Introduction of OM

8/11/2019 Introduction of OM

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OPERATION AND PRODUCTIVITY

Lecture Notes for Operation Management

By Fahmy Radhi


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9/23/2014 Operation Management 2

Operations Management

Planning, organizing, executing andcontrolling in a systematic process

that transform inputs into outputsof greater value

It deals with the production ofgoods and services


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Transformation Process

Input Process Output

Materials

Machines

Man/workers

Money/capital

Information

Manufacturing

Assembling

Transporting

Storing

Consulting

Automobiles

Televisions

Services


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Functions - Bank

Operations Finance/Accounting

Marketing

CheckClearing

TellerScheduling

TransactionsProcessing

Security

Commercial Bank 1984-1994

T/Maker Co.


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Functions - Airline

OperationsFinance/

AccountingMarketing

Ground

Support

Flight

Operations

Facility

MaintenanceCatering

Airline 1984-1994 T/Maker Co.


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Functions - Manufacturer

OperationsFinance/

AccountingMarketing

Production

ControlManufacturing

Quality

ControlPurchasing

Manufacturing


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Characteristics of Goods

Tangible product

Consistent productdefinition

Production usuallyseparate fromconsumption

Can be inventoriedLow customerinteraction

1995 Corel Corp.


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CRUD

E

OILPRODUCTION

ALUMINIU

M

SMELTING

SPECIALISTMAC

HINETOOL

MANUFACTU

RER

RESTAURANT

CO

MPUTERSYSTEMS

SERVICES

MAN

AGEMENT

CON

SULTANCY

PSYCHOTHER

APYCLINIC

The output from most operations is a mixture of

goods and services

PURE GOODSTangible

Can be stored

Production precedesconsumption

Low customercontact

Can be transported

Quality is evident

PURE SERVICES

Quality difficult to judge

Cannot be transported

High customer contact

Production and

consumption aresimultaneous

Cannot be stored

Intangible


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10 Strategic OM Decisions

Goods & service designQuality

Process & capacity design

Location selectionLayout design

Human resource and job design

Supply-chain management

InventoryScheduling

Maintenance


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The Critical Decisions

Quality management

Who is responsible for quality?

How do we define quality?

Service and product design

What product or service should we offer?

How should we design these products andservices?


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Process and capacity design

What processes will these products requireand in what order?

What equipment and technology isnecessary for these processes?

Location

Where should we put the facility On what criteria should we base this

location decision?


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Layout design

How should we arrange the facility?

How large a facility is required?

Human resources and job design

How do we provide a reasonable workenvironment?

How much can we expect our employeesto produce?


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Supply chain management

Should we make or buy this item?

Who are our good suppliers and how many

should we have?

Inventory, material requirementsplanning,

How much inventory of each item shouldwe have?

When do we re-order?


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Intermediate, short term, and projectscheduling Is subcontracting production a good idea?

Are we better off keeping people on thepayroll during slowdowns?

Maintenance

Who is responsible for maintenance? When do we do maintenance?


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Types of Manufacturing Operations

Job Shop Manufacturingmake-to-orderproduct in accordance with design suppliedby the customer.

Its characteristics:

High variety product with low volume,

Using the multipurpose equipments and

flexibility material handling,Need broad range skills.

E.g. custom-built home, custom tailor clothes,specific machines


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Repetitive Manufacturingmake-to-stockproduced to anticipation of customerdemand.

Its characteristics:High volume with low variety as standardizedproduct for mass market

Repetitive process using the single purpose

equipment for the same processNeed a specialist skills.

E.g. Television, Refrigerator, most costumergoods


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Batch Manufacturingsimilar standardproduct produced periodically in batches.

Its characteristics:

Combination of product variety and averagevolume per product,

Using flexible Equipment that must be

capable of performing some variety of tasks,Need a variety of skills.

E.g. hand tools, bakeries


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Types of Services Operation

Service Factories: Low labor intensity - Lowcustomer interaction. E.g.: airline, hotel.

Service Shops:Low Labor intensity - highcustomer interaction. E.g.: hospital, repair

serviceMass Service: high labor intensity - lowcustomer interaction. E.g.: Banking,Education

Professional Services: both highly labor-intensity and customer interaction. E.g.:Doctors, Lawyer


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Layout Types

Process/functional Layoutsarranged bygroup similar process or function or activitiesin department or work centers

Product/line Layouts

arranged in lineaccording to the sequence of operations forparticular product or service

Fixed-position Layoutarrangement inwhich the product is in fixed place, whileworker along with equipments are move tothe product


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Thank for Attention

To be continued

Introduction of OM

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