Introduction to Operations

Management

Operations Management (OM) involves

the planning, organizing, and
supervising of processes, and making
necessary improvements for higher
profitability. It ensures that business
operations are efficient in terms of
using as few resources as needed and
effective in terms of meeting customer
requirements.
Purpose:
To ensure efficient and effective
production of goods and services.
Role of Total Quality
Management (TQM)
O p e ra t ion s M a n a g e me nt ( O M) f o c u s e s o n
t h e a d m i nis tra tion o f b u s i n e s s p ra c t i c es t o
c r e a t e t h e h i g h e s t l e ve l o f e f f ic ien c y
p o s s i b le w ith in a n o r g a n iz a tion . To t a l
Q u a l i t y M a n a g e m e n t ( TQ M ) i s a n i n te g ra l
p a r t o f O M , e m p h a s iz ing c o n t i n u ou s
i m p r ovem en t, c u s t ome r f oc u s , a n d
s y s t e m a tic m a n a g e men t o f p r o c e s s e s t o
e n s u r e c o n s i s t en t q u a l ity a n d e f f ic ien c y.
Key Concepts and Jargon

• S u p p l y C h a i n M a n a g e m en t : C o o r d i na ti o n o f p r o d u c t i o n , s h i p me n t, a n d
d i s t ri bu ti o n.

• P r o d u c t i o n L i n e : T h e a r ra n g e me nt i n a f a c t o r y i n w h i c h a t h i n g b e i n g
m a n u f a c tu re d i s p a s s e d t h r o u g h a s e t l i n e a r s e q u e nc e o f m e c h a ni ca l o r
m a n u a l o p e ra t i o ns ( a l s o k n o w n a s A s s e m bl y L i n e ).

• L e a n M a n u f a c t u r i n g : M i n i mi zi n g wa s t e w i t h o ut s a c r i f i c i ng p r o d u c ti vi ty.

• J u s t - In- Ti m e ( J I T ) : I nve nto r y m a n a g e me n t s t ra t e g y t o i n c r e a se e f f i c i e nc y.

• To t a l Q u a l i t y M a n a g e m en t ( TQ M ) : E n s u r i n g q u a l i ty i n a l l o r g a n i z a ti o n a l
processes.

• S i x S i g m a : D a t a - dri ve n a p p r o a c h t o e l i mi na te d e f e c t s .
Process vs. Result

Process-Focused Approach:
Def inition: Emphasizes the steps and procedures
to achieve a result.
Advantages: Predictability, consistency, quality
assurance.
Result-Focused Approach:
Def inition: Emphasizes the f inal result or output.
Advantages: Flexibility, innovation, customer
satisfaction.
Process-Focused Approach: The
Traditional Path to Efficiency

• Historical Context: Dominant from

the 1950 s to the 1990 s.

• Key Characteristics:
• Emphasis on standardized
procedures.
• Focus on efficiency and
predictability.

• Example: Manufacturing assembly line.

Process-Focused Approach:
Specialization and Labor Intensity

• In d i v i d u a l S p e ci a l i z a t i o n s:
• Wo r k e r s a s s i g n e d s p e c i f i c , r e p e t i t i v e t a s k s .

• Enhanced skill in a particular area but limited overall job scope.

• E x a m p l e : Wo r k e r s o n a n a s s e m b l y l i n e e a c h r e s p o n s i b l e f o r a s i n g l e p a r t o f t h e p r o d u c t .

• La b o r In t en si ve:
• H i g h d e p e n d e n c y o n h u m a n l a b o r.

• Jobs were of ten physically demanding and repetitive.

• E x a m p l e : Te x t i l e f a c t o r i e s w i t h n u m e r o u s w o r k e r s o p e r a t i n g l o o m s .
Driving
Industrialization

Impact on Industrialization:

• Boosted production capacity

and efficiency.

• Enabled mass production

and economies of scale.

Economic Growth:

• Creation of numerous jobs.

• Rise of manufacturing hubs

and industrial cities.
Result-Focused Approach: The Modern
Path

Characteristics of Result -Focused Approach:

• Emphasis on outcomes and customer satisfaction.

• Flexibility and adaptability to change.

Technology and Innovation:

• A u t o m a t i o n a n d A I r e d u c i n g t h e n e e d f o r m a n u a l l a b o r.

• D a t a - d r i ve n d e c i s i o n m a k i n g f o r b e t t e r o u t c o m e s .

Benef its:
• E n h a n c e d e f f i c i e n c y a n d i n n ova t i o n .

• Ability to quickly adapt to market demands and changes.

Operational Disruptors

Operational disruptors are factors that significantly change the

way organizations operate, of ten leading to increased efficiency,
innovation, and competitiveness.

• Technology and Innovations

• Human Errors

• Streamlining

• Multi-tasking

• Output-based
Activity #1

• Group yourselves into 5 groups

• Repor t on Operational Disruptors that have impacted companies
and industries
• Discuss the company, background, products, production process
and operational disruptors
• Give a comprehensive explanation on the impact of the
Operational Disruptor and the result to the company and the
industr y it belongs
• Repor t using Powerpoint, maximum of 20 minutes per group
End of Lecture # 1
Modern Disruptors
O p e ra tion al d i s r u p to rs a r e e ve n ts ,
te chnologies, or cha n g e s th a t s i g n if ican tly
a l te r th e way a b u s i n es s o r o r g a n iz a tion
f u n ctio n s . Th e y o f te n l e a d to s h i f ts i n
w o r k f low, e f f icien cy, a n d th e s tr u ctu r e o f
o p e ra tion s . Th e s e d i s r u p tion s ca n b e e i th e r
p osi tive or ne g a tive, d e p e n d in g o n h o w th e y
a r e m a n a g ed a n d th e co n te xt i n w h i ch th e y
o ccu r.
Remote Work and
Telecommuting:

The widespread adoption of remote

work technologies (e.g., video
conferencing, cloud computing) has
disrupted traditional office
environments. It has led to more
flexible work arrangements, reduced
need for office space, and changes in
team collaboration dynamics.
Artificial
Intelligence and
Machine Learning:

AI and machine learning

technologies automate complex
tasks, enhance decision-making,
and provide predictive analytics.
This reduces the need for human
inter vention in repetitive tasks
and improves efficiency and
a c c u ra c y i n o p e ra t i o n s .
Internet of Things (IoT):

IoT devices connect physical

objects to the internet, enabling
real-time monitoring and
management of assets. This
disrupts traditional maintenance
and logistics operations by
providing real -time data and
predictive maintenance
capabilities.
E-commerce and Digital Marketplaces:

The rise of e -commerce platforms like

Amazon and Alibaba has transformed
retail operations, reducing the need
for physical stores, changing supply
chain logistics, and altering customer
service practices.
Blockchain
Technology:

Blockchain disrupts traditional

transaction and record -keeping
processes by providing a
decentralized, transparent, and secure
way to track transactions. This affects
industries like finance, supply chain,
and healthcare by reducing fraud,
enhancing transparency, and
streamlining operations.
 Automation and Robotics:
Advanced robotics and automation systems take over manual
labor tasks, especially in manufacturing and warehousing. This
reduces labor costs, increases production speed, and improves
precision but also requires a shif t in workforce skills and training.
Mobile and
Digital
Payments:
T h e a d o p t ion o f m o b i le
p a y m e n t s y s t e m s a n d d i g it a l
c u r r e n c i es d i s r u p t s t ra d i tion a l
b a n k i ng a n d p a y m e nt
p r o c e s s e s . I t p r ov i de s f a s t e r,
m o r e s e c u r e t ra n s a c t ion s a n d
opens up new business
m o d e ls a n d r e ve n u e s t r e a m s .
Problems ➔ Solutions ➔ Problems ➔
Solutions... It’s a cycle

Modern operational disruptors are of ten introduced as solutions

to existing industrial problems, aiming to make operations more
efficient and effective. These disruptors drive significant changes
in how businesses operate, necessitating an adaptive approach
from employees and management alike. The ability to
successfully navigate these changes of ten hinges on strategic
planning and proactive adaptation. One effective method for
managing this transition is through Road Mapping.
Road Mapping

Road Mapping is a strategic planning process used to visualize

and manage the path from the current state to a desired future
state. It involves setting clear objectives, identifying the steps
needed to achieve these objectives, and anticipating potential
challenges. In the context of adapting to modern operational
disruptors, road mapping helps organizations create a structured
approach to implement new technologies and processes,
ensuring that the transition is smooth and sustainable.
 Road Mapping Guide Questions

Where are Where do we How do we

we now? want to go? get there?
Guide Questions for Road Mapping

WHERE ARE WE NOW?

This question involves assessing the current state of
the organization. It requires a thorough evaluation of
existing operations, technologies, workforce skills, and
business processes.
Guide Questions for Road Mapping

WHERE DO WE WANT TO BE?

This question defines the desired future state of the
organization. It sets clear goals and objectives for
what the organization aims to achieve by adopting new
technologies or processes.
Guide Questions for Road Mapping

HOW DO WE GET THERE?

This question outlines the roadmap for achieving the
desired future state. It involves detailed planning of
the steps needed, resource allocation, timelines, and
risk management.
 E x p a n d i n g o n Ro a d Ma p p i n g :
Mu l ti pl e So l u ti o n s a n d C h o o s i n g
t h e R i g h t D i r e ct i o n

Through the road mapping process, organizations can

identify multiple potential solutions to address the
challenges posed by operational disruptors. This
comprehensive approach allows for the evaluation of
various strategies and the selection of the most
effective path forward. By considering different
scenarios and solutions, businesses can make
informed decisions that align with their goals,
resources, and capabilities.
End of Lecture # 2
Road Mapping in Operations
Management

Road mapping is a strategic planning tool used in operations

management to define and visualize the steps needed to achieve
long-term goals. This tool is especially valuable in responding to
business problems brought about by disruptors. Road mapping
involves answering three critical questions: "Where are we
now?", "Where do we want to go?", and "How do we get there?".
Where Are We Now?

This stage involves a comprehensive assessment of the current

situation of the business. It includes:
Internal Analysis: Evaluate current operational capabilities, resources ,
processes, technologies, and workforce skills.
• SWOT Analysis (Streng ths, Weaknesses, Oppor tuni ti es,
Threats): Identify internal strengths and weaknesses as well as
external oppor tunities and threats.
• Per formance Metrics: Analyze key per formance indicators (KPIs)
such as product ion eff iciency, lead times, quality control, and
custom er satisf action.
• Resource Inventor y: Assess the availability and utilizat ion of
physical and human resources.
Where Are We Now?

E x t ern a l An a l y s i s : E xa m i n e th e e xte r n a l e nv i r on me nt to u n d e r s tan d th e

i m p a ct o f d i s r u p tor s .
• Ma r ke t Tr en d s : Id e n tify ch a n g e s i n m a r ke t d e m a n d , cu s to m e r
p r e f e r en ces , a n d i n d u s tr y s ta n d a r ds.
• C o m p e t i t i ve La n d s ca p e : A naly ze co mp etitor s ' s tra te g ies , s tr e n g th s ,
a n d w e a k n es s e s .
• Te ch n o l o gi ca l Ad va n cemen t s: Re v i ew e m e r g in g te ch n o l ogie s th a t
co u l d i m p a ct o p e ra tion s .
• Re g u l a tor y E nv i r o n men t : C o n s i d e r a ny c h a n g e s i n l a w s a n d
r e g u l atio ns th a t m ay a f f e ct o p eratio ns .
T h e g o a l i s t o h a ve a c l e a r, o b j e c t i ve u n d e r st a ndi n g o f t h e c u r r e n t o p e ra t i o n a l
s t a t u s a n d t h e e x t e rna l f a c t o r s i n f l ue n ci n g i t .
Where Do We Want to Go?

T h i s s t a g e i nvo l ve s d e f i ni ng t h e d e s i re d f u t u r e s t a t e o f t h e b u s i ne s s . I t i n c l ude s:

V i s i o n a n d M i s s i o n : C l a ri f y t h e l o n g - te r m v i s i o n a n d m i s s i o n o f t h e
o r g a n i z a ti o n .

S t ra t e g i c G o a l s : S e t s p e c i f i c , m e a s ura bl e , a c h i e va bl e , r e l e va n t, a n d t i m e - bo u nd
( S M A RT) g o a l s .
• Market Positioning: Determine the desired market position, such as being a cost
l e a d e r o r a n i n n o v a t i o n l e a d e r.

• O p e r a t i o n a l E x c e l l e n c e : A i m f o r i m p r o v e m e n t s i n e f f i c i e n c y, p r o d u c t i v i t y, q u a l i t y,
and customer satisfaction.

• Innovation and Adaptability: Set goals for adopting new technologies, processes,
and business models to stay competitive in a disruptive environment.
Where Do We Want to Go?

Gap Analysis: Identify the gaps between the current state and
the desired future state.

• Skills and Capabilities: Determine what new skills and

capabilit ies are needed.

• Technol ogi cal Upgrades: Identify necessar y technolog ical

investment s and upgrades.

• Process Improvements: Highlight areas where processes need

to be optim ized or redesigned.
How Do We Get There?

Th i s s ta g e i nvo lve s d e ve lo pin g a d e ta ile d a cti o n p l a n to a ch i e ve th e d e s i r e d

f u tu r e s ta te . It i n cl u de s :
S t ra t eg i c In i t i a t i ves : D e f i ne ke y i n i tiatives a n d p r o j e cts th a t w i l l b r i d g e
the g a p b e tw e e n th e cu r r e n t a n d d e s i r e d sta te s.
• P r o c e s s O p t i m i za t i o n : I m p l e me nt l e a n m a n a g e me nt, S i x S i g ma , o r o t h e r
p r o c e s s i m p rove me n t m e t h o do l o g i e s .
• Te c h n o l o g y A d o p t i o n : I nve s t i n n e w t e c h n o l o g i e s s u c h a s a u t o m a tio n ,
A I , a n d Io T t o e n h a nc e o p e ra ti o n a l c a p a b i li ti e s .
• Ta l e n t D e ve l o p m e n t : U p s k i l l a n d r e s k i l l t h e w o r k f o r c e t o m e e t f u t u r e
d e m a nds .
• S u p p l y C h a i n M a n a g e m en t : E n h a n c e s u p p l y c h a i n r e s i l i e nc e a n d
f l e x i bi l i ty t o h a n d l e d i s r up tio n s .
How Do We Get There?

Ro a d M a p D e v e l o p m e n t : C r e a t e a v i s u a l r o a d m a p t h a t o u t l i n e s t h e t i m e l i n e ,
milestones, and key activities for each initiative.
• Short-term Actions: Identify immediate actions that can deliver quick wins and build
momentum.

• Medium-term Projects: Plan for medium-term projects that require more significant
changes and investments.

• Long-term Goals: Set long-term goals that align with the overall strategic vision.

Monitoring and Adjustment: Establish a monitoring and feedback mechanism to

t ra c k p r o g r e s s a n d m a k e n e c e s s a r y a d j u s t m e n t s .
• KPIs and Metrics: Define KPIs to measure the success of each initiative.

• Regular Reviews: Conduct regular reviews and updates to the road map based on
performance data and changing circumstances.

• Agility and Flexibility: Ensure the plan is adaptable to respond to new disruptors and
changing market conditions.
Responding to Disruptors with Road
Mapping

D i s r u p to rs , s u ch a s te ch n o log ical a d va n cem en ts , m a r ke t s h i f ts , o r n e w

co m p e tito rs , r e qu ire b u s i n e s s es to b e a g i l e a n d p r o a ctive. Ro a d m a p p in g
h e l p s b u s i n e s s e s n av i g ate th e s e ch a l le ng es b y p r ov i din g a s tr u ctu r e d
a p p r o a ch to tra n s f o rm atio n.

1 ) Ag i l i t y : Ro a d m a p p in g e n co u ra g e s b u s i n e s s es to b e f l e xi ble a n d
r e s p o n s ive to ch a n g e s . B y r e g u l arly a s s e s s i n g th e cu r r e n t s ta te a n d
a d j u s ting th e r o a d m a p, b u s i n e s s es ca n s tay a h e a d o f d i s r u p tor s .

2 ) In n ova t i o n : B y s e tti ng g o a l s f o r te chnological a d op tion a nd p r oce ss

i m p r ovem en ts , r o ad m a p p in g d r ives i n n ovation . B u s i n e s s e s ca n l e ve rag e
n e w te ch n o log ies to e n h a n ce e f f icie ncy a n d cu s to m e r value .
Responding to Disruptors with Road
Mapping

3) Resilience: A well-defined road map helps build operational

resilience. By identifying and mitigating risks, businesses can
better withstand disruptions.

4) Competitive Advantage: Road mapping helps businesses

anticipate and respond to competitor actions. By continuously
improving operations and adopting new strategies, businesses
can maintain a competitive edge.
Final Notes:

Road mapping is an essential tool in operations management,

particularly in the face of disruptive forces. By systematically
answering "Where are we now?", "Where do we want to go?",
and "How do we get there?", businesses can develop a clear,
actionable plan to achieve their strategic objectives, adapt to
changes, and maintain a competitive advantage. This structured
approach ensures that businesses remain agile, innovative, and
resilient in an ever-evolving market landscape.
Sample Cases
End of Lecture # 3