proximate to customer), Diffculty in Productivity Measurement (Less ,More), production and delivery(Not simultaneous, simultaneous),

Quality assurance challenge(Less ,More)

Unit-1 OM,mba2Trim, p32 (Recommended Reading : POM ,Chap 14,

Service operations:Planning&Scheduling, ,Aswathappa,Sridhar Bhatt(2008) )(PP291 to 302))

OPERATION STRATEGIES FOR SERVICES; COMPETITIVE PRIORITIES FOR SERVICE FIRM

are(1) low service product cost, (2)Fast and ontime delivery,(3) Services to be of high quality,(4)customer service attitude & (5)flexibility.

THREE TYPES OF SERVICE OPERATIONS are(1) Quasi-manufacturing,eg:Aircraft maintenance works, (2)Customer-as-participants(eg:Retailing, (3)Customer as product(Beauty clinic, Hospital,Tailor..)

Unit-1 OM,mba2Trim, p33 SCHEDULING FOR SERVICES: Services are by

people & the demand pattern in non uniform,Hence Scheduling of services involves(1) scheduling customers, (2) scheduling work force, (1) scheduling Equipment,Eg:Restaurant

SCHEDULING STRATEGIES FOR SERVICES: (1) Schedule for peak demand, (2) Chase

demand (3) Reservation strategy(Hotels,airlines…) (4) consumer participation (Self service Restaurants,ATM services..), (5) Adjustable capacity (Close-off hours in a restaurants). (6) Cross training(Banks, restaurants) (7) Sharing Services (Hiring buses from State R.T.Cc)

Unit-1 OM,mba2Trim, p34 SCHEDULING STRATEGIES FOR QUASI –

MANUFACTURING “SERVICES”: (1) Product- focused operations: Eg: Back room

operations at a fast food restaurants like layout,assembly line balancing,automation,HRD,Materials purchase,production of high volume standard products,cost management , to meet highly variable hour-to-hour customer demand.

(2) Process- focused operations: Eg: Medical test laboratory.Based on the nature of service requested , the job is routed to the appropriate departments until it is completed.

Unit-1 OM,mba2Trim, p35 PERSONNEL SCHEDULING IN SERVICES :due to

demand variability,Service time variability(Eg:Health spa), use of personnel when they are needed(full 7 part time employees).

SCHEDULING ‘CUSTOMER-AS-PARTICIPANT ‘ SERVICE OPERATIONS:

Eg: Retailing,Tourism…Customer needs are to be looked into.

SCHEDULING ‘CUSTOMER-AS-PRODUCT’ SERVICE OPERATIONS:

Service is performed on customers. Eg: Beauty clinic,medical Treatment, Surgery…

Unit-1 OM,mba2Trim, p36 SCHEDULING MULTIPLE RESOURCES: It is critical in service sector.Eg: An

educational institute must schedule Faculty,classrooms , LCD systems and Students.A hospital must schedule Doctors,surgeons,Nurses,O.Ts,Ward staff,admissions,spl equipments,billing activity….Others are Banks, Airlines.

Manning system is based on Cyclical or Rotating schedule.

/ End of unit-1/