Ch01 o.m.-introduction
- 2. FACULTY Prof. M.H.Varma B.E.(Mech.),DMS, PGDMM, MBA(SCM)
- 3. Scope of Discussions / Objectives Understanding the basic Concepts of Operational Activities of Organisations in Manufacturing and Services Sectors
- 4. Learning Outcomes On successful completion of the Course, the Students should be able to do the following : - • Student should be able to differentiate how different Operations Strategies lead to achieve Competitiveness • Ability toProcesses differences between Manufacturing and Service demonstrate • Discusstothe Processthe Concepts and SCM, TQM, JIT Tools and of Product Service Design • Ability describe overall purpose in the Organisation Techniques and it’s of • of Project Management of Planning and Control Processes Demonstrate understanding
- 5. 5 Operations Management- Introduction
- 6. 6 Customer Retention - Key Issues A Recent Survey says – •“More thando notof unsatisfied customers 90 % complain” •“It costs 5than it more to get a anew customer times does to keep current customer”
- 7. 7 What is Operations Management? Defined Operations management (OM) is defined as the design, execution and improvement of the systems that create and deliver the firm’s primary products and services
- 8. 8 Why Study Operations Management? Systematic Approach to Org. Processes Business Education Operations Career Opportunities Management Cross-Functional Applications
- 9. 9 What is a Transformation Process? Defined A transformation process is defined as a user of resources to transform inputs into some desired outputs
- 10. 10 Operations as a Process Input Transformation Output (Conversion) Process
- 11. 11 Operations as a Process Input Transformation Transformation Output Fabrication Assembly Fabrication: making the parts Assembly: putting the parts together
- 12. 12 Operations as a Process Energy Materials Labor Transformation Goods or (Conversion) Capital Services Process Information Feedback information for control of process inputs and process technology
- 13. 13 Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications
- 14. 14 What is a Service and What is Goods? “If you drop it on your foot, it won’t hurt you.” (Goods or service?) “Services never include goods and goods never include services.” (True or false?)
- 15. 15 OM in the Organization Chart Finance Operations Marketing Plant Operations Director Manager Manager Manufacturing, Production control, Quality assurance, Engineering, Purchasing, Maintenance, etc
- 16. Functional Integration Human Financial Resource Management Management Marketing Production/ Management Operations Management Management Materials Information Management System Research and Development
- 17. Relation of Operations to its Environment SOCIETY External Human Environment Engineering Marketing Resources Suppliers Operations transformation system CUSTOMERS Accounting Finance MIS COMPETITORS GOVERNMENT
- 18. Functions of Operations Managers Planning • Plan product and service mix • Location & Capacity Planning • Plan equipment procurement • Generate Master Schedule – What products to make and when • Decide number of shifts/ number of hours Organizing • Centralized or Decentralized operations • Design hierarchical structure • Assign responsibility for every activity • Organize supplier/ subcontractor networks • Establish maintenance policies
- 19. Functions of Operations Managers Controlling • Compare costs to budget • Inspect the Quality levels • Compare work progress to schedule • Compare actual labor hours to standards Directing • Establish provisions of union contracts • Establish personnel policies • Establish employment contracts • Issue Job assignments and instructions
- 20. Functions of Operations Managers Motivating • Provide specific objectives/ Goals & challenges • Encourage through praise, recognition of job achieved • Motivate through tangible Reward System Coordinating • Coordinate through use of forecasts and master schedule • Recommend corrective actions/ necessary improvement on performance achieved • Report, inform and communicate (through MIS Reports) Training and development • Support employees in training programs • Encourage suggestion schemes • Facilitate people involvement/ empowerment
- 21. 21 Core Services Defined Core services are basic things that customers want from products they purchase
- 22. 22 Core Services Performance Objectives Quality Operations Flexibility Speed Management Price (or cost Reduction)
- 23. 23 Value-Added Services Defined Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way
- 24. 24 Value-Added Service Categories Problem Solving Operations Sales Support Information Management Field Support
- 25. 25 The Importance of Operations Management Synergies must exist with other functional areas of the organization Operations account for 60-80% of the direct expenses that burden a firms profit.
- 26. 26 Historical Evolution of Operations Management Scientific Management – F. W. Taylor – “ The Principles of Scientific Management” Moving Assembly Line – In 1911- Henry Ford applied the principles of Scientific Management (Model T) Hawthorne Studies – Research Team from HBS – under the leadership of Elton Mayo- study conducted at Western Electric Company’s Hawthorne Plant (Chicago) Operations Research – Operations Research teams formed in military operations to smoothen the complex logistics issues (USA & Europe)
- 27. 27 Historical Development of OM • JIT and TQC • Manufacturing Strategy Paradigm • Service Quality and Productivity • Total Quality Management and Quality Certification
- 28. 28 Historical Development of OM (cont’d) • Business Process Reengineering • Supply Chain Management • Electronic Commerce
- 29. 29 Current Issues in OM • Coordinate the relationships between mutually supportive but separate organizations. • Optimizing global supplier, production, and distribution networks. • Increased co-production of goods and services
- 30. 30 Current Issues in OM (cont’d) • Managing the customers experience during the service encounter • Raising the awareness of operations as a significant competitive weapon
- 31. 31 Question Bowl A major objective of this book is to show how smart managers can do which of the following? b. Improve efficiency by lowering costs c. Improve effectiveness by creating value d. Increasing value by reducing prices e. Serving customers well f. All of the above Answer: e. All of the above
- 32. 32 Question Bowl In the Input-Transformation-Output Relationship, a typical “input” for a Department Store is which of the following? b. Displays c. Stocks of goods d. Sales clerks e. All of the above f. None of the above Answer: e. None of the above (The above are considered “Resources” of a department store. The correct answer is “Shoppers”.)
- 33. 33 Question Bowl In which of the following decades did the concept of quality control originate? b. 1920’s c. 1930’s d. 1940’s Answer: b. 1930’s (Tools such e. 1950’s as sampling inspection and f. 1970’s statistical tables where first developed by Walter Shewhart, H. F. Dodge, and H. G. Romig.)