Chap01 Operation Mgmt & Strategy
Transcript of Chap01 Operation Mgmt & Strategy
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BKC3813 - OPERATION and PROJECT MANAGEMENT
(E)
Hj. M Noor Nawi, FKKSA, UMP.
(X 2813)
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Chapter 1: OPERATION MANAGEMENT &
STRATEGYThe Outline: Definition Concept Classification of System Manufacturing vs Services System Framework The Objective The Scope The Operation Strategy
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WHAT IS OPERATION MANAGEMENT?
• What is Production Management?The management interrelated activities in manufacturing designed product/s
• What is Operation Management?The business function responsible for planning, coordinating, and controlling the resources needed to produce a company’s products and services
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OPERATION MANAGEMENT
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The Concept INPUT
TRANSFORMATION PROCESS OUTPUT
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Input-Transformation-Output Processes
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CLASSIFICATION OF PRODUCTION SYSTEM
1) Job-Shop Production2) Batch Production3) Mass Production4) Continuous Production System
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CLASSIFICATION OF PRODUCTION SYSTEM
Job-Shop Production1. Characteristics2. Advantages3. Limitations
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CLASSIFICATION OF PRODUCTION SYSTEM
Batch Production1. Characteristics2. Advantages3. Limitations
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CLASSIFICATION OF PRODUCTION SYSTEM
Mass Production1. Characteristics2. Advantages3. Limitations
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CLASSIFICATION OF PRODUCTION SYSTEM
Continuous Production System1. Characteristics2. Advantages3. Limitations
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Differences between Manufacturing and Service Operation
MANUFACTURING• Tangible• Output Consumption
over time.• Nature of work – Less
Labour More Equipment• Little Degree of
Customer Contact• No Customer
Participations• Sophisticated
Performance Measurement
SERVICE• Intangible• Immediate
Consumption of Output.• More Labour Less
Equipment Usage• Direct Customer
Contact• Frequent Customer
Participation• Easy method to
Performance Measure.
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Quiz 01Q. What are the FOUR objectives of Production
Management?
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Operation Management System Framework
• Planning- activities that establishes a course of action & guide future Decision -Making• Organizing
- activities that establishes a structure of tasks and authority• Controlling
- Activities that assure the Actual performance in accordance with planned performance
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Operation Management System Framework
• Behaviour- relationship all above parameters with human behaviour• Models
- e.g aggregate planning, break even analysis, linear programming & Simulation, decision tree analysis & simple median models.
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Objectives of Operation Management
Customer Service- provide goods and services with Right Specifications, Right Cost & Right Time!!!
Resource Utilization- Man, Materials & Machines
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Quiz 02Q.What are the scopes (areas) of Operation/
Production Management?
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Scope of Operation Management
• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Scope of Operation Management• Location of Facilities• Plant Layout and Materials Handling• Product Design• Process Design• Production and Planning Control• Quality Control• Materials Management• Maintenance Management
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Location of Facilities Long-term Capacity & Commitment Base of Operation Large Investment of Plant & Machineries Expansion Plan & Policy Diversification Plan for Products/ Market Sources of Raw Materials Manpower Supplies (skilled or non-skilled) Optimal Location – greatest advantages to
organizations
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Plant Layout and Materials Handling
Plant Layout:1. Physical arrangement of facilities, comprise
of departments, work centres and equipment.2. Meeting most economic output quality and
quantity.
Materials Handling:1. About moving materials from store to
machine and so on…..in manufacturing process.
2. Cost reduction by proper section, operation and maintenance of MH devices and help to increase output, improve quality & speed up deliveries.
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Product Design Conversion of Ideas into Reality Product Development translates customers needs
via marketing into technical specs and design various features into the product specifications.
P.D. and Development provide link bet marketing, customer needs & expectations and activities required to manufacture the product.
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Process Design• Decision Making in Overall Process Route for
Converting Raw Mat into Finished Goods.• Selection of a process• Choice of Technology• Process Flow Analysis• Layout of the facilities• Analyse workflow• Select workstation in the workflow
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Production and Planning Control
• Advance process• Setting, fixing, orders and follow up progress.• Planning – what, how, when & who?• Routing – selection of route to be follow• Scheduling• Dispatching• Follow-up
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Quality Control• Improve Income • Reduce cost• Achieve Interchangeability• Produce optimal quality• Prompt inspection• Variation check• Customers satisfaction, goodwill, confidence and
reputation.
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Materials Management• Minimise material cost• Efficient in purchasing, receiving, transporting
and warehousing.• Cut cost via simplification, standardisation, value
analysis and import subtitution.• New source of supply?• Reduce investment tie in inventory & develop
high inventory turnover ratios.
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Maintenance Management • Minimum breakdown – low cost• No interruption, optimal capacity• Availability of machines, buildings and services
functional at optimal return on investment.
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Historical Development of Operation Management
• Industrial revolution Late 1700s• Scientific management Early 1900s• Human relations movement 1930s to
1960s• Management science Mid-1900s• Computer age 1970s• Environmental Issues 1970s
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Historical Development of Operation Management
• Time-Based Competition 1990s
• Supply chain Management 1990s
• Electronic Commerce2000s
• Outsourcing and flattening of the world 2000s
• Just-in-Time Systems (JIT) 1980s
• Total quality management (TQM)1980s
• Reengineering 1990s• Global competition
1980s• Flexibility 1990s
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Operation Management Strategy• Operations Management Strategy is
concerning the planning to achieve vision and mission of organisation via total patterns of decisions and actions which set the role, objectives and activities of the operation so that they contribute to, and support, the organisation’s business strategy!!!
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Operation Strategy• Operational decisions occur on a daily/
weekly/ monthly/ yearly basis and are made considering the risk to the business.
• These decisions are administrative in nature and can be implemented quickly and tend to carry minor risk.
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Tactical Strategy• Tactical Strategic decisions are medium
term decisions. • Misguided strategy could take a
business in entirely the wrong direction and lead to failure, a misguided tactic would have a more limited impact.
• Tactical strategy tend to be more changeable.
(2 – 5years)
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Strategic Planning• Long-term Strategy ( > 5 years )• Strategic decisions are those which
affect the long term performance of the business and which relate directly to its aims and objectives.
• They are usually taken at the highest levels of management and carry higher levels of risk.
• Effective strategic decisions bring high levels of reward.
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Productivity Measurement Productivity is a measure of how efficiently inputs
are converted to outputs Productivity = output/input
Total Productivity Measure Total Productivity = $sales/inputs $
Partial Productivity Measure Partial Productivity = cars/employee
Multifactor Productivity Measure Multi-factor Productivity = sales/total
$costs
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Quiz 031) What are the elements/ factors that contribute
to the success of O.M.? and 2) How and Why these factors can affect the
success of O.M.?
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Cont.ANS: Right Quality Right Quantity Right Time Right Manufacturing Cost