Chapter 1 introduction
- 1. CHAPTER-1 INTRODUCTION Definition, operations functions its environment, operation system, the life cycle approach, historical development of operation management, productivity and competitiveness • Production management: production management as the art of managing production process to best support the organizational goals and policies. • Operation management: Operation management as the art of managing transformation process to best support the organizational goals and policies.
- 2. Definitions: • According to Jay Heizer and Berry Render “ Operation management is the set of activities that creates value in the form of good and services by transforming inputs into output.” • According to Kaniska Bedi “POM is defined as the design, operation and improvement of the transformation process, which converts the various inputs into the desired output of products and services.” • Operation management deals with the design and management of products, processes, services and supply chains. It considers the acquisition, development and utilization of resources that firm need to deliver the goods and services their clients want.
- 3. #Why operation management (Objectives of operation management) • Ultimate objectives – Right quality – Right quantity – right time – Pre-established cost • Intermediate objectives. – Machinery & equipment – Materials – Manpower – Manufacturing services
- 4. #Scope of operation management • Activities relating to production system designing – Human factor – Research and development activities • Activities relating to analysis and control of activities. – Production planning – Production control – Quality control – Industrial engineering – Purchasing – Plant engineering – Manufacturing – Method analysis – Inventory control – Plant layout and materials handling – Work measurement etc…..
- 5. Functions of the operations: (refer Azaya B Sthapit page 6) 1) Planning: Operation strategies, Forecasting, Product Planning, Process Choice, Capacity Planning, Location planning, Layout planning 2) Organizing: Job Design, Production/operation standards, Work measurement, Project management. 3) Controlling: Material control(inventory control and Materials Requirement Planning),Japanese manufacturing system, Managing for quality, Quality control and analysis. 4) Behavior 5) Model
- 6. Operation system(Transformation System): (refer Azaya B Sthapit page 10) Feed back Mechanism Random Disturbances Transformation Process Inputs Outputs Quality of Input Monitored Quality of Output Monitored
- 7. The life cycle approach: (refer Azaya B Sthapit page-16)
- 8. #Historical Development of Operation Management: (refer Azaya B Sthapit page-12/18) Evolution of production management as operation management: Till 1930’s: Scientific management and FW Taylor 1930’s-1950’s: Production management 1970’s: Operation management 1980’s and 1990’s: Robotics and numerical control, computer assisted design, statistical process control for quality(TQM), Lean (just-in-time) manufacturing, Benchmarking, ISO standard, Time based competition, Outsourcing, Contract manufacturing, Supply Chain management, Virtual management
- 9. #Trend in POM (Future prospective of POM) • Global competition • Operation strategy • Flexibility • Cycle time Reduction (Raw materials, Work in progress WIP, Finished Goods) • Business process reengineering • Supply Chain management • Workers involvement • Lean manufacturing(TQM) • More product variety • More services • Advances in technology • Environmental concern (Refer Azaya B Sthapit page 41)
- 10. #Productivity Challenges: The creation of goods and services requires changing resources into goods and services. The more efficiently we make this change, the more productive we are and the more value we added to the goods or service provided. Productivity is the ration of outputs(goods and services) of the system to inputs(labor, capital or management) employed in the system. Productivity(P)= 𝑂𝑢𝑡𝑝𝑢𝑡(𝑂) 𝐼𝑛𝑝𝑢𝑡(𝐼) The operation manager’s job is to enhance (improve) this outputs to inputs. Improving productivity means improving efficiency.
- 11. # Ethics and Social Responsibility Operation managers are subjected to constant changes and challenges. The systems they build to convert resources into goods and services are complex. The physical and social environment changes, as do laws and values. These changes present a variety of challenges that come from the conflicting perspectives of stakeholders such as customer, distributors, suppliers, owners, lenders, and employees. These stakeholders, as well as government agencies at various levels, require constant monitoring and thoughtful response
- 12. Identifying ethical and socially responsible responses while building productive systems is not always clear-cut. Among the many ethical challenges facing operation managers are: Efficiently developing and producing safe, quality products. Maintaining a clean environment. Providing a safe workplace. Honoring community commitments. Managers must do all of this in an ethical and socially responsible way while meeting the demands of the marketplace.