Introduction to operations
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The document discusses key concepts in operations management. It describes operations as transforming inputs into outputs of greater value through processes. Operations management involves planning, organizing, and controlling these processes. It highlights the importance of operations functions like production, inventory management, and quality control. It also discusses different types of operations systems and the use of quantitative models to analyze operations.
Introduction to operations
- 1. The Strategic Importance of Operations DMA Kukasooriya ISL-Certified Six Sigma Black Belt (Director-PMD,NIBM) 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 2. Operations Management Organization Finance Operations Marketing Operations is a function or system that transforms inputs in to outputs of greater value. Operations Management design and operation of productive systems 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 3. 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc) How do we Understand Operations? 1. Identify Issues of operations 2. Define gaps 3. Creating Solutions - Product development 4. Designing a process 5. Managing the process 6. Operation Research for development 7. Improvement of processes 8. Innovation of new products and processes
- 4. Value-Added The difference between the cost of inputs and the value or price of outputs. Inputs Material Labor Capital Transformation/ Conversion process Outputs Goods Services Control Feedback FeedbackFeedback Value added 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 5. Business Operations Overlap Marketing Operations Finance 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 6. Operations Management includes: ◦ Forecasting ◦ Capacity planning ◦ Scheduling ◦ Managing inventories ◦ Assuring quality ◦ Motivating employees ◦ And more . . .
- 7. Steel production Automobile fabrication House building Road construction Dressmaking Farming Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing Low service content High goods content High service content Low goods content Increasing goods content Increasing service content Goods-service continuum 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 8. Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 $0.15 Wheat transported to mill $0.08 $0.23 Mill produces flour $0.15 $0.38 Flour transported to baker $0.08 $0.46 Baker produces bread $0.54 $1.00 Bread transported to grocery store $0.08 $1.08 Grocery store displays and sells bread $0.21 $1.29 Total Value-Added $1.29 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 9. Types of Operations Operations Examples Goods Producing Farming, mining, construction, manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 10. Food Processor Inputs Processing Outputs Raw Vegetables Cleaning Canned vegetablesMetal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 11. Hospital Process Inputs Processing Outputs Doctors, nurses Examination Healthy patientsHospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 12. Operations Interfaces Public Relations Accounting Industrial Engineering Operations Maintenance PersonnelPurchasing Distribution MIS 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 13. Decision Making System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 14. Decision Making System operation – personnel – inventory – scheduling – project management – quality assurance 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 15. Major Characteristics of Production Systems Degree of standardization Type of operation – project – job shop – repetitive production – continuous processing 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 16. Manufacturing or Service? Tangible Act 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 17. Manufacturing vs Service Characteristic Output Customer contact Uniformity of input Labor content Uniformity of output Measurement of productivity Opportunity to correct Manufacturing Tangible Low High Low High Easy High Service Intangible High Low High Low Difficult Low quality problems High 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 18. Responsibilities of Operations Management Products & services Planning – Capacity – Location – – Make or buy – Layout – Projects – Scheduling Controlling – Inventory – Quality Organizing – Degree of centralization – Subcontracting Staffing – Hiring/laying off – Use of Overtime Directing – Incentive plans – Issuance of work orders – Job assignments 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 19. Models A model is an abstraction of reality. – Physical – Schematic – Mathematical What are the pros and cons of models? Tradeoffs 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 20. Systems Approach “The whole is greater than the sum of the parts.” Suboptimization 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 21. Quantitative Approaches • Linear programming • Queuing Techniques • Inventory models • Project models • Statistical models 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 22. Pareto Phenomenon • A vital few things are important for reaching an objective or solving a problem. • 80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few? 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 23. The Internet E-Business Supply Chain Management Lean manufacturing Six Sigma Quality Recent Trends
- 24. 121 154 193 234 29451 57 64 78 98 2006 2007 2008 2009 2010 IT/BPO Export Revenue IT Revenue $m BPO Revenue $m 173 213 258 312 392 5th Largest Export revenue earner for Sri Lanka Workforce 35,000 direct employment
- 25. Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer Simple Product Supply Chain 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)
- 26. Continuing Trends • Quality and process improvement • Technology • Globalization • Operations strategy • Environmental issues 28/6/2015 DMA Kulasooriya,NIBM (UCD -BSc)