0perations Mgmt

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0perations Mgmt

Unit- 1

Introduction to OM


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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.


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Contd.

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 .


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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.


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Characteristic of Operation & Production

Function

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 .


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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

engineers.


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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 .


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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.


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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


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Contd.

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.


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Contd

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


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10. Supply chain management : reducing TC

,Warehousing etc.


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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 .


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Contd.

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

Harris.


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Contd..

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.


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Contd..

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.


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OM & other Functional Areas


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Contd.


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Contd.

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


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Contd

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

operations.


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Contd.

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 .


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Contd

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.


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Contd..

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


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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


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Contd

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.


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Contd

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.


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Contd

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.


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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

strategy.

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