UNIT : 1

Operations management
Operations management is an area of management concerned with designing and
controlling the process of production and redesigning business operations in the
production of goods or services.[1] It involves the responsibility of ensuring
that business operations are efficient in terms of using as few resources as needed
and effective in terms of meeting customer requirements. Operations management is
primarily concerned with planning, organizing and supervising in the contexts of
production, manufacturing or the provision of services.
It’s Objectives
Objectives of production management may be amplified as under:

• Producing the right kind of goods and services that satisfy customers’ needs
(effectiveness objective).
• Maximizing output of goods and services with minimum resource inputs (efficiency
objective).
• Ensuring that goods and services produced conform to pre-set quality specifications
(quality objective).
• Minimizing throughput-time- the time that elapses in the conversion process- by
reducing delays, waiting time and idle time (lead time objective).
• Maximizing utilization of manpower, machines, etc. (Capacity utilization objective).
• Minimizing cost of producing goods or rendering a service (Cost objective).

Functions
• Finance - Finance is a crucial component within operations management. It is essential to make
sure that all finances have been utilized to their fullest extent and are being properly carried out
to ensure for optimized creation of goods and services. Proper utilization of finances will allow
for a product or service to be created that will satisfy overall consumer needs.
• Strategy - When utilizing strategy within operations management, this refers to planning tactics
that can aid through optimized resources and development of a competitive edge over other
businesses. Many business strategies include supply chain configuration, sales, capacity to hold
money, and optimum utilization of human resources.
• Operation - This function of operations management is concerned with planning, organizing,
directing, and overall control of all activities within the organization. This is the primary function
of operations management and will effectively aid in converting raw materials and human efforts
into a durable good and service that consumers will be able to utilize.
• Product Design - With new technology becoming available, the selling of a product become
much more simple. One of the main duties of operations management is to ensure that a product
is designed properly and caters to market trends and needs of consumers. Modern-day consumers
 are concerned about quality instead of quantity, which is why it is so crucial to develop a durable
and top-notch quality product.
• Forecasting - Forecasting is the process in which software makes an estimate of certain events
that may occur in the future. In operations management, forecasting can take an estimate of
consumer demand, which correlates with production through creating an accurate amount of
product needed within a given time. Overall, forecasting plays a crucial role within the
production process.

Scope
The scope of operations management based on the interrelationship of three aspects, namely:

1. Structural aspects, in the form of input that will be transformed according

to criteria of the desired products, machinery, equipment, formulas and models.
2. Functional aspects, namely the link between the
component input, with interaksinyamulai of the
planning, implementation, control, and improvements to obtain optimum perfor
mance, so that operations can be run continuously.
3. Environmental aspects, is the tendency that occurs outside the system, such
as community, government, technology, economics, political, social,
cultural, demonstrated ability to adapt.

Each manager will carry out basic functions of management processes. Management
process consists of planning, organizing, setting up employees,
directing, and controlling. Operations managers to
implement these management processes in decision making in operations management functions.

Based on the aspects mentioned above, the scope of operations management is defined to be
ten important decisions in operations management are as follows:
1. The design of products and services
2. manage the quality
3. the strategy process
4. strategic location
5. Layout strategy
6. Human resources
7. Supply chain management
8. inventory management
9. scheduling
10. maintenance
Types Of Production Systems
There are three common types of basic production systems: the batch system, the
continuous system, and the project system. In the batch system, general-purpose
equipment and methods are used to produce small quantities of output (goods or
services) with specifications that vary greatly from one batch to the next. A given
quantity of a product is moved as a batch through one or more steps, and the total
volume emerges simultaneously at the end of the production cycle. Examples include
systems for producing specialized machine tools or heavy-duty construction equipment,
specialty chemicals, and processed food products, or, in the service sector, the system
for processing claims in a large insurance company. Batch production systems are often
referred to as job shops.
* In the continuous system, items to be processed flow through a series of
steps, or operations, that are common to most other products being processed. Since
large volumes of throughput are expected, specially designed equipment and methods
are often used so that lower production costs can be achieved. Frequently the tasks
handled by workers are divided into relatively small segments that can be quickly
mastered and efficiently performed. Examples include systems for assembling
automobile engines and automobiles themselves, as well as other consumer products
such as televisions, washing machines, and personal computers. Continuous
production systems are often referred to as assembly systems or assembly line systems
and, as noted below, are common in mass production operations.
* The two types of systems mentioned thus far are often found in combination. In
the production of integrated circuits for electronic equipment, for example, thousands of
circuits are processed as a batch on several large slices of silicon crystal through
dozens, or even hundreds, of processing steps. The tiny circuits, each only a few
millimetres on a side, are then separated and individually assembled with other circuit
elements on a continuous line to produce the final product.
* The third type of production system is the project, or “one-shot” system. For a
single, one-of-a-kind product, for example, a building, a ship, or the prototype of a
product such as an airplane or a large computer, resources are brought together only
once. Because of the singular nature of project systems, special methods of
management have been developed to contain the costs of production within reasonable
levels.

Operations strategy
A plan specifying how an organization will allocate resources in order to support
infrastructure and production. An operations strategy is typically driven by the overall
business strategy of the organization, and is designed to maximize the effectiveness of
production and support elements while minimizing costs.

Facility Planning: Steps, Process, Objectives, Importance

 Meaning : Facility planning or strategic facility planning recognizes that every decision
made in business planning has a direct impact on an organization’s real estate assets
and needs.

4 Steps of Facility Planning

1. Understanding.
2. Analyzing.
3. Planning.
4. Acting.

1. Understanding
The first step, understanding, requires a thorough knowledge of your organization’s
mission, vision, values, and goals.
2. Analyzing
Second, exploration of the range of possible futures and triggers is needed to analyze
your organization’s facility needs using analytical techniques — such as systematic
layout planning (SLP), strengths, weaknesses, opportunities and threats analysis
(SWOT), strategic creative analysis (SCAN), or scenario planning.
3. Planning
Third, once the analysis is completed, plans for potential responses and periodic
updates to existing plans in response to changes in the market need to be developed to
meet the long-range needs of your specific organization.
The following are major steps in setting up the plan:

▪ Document the primary objectives to be addressed (the gap) in the SFP.

▪ Evaluate sites, zoning, costs, labor, competition and all factors critical for success.
▪ Conduct financial and risk analysis to focus on finding the maximum value.
▪ Develop alternatives with recommendations and priorities.
▪ Develop a process for marketing the recommended SFP to gain management
approval.
▪ Obtain financial and other approvals needed to launch the action phase.

4. Acting / Action
Fourth, take actions as planned to successfully implement the strategic facility planning.
Take actions as planned and implement the SFP. Feedback from actions taken can be
incorporated into the next plan and/or project to provide continuous improvement to
future SFPs.
Conculsion
The cyclical nature of constant planning for the changing future and adopting plans
along the way are normal
events. These changes and updates must be managed to ensure they are achievable.
7 Major Factors Affecting Plant Layout
Some of the major factors which affect plant layout are: (1) Policies of management (2)
Plant location (3) Nature of the product (4) Volume of production (5) Availability of
floor space (6) Nature of manufacturing process and (7) Repairs and maintenance of
equipment and machines.

(1) Policies of management:

It is important to keep in mind various managerial policies and plans before deciding
plant layout.

Various managerial policies relate to future volume of production and expansion, size of
the plant, integration of production processes; facilities to employees, sales and
marketing policies and purchasing policies etc. These policies and plans have positive
impact in deciding plant layout.

(2) Plant location:

Location of a plant greatly influences the layout of the plant. Topography, shape, climate
conditions, and size of the site selected will influence the general arrangement of the
layout and the flow of work in and out of the building.

(3) Nature of the product:

Nature of the commodity or article to be produced greatly affects the type of layout to be
adopted. In case of process industries, where the production is carried in a sequence,
product layout is suitable. For example, soap manufacturing, sugar producing units and
breweries apply product type of layout. On the other hand in case of intermittent or
assembly industries, process type of layout best suited. For example, in case of
industries manufacturing cycles, typewriters, sewing machines and refrigerators etc.,
process layout method is best suited.

Production of heavy and bulky items need different layout as compared to small and
light items. Similarly products with complex and dangerous operations would require
isolation instead of integration of processes.

(4) Volume of production:

Plant layout is generally determined by taking into consideration the quantum of
production to be produced. There are three systems of production viz.,
(a) Job production:
Under this method peculiar, special or non- standardized products are produced in
accordance with the orders received from the customers. As each product is non-
standardized varying in size and nature, it requires separate job for production. The
machines and equipment’s are adjusted in such a manner so as to suit the requirements
of a particular job.

Job production involves intermittent process as the work is carried as and when the
order is received. Ship building is an appropriate example of this kind. This method of
plant layout viz., Stationery Material Layout is suitable for job production.

(b) Mass production:

This method involves a continuous production of standardized products on large scale.
Under this method, production remains continuous in anticipation of future demand.
Standardization is the basis of mass production. Standardized products are produced
under this method by using standardized materials and equipment. There is a
continuous or uninterrupted flow of production obtained by arranging the machines in a
proper sequence of operations. Product layout is best suited for mass production units.

(c) Batch production:

It is that form of production where identical products are produced in batches on the
basis of demand of customers or of expected demand for products. This method is
generally similar to job production except the quality of production.

Instead of making one single product as in case of job production a batch or group of
products is produced at one time, It should be remembered here that one batch of
products has no resemblance with the next batch. This method is generally adopted in
case of biscuit and confectionary manufacturing, medicines, tinned food and hardware’s
like nuts and bolts etc.

(5) Availability of floor space:

Availability of floor space can be other decisive factor in adopting a particular mode of
layout. If there is a scarcity of space, product layout may be undertaken. On the other
hand more space may lead to the adoption of process layout.
(6) Nature of manufacturing process:
The type of manufacturing process undertaken by a business enterprise will greatly
affect the type of layout to be undertaken.

A brief mention of various processes is given us under:

(i) Synthetic process:
Under this process two or more materials are mixed to get a product. For example, in
the manufacture of cement, lime stone and clay are mixed.

(ii) Analytical process:

This is just the reverse of synthetic process. Under this method different products are
extracted from one material. For example, from crude oil, petroleum, gas, kerosene and
coal tar etc. are extracted.

(iii) Conditioning process:

Under this process the original raw material is given the shape of different products and
nothing is added to it. Jute is an important example of this kind.

(iv) Extractive process:

This method involves the extraction of a product from the original material by the
application of heat or pressure. This involves the process of separation, for example,
aluminium is separated from bauxite

(7) Repairs and maintenance of equipment and machines:

The plant layout should be designed in such a manner as to take proper care with regard
to repairs and maintenance of different types of machines and equipment being used in
the industry. The machines should not be installed so closely that it may create the
problems of their maintenance and repairs. It has been rightly said that “Not only
should access to parts for regular maintenance such as oiling, be considered in layout
but also access to machine parts and components when replacement and repair are
fairly common”.

Techniques or tools used for the design of good plant layouts

1. Charts and diagrams:
 In order to achieve work simplification, production engineers make use of several charts
and diagrams for summarizing and analyzing production process and procedure. These
include

• Operation process chart: It subdivides the process into separate operations and
inspection. When a variety of parts and products are manufactured which follow a
different path across several floor areas, an operation process chart may be necessary
for the important material items or products. The flow lines of the charts indicate the
sequence of all operation in the manufacturing cycle.
• Flow process chart: This chart is the graphic summary of all the activities taking place
on the production floor of an existing plant. By preparing this type of chart, it can be
found out as to where operations can be eliminated , rearranged, combined, simplified
or subdivided for greater economy.
• Process flow diagram: The diagram is both supplement and substitute of process flow
chart. It helps in tracing the movement of material on a floor plan or layout drawing. A
diagram may be drawn to scale on the original floor plan to show the movement of work.
It is a good technique to show long materials hauls and backtracking of present layouts,
thereby indicating how the present layout may be improved. Colored lines can show the
flow of several standards products.

Layouts, thereby indicating how the present layout may be improved. Colored lines can
show the flow of several standard products. This diagram can be used to analyze the
effectiveness of the arrangement of the plant activities, the location of specific
machines, and the allocation of space. It shows how a more logical arrangement and
economical flow of work can be devised.
2. Machines data card: This card provides full information necessary for the placement
and layout of equipment. The cards are prepared separately for each machine. The
information generally given on these cards include facts about the machine such as
capacity of the machines, scape occupied, power requirements, handling devices
required and dimensions.
3. Templates: Template is the drawing of a machine or tool cut out from the sheet of
paper. Cutting to scale shows the area occupied by a machine. The plant layout
engineer prepares a floor plan on the basis of reel vent information made available to
him. The template technique is an important technique because (i) it eliminates
unnecessary handlings, (ii) minimize backtracking of materials, (iii) it makes the
mechanical handling possible, (iv) it provides a visual picture of proposed or existing
plan of layout at one place, (v) it offers flexibility to meet future changes in the
production requirements.
4. Scale models: Though the two-dimensional templates are now in extensive use in
the fields of layout engineering but it is not much use to executives who cannot
understand and manipulate them .One important drawback of template technique is that
it leaves the volume, depth, height and clearance of the machines to the imaginations of
the reader of the drawing. These drawbacks of the template technique have been
removed through the development of miniature scale models of machinery and
equipment cast in metal. With scale models, it has now become possible to move tiny
figures of men and machines around in miniature factory .The miniature machines and
models of material handling equipment are placed in a miniature plant and moved
around in pawn on a chessboard.
5. Layout drawings: Completed layouts are generally represented by drawings of the
plant showing wall, columns, stairways, machines and other equipments, storage areas
and office areas.
The above techniques and tools are used for the planning of layout for the new plant.