OPERATION MANAGEMENT II
Glossary:
Module – I
Operations: It refers to the processes that are used to transform the resources employed by a
firm into products and services desired by customers.
Operation Management: design, operation and improvement of the systems that create and
deliver the firms’ primary product or services.
Transformation Process: it uses resources to convert inputs into some desired output.
Core competency: one thing that a firm can do better than its competitors. It yields a long
term competitive advantage to the company.
Operation strategy: setting broad policies and plans for using the resources of a firm to best
support the firms’ long term competitive strategy.
Order winner: a dimension that differentiate the products or services of one firm from those
of another.
Order qualifier: a dimension used to screen a product or service of one firm from those of
another.
Straddling: occurs when a firm seeks to match what a competitor is doing by adding new
features, services, or technologies to existing activities. This often creates problems if certain
trade-offs need to be made
Design: It means the aesthetic design of a product, such as the external shape of a car or the
colour, texture, and shape of the casing of a can opener. In another sense, design can mean
establishing the basic parameter of a system. For example, before considering any details, the
design of a power plant might mean establishing the characteristics of the various units such
as generators, pumps, boilers, connecting pipes, and so forth. Yet another interpretation of the
word design is the detailing of the materials, shapes, and tolerance of the individual parts of a
product.
It is an activity that starts with sketches of parts and assemblies and then progress to the
computer aided design (CAD) work stations, where assembly drawings and detailed part
drawings are produced.
Job Design: The function of specifying the work activities of an individual or group in an
organisational setting.
Specialisation of Labour: It’s a practice where simple and repetitive jobs are assigned to
each worker.
Job Enrichment: Specialized work is made more interesting by giving the worker a greater
variety of tasks or by getting a worker involved in planning, organization and inspection. A
job is said to be enlarged horizontally if the worker performs a greater number of variety of
tasks and it is said to be enlarged vertically if the worker involves in planning, organising,
and inspecting his own work.
Social Technical System: A philosophy that focuses more on the interaction between
technology and work group. The approach attempts to develop jobs that adjust the production
process technology to the needs of the worker and work group.
Work Measurement: Job analysis for the purpose of setting time standards.
Time Study: separation of a job into measurable parts, with each element timed individually.
The individual times are then combined, and allowances are added to calculate a standard
time.
Work Sampling: Analysing a work activity by observing an activity at random times.
Statements about how time is spent during the activity are made from these observations.
Pre-determined Motion Time System (PMTS): Systems for deriving a time for a job by
summing data from tables of generic movement times developed in the laboratory.
Elemental Data: Used to derive a job time by summing times from a database of similar
combinations of movements.
Normal Time: The time that a normal operator would be expected to take to complete a job
without the consideration of allowance.
Standard Time: Calculated by taking the normal time and adding allowances for personal
needs, unavoidable work delays, and worker fatigue.
Explain about operation strategy
Strategy should describe how a firm intends to create and sustain value for its shareholders. Typically a
strategy breaks down into three major components: operations effectiveness, customer management, and
product innovation. It is important that a firm’s strategy align with its mission of serving the customer.
Complicating the situation is the fact that the needs of customers change over time, thus requiring
continuous change to strategy
Operation effectiveness relates to the core business processes needed to run the business. Business
process spans all the business functions from taking customer order, handling returns, Manufacturing
managing the updating of websites, to shipping products. Operational effectiveness is reflected directly
in the cost associated with doing business. Strategies associated with operational effectiveness, such as
quality initiatives, process redesign, and technology investments, can show quick near term
(12 to 24 months) results.
Customer management relates to better understanding and leveraging customer relationships. A strategy
that involves segmenting customers, for example may take a little longer to realize, perhaps two to three
year.
Product innovation involves the development of new product, market and relationships to sustain
growth. service companies may be able to implement a product innovation in as few as two to three
years, while manufacturers may take three to five years pharmaceutical firms may take as many as 10
years to reap benefits from a new product
Operations and supply management is significant since it relates to all three component of strategy. A
world class company recognizes that its ability to compete in the marketplace depends on developing an
operations and supply strategy that is properly aligned with its mission of serving the customer. A
company’s competitiveness refers to its relative position in comparison to other firms in the local or
global marketplace.
Module II
Aggregate planning- is a marketing activity that does an aggregate plan for the production
process, in advance of 6 to 18 months, to give an idea to management as to what quantity of
materials and other resources are to be procured and when, so that the total cost of operations
of the organization is kept to the minimum over that period.
BREAK EVEN ANALYSIS- The economic Comparison of location can be made by
identifying the fixed cost and variable cost & plotting break even analysis on a graph for each
location.
Calculate Capacity- The objective of calculating capacity should be a priority in the
aggregate planning process. Look at how many units you can produce per day, week or
month
Project Demand- Figure how many units will be in demand for the short term. Begin by
basing your calculations on a previous year's demand during a comparable time period.
Level Capacity Plan- A level strategy seeks to produce an aggregate plan that maintains a
steady production rate and/or a steady employment level.
Mixed Strategies- Most firms find it advantageous to utilize a combination of the level and
chase strategy.
Capacity Planning- Capacity planning refers to determining what kind of labour and
equipment capacities are required and when they are required.
Design Capacity: It refers to the maximum output that can possibly be produced in a given
period of time. It is the ideal situation.
Effective Capacity: Refers to the maximum possible output, given the changes in product
mix, machine maintenance, scheduling and operating problems, labour problems, etc.
Efficiency = Actual Output / Effective Capacity
Utilization = Actual Output / Design Capacity
Design Capacity
Design capacity of a facility refers to the fixed rate of output under normal conditions.
System capacity- system capacity refers to maximum output that can be produced
with in existing production facility.
Actual Output- it refers to the actual output obtained from a production facility .
MODULE III
Resource Requirement Planning- The process of converting the production plan or
the master production schedule into the impact on key resources, e.g., man hours,
machine hours, storage, standard cost , shipping cost and inventory levels.
Material Requirement Planning(MRP-I)- Material requirements planning (MRP) is
a system for calculating the materials and components needed to manufacture a
product. It consists of three primary steps: taking inventory of the materials and
components on hand, identifying which additional ones are needed and then
scheduling their production or purchase.
MRP II- It represents an effort to expand the scope of production resource planning
and to involve other functional areas of the firm in the planning process," such as
marketing, finance, engineering, purchasing, and human resources.
Poor inventory management-Close control over inventory is vital for profitability
and efficiency.
Just-in-time -(JIT) manufacturing has made good control processes even more
important.
Inadequate quality control- Customers have always had the ability to be
unforgiving, but never more so than in today’s climate of instant feedback and social
sharing.
Supply chain problems- There was a time when manufacturers sourced almost
everything they needed – whether raw materials or components – from local suppliers
master production schedule (MPS)- It is a plan for individual commodities to be
produced in each time period such as production, staffing, inventory, etc.It is usually
linked to manufacturing where the plan indicates when and how much of each product
will be demanded.
MODULE – IV
Project type- An unique undertaking for essentially a single purpose which is defined
by scope, quality, time, and cost objectives.
It is the art and science of directing human and material resources to achieve stated
objectives within the constraints of time, budget, and quality and to the satisfaction of
everyone involved .
Project life cycle-The project management life cycle is usually broken down into four
phases: initiation, planning, execution, and closure. These phases make up the path
that takes your project from the beginning to the end.
Gantt chart- It is commonly used in project management, is one of the most popular
and useful ways of showing activities (tasks or events) displayed against time.
Program evaluation and review technique (PERT) -It is a technique adopted by
organizations to analyze and represent the activity in a project, and to illustrate the
flow of events in a project. PERT is a method to evaluate and estimate the time
required to complete a task within deadlines.
Critical Path Method:-In project management, a critical path is the sequence of
project network activities which add up to the longest overall duration, regardless if
that longest duration has float or not. This determines the shortest time possible to
complete the project. There can be 'total float' (unused time) within the critical path.
Network Diagram-A network diagram is a graphical representation of the project and
is composed of a series of connected arrows and boxes to describe the inter-
relationship between the activities involved in the project. Boxes or nodes represent
the description of activities and arrows show the relationship among the activities.
Slack-Slack time can be defined as the amount of time a task can be delayed without
causing another task to be delayed or impacting the completion date of your project. ...
Because slack time can occur at any time, it's important for project managers to keep a
wealth of ideas in their back pocket.
Float-Float or slack is the amount of time a project or task can be delayed without it
impacting the overall deadline or other tasks in the project. Calculating them can help
you validate your project schedules and make sure you understand whether you'll be
able to deliver projects on time.
Critical Path- The path in a network diagram which takes the longest time in
completing all the activities in it. The time taken by the critical path is the over all
project completion time of the project.
Quality Assurance (QA)- it is defined as an activity to ensure that an organization is
providing the best possible product or service to customers.
Quality Design-Designing for quality and innovation is one of the three universal
processes of the Juran Trilogy, in which Juran describes what is required to achieve
breakthroughs in new products, services, and processes.
Control of Quality-Quality control popularly abbreviated as QC.
Quality control- it is to check whether the products meet the specifications and
requirements of the customer. If an issue or problem is identified, it needs to be fixed
before delivery to the customer.
Statistical Quality Control-Statistical quality control refers to the use of statistical
methods in the monitoring and maintaining of the quality of products and services.
X-Bar Chart-The x-bar and R-chart are quality control charts used to monitor the
mean and variation of a process based on samples taken in a given time.
R-chart-In order to use the R-chart along with the x-bar chart, the sample size n must
be greater than 1 and less than 11.
p Control Charts-A p control chart is used to look at variation in yes/no type
attributes data. There are only two possible outcomes: either the item is defective or it
is not defective.
Acceptance Sampling-Acceptance sampling uses statistical sampling to determine
whether to accept or reject a production lot of material.
Total Quality Management (TQM)- Total Quality Management (TQM) is a
comprehensive and structured approach to organizational management that seeks to
improve the quality of products and services through ongoing refinements in response
to continuous feedback.
Total quality management (TQM) consists of organization-wide efforts to install and
make permanent a climate in which an organization continuously improves its ability
to deliver high-quality products and services to customers. While there is no widely
agreed-upon approach, TQM efforts typically draw heavily on the previously
developed tools and techniques of quality control. TQM enjoyed widespread attention
during the late 1980s and early 1990s before being overshadowed by ISO 9000, Lean
manufacturing, and Six Sigma.
Six Sigma: Six Sigma is a set of techniques and tools for process improvement. It was
introduced by engineer Bill Smith while working at Motorola in 1986. Jack Welch
made it central to his business strategy at General Electric in 1995. Today, it is used in
many industrial sectors.
Assembly Line: An assembly line is a manufacturing process (most of the time called
a progressive assembly) in which parts (usually interchangeable parts) are added as
the semi-finished assembly moves from workstation to work station where the parts
are added in sequence until the final assembly is produced. By mechanically moving
the parts to the assembly work and moving the semi-finished assembly from work
station to work station, a finished product can be assembled faster and with less labor
than by having workers carry parts to a stationary piece for assembly.
Quality Function Deployment (QFD)- it is a structured approach to defining
customer needs or requirements and translating them into specific plans to produce
products to meet those needs. The “voice of the customer” is the term to describe
these stated and unstated customer needs or requirements.
Poka-Yoke-Poka-yoke (pronounced PO-ka yo-KAY) is the use of a mechanism or
device that helps an equipment operator (or anyone) avoid mistakes. In Japanese,
poka-yoke translates to "mistake-proofing" or "inadvertent error prevention" and was
originally described as baka-yoke, which means "fool-proofing." The purpose of the
poka-yoke technique is to eliminate product defects by preventing them in the first
place, correcting them or drawing attention to human errors as they occur. In
manufacturing, this means not accepting, creating or allowing defects to move down
the line.
