Operations as a Transformation

Process

Operations Management Input

transformed
resources
Environment

Material Output
The
Introduction Information
Customers
transfor-
Goods

INPUT OUTPUT
mation
Facilities process Output
Staff
Services
Input
transforming Environment
resources

Output: Goods & Services Illustration of Input – Output

Transformation Process
Input Resources Transformation Output
Process
Automobile Raw material, workers, Manufacturing Finished car
equipment
More like a More like
manufacturing a service Aircraft, pilots, crew, Move passengers Transported
Airline
process process passengers passengers

Department Goods for sale, staff, Display goods, sell Customers & goods
Store customer goods, Sales advice together

Dentist Dental surgeons, Check & treat teeth, Patients with

• Intangible equipments, patients give preventative healthy teeth &
• Tangible advice gums
• Output can be inventoried • Output cannot be inventoried Zoo Zoo keepers, animals, Display animal, Entertained
• Low customer contact • High customer contact customers educate customers, /informed
breed animal customers
• Consumption after • Consumption are production Police officers, Prevent / solve crime, Lawful society,
Police
production simultaneous information, public arrest criminal public with feeling
of security
• Quality
Figure 1.3 is evident • Quality difficult to judge

1
 Input: Transformed Resources Input: Transforming Resources

Two types: 1) facilities and 2) staff

Mixture of 1) Material, 2) Information & 3) Customers
Ferry company Paper Radio station
Predominantly Predominantly Predominantly manufacturer
Materials processors Information processors Customer processors Types of Ships Pulp-making vats Broadcasting
All mfg. operations Accountants Hairdressers On-board navigation Paper-making equipment
Facilities
Mining & extraction Bank headquarters Hotels equipment machines Studios and studio
Dry docs Reeling equipment equipment
Retail operations Market research company Hospitals transmitters outside
Material-handling equipment Slitting equipment
Warehouse Financial analysts Mass rapid transports broadcast vehicles
On-shore building Packing machinery
Postal services News service Theatres
Warehouses Steam-generating
Container shipping line Univ. research unit Theme Parks boilers, warehouses
Trucking company Telecom company Dentists Sailors, Engineers Operators Disc jockeys
Types of
Staff Catering staff Chemists & chemical Announcers
On-board shop assistants engineers Technicians
Cleaners Process plant engineers
Maintenance staff

Different types of Performance of Process Output /

transformation processes Competitive Priorities
Material processors Information Customer
processors processors COST Definition Process Considerations Example
Physical Mfg. operations, Hairdressers, plastic 1. Low-cost Delivering a service or a Processes must be designed and Local Manuf.,
operations product at the lowest operated to make them efficient Accer
properties mining & extrac. surgeons possible cost
Informational Bank HQs, QUALITY
properties accountants 2. Top quality Delivering an outstanding May require a high level of Apple
service or product customer contact and may require
Possession Retail operations Financial analysis, superior product features
market research 3. Consistent Producing services or Processes designed and McDonald’s
quality products that meet design monitored to reduce errors and
Location Postal service, port & Telecom company Public transport, taxi specifications on a prevent defects
distrbtn consistent basis

Storage/Accomod Warehouse Library Archives Hotels TIME

ation 4. Delivery Quickly filling a Design processes to reduce lead Dell , Pizza
speed customer’s order time
Physiological Hospitals & other Meeting delivery-time Planning processes to increase FedEx, Pizza
5. On-time
state health care delivery promises percent of customer orders
shipped when promised
Psychological Education, theatres,
6. Development Quickly introducing a new Cross-functional integration and Mobile companies
state psychoanalysts speed science or a product involvement of critical external
suppliers

2
Performance of Process Output /
Production System Design
Competitive Priorities

FLEXIBILITY Definition Process Considerations Example Strategic

7. Customizatio Satisfying the unique Low volume, close customer Thermax Process Choice fit Competitive
n needs of each customer contact, and easily reconfigured
by changing service or
products designs Strategy Priorities
8. Variety Handling a wide Capable of larger volumes than Flipkart
assortment of services or processes supporting
products efficiently customization
9. Volume Accelerating or Processes must be designed for The United States
flexibility decelerating the rate of excess capacity Postal Service
production of service or (USPS)
products quickly to
handle large fluctuations  The process chosen should reflect the desired
in demand
competitive priorities

Product-Process Matrix Product-Process Matrix

One of Low Volume High Volume
a kind Many Products Few Products
 For manufacturing organization it brings together Project (construction)
1. Product customization & Volume
Job Shop (machine shop)
2. Process characteristics Very
Jumbled
Flow
 Process choices include job, batch, line, and Batch
Process (apparel)
continuous flow processes
 Production include make-to-order (MTO),
Assembly
assemble-to-order (ATO), and make-to-stock Line (auto assembly)
(MTS)
Continuous
Rigid Process
Flow (sugar mill)

3
 Product-Process Matrix Materials in Manufacturing

RM : Raw materials

WIP : Work in Process

FG : Finished good

Examples ?

Poor Good

Manufacturing Deliverable

Process Summary
Customer response time

High Moderate Low

Raw Materials Work-in-Process (WIP) Finished Products Operations Management

Dell,
Thermax Dell,
Bajaj
MTO ATO
Subways
MTS
is
Job Line
the process of managing resources to deliver
Continuous flow
Batch Batch Line

Flexibility (i.e. Product varieties

Batch Goods & Services to Customers
customization) Delivery speed Cost
Top quality Delivery speed
On-time delivery

Customer Interface point

4
 Objectives on OM I Operations : Consultant approach
 1) Introducing the role of operation and understanding • Operations improvement double the plant output
the various operation systems and providing the basic Plant can produce 50-60 % more with present facilities and can almost double the production by
adding a few balancing equipments.
concepts on how it can be managed to meet required Plant Layout & Materials Handling , Materials Planning and Production Planning &
competitive advantage. Scheduling, Production system from Batch to Flowline.

 2) Developing the ability to analyze and map the firm’s • Faster delivery at lower cost through productivity & process improvements
Production paradigm changed from purely ‘Made-To-Order’ to a combination of
operation and also measuring and improving key ‘Made-To-Stock’ & ‘Made-To-Order’.
performance measures.
• Increased Productivity & improved Quality from existing plant
 3) Proving techniques for planning strategic, tactical Process Capability studies to address Quality issues, which led to 15% drop in and one sixth
and operational decisions in manufacturing and service lesser “Seconds” Quality products generated
environments. • Production capacity increased 75% with facilities redesign
Conventional process based plant layout was reorganise into facilities, with some additional
equipments, for Focussed Manufacturing by creating 3 Plants-Within-Plant using Pull-System
of production with Kanban.