Operations management module 1 ( calicut university )
- 1. Operations Management Module 1 Sudharman Raman Assistant professor CBS – Kanjikode, Palakakd
- 2. Definitions • Association of Operations Management defines; the field of study that focuses on the effective planning, scheduling, use and control of manufacturing or service organization through the study of concepts from enginering,MIS,quality & industrial mgt as they affect the org. • According to shrin and Joel G. Siegel’ production and operation management is the management of all activities directly related to the production of goods and services’
- 4. a) Input b) Transformation process Altration, Transportaion, Storage. c) Output Goods Services
- 5. Production : An Integration of fucntions Your Logo Marketi ng 01 Puplic Relatio ns 02 Human Resourc e 03 Finance04Purchasi ng 05 Material manage ment 06
- 6. Scope of OM 1. Product Selection and development 2. Process Selection 3. Facilities Location 4. Layout Planning 5. Material handling 6. Manufacturing System 7. Production planning and control 8. Work Study 9. Quality 10. Safety management
- 7. Decision making • Operational Decisions (Short term) • Tactical Decisions (Mid term) • Strategic Decisions (Long term)
- 8. OPERATIONS MANAGEMENT OPERATIONS STRATEGY S U D H A R M A N R A M A N A S S I S TA N T P R O F E S S O R C B S – K A N J I K O D E , PA L A K K A D
- 9. DEFINITION • A Strategy is the pre-decided procedures and practices to be followed by all the members of an organization. • A set of managerial decisions and actions for the long term performance of enterprises by exercising checks and control at different levels and timing.
- 10. Operation management is the systematic design, direction &control of the process that transform inputs into services. Plants – Factory &location where all activities take place. People – Direct &Indirectworkforce. Parts – The components, sub assemblies, or even products. Processes – Methodologies, technology, tooling &fixtures for establishing maintaining, and improving productivity. Planning &control – MIS which initiates, direct, monitors &collect feedback. 1
- 11. 2 Corporate Strategy • Environment Scanning • Core Competencies. • Core Process • Global Strategies Functional Strategy • Finance • Marketing • Operations Market Analysis • Market Segmentation • Needs Assessment Competitive Priorities • Cost • Quality • Time • Flexibility Competitive Capabilities • Current • Needed • Planned New Service/ Product Design • Design • Analysis • Development • Full launch OPERATION MANAGEMENTAND STRATEGY Operation function should be guided by strategies which are consistent with the organisation strategies
- 12. OPERATION STRATEGY The set of decision that are warranted in the operational processes to support the competitive of the business. To develop organizational strategies at three level of operation: • Corporate Level • Business Level • Functional Level CORPORATE STRATEGY BUSINESS STRATEGY PRODUCT OR SERVICES COMPETITIVE PRIORITIES ( COST, TIME QUALITY, FLEXIBILITY) GLOBAL BUSINESS ENVIROMENT COMPETENCIES 12
- 13. OPERATION STRATEGY Production Systems ( Make to stock/ Order, Assemble to order) Product Plans Outsourcing Process Decisions Quality Decisions Capacity Decisions ( Facility planning, location, layout) Operating Decisions. Technology Decisions. Resource Planning. LINKAGE BETWEEN CORPORATE, BUSINESS & OPERATION STRATEGY 13
- 14. ELEMENTS OR COMPONENTS OF OPERATION STRATEGY• The six elements of operation strategy are: • 1)Designing of the production system – The product design has two varieties - Customised product design – The design is customised when the volume is low • and special features are inbuilt. Eg: Turbines, boiler, air compressors etc. Standard product design – The designer adopt a universal design so that the product will have wide acceptance across the customer. Eg: Air conditioners, TV. 14
- 15. • There are two types of production systems: Product focussed – system is adopted where mass production is using a group • of machines. Eg: Automobiles, computer. Process focussed – system is based on a single task like painting, packing, heat. • 2) Facilities for the production and services – Production allows the firm to provide the customer with products of low cost, faster delivery, on-time delivery.
- 16. 3) Product &service design and development – Generating the idea. Creating the feasibilityreports. Designing the prototype Preparing a production model. Evaluating the economies of scale for production. Testing the product in the market. Obtaining feedback. Creating the final design and starting the production. Product life cycle introduced in the market has its own life cycle. 1) Introduction stage. 2) Growth stage. 3) Maturity stage. 4) Decline stage. ELEMENTS OR COMPONENTS OF OPERATION STRATEGY 16
- 17. QUALITY FLEXIBILITY OPERATION STRATEGY TIME 7 OPERATION MANAGEMENTAND STRATEGY Phases of Operations Strategy Quality is the driving factor for any organisation. Quality includes Just-In-Time, Lean Manufacturing, Total Quality Management, Total Productive Maintenance. Flexibility enables a firm to meet the changing demands of the customers to develop new processes and materials and to make the organisation more agile in its manufacturing Planning Design Time Processing Time Changeover Time Delivery Time Response Time Factor To Be Reduced During Operation
- 18. OPERATION MANAGEMENT AND STRATEGY 1 8 Strategic Decision Making- is most crucial management function. Decisions commit the organisation and its members to activities which have financial repercussions and effect the functioning of others departments or division. Strategic Decision making consistof :- • Data Gathering • Analysis • Predicting outcomes • Environmental Scanning • Core competencies Environmental Scanning • Competitors may be gaining an edge by diversification, making forays into firm niche market by making new and better products. • Suppliers could be forming cartels and preparing to drive hard bargains. •Government could be passing laws and issuing order which could affect the supply of materials. Now it is used to be SWOT analysis and PESTLE analysis.
- 19. Customer Relationship New Product Services Development Supplier Relationship Order Fulfillments. 1 9 OPERATION MANAGEMENTAND STRATEGY Strategic Decision Making •Core competencies – The objective to use unique strengths to create and develop an organisation. Core processes of an organisation are determined by the core competencies. Four main core processes are mentioned:
- 20. 10 OPERATION MANAGEMENTAND STRATEGY Differentiation Strategic – is referred to the long term priorities or goal achieve. “Companies have different potential in terms of maneuverability along with target market place (channels), promotion and price. These are affected by the company’s position in the market, and the industry structure”. The BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. market share relative to competitors: Abusiness unit that has a large market share in a fast growing Stars may industry. generate cash, but because the market is growing rapidly they require investment to maintain their lead. If successful, a star will become a cash cow when its industry matures a business unit that has a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units A business unit thathas a small market share in a high growth market. These business units require resources to grow market share, but whether they will succeed and become stars is unknown. A business unit that has a small market share in a mature industry. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.
- 21. INDUSTRY BESTPRACTICES Pragmatic Benchmarking – is a method of measuring a company’s processes, methods and procedures in a way that all functions in great details. Benchmarking - Aprocess of comparison with a superior performer anywhere in the world to improve quality . The following are types of benchmarking:- 21 Process benchmarking – Businessprocess. Financial benchmarking. Performance benchmarking. Product benchmarking. Strategic benchmarking. Functional benchmarking. Benchmarking is classified into two groups : Internal Benchmarking – refers to comparison within the organisation or industry. External Benchmarking – refers to comparison with outsiders.
- 22. INDUSTRY BESTPRACTICES Steps inBenchmarking – Planning, analysis, integration, and action are the four steps recognized in the process of benchmarking. Targets are set and activities are conducted to reach them. 22 Planning – determines the process, service, or the product to be benchmarked on which metrics are assigned for collection of data. Analysis – Analysed data gives inputs for comparison with the target company’s performance on the parameter benchmark on which data was collected. Integration – Resources are required across all functions to achieve the target needs. Integration involves putting together resources like people, equipments and communication, so that progress is unhindered. Action – When changes are needed, actions have to be planned according to the steps earlier stated. The teams are provided with necessary leadership, authority and supporting facilities to enable them to complete all activities within the time frame set for the purpose.
- 23. MANUFACTURING STRATEGIES There are many types of competitive priorities for process used in the manufacturing of products. The production systems are: Batch production. Mass production. Customised production. Assemble products. 23 The following are three dominant strategies: Make to stock – Manufacturing firms adopt this strategy to ensure immediate delivery of the products, minimizing delivery times. Eg: chemical, soft drink. Assemble to order – This strategy serves as a competitive priority of customization and ensures fast delivery. Eg: Paints to colors, furniture. Make to order – The firms set of processes that suits the manufacture based on the customer requirements. This strategy gives a higher degree of customization, one of the major competitive priority.