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PPT1 Operations Management Introduction

The document provides an introduction to operations management, describing operations as a transformation process that takes various inputs like materials, information, and customers and transforms them through production processes and staff into outputs like goods and services. It discusses different types of production processes and how they relate to factors like the level of customization, volume, and flexibility required. The key objectives of operations management are introduced as managing resources to deliver goods and services to customers while meeting competitive priorities around cost, quality, time, and flexibility.

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Shibani Shankar Ray
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43 views

PPT1 Operations Management Introduction

The document provides an introduction to operations management, describing operations as a transformation process that takes various inputs like materials, information, and customers and transforms them through production processes and staff into outputs like goods and services. It discusses different types of production processes and how they relate to factors like the level of customization, volume, and flexibility required. The key objectives of operations management are introduced as managing resources to deliver goods and services to customers while meeting competitive priorities around cost, quality, time, and flexibility.

Uploaded by

Shibani Shankar Ray
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Operations Management

Introduction
Sanjay Choudhari
Indian Institute of Management
Indore

Operations as a Transformation
Process
Input
transformed
resources

Material
Information
Customers

INPUT
Facilities

Environment

The
transformation
process

Staff

Input
transforming
resources

Environment

Output
Goods

OUTPUT
Output
Services

Output: Goods & Services

More like a
manufacturing
process

Tangible
Output can be inventoried
Low customer contact
Consumption after
production
Quality
Figure 1.3 is evident

More like
a service
process

Intangible
Output cannot be inventoried
High customer contact
Consumption are production
simultaneous
Quality difficult to judge

Illustration of Input Output


Transformation Process
Input Resources

Transformation
Process

Output

Automobile

Raw material,
workers, equipment

Manufacturing

Finished car

Airline

Aircraft, pilots, crew,


passengers

Move passengers

Transported
passengers

Department
Store

Goods for sale, staff,


customer

Display goods, sell


goods, Sales
advice

Customers &
goods together

Dentist

Dental surgeons,
equipments, patients

Check & treat


teeth, give
preventative
advice

Patients with
healthy teeth &
gums

Zoo

Zoo keepers,
animals, customers

Display animal,
educate
customers, breed
animal

Entertained
/informed
customers

Police

Police officers,
information, public

Prevent / solve
crime, arrest
criminal

Lawful society,
public with
feeling of

Input: Transformed Resources


Mixture of 1) Material, 2) Information & 3) Customers
Predominantly
Materials processors

Predominantly
Predominantly
Information processors Customer processors

All mfg. operations


Mining & extraction
Retail operations
Warehouse
Postal services
Container shipping line
Trucking company

Accountants
Bank headquarters
Market research company
Financial analysts
News service
Univ. research unit
Telecom company

Hairdressers
Hotels
Hospitals
Mass rapid transports
Theatres
Theme Parks
Dentists

Input: Transforming Resources


Two types: 1) facilities and 2) staff
Ferry company

Paper
manufacturer

Radio station

Types of
Facilities

Ships
On-board navigation
equipment
Dry docs
Material-handling equipment
On-shore building
Warehouses

Pulp-making vats
Paper-making machines
Reeling equipment
Slitting equipment
Packing machinery
Steam-generating
boilers, warehouses

Broadcasting
equipment
Studios and studio
equipment
transmitters outside
broadcast vehicles

Types of
Staff

Sailors, Engineers
Catering staff
On-board shop assistants
Cleaners
Maintenance staff

Operators
Chemists & chemical
engineers
Process plant engineers

Disc jockeys
Announcers
Technicians

Different types of
transformation processes
Material processors
Physical
properties

Information
processors

Mfg. operations,
mining & extrac.

Informational
properties

Customer
processors
Hairdressers, plastic
surgeons

Bank HQs, accountants

Possession

Retail operations

Financial analysis,
market research

Location

Postal service, port &


distrbtn

Telecom company

Public transport, taxi

Storage/Accomod
ation

Warehouse

Library Archives

Hotels

Physiological
state

Hospitals & other


health care

Psychological
state

Education, theatres,
psychoanalysts

Performance of Process Output /


Competitive Priorities
COST

Definition

Process Considerations

Example

1. Low-cost
operations

Delivering a service or a
product at the lowest
possible cost

Processes must be designed and


operated to make them efficient

Local Manuf.,
Accer

2. Top quality

Delivering an outstanding
service or product

May require a high level of


customer contact and may require
superior product features

Apple

3. Consistent
quality

Producing services or
products that meet design
specifications on a
consistent basis

Processes designed and


monitored to reduce errors and
prevent defects

McDonalds

4. Delivery
speed

Quickly filling a
customers order

Design processes to reduce lead


time

Dell , Pizza

5. On-time
delivery

Meeting delivery-time
promises

Planning processes to increase


percent of customer orders
shipped when promised

FedEx, Pizza

6. Development
speed

Quickly introducing a new


science or a product

Cross-functional integration and


involvement of critical external
suppliers

Mobile companies

QUALITY

TIME

Performance of Process Output /


Competitive Priorities
FLEXIBILITY

Definition

Process Considerations

Example

7. Customizatio
n

Satisfying the unique


needs of each customer
by changing service or
products designs

Low volume, close customer


contact, and easily reconfigured

Thermax

8. Variety

Handling a wide
assortment of services or
products efficiently

Capable of larger volumes than


processes supporting
customization

Flipkart

9. Volume
flexibility

Accelerating or
decelerating the rate of
production of service or
products quickly to
handle large fluctuations
in demand

Processes must be designed for


excess capacity

The United States


Postal Service
(USPS)

Production System Design


Process Choice
Strategy

Strategic
fit

Competitive
Priorities

The process chosen should reflect the desired


competitive priorities

Product-Process Matrix

For manufacturing organization it brings together


1.

Product customization & Volume

2.

Process characteristics

Process choices include job, batch, line, and


continuous flow processes

Production include make-to-order (MTO),


assemble-to-order (ATO), and make-to-stock
(MTS)

Product-Process Matrix
One of
a kind

Low Volume
Many Products

High Volume
Few Products

Project (construction)

Very
Jumbled
Flow

Job Shop (machine shop)

Batch
Process (apparel)

Assembly
Line (auto assembly)

Rigid
Flow

Continuous
Process
(sugar mill)

Product-Process Matrix

Poor

Good

Manufacturing Deliverable

Materials in Manufacturing
RM : Raw materials
WIP : Work in Process
FG : Finished good

Examples ?

Process Summary
Customer response time
High
Raw Materials

Moderat
e
Work-in-Process (WIP)

Thermax
MTO

ATO

Dell,
Subways

Low
Finished Products
Dell,
Bajaj
MTS

Job

Line

Continuous flow

Batch

Batch

Line

Flexibility (i.e.
customization)
Top quality
On-time delivery
Customer Interface point

Product varieties
Delivery speed

Batch
Cost
Delivery speed

Operations Management
is
the process of managing resources to deliver
Goods & Services to Customers

Objectives on OM I

1) Introducing the role of operation and understanding


the various operation systems and providing the basic
concepts on how it can be managed to meet required
competitive advantage.

2) Developing the ability to analyze and map the firms


operation and also measuring and improving key
performance measures.

3) Proving techniques for planning strategic, tactical and


operational decisions in manufacturing and service
environments.

Operations : Consultant approach

Operations improvement double the plant output


Plant can produce 50-60 % more with present facilities and can almost double the production by
adding a few balancing equipments.
Plant Layout & Materials Handling , Materials Planning and Production Planning &
Scheduling, Production system from Batch to Flowline.

Faster delivery at lower cost through productivity & process improvements


Production paradigm changed from purely Made-To-Order to a combination of
Made-To-Stock & Made-To-Order.

Increased Productivity & improved Quality from existing plant


Process Capability studies to address Quality issues, which led to 15% drop in and one
sixth lesser Seconds Quality products generated
Production capacity increased 75% with facilities redesign
Conventional process based plant layout was reorganise into facilities, with some additional
equipments, for Focussed Manufacturing by creating 3 Plants-Within-Plant using PullSystem of production with Kanban.

Operations : Competitive analysis


Delivery

Cost

Quality

1. Speed
2. On time

Factory cost

1. Rework
2. Defects

Attributes

1. 22 weeks
2. 60%

Rs 400 per
unit

1. Rs 10000
2. 16 %.

Company - Current

1. 25 weeks
2. 50%

Rs 350 per
unit

Market

1. 20 weeks
2. 70%

Rs 400 per
unit

Strong competitor

1. 17 weeks
2. 75%

380 per unit

1. Rs 5000
2. 10 %.

Company Target (1
year)

Flexibility Innovativ
eness

Qualifying /Order
winning

Dimensions of Operations
Management
Strategy
Design/ Tactical
Control

Example: Bank
Strategy ( 2-5 years)
Location, Geographical Coverage, Number of Offices
Nature of Services to Offer

Design / Tactical (6 months 1 years)


Process Steps, Layout, Number of counters
Capacity Planning
Application design

Control ( day to 1 months activities)


Queue Discipline, Control of Errors
Scheduling & Processing
Information Display

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