0perations Mgmt

download 0perations Mgmt

of 32

Embed Size (px)

Transcript of 0perations Mgmt

  • 8/7/2019 0perations Mgmt


    0perations Mgmt

    Unit- 1

    Introduction to OM

  • 8/7/2019 0perations Mgmt


    O.M. deals with processes that produces goods and

    services that people use everyday .

    Processes are the fundamental activities that

    organization use to do work and achieve their goals.

    Each organization whether public and private ,

    service or manufacturing must manage process to

    add value for their customers.

  • 8/7/2019 0perations Mgmt


  • 8/7/2019 0perations Mgmt



    OM as a set of decisions.

    Decision making is an essential aspect of all

    management activities including operation mgmt.

    The operation managers decision should reflect

    corporate strategy .

    Scheduling work , assigning resources including

    people , equipment ,managing inventories, assessingquality standard .

  • 8/7/2019 0perations Mgmt


    Decision making in O.M.

    1. Strategic Decision : These are related to products,

    processes and manufacturing facilities.

    2. Operating Decision : Related to Planning

    production to meet demand.

    3. Control Decision : Related to planning and

    controlling operations. These decision are mainly

    related day to day activity of workers ,quality of

    products and services etc.

  • 8/7/2019 0perations Mgmt


    Characteristic of Operation & Production


    1. Productivity Improvement

    Productivity = output/input

    2. Manufacturing as a competitive Advantage

    Production system offers vast scope to gain competitive

    advantage & firms need intend to exploit the potential

    with the help of TQM , Time-based Competition

    ,Business Process Reengineering(analysis and designof workflows and processes within an organization) ,

    Just in time .

  • 8/7/2019 0perations Mgmt


    2. Service Orientation :

    Due to emergence of service sector the

    production system need to be organized . There is increased presence of professionals

    on the production instead of technicians and


  • 8/7/2019 0perations Mgmt


    3. Disappearance of Smokestack

    Term used by Alvin Toffler .

    Protective Labor Legislation , Environmental Movement

    and gradual emergence of knowledge based

    organization have drastic change in production

    system .

  • 8/7/2019 0perations Mgmt


    4 Small has become Beautiful

    E F Schumacher in his book Small is beautiful

    opposed big organization and increasedspecialization. He advocate intermediate

    technology based on smaller working units

    ,community ownership .

    Businessmen all over the world didnt believe

    in his philosophy.

  • 8/7/2019 0perations Mgmt


    Recent Trends in O.M.

    1. Global Market Place :

    Due to globalization companies have compelled

    in many countries 2.Operation Strategy : More & more firms

    recognizing the importance of this strategy.

    3.T.Q.M 4.Flexibility: ability to adapt quickly to change

    in demand, product design

  • 8/7/2019 0perations Mgmt



    5. Time Reduction : Reduction of

    manufacturing cycle time and speed to market

    for a new product .

    6. Technology : Advancement in technology

    ,new processes and new materials and

    components e.g. automation ,

    computerization, I.T.

  • 8/7/2019 0perations Mgmt



    7. Workers Involvement : To assign

    responsibility for decision making to the

    lower level organization .

    8. Environmental Issues: Pollution control

    ,waste disposal

    9. Corporate Downsizing /Rightsizing :

    It is necessary due to competition ,need for

    improved profit

  • 8/7/2019 0perations Mgmt


    10. Supply chain management : reducing TC

    ,Warehousing etc.

  • 8/7/2019 0perations Mgmt


    Historical Evolution of O.M.

    At the turn of the 20th century, the economic structure in

    most of the developed countries was fast changing from a

    feudalistic economy to an industrial or capitalistic economy.

    This changed economic climate produced the new techniquesand concepts.

    Fredric W Taylor studied the simple output to time

    relationship for manual labor such as brick-laying. This formed

    the present day time study .

  • 8/7/2019 0perations Mgmt



    So focus was on controlling the work output of the manual

    labor or the machine operator. The primary objective of

    production management was that ofefficiency efficiency of

    the individual operator .

    The aspects of collective efficiency came into being later,

    expressed through the efforts of scientists such as Gantt who

    shifted the attention to scheduling of the operations.

    Even now, we use the Gantt charts in operations scheduling

    In 1930, a basic inventory model was presented by F W


  • 8/7/2019 0perations Mgmt


  • 8/7/2019 0perations Mgmt



    In 1935, H F Dodge and HG Roming came up with application

    of statistical principles to the acceptance and/or rejection of

    the consignments supplied by the suppliers to exercise control

    over the quality. This field, which has developed over the

    years is now known as; acceptance sampling.

    Frederick W. Taylor's systematic approach to scientific

    management at the beginning of the twentieth century. The

    introduction of Taylor's method of scientific management and

    Henry Ford's moving assembly line brought the world into an

    age where management was predominantly centered around

    the production of goods.

  • 8/7/2019 0perations Mgmt



    The birth ofOperations Research (OR) during the World War II

    period saw a great development in the application of scientifictechniques in management .

    Various techniques such as linear programming ,game theory,

    queuing theory and the like developed by people such as

    George Dantzig A Charnes and W.W Cooper have become

    indispensable tools for management decision making today.

  • 8/7/2019 0perations Mgmt


    OM & other Functional Areas

  • 8/7/2019 0perations Mgmt



  • 8/7/2019 0perations Mgmt



    1. OM with Finance/Accounting :

    If there is a need of new product ,technology, resource than

    there should be technology leadership.

    Due to it appropriate finance should be raised through afinance strategy .

    The accounting , Budgeting and control should be supportive

    ofmanufacturing Strategy .

    Ex : In Just in time Production the accounting system &control System be different from traditional System

  • 8/7/2019 0perations Mgmt



    2. OM with Marketing :

    Marketing Strategy based on any Ps such as Place , Price &Positioning should be congruent to manufacturing strategy

    and vice-versa.

    Marketing strategy may lead to company s technology

    strategy. Marketing strategy should provide perfect feedback to


  • 8/7/2019 0perations Mgmt



    3. OM with H.R.

    To make the company a preferred Employer therefore

    attracting the best Talent .

    It would help the manufacturing function in terms of

    improving quality ,productivity.

    Create Coherence between peoples attitudes and

    organization objectives and strategies .

  • 8/7/2019 0perations Mgmt



    4. OM with R & D :

    Operation can't bring additional Flexibility beyond a point

    unless the R & D function helps in process capabilityimprovements.

    Designing the new product , process according to the inter or

    intra needs.

  • 8/7/2019 0perations Mgmt



    5. OM with Logistics :

    Quick movement of materials inside an outside the factory.

    Arrange the storage (inventory) , distribution and other

    support to help manufacturing strategy of providing

    product/services on time

  • 8/7/2019 0perations Mgmt


  • 8/7/2019 0perations Mgmt


    Operation Strategy

    It includes six components :

    1. Positioning the Production system :

    Selecting the type of product design

    Type of Production Processing System

    Type of Finished goods inventory policy

  • 8/7/2019 0perations Mgmt


  • 8/7/2019 0perations Mgmt



    3. Product/Service Design :

    For Product life Cycle such as introduction ,growth, maturity

    and decline .The operations activities , marketing andengineering activities related to Product design and

    development are intense as new product developed.

    The product design has a tremendous impact on product

    quality , production cost , level of inventories.

  • 8/7/2019 0perations Mgmt



    4. Technology Selection and process Development :

    An essential part of operation strategy is determine how

    products will be produced. It involves deciding and planning every detail of production

    processes and facilities.

    In present scenario combining automated machines and

    warehouses with conventional equipments are the challengesfaced by operation managers.

  • 8/7/2019 0perations Mgmt



    5. Allocation of Resources to Strategic Alternatives:

    Allocation ofCapital funds , Capacity , Workers , Engineeringtalents , machine , material and other resources must be

    allowed in such a way that maximize the achievement of

    objectives of operations.

  • 8/7/2019 0perations Mgmt


    6. Facility Planning , Capacity , Location & Layout :

    How to provide the long range capacity to produce the

    product / service ?

    The decision regarding acquisition of land ; productionequipment ; specialized technologies .

    The internal arrangement of departments ,work centers ,

    production process within facility is a crucial part of position