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INTRODUCTION TO OPERATIONS MANAGEMENT

Prof. Kaushik Paul

 Associate Professor

Operations Area

E-Mail: kaushik.paul@igsm.in 

Phone: 43559308

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OBJECTIVES

To recognise that Operations Management exists

To understand the concepts of core and value added services

To understand how Operations management is used inpractice

To understand how the transformation process works.

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They are alloperations 

Retailoperation

Back officeoperation in

a bank

Take-out /restaurantoperation

Kitchen unitmanufacturing

operation

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A GENERAL MODEL OF OPERATIONS MANAGEMENT

Input

transformedresources

MaterialsInformationCustomers

FacilitiesStaff

Inputtransforming

resources

Planning andcontrol

ImprovementDesign

The operation‟s

competitive roleand position

Operation‟s

strategic

objectives

Operationsstrategy

Customers

Outputproducts and

services

Inputresources

ENVIRONMENT

ENVIRONMENT

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Core services are basic things that customers want from

 products they purchase

CORE SERVICES DEFINED  

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CORE SERVICES PERFORMANCE OBJECTIVES 

OperationsManagement

Flexibility

Quality 

Speed 

Price (or costReduction)

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Value-added services differentiate the organization fromcompetitors and build relationships that bind customersto the firm in a positive way 

VALUE-ADDED SERVICES  DEFINED 

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VALUE-ADDED SERVICE CATEGORIES  

Operations Management

Information 

Problem Solving

Sales Support 

Field Support 

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WHERE DOES THE BUSINESS GET ITS COMPETITIVE ADVANTAGE?

The way it 

 produces its 

 goods and 

services? The way it 

 positions itself in 

its market? 

The “technological” 

specification of its 

 product/service?  Product/

Service

 Technology

Marketing Operations

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THE THREE FUNCTIONS WORKING TOGETHER .... e.g. SWATCH

butalso

Standardize,easy to make

product at highvolume so low

cost

Product/servicedesign

OperationsMarketing

Further

innovations

whichfunds which

funds etc.

Increased varietydoes not

increase costsbut because

volume is high

Extendedrange

Mass fashionorientation

allows

whichgives

Innovativeplastic designwith few parts

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CORE AND SUPPORT FUNCTIONS

Accountingand finance

function

Human

resourcesfunction

Others

Engineering/

technicalfunction

Information/technical (IT)

function

Marketingfunction

Product/servicesdevelopment

function

Operationsfunction

Core functions 

Support functions 

A broad definition of operations management 

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THE POSITION OF THE OPERATIONS FUNCTION

Marketing Operations

ChurchCall onnewcomers

Manageappeals

Retranslatescriptures

Conductweddings

Advertise ontelevision

Paysuppliers

Designhamburgers

Makehamburgers

Sell tostores

Pay staffD esign newfurniture

Assemblefurniture

Identifyneeds

Raisecapital

D evelopproduct

Make anddistribute

Accountingand finance

Productdevelopment

Fast foodchain

Furnituremanufacturer

Processperspective

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The best way to start understanding the nature of “Operations ” isto look around you

Everything you can see around you (except the flesh and blood) hasbeen processed  by an operation 

Every service you consumed today (radio station, bus service,lecture, etc.) has also been produced  by an operation 

Operations Managers create everything you buy, sit on, wear, eat,throw at people, and throw away

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IKEA STORE

Design elegantproducts which can beflat-packed efficiently

Design a store layoutwhich gives smoothand effective flow

Ensure that the jobs ofall staff encourage theircontribution tobusiness success

Maintain

cleanliness andsafety of storagearea Arrange for fast

replenishment ofproducts

Monitor and enhancequality of service tocustomers

Site selection for

stores of anappropriate size inthe most effectivelocations

Continually examineand improveoperations practice

SOME OPERATIONS MANAGEMENT ACTIVITIES AT IKEA

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ALL OPERATIONS ARE TRANSFORMATION PROCESSES

ENVIRONMENT

ENVIRONMENT

INPUT OUTPUTGOODS

ANDSERVICES

TRANSFORMEDRESOURCES

MATERIALS

INFORMATIONCUSTOMERS

FACILITIESSTAFF

TRANSFORMINGRESOURCES

TRANSFORMATIONPROCESS

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OPERATIONS MANAGEMENT – BASIC PRINCIPLES

All types of enterprise have an operations function, even ifit isn‟t called „operations. 

Most operations produce both products and services.

Materials

Products andservices

Information

Customers

Operationsmanagement isconcerned with

producing anddelivering products

and services

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THE OUTPUT FROM MOST TYPES OF OPERATION IS AMIXTURE OF GOODS AND SERVICES

   C  r  u   d  e  o   i   l  p  r  o   d  u  c   t   i  o  n Pure goods Tangible

Can be storedProduction precedes

consumptionLow customer

contactCan be transported

Quality is evident

IntangibleCannot be storedProduction andconsumption are

simultaneousHigh customer contactCannot be transportedQuality difficult tojudge

Pure services

   A   l  u  m   i  n   i  u  m   s  m  e   l   t   i  n  g

   S  p  e  c   i  a   l   i  s   t  m  a  c   h   i  n  e   t  o  o   l

  m  a  n  u   f  a  c   t  u  r  e  r

   R  e  s   t  a  u  r  a  n   t

   C  o  m  p  u   t  e  r  s  y  s   t  e  m  s

  s  e  r  v   i  c  e  s

   M  a  n  a  g  e  m  e  n   t

  c  o  n  s  u   l   t  a  n  c  y

   P  s  y  c   h  o   t   h  e  r  a  p  y  c   l   i  n   i  c

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THE ACTIVITIES OF OPERATIONS MANAGEMENT

ENVIRONMENT

ENVIRONMENT

INPUT OUTPUTGOODS

ANDSERVICES

INPUTTRANSFORMED

RESOURCES

MATERIALSINFORMATIONCUSTOMERS

FACILITIESSTAFF

INPUTTRANSFORMED

RESOURCES

OPERATIONSSTRATEGY

DESIGN

PLANNING AND

CONTROL

IMPROVEMENT

OPERATIONSSTRATEGIC

OBJECTIVES

THEOPERATIONSCOMPETITIVE

ROLE AND

POSITION

Operationsstrategy

Operationsmanagement

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Operations Activities as Feedback Loops 

Design activities set the basic configuration

Planning & control activities guide short/medium term changes

Planning & Control

Design

Improvement

Improvement activities guide longer term changes

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HISTORICAL DEVELOPMENT OF OM 

JIT and TQC

Manufacturing Strategy Paradigm

Service Quality and Productivity

Total Quality Management and Quality Certification

Business Process Reengineering

Supply Chain Management

Electronic Commerce

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OBJECTIVES

To recognise that Operations Management exists

To understand the concepts of core and value added services

To understand how Operations management is used inpractice

To understand how the transformation process works.

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 References: 

1) „Operations Management‟ By Nigel Slack et al. 2e  

2) „Operations Management for Competitive Advantage‟  

By Chase, Jacobs & Aquilano, 10e 

HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE  

THANK YOU