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POST GRADUATE PROGRAMME IN MANAGEMENT SESSION PLAN FOR SL OP 502: OPERATIONS MANAGEMENT Course Instructor Dr. N. Sambandam

OPERATIONS MANAGEMENT PROGRAMME SCHEDULE Session No. Topic 1 & 2 Introduction, Operations Strategy & Competitiveness 3 & 4 Process Analysis, Product Design and Manufacturing Process Selection & Design 5 & 6 Service Process Selection & Design and Facility Location 7 & 8 Facility Layout and Waiting Line Management 9 & 10 Strategic Capacity Management and Aggregate Sales and Operations Planning 11 & 12 Inventory Control & Mid Term Test 13 & 14 Materials Requirement Planning – MRP 15 & 16 Supply Chain Strategy 17 & 18 Total Quality Management 19 & 20 Just-In-Time and Lean Systems 21 & 22 Project Management 23 & 24 Case Discussions 25 & 26 Course Review with Problem Solving 27 & 28 Course Review with Problem Solving

REFERENCES Richard B. Chase, “Operations and Supply Management”, 12 th Edition, Tata McGraw Hill, 2010. Krajewski, Lee J, et al. “Operations Management Strategy and Analysis”, 7 th Edition Pearson Education India. Norman Gaither, “Production and Operations Management”, 8 th Edition, The Dryden Press, 1999. Russell, R.S & Taylor III, B.W, “Production and Operations Management” 4 th Edition, Pearson Education, 2000. EVALUATION SCHEME : Assignment (2 Nos.) : 20% Mid Term Test : 15% Attendance/Case Study Presentation : 15% Semester Ending Exam : 50%

Business Functions Finance Operations Marketing

Organization Chart for Commercial Bank Commercial Bank Operations Teller Scheduling Check Clearing Collection Transaction processing Facilities design/layout Vault operations Maintenance Security Finance Investments Securities Real estate Accounting Auditing Marketing Loans Commercial Industrial Financial Personal Mortgage Trust department

Organization Chart for Airline Airline Operations Ground support equipt. Maintenance Ground operations Facility maintenance Catering Flight operations Crew scheduling Flying Communications Dispatching Management science Finance/Accounting Accounting A/C payable A/C receivable General ledger Finance Cash control International Exchange Marketing Traffic administration Reservation Schedules Tariffs (pricing) Sales Advertising

Organization Chart for Manufacturing Manufacturing Operations Facilities Construction; maintenance Production and Inventory control Scheduling; materials control Quality assurance and control Supply Chain Management Manufacturing Tooling; fabrication; assembly Design Product development and design Detailed product specifications Industrial engineering Efficient use of machines, space, and personnel Process analysis Development and installation of production tools and equipment Finance/accounting Disbursements/credits A/C receivable A/C payable General ledger Funds management Money market International exchange Capital requirements Stock issue Bond issue and recall Marketing Sales promotion Advertising Sales Market research

OPERATIONS MANAGEMENT DEFINITION The management of the Production function within any Organization, whether it produces GOODS or SERVICES. TYPES OF ORGANIZATION Manufacturing – The output is tangible product Example: Automobile Industry, Chemical Industry, Electrical Appliance Company, etc. Non Manufacturing – The output is intangible product. Example: Bank, Hospital, Restaurant, Parking lot, Barber Shop, etc.

FUNCTIONS OF MANUFACTURING RAW MATERIALS FACTORY OPERATIONS 1. PROCESSING 2. ASSEMBLY 3. MATERIAL HANDING 4. INSPECTION & TESTING FINISHED PRODUCTS SHIPPING RECEIVING 5. CONTROL

TYPES OF OPERATIONS 1. PROJECT 2. UNIT/BATCH 3. MASS 4. CONTINUOUS

Types of Processes Type of product Unique PROJECT BATCH Made-to- order (customized) Type of customer One-at-a-time Few individual customers MASS Made-to- stock (standardized ) Mass market CONT. Commodity Mass market Product demand Infrequent Fluctuates Stable Very stable

Types of Processes (cont.) Demand volume Very low PROJECT BATCH Low to medium No. of different products Infinite variety Many, varied MASS High Few CONT. Very high Very few Production system Long-term project Discrete, job shops Repetitive, assembly lines Continuous, process industries

Types of Processes (cont.) Equipment Varied PROJECT BATCH General-purpose Primary type of work Specialized contracts Fabrication MASS Special-purpose Assembly CONT. Highly automated Mixing, treating, refining Worker skills Experts, crafts-persons Wide range of skills Limited range of skills Equipment monitors

Types of Processes (cont.) Advantages Custom work, latest technology PROJECT BATCH Flexibility, quality Dis-advantages Non-repetitive, small customer base, expensive Costly, slow, difficult to manage MASS Efficiency, speed, low cost Capital investment; lack of responsiveness CONT . Highly efficient, large capacity, ease of control Difficult to change, far-reaching errors, limited variety Examples Construction, shipbuilding, spacecraft Machine shops, print shops, bakeries, education Automobiles, televisions, computers, fast food Paint, chemicals, foodstuffs

MANUFACTURING NATURE OF PRODUCTS: DISCRETE, BULKY, CONTINUES. NATURE OF CUSTOMER: MTS, MTO ATO & ETO VOLUME OF PRODUCTION: UNIT BATCH MASS PHYSICAL FLOW OF MATERIAL : FIXED LAYOUT PRODUCT LAYOUT PROCESS LAYOUT GROUP LAYOUT MIXED LAYOUT REPETITIVE : REFINERIES, CEMENT, SUGAR, INSURANCE, AUTO PARTS, ETC. PROJECT: MARKETING RESEARCH, CONSTRUCTION JOB M/C SHOP, RESTAURANTS, DELIVERY SERVICES, ETC. HYBRID (job lot Prod.) FURNITURE, M/C TOOLS APPLIANCES, ETC. LIMITED – QUANTITY LARGE SCALE PRODUCTION. DYNAMO, GENERATOR, BOAT, CRANE, ETC.

Difference between MTS & MTO Companies Sr. No . Characteristics MTS MTO 1. Product mix Many standard product Few standard product 2. Resources Specialist Machinery and workforce Multitask machinery and workforce 3. Product Demand Demand for standard product and can be forecasted Demand is volatile and rarely be predicted. 4. Capacity Planning Based on forecast demand. Planned well in advance. Adjusted later if necessary. Based on receipt of customer orders. Can not be planned for in advance. 5. Product lead times Unimportant to customers. Can be set initially Vital for customer satisfaction. Agreed with customers. 6. Prices Fixed by producer Agree with customers before production commences

Customer order decoupling point Raw Materials Components Semi Finished Finished Goods ENG PROD PROD PROD SUPPLIER Production Based on Forecast Stock Point Production Based on Customer Order CLIENT Engineer -to-Order Make-to-Order Assemble -to-Order Make to Stock

MANUFACTURING STRATEGY AND LEAD TIME Delivery Lead Time Engineer to order Make to order Assembly to order Make to stock

Manufacturing Sectors Textile and Garments Skill Development Leather and Leather Goods Ports & Shipping Industry Auto Components Capital Goods Industry Drugs & Pharmaceuticals Paper Industry Food Processing Biotechnology Telecom Equipment Cement Gem and Jewellery Fertilizers Handlooms and Handicrafts Minerals and Metals Chemicals & Petrochemicals Steel IT Hardware/Electronics

Service Sectors Banks Hospital Mutual Fund Financial Institutions (UTI, HDBC, etc.) Railways Insurance (LIC, Pearless, New India Insurance) Shipping Corporation of India Air Lines (Private & National) Road Transport (BEST, TCI, etc.) Tourist Corporations (TCI, Thomas Cook, Govt.. Tourism etc.) Municipal Corporations Hotel & Restaurants Educational (Universities & Institutions) Post & Telegraphs CPWD Construction (Builders) Food & Fertilizers (Storing & Distribution)

Characteristics of Services and Manufactured Products Services Manufacturing Output Intangible Tangible Output Inventoried No Yes Customer Contact Extensive Little Lead Time Short Long Intensity Labor Capital Quality Subjective Objective

DIFFERENCES BETWEEN MANUFACTURING AND SERVICE OPERATIONS MANUFACTURING 1) PRODUCTIVITY EASILY MEASURED. EXAMPLE: AUTOMOBILE TYRES 2) QUALITY STANDARDS EASILY ESTABLISHED. EXAMPLE: TELEVISION, RADIO, ETC. 3) LESS SO. PERSONS IN MANUFACTURING SELDOM SEE THE CUSTOMER OF THE PRODUCT. 4) INVENTORIES CAN BE ACCUMULATED; E.G., TO DEAL WITH DEMAND FLUCTUATIONS. 5) LARGE PORTION OF ASSETS IN FACILITIES, EQUIPMENT, AND INVENTORY. 6) MORE MATERIAL HANDLING. SERVICE 1) NOT SO. EXAMPLE: ADVISORY SERVICES MAY PROVIDE ONLY SPOKEN WORDS. AN ENTIRELY INTANGIBLE PRODUCT, VERY DIFFICULT TO MEASURE. 2) NOT SO. EXAMPLE: IN HOSPITAL, PATIENTS SATISFACTION CAN NOT BE EASILY MEASURED. 3) VERY IMPORTANT TO KEEP IN CONTACT WITH CUSTOMERS. EXAMPLE: THE DOCTOR-PATIENT RELATONSHIP IS OCNSIDERED TO BE VERY IMPORTANT 4) INVENTORIES CANNOT BE ACUMULATED; E.G. BARBER CANNOT STORE HAIR CUTS. DEMAND LEVELING CAN BE DONE OFFERING DISCOUONT RATE SUCH AS IN TELEPHONE SERVICE IS EXTREMELY IMPOROTANT. 5) NOT SO (HEALTH CARE IS AN EXCEPTION.) 6) NOT SO EXCEPT, SAY,MAIL AND OTHER DISTRIBUTION

Operations Managers Directing People Control or Follow up Motivating Personnel Planning Courses of Action Training People Organizing and Coordinating Activities What Operations Managers Do ③ DIRECTING PEOPLE SO THAT THEY UNDERSTAND THEIR ASSIGNMENTS AND PERFORM THE PROPER ACTIVITIES ⑥ CONTROL OR FOLLOW- UP TO SEE THAT THE OBJECTIVES ARE BEING MET AND TAKING CORRECTIVE ACTION IF THE PROGRESS IS NOT SATISFACTORY ④ MOTIVATING PERSONNEL SO THAT THEY WILL PROVIDE THE NECESSARY CONTRIBUTIONS TO THE ORGANIZATION . ② ORGANIZING RESOURCES SUCH AS PEOPLE, EQUIPMENT (LAYOUT), AND TIME (SCHEDULE) AND COORDINATING ACTIVITIES SO THAT TEAM WORK IS ACHIEVED. ① PLANNING OBJECTIVES AND COURSES OF ACTION WHEREBY THE OBJECTIVES MAY BE ACHIEVED. ⑤ TRAINING PEOPLE SO THAT THE NECESSARY SKILLS ARE DEVELOPED TO ENSURE THE SUCCESS AND CONTINUITY OF THE ORGANIZATION

SKILLS OF OPERATIONS MANAGERS AT VARIOUS LEVELS OF A MANUFACTURING FIRM SKILLS NEEDED Plant Manager Production Manager Production Supervisor Management Levels CONCEPTUAL COMPETENCE BEH AVIORIA L COMPETENCE TECHNICAL COMPETENCE

Historical Events in Operations Management Era Events/Concepts Dates Originator Industrial Revolution Steam engine 1769 James Watt Division of labor 1776 Adam Smith Interchangeable parts 1790 Eli Whitney Scientific Management Principles of scientific management 1911 Frederick W. Taylor Time and motion studies 1911 Frank and Lillian Gilbreth Activity scheduling chart 1912 Henry Gantt Moving assembly line 1913 Henry Ford

Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator Human Relations Hawthorne studies 1930 Elton Mayo Motivation theories 1940s Abraham Maslow 1950s Frederick Herzberg 1960s Douglas McGregor Operations Research Linear programming 1947 George Dantzig Digital computer 1951 Remington Rand Simulation, waiting line theory, decision theory, PERT/CPM 1950s Operations research groups MRP, EDI, EFT, CIM 1960s, 1970s Joseph Orlicky, IBM and others

Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator Quality Revolution JIT (just-in-time) 1970s Taiichi Ohno (Toyota) TQM (total quality management) 1980s W. Edwards Deming, Joseph Juran Strategy and operations 1980s Wickham Skinner, Robert Hayes Business process reengineering 1990s Michael Hammer, James Champy Six Sigma 1990s GE, Motorola

Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator Internet Revolution Internet, WWW, ERP, supply chain management 1990s ARPANET, Tim Berners-Lee SAP, i2 Technologies, ORACLE E-commerce 2000s Amazon, Yahoo, eBay, Google, and others Globalization WTO, European Union, and other trade agreements, global supply chains, outsourcing, BPO, Services Science 1990s 2000s Numerous countries and companies

Evolution of Operations and Supply Chain Management (cont.) Supply chain management management of the flow of information, products, and services across a network of customers, enterprises, and supply chain partners

Changing Paradigm of Manufacturing

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