Operations

Management
Course Learning Outcomes:
1. Define operations functions and its strategic dimensions
2. Explain the considerations managers make in assessing the risks in a project and
calculate the probability of completing a project on time
3. Analyse the importance of good quality, the cost of poor quality, how quality
management systems have evolved and learn how to use quality tools in problem
solving
4. Evaluate the key factors that determine the appropriate choice of an inventory system
Content:
Session Session
Topics Topics
No No
Introduction to operations management concept, 14 Quality Management
1 15 Quality Costs
functions
Analytical Tools for Six Sigma & Continuous
Operations strategy, Competitive strategic 16
2 Improvement
dimensions
17 Measuring process capability
3 Types of Manufacturing process 18-19 Process Control Charts
4 Service processes Supply chain management -Strategic sourcing and
20
5 Facility Location bullwhip effect
6-7 Facility Layout-Types 21 Supply chain uncertainty framework
Forecasting in operations and Qualitative techniques
8 Introduction to project management 22
of forecasting
9 Network Diagram and Critical Path Identification 23-24 Quantitative Techniques of forecasting
25 Forecast errors
10 Slack Timing Identification 26 Inventory Management introduction
11 Programme Evaluation & Review Technique 27-28 P & Q-models of Inventory Management
12-13 Time Cost Networking Models 29 Price-Break Models
Contemporary developments in Operations
Mid-term Test 30
Management
Strategy:
Strategy: Becoming Competitive

Mission The reason for the existence of an

organization

Goals Provide detail and scope of the mission

Strategies Plans for achieving organizational goals

Strategy: Becoming Competitive

Mission The reason for the existence of an

organizationfor achieving organizational goals
• Microsoft: To help people and businesses throughout the
world to realize their full potential
• Apple: To bring the best user experience to customers
• Starbucks: To inspire and nurture the human spirit—one
cup and one neighbourhood at a time
• Walt Disney: To make people happy
Strategy: Becoming Competitive

Mission The reason for the existence of an

organization

Goals Provide detail and scope of the mission

Strategies Plans for achieving organizational goals

Strategy: Becoming Competitive

Mission The reason for the existence of an

organization

Goals Provide detail and scope of the mission

• Social responsibility: this pertains to fair and
beneficial business practices toward labor, the
Strategies Plans for achieving organizational goals
community, and the region in which a firm conducts
its business
• Economic prosperity: the firm is obligated to
compensate shareholders who provide capital
• Environmental stewardship: this refers to the firm’s
impact on the environment
Strategy: Becoming Competitive

Mission The reason for the existence of an

organization

Goals Provide detail and scope of the mission

Strategies Plans for achieving organizational goals

Strategy: Becoming Competitive
Strategy: Operations Strategy

• Operations and Supply Chain Strategy: Setting broad

policies and plans for using the resources of a firm
• Must be integrated with corporate strategy
• Can be viewed as part of a planning process that coordinates
operational goals with those of the larger organization

• Operations effectiveness: performing activities in a

manner that best implements strategic priorities at a
minimum cost
Strategy: Competitive Dimensions
Price
• Make the product or deliver the service cheap Case: Narayana Health
Quality Care System
• Make a great product or delivery a great service
https://www.youtube.com/watch?v=wXvTzpapa-s
Delivery Speed
• Make the product or deliver the service quickly

Delivery Reliability 1. Mission

• Deliver it when promised 2. Goal
Coping with Changes in Demand 3. Business Strategy
4. Operations Strategy
• Change its volume
5. Comp. Dimensions
Flexibility and New-Product Introduction Speed
• Change it
Strategy: Competitive Dimensions
Case: Narayana Health Care System
1. Mission: To evolve as the most preferred destinations for quality
healthcare that provides a comprehensive range of services and is
trusted for personalized care with compassion. Committed to deliver
quality & personalized care to improve the well-being of patients and
communities we serve.
2. Goal: To make a positive difference in the lives of the people by engaging
in activities that eliminate or alleviates pain and suffering to the
underprivileged sections of the society.
3. Business Strategy: Low-Cost, High-Quality Tertiary Care ith Hybrid Pricing
Model
4. Operations Strategy: Operational Synergy
5. Comp. Dimensions: Price & Quality
Strategy: Competitive Dimensions – Other Criteria

Technical liaison and support

• A supplier may be expected to provide technical assistance for product development

Meeting a launch date

• A firm may be required to coordinate with other firms on a complex project

Supplier after-sale support

• An important competitive dimension may be the ability of a firm to support its
product after the sale
Environmental impact
• This dimension is related to environmental/green criteria

Other dimensions
• These typically include such factors as colors available, size, weight, location of the
fabrication site, customization available, and product mix options
Strategy: Trade-Offs
• Management must decide which parameters of performance
are critical and concentrate resources on those
characteristics
• For example, a firm that is focused on low-cost production
may not be capable of quickly introducing new products
• Straddling: seeking to match a successful competitor while
maintaining its existing position
• It adds features, services, or technology to existing
activities - Often a risky strategy

Case: Narayana Health Care System

Strategy: Order Qualifiers & Order Winner

• Order Qualifiers: those dimensions that are necessary for

a firm’s products to be considered for purchase by
customers
• Features customers will not forego

• Order Winners: criteria used by customers to differentiate

the products and services of one firm from those of other
firms
• Features that customers use to determine which product to
ultimately purchase
Case: Narayana Health Care System
Strategy: Implementation
IKEA: Large Variety at Low Price
• Targets young, low cost buyers
• Uses a self-service model showing
furniture in familiar settings
• Designs its own low-cost, modular,
ready-to-assemble furniture
• Stores stock the products in boxes
• Customers pick their own boxes from
inventory
• Offers in-store child care & extended
hours
Strategy: Implementation
IKEA: Large Variety at Low Price
Strategy: Implementation

Case: Narayana Health Care System

Strategy: Formulating Operations Strategy
Self study
Strategy: Performance Measurement

Output
Performance = -----------------
Input
Strategy: Performance Measurement

Output
Performance = -----------------
Input
Strategy: Performance Measurement - Productivity

Case: Narayana Health Care System

Strategy: Performance Measurement - Productivity

Business Productivity Measure

Restaurant Customers (meals) per labor hour

Retail store Sales per square foot

Chicken farm Pounds of meat per pound of feed

Utility plant Kilowatt hours per ton of coal

Paper mill Tons of paper per cord of wood

Strategy: Performance Measurement - Productivity
M/s ABC Ltd makes high-performance Carrom Boards for home players. Below is
information about the inputs and outputs for one model, the CB-1975.
Units sold 1,217
Sale price each Rs. 1,700
Total labor hours 8,672
Wage rate Rs 120/hour
Total materials Rs 460,000
Total energy Rs 80,000

Calculate the labor productivity in sales revenue/labor expense.

Calculate the multifactor productivity in sales revenue/total expenses.

Strategy: Performance Measurement - Productivity
Strategy: Performance Measurement - Productivity
Operations Management – Strategy

Topics:
• What is Operations Strategy?
• Competitive Dimensions
• Formulating Ops Strategy
• Implementing Ops Strategy
• Productivity