Hut 310: Management For Engineers: Functional Areas of Management

GOVERNMENT COLLEGE OF ENGINEERING KANNUR
DEPARTMENT OF ELECTRICAL & ELECTRONICS ENGINEERING

6th SEMESTER ELECTRICAL & ELECTRONICS ENGG. 2021 Admsn
HUT 310: MANAGEMENT FOR ENGINEERS

MODULE 5:
FUNCTIONAL AREAS OF MANAGEMENT
Part 02
References:
1. H. Koontz, H. Weihrich, Essentials of Management, Tata McGraw Hill, 10th Ed.
2. O. P. Khanna, Industrial Engineering and Management, Dhanpat Rai & Sons, 1991.
3. R. L. Daft, New Era Management, 11th Ed., Cengage
4. H. Weirich, M. V. Cannice and H. Koontz, Management: A Global, Innovative and
Entrepreneurial Perspective, McGraw Hill Education, 14th Edition
5. J. P. Mahajan, Management, Theory and Practices, Ane Books, ND, 2011.
6. L. J. Krajewski, M. K. Malhotra, L. P. Ritzman and S. K. Srivastava, Operations
Management, Pearson, 11th Ed.
7. Tripathy and Reddy, Principles of Management, 5th Ed, TMH
8. Rajesh Kumar R, Principles of Management, Jothis Publications, Kochi, 2017.
9. B. R. Mishra, Management Principles and Application, DDCE Utkal.
10. M. Mahajan, Industrial Engineering and Production Management, Dhanpat Rai &Co.
FUNCTIONAL
11. OpenStax, Principles AREAS
of Management, OF MANAGEMENT
Rice University, Texas
12. M. Carpenter, T. Bauer, B. Erdogan, Management Principles, Creative Commons.
OPERATIONS MANAGEMENT
In Module 3 we have gone through the basics of production management and productivity as aprt of
Operations management.
Production/Operation management is the process which combines and transforms various resources
used in the production/operation subsystem of the organization into value added products/services in
a controlled manner as per the policies of the organization.
Production & Operation management
The set of interrelated management activities which are involved in manufacturing certain products
is called production management;
then corresponding set of management activities for service management for service as output is
called as operation management.
Eg: Products/goods:
- Boiler with a specific capacity,
- Constructing flats,
- Car, bus, radio, television etc….
Services:
- Hospitals, Medical facilities,
- Airline/ Travel booking services.etc.. .
- consultants, restaurants, musicians, etc
Operations Management
Production and operations managers not only oversee the making of goods or delivery of services
but also have a principal role in:
- quality control,
- planning,
- improving systems and
- customer satisfaction.
• Decision Areas of Operations Management
General manager/ Top level managers should integrate the divergent interests of the various
functional managers such as Production manager, Sales manager, Finance manager etc…
Operational manager can coordinate the following areas for better functioning.
- Location Strategy...
- Layout Design and Strategy.
- Design of Goods and Services/ Product design.
- Process and Capacity Design.
- Human Resources and Job Design. ...
- Materials management.
- Maintenance management,
- Quality control and Management. ...
- Supply Chain Management. ...
- Inventory Management
- Production and planning control, etc.
A system approach/ detailed schematic for the operations management is shown below.
• Some important aspects of the above operational management roles are briefly explained below.
- Inventory Control:
- Supply Chain Management- SCM:
- Quality Control Circle: or Quality Control
INVENTORY CONTROL:
Inventory control is the process of keeping the right number of parts and products in stock to avoid
shortages, overstocks, and other costly problems.
The four types of inventory are:
- Raw Materials,
- Finished Goods,
- Semi finished products/ Work-in-process (WIP).
- Maintenance, Repair, and Overhaul (MRO),.etc..
• The advantages of an inventory control:
- To provide a reserve stock for variations in lead times of delivery of materials…
- Smooth and uninterrupted production,
- No stock out,
- The timely delivery of goods and service,
- Improvement in customer’s relationship,
- To ensure timely action for replenishment,
- Efficient purchasing, storing, consumption and accounting for material,
- Eliminates the possibility of duplicate ordering
- Economy in (mass) purchasing,
- Efficient utilization of working capital.
- Maintain real-time inventory levels,
- Reduce manual and labour inaccuracies,
- Short-term and long-term stock forecasting and procurement,
- Improves internal stock handling efficiency,
- Optimize your logistic workflow, etc…
• Just-in-time (JIT) inventory:
JIT inventory system is a management strategy where company receive goods as close as possible
to when they are actually needed,
- it does not keep a stock of parts/ components,
- here resources are made available whenever required without using any large stock or storage.
• Lean production:
A production methodology focused on:
- eliminating waste,
- where waste is defined as anything that does not add value for the customer.
eg: Waiting, production interruptions, defects,
Overproduction, Overprocessing, etc..
- not only to manufacturing, it is applicable to all types of organizations and processes,..
SUPPLY CHAIN MANAGEMENT- SCM:

SCM is the handling of the entire production flow of a product or service to maximize quality,
delivery, customer experience and profitability.
• It deals with the management of the flow of:
raw materials, sub-assemblies, other goods, data, and finances related to a product or service,
from the procurement of raw materials to the delivery of the product at its final destination.
• Operation Management deals with internal process,
But, SCM deals with efficient flow of resources from and to external side, for internal process, in
an economical manner.
• SCM along with Value Chain Management aims at SCM with additional concern for customer
like external environment also, for providing the service at the greatest value at the lowest cost.
• Supply Chain manager duties may include:
- Managing activities related to purchasing, inventory control, and warehousing,
- Coordination of supply chain with other functional areas,like sales, marketing, finance,
production, or quality assurance.. etc.
- Manage supply chain staff,
- Forecasting demand for materials or products,
- Creating supply plans to ensure raw materials,
- Evaluating suppliers and supplier strategies,
- Evaluating risks to supply chains and suppliers,
- Troubleshooting issues in the chain
- Analyzing inventories,
- To reduce waste,
- Optimize customer service… etc
QUALITY CONTROL CIRCLE: or Quality Control / QC
Quality Control (QC) is required to building a successful business, that delivers products that meet or
exceed customers‘ expectations.
• QC is a group of people to meet regularly to solve the problems in the work.
Workers or Supervisors trained/ experienced in problem solving, Statistical Quality control, etc
will be included.
• Quality Assurance (QA) and Quality Control (QC) are two aspects of quality management.
• QA:..all the planned and systematic activities to provide confidence that a product or service
will fulfill requirements for quality,
- the guidelines, policies, and procedures..
- from initial stages onwards
• QC: .. the operational techniques and activities used
to fulfill requirements for quality of a product.
- product's actual review during production,
- inspection aspect during during the execution phase..
• The confidence provided by quality assurance is twofold:
- internally to management and
- externally to customers, government agencies,
regulators, certifiers, and third parties
• Need/ Advantages of QC:
- Improving the quality of products and services.
- Increasing the productivity of manufacturing processes, commercial business, corporations,
etc
- Reducing manufacturing and corporate costs.
- Improving the marketability of products/ service
- Reducing consumer prices of product/ services.
- Improving/assuring on time delivery/ availability
- Minimizes waste
- Reduce risk
- Improved customer loyalty, et…
• TOTAL QUALITY MANAGEMENT (TQM)
TQM in operations management is a Long term commitment to the continuous improvement of
quality, throughout the organization, with the active participation of all members
TQM is the continual process of:
- detecting and reducing or eliminating errors in manufacturing,
- streamlining supply chain management,
- improving the customer experience, and
- ensuring that employees are up to speed with training.
Major steps to TQM,
- Top management driven philosophy and Management commitment
- Commitment and Understanding from Employees. ...
- Quality Improvement Culture. ...
- Continuous Improvement in Process. ...
- Focus on Customer Requirements. ...
- Cooperation of suppliers etc
- Effective Control.
- Free flow of information, and Use of computer aided techniques
- It is not a one time effort,
- Requires Training and education, employee involvement etc.
Economic Order Quantity (EOQ):

Economic order quantity (EOQ)of a company is the ideal order size, allowing them to meet demand
without overspending.
Inventory managers calculate EOQ to minimize holding costs and excess inventory.
- to minimize logistics costs, warehousing space, stockouts, and overstock costs.
- Three Variables (or Inputs) are used to calculate EOQ:
D = Demand in units (annual)
S = Order cost
H = Holding costs (per unit, per year)
- Economic Order Quantity (EOQ) = √ [2DS/H]
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GOVERNMENT COLLEGE OF ENGINEERING KANNUR

DEPARTMENT OF ELECTRICAL & ELECTRONICS ENGINEERING

HUT 310: MANAGEMENT FOR ENGINEERS

SUPPLY CHAIN MANAGEMENT- SCM:

Economic Order Quantity (EOQ):

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