Unit IV –

4.2 Emerging Concepts in POM

 Recommended Books
1. Kale S. (1st Ed., 2013), Production and Operations
Management, McGraw Hill Education.
2. Mahadevan, B. (2nd Ed., 2015) Operations
Management: theory and practice, Pearson
Education India.
3. Chary, S. N. (5th Ed., 2012) Production and
Operations Management, McGraw Hill Education.
4. Panneerselvam, R. (3rd Ed., 2012), Production and
Operations Management, Prentice Hall.
> There is a mini book by F C Sharma, Mahavir Book
Depot
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● IT – Information Technology
● ICT- Information & Communication Technology
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● “You can’t manage what you don’t measure” great Peter
Drucker.
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● With the growth of digital technologies, measurement and
monitoring has become much easier. Technologies
facilitate both efficiency and effectiveness. Thus control
and management has become easier.
Usage of IT in Production Management :
In last few years, technology has changed the way organization
conduct their business. Advent of technology in operation
management has increased productivity of the organization.
The scope of technology has evolved over a period of time and
has moved from development of products into design,
management and improvement of operating system and
processes. Over the years, advances in technology have
transformed key aspects of operations management. New tools
and technologies have been incorporated into the design and
operation of service and production systems.
Usage of technology in operation management has ensured that
organizations are able to reduce the cost, integrate suppliers
with the organization, improve the delivery process,
standardize and improve quality and focus on customization,
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● INCREASED CONTROL OVER PRODUCTION
● Use of information technology provides improved visibility,
transparency and accountability to the entire process. It allows
the manufacturing companies to have better control over
product flow and information flow across the supply chain.
Example: Lean manufacturing,
● BETTER INVENTORY MANAGEMENT
● Maintaining optimal levels of inventory is a challenge faced by
all manufacturers. With the use of technology, manufacturers
can create adaptable business processes that provide flexibility
to handle varied demand situations.
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● INCREASED QUALITY CONTROL through techniques like Six
Sigma, Control Charts
● INCREASED COLLABORATION BETWEEN SUPPLY CHAIN
PARTNERS & OTHERS
● With the IT enabled, real time information sharing,
manufacturers can increase the collaboration with their key
partners. This helps control the manufacturing process and
leads to lower costs through more effective decisions in
procurement and contract management. Example: Just In Time
(JIT), e-collaboration
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● MORE EFFECTIVE ORDER TRACKING AND DELIVERY
● Timely delivery of product is an important factor in ensuring
customer satisfaction. Higher customer satisfaction levels lead
to higher customer retention and repeat business. Technology
solutions can play a vital role in increasing speed of delivery
and in keeping the customer informed about the product
delivery schedule. Examples – Bar Codes, Scanner, RFID
technology
● SETTING UP AND INTEGRATION OF WIDELY DISPERSED/
GLOBAL MANUFUCTAURING BASE, thus taking advantage of
location specific cost and market advantage – example ERP
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● MANUFACTURING COST REDUCTION
● PRODUCTIVITY IMPROVEMENT
● CAPTURING PRODUCT AND PROCESS IMPROVEMENT IDEAS
FROM DIFFERENT AREAS AND DATA ANALYTICS
● BETTER WORK STUDY ANALYSIS
● WORKING TOWARDS HUMAN ERGONOMICS, SAFETY,
● BETTER PLANT MAINTENANCE LIKE PLANNED MAINTENANCE,
PREDICTIVE MAINTENANCE ETC.
● CAD/ CAM/ FMS(FLEXIBLE MANUFACTURING SYSTEM)
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● HIGHER SERVICE LEVELS AND LOWER SUPPLY CHAIN COSTS.
● INCREASED AUTOMATION/ COMPUTERIZATION/ MECHANIZATION
● ROBOTICS
● BETTER PLANNING & SCHEDULING
● BETTER ROUTING
Role of IT in POM/ Manufacturing Systems/ Supply Chain Management
● TOWARDS DIGITAL TRANSFORMATION
● Digital Transformation – especially for manufacturers – can
enable transparency and insight in the “upstream” (raw
materials, sourcing) and “downstream” (distribution, logistics,
delivery, service) of the company’s supply chain, all the way to –
and through – customer receipt, acceptance, and use, in many
cases.
Areas of major impact of IT:
1. Supply chain management
A well-managed supply chain links the suppliers, manufacturers, distributors and customers by a
suitable information system for controlling across boarder in order to achieve optimum
productivity, overall satisfaction and joyful relation at cheaper cost. Quick and effective information
system helps manager to understand the customer response, their demands, inventory in the stock,
how much to be produced and where to deliver and when to deliver? Here comes the role of
Internet, which is considered as a cheapest inter-organizational information system, which helps in
aligning the interdependent strategies to achieve cooperative rather than competitive role of Supply
chain management partners.
To achieve integration and effective information sharing across and beyond the organisations, IT in
SCM is required. The organisations are moving towards the virtual supply chain with help of rapid
changes in technology and IT applications viz; Electronic Data Exchange (EDI), Radio Frequency
Identification
2. Reduction in(RFID),
costs Bar Code, Electronic Commerce, Decision Support system, Enterprises
Resource Planning
It is possible (ERP)
to gather package,
data etc.
of costs of Itmaterials
is also easily
fromapplicable in curbing
various sources and the
alsoe-risks.
to compare it in real
time. No longer does one have to carry out a manual search for sources, call for quotations, or wait
for replies in a slow postal system. The internet gives access to ready information across the globe
and materials can be obtained from the cheapest sources. Similarly, production processes can be
performed globally wherever labour costs or costs of production and operation are the lowest. This
has resulted in the considerable reduction of transaction and operations costs.
 Areas of major impact
of IT:
3. Customer relations management
It is possible to track the preference of every customer with the latest technology that is available. Data
about customers can be mined and systems designed not only to meet customer satisfaction but also
offer customer delight. Greater customization of products is possible. For instance, Dell Computers can
assemble and deliver computers according to the specifications suggested by the customer in a matter of
hours.
4. Productivity
The growth of information technology has improved productivity because of inventions of new tools
and
5. software.
Decision That makes productivity much easier and less time consuming.
making
Internet-based technologies ensure that timely and accurate information is available to the decision
maker at the right time. This enhances the quality and timeliness of decisions. Information
technology is helping to integrate the supply system, the production and operations system and the
customer. Decisions can be taken speedily at appropriate levels. A flatter organizational structure is
emerging where authority can be delegated rather than following a strictly hierarchical chain of
command.
6. Globalization
Today, operations can be spread globally. Business Process Outsourcing (BPO) is a common feature.
Operations are carried out globally in such a manner that costs are reduced. For instance, credit
card companies and banks are outsourcing all their telemarketing and related operations to India
because Indian labour is cheaper than the labour in USA or Europe. Information technology has
made this possible.
Areas of major impact
of IT:
7. Cloud Computing
Cloud computing is a relatively new technology that aids production by increasing the capacity
of the organization to store data. It saves in costs because it allows the IT professionals to
employ different types of resources from various types of programs, without completely
rebuilding the infrastructure of the company. It also helps to streamline production and save
on costs because it lessens the need for purchasing additional servers in order to maintain or
increase the speed of the computer systems.
 Areas of major impact
of
ITIT:
in Manufacturing and Design
Technology is getting extensively used in
customization of design products and services.
The usage of computers and supporting
electronic systems is integral part of modern
industrial and services industry. Current
techniques can be broadly classified into
• following categories:
Computer-Aided Design (CAD): CAD
facilitates linking of two more complex
components of design at very high level of
accuracy thus delivering higher productivity.
• Computer-Aided Manufacturing System
(CAM): Precision is very essential in
operating any machines and therefore,
Computerized Numerically Controlled
machines are used, thus ensuring highest
level of accuracy.
What is supply chain management (SCM)?
What is supply chain management (SCM)?
Supply Chains
● A supply chain is the connected network of individuals,
organizations, resources, activities, and technologies involved
in the manufacture and sale of a product or service.
● A supply chain starts with the delivery of raw materials from a
supplier to a manufacturer and ends with the delivery of the
finished product or service to the end consumer and its
subsequent servicing.
● Supply chains cover everything from production to product
development to the information systems needed to direct these
activities/ functions.
What is supply chain management (SCM)?
● Supply chain management is the management of the flow of
goods and services and includes all processes that transform
raw materials into final products.
● SCM represents efforts by manufcaturers to develop and
implement supply chains that are as efficient and economical as
possible.
● It focuses on active streamlining of a business activities to
maximize customer value and gain a competitive advantage in
the marketplace.
What is supply chain management (SCM)?
● SCM attempts to centrally control or link the production,
shipment, and distribution of a product.
● This is done by keeping tighter control of internal inventories,
internal production, distribution, sales, and the inventories of
company vendors.
● By managing the supply chain, companies are able to cut
excess costs and deliver products to the consumer faster.
FLOWCHART OF SCM
What is supply chain management (SCM)?
Example of Supply Chain Management
● Walgreens Boots Alliance Inc. operates one of the largest
pharmacy chains in the United States and needs to efficiently
manage and revise its supply chain so as to stay ahead of the
changing trends and to continue to add value to its bottom line.
● The Company placed focused efforts on transforming its supply
chain in 2016.
What is supply chain management (SCM)?
Contd… Example
● In 2016, Walgreens invested in the technology portion of its
supply chain.
● It implemented a forward-looking SCM that synthesizes relevant
data and uses analytics to forecast customer purchase behavior,
and then it works its way back up the supply chain to meet that
expected demand.
What is supply chain management (SCM)?
Contd… Example
● For example, the company can anticipate flu patterns, which
allow it to accurately forecast needed inventory for over-the-
counter flu remedies, creating an efficient supply chain with
little waste.
● Using this SCM, the company can reduce excess inventory and
all of the inventories' associated costs, such as the cost of
warehousing and transportation.
What is supply chain management (SCM)?
Supply Chain - - Domain/ Scope
● 1. Purchasing
● 2. Operations
● 3. Resource Management
● 4. Information Workflow
● 5. Logistics - Logistics is the part of supply chain management
that coordinates all aspects of planning, purchasing, production,
warehousing, and transportation so that the products will reach
the end-consumer without any hindrances.
What is supply chain management (SCM)?
Supply Chain - - Key Objectives/ Activities
● Aligning flows of money, materials, and information between
customers and suppliers
● Integrating functions/ activities of logistics, purchasing, and
operations
● Coordinating processes to increases profitability by aligning the
processes used to plan, source, make, deliver, and (when
necessary) return a company’s products and services.
● Designing adaptable systems with the help of simulation tools
which can predict how a supply chain will behave and show how
small changes can cause major disruptions in the flow of materials.
● Managing resources like people, processes, and technology to
meet the needs of customers.
 Business value
goals: Rapid
demand Customer value
fulfillment. goals: Give
Collaborative customer what
supply chain they want ,
planning and when and how
execution. they want it , at
low cost.

1. Enterprise
coordination of 2. Effective 3.
manufacturing distribution Responsiveness
and business system and
process accountability to
customers.
Objectives of SCM
SUPPLY CHAIN MANAGEMENT STRATEGIES
 SUPPLY CHAIN MANAGEMENT STRATEGIES
1. COST STRATEGY :
Focuses on delivering a product or service to the customer at the
lowest possible cost without sacrificing quality. Eg – Walmart
2. TIME STRATEGY :
This strategy can be in terms of speed of delivery, response time,
or even product development time. Eg- FedEx
3. QUALITY STRATEGY :
Consistent, high-quality goods or services require a reliable, safe
supply chain to deliver on this promise.
4. FLEXIBILITY STRATEGY :
Can come in various forms such as volume, variety, and
customization. Eg- Amazon
What is supply chain management (SCM)?
● Top 15 Supply Chain Management Softwares
SCM - PROBLEMS & CHALLENGES
 SCM - PROBLEMS & CHALLENGES
1. QUALITY CUSTOMER SERVICE
The supply chain management is centralized on the needs of the
customers. It is about giving the right quantity and the right
quality of the product for the right amount of money. All this, in
perfect timing and setting.

SOLUTION: It might seem simply, but on the contrary, it isn’t.

Customers have different preferences and we have to always
adjust to the customer’s needs. Being able to provide customers
unique solutions make a difference entirely. Companies that
actually excel in this field are the ones that make an effort to
learn and invest in new technologies.
 SCM - PROBLEMS & CHALLENGES

2. COSTING
Globally speaking, the costs of raw materials, energy and labor have
increased due to economical constraints. In order for operations to
continue production and provide customers with good quality items
at affordable rates, adjustments have to be made to keep operations
running.

SOLUTION: The best solution to this issue would be improving

your cost control by executing your plans efficiently through
constant monitoring. Through efforts in providing warehouse
efficiency you would be able to do so.
 SCM - PROBLEMS & CHALLENGES
3. RISK MANAGEMENT
Due to the constant change in the market, coming from a variety of
sources such as consumer demands, political agendas and global
sourcing, would cause major issues to the operations.

SOLUTION: Always be prepared with a risk management plan, on

how your company will be able to overcome disruptions during
the course of operations. By hiring a logistics software
development company you would be able to manage these issues
effectively with less effort on your end. After all, logistics
management is vital to the entire operation.
 SCM - PROBLEMS & CHALLENGES

4. SUPPLIER RELATIONSHIP
By creating a mutually sound and harmonious relationship with
your partners or suppliers, you will be able to provide your
customers with products of high standards in a timely manner.
This also allows you to create opportunities for improvement in
terms of performance.

SOLUTION: By building a strong working relationship with

your supplier, you would be able to work efficiently and come
up with a better output in a short period of time.
 SCM - PROBLEMS & CHALLENGES
5. QUALIFIED PERSONNEL
Over the years, it has become a challenge to find talent interested
and passionate about this line of work. Personnel hired in this
field must have an understanding about the duties and
responsibilities needed.

SOLUTION: Since locating dedicated personnel to work for this

field has become increasing hard to find, their market value will
start to rise. Hiring and promoting through in-house staff would
be the most affordable solution at this point.
 SCM - PROBLEMS & CHALLENGES
6. UNFORESEEN DELAYS
Procurement of materials and products may be easy, but the
delivery may not always be 100% on time, especially with time
differences and a variety of shipping time frames. When items are
sourced from different countries, delays like this are very common.

SOLUTION: Always have buffer stocks. Through an efficient

warehouse management system you are able to know when you
need to have certain materials delivered as well as create a time
cushion in terms of delivery to make sure everything runs
smoothly.
 SCM - PROBLEMS & CHALLENGES
7. FAST-CHANGING MARKETS
With technological advancements changing our markets everyday, it
is quite difficult to stay in pace and adapt to the variety of
innovations in the market. But because the goal is to stay efficient
in these changing times, companies would have to be more flexible.

SOLUTION: Change is inevitable. The way we adapt to change is

definitely something we need to manage by using logistics
management software. We are able to move with the flow and
improve our output as a whole.
What is supply chain management (SCM)?
● Risks In Supply Chain Management
What is supply chain management (SCM)?
Some Risks In Supply Chain Management
● TRADE WARS. ...
● RAW MATERIAL SHORTAGES. ...
● RECALLS AND SAFETY SCARES. ...
● CLIMATE CHANGE. ...
● TOUGHER ENVIRONMENTAL REGULATIONS. ...
● ECONOMIC UNCERTAINTY AND STRUCTURAL CHANGE. ...
● INDUSTRIAL UNREST. ...
● CONTAINER SHIP FIRES.
● DRONES AND AVIATION SAFETY
What is supply chain management (SCM)?
What is supply chain management (SCM)?