SUBMITTED TO:- MR.

NIMESH BHOJAK
SUBMITTED BY:- VIJAY JAIN(02)
MITTAL PATEL(03)
JATIN AGRAWAL(04)
LOKENDRASINGH CHUNDAVAT(05)

1
…is the study and development of techniques
for the formulation and analysis of
management and related business problems.
Operations research models are often helpful
in this process.

2
…is the application of techniques developed in
mathematics, statistics, engineering and the
physical sciences to the solution of problems
in business, government, industry, economics
and the social sciences.

3
…employ mathematical models to reach a
wide variety of business decisions.
◦ They give modern managers a competitive edge
◦ Managers do not need to have great
mathematical skills
◦ Familiarity allows one to:
 Ask the right questions
 Recognize when additional analysis is necessary
 Evaluate potential solutions
 Make informed decisions

4
…like more traditional methods, however,
qualitative methods come in many
varieties.  Different researchers focus on
different sources of data:
◦ One's own immediate experience
◦ Others' experiences, which we might seek to
understand through:
 their speech or writing,
 their other behaviors,
 their products - technology, artwork, footprints, etc.

5
 Production is the creation of goods and
services
 Production and/or Operations Management

are the activities that transform resources

into goods and services

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 It is one of the 3 critical parts of any
organization:
◦ Marketing – generates demand
◦ Operations – creates the product
◦ Finance/accounting – tracks organizational
performance, pays bills, collects money
 It shows us how goods and services are
produced
 It shows us what POM managers do
 It is the most costly part of any organization

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   Meat Furniture Restaurant Heavy

  Packing Manufacturing   Equipment

POM        
Materials 79% 40% 38% 42%
Labor 8 15 20 12
Fringes 3 22 16 23
Total 90 77 74 77
         
S, G & A 9 15 22 20
Int., Taxes,
Profits, etc. 1 8 4 3

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 Education, Health, etc.
6% 5%
5%
6% 3% Manufacturing
1%
Retail Trade

State & Local Gov't

14%
Finance, Insurance
26%
aaaaaaaa
Wholesale Trade

Transport, Public Util.

16% Construction

Federal Government
18%
Mining

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 Less than 20% of all jobs are in
manufacturing (and they are declining)
 Almost 80% of jobs are in the service sector

(and they are increasing)

 Nearly half of all jobs are in POM
 Most POM jobs are professional and/or

managerial

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 Forecasting…………………………… Ch. 4
 Service, product design…………….. Ch. 5
 Quality
Ch. 6, 6S
management…………………
 Process, capacity design…………... Ch. 7, 7S
 Location ..………….………………… Ch. 8
 Layout design ………………………. Ch. 9
 Human resources, job design…….. Ch. 10, 10S
 Supply-chain Ch. 11, 11s
management…………
 Inventory management ……………. Ch. 12, 14, 16
 Scheduling ………………………….. Ch. 3, 13, 15
 Maintenance ...……………………… Ch. 17

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 Quality management
◦ Who is responsible for quality?
◦ How do we define quality?
 Service and product design
◦ What product or service should we offer?
◦ How should we design these products and
services?

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 Process and capacity design
◦ What processes will these products require and
in what order?
◦ What equipment and technology is necessary for
these processes?
 Location
◦ Where should we put the facility
◦ On what criteria should we base this location
decision?

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 Layout design
◦ How should we arrange the facility?
◦ How large a facility is required?
 Human resources and job design
◦ How do we provide a reasonable work
environment?
◦ How much can we expect our employees to
produce?

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 Supply chain management
◦ Should we make or buy this item?
◦ Who are our good suppliers and how many
should we have?
 Inventory, material requirements planning,
◦ How much inventory of each item should we
have?
◦ When do we re-order?

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 Intermediate, short term, and project
scheduling
◦ Is subcontracting production a good idea?
◦ Are we better off keeping people on the payroll
during slowdowns?
 Maintenance
◦ Who is responsible for maintenance?
◦ When do we do maintenance?

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 Division of labor (Adam Smith, The Wealth
of Nations, 1776)
 Industrial Revolution
 Standardization of parts (Eli Whitney, 1765

- 1825)
◦ Cotton Gin (1792)
◦ Contract with U.S. for muskets (1798)
 Some doubt about true interchangeability
 Simeon North (Middletown)
 John Hall (Harpers Ferry)

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 Scientific management (Frederick Taylor
1865 - 1915)
◦ The Principles of Scientific Management, 1911
 Match employees to jobs
 Provide the proper training
 Provide the proper methods and tools
 Establish legitimate incentives

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 Taylor’s 4 Principles of Scientific
Management:
◦ Replace rule-of-thumb work methods with methods
based on a scientific study of the tasks
◦ Scientifically select, train, and develop each worker
rather than passively leaving them to train themselves
◦ Cooperate with the workers to ensure that the
scientifically developed methods are being followed
◦ Divide work nearly equally between managers and
workers, so that the managers apply scientific
management principles to planning the work and the
workers actually perform the tasks

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 Coordinated assembly line (Henry Ford
1863 -1947)
 Gantt charts (Henry Gantt 1861-1919)
 Motion studies (Frank and Lillian Gilbreth,
1922)
 Quality control (Shewhart, Juran,
Feigenbaum, Deming, Taguchi, etc.)
 CAD
 Flexible manufacturing systems (FMS)
 Computer integrated manufacturing (CIM)

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 From To
 Global focus
 Local or national  Just-in-time

focus  Supply chain

 Batch shipments partnering
 Low bid purchasing  Rapid product
 Lengthy product development
development cycles  Strategic alliances
 Standardized  Mass customization
products  Empowered
 Job specialization employees
 Teams

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22
 Tangible product
 Consistent product
definition
 Production usually
separate from
consumption
 Can be inventoried
 Low customer
interaction © 1995 Corel Corp.

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  Intangible product
 Produced & consumed at
same time
 Often unique
 High customer interaction
 Inconsistent product
definition
 Often knowledge-based
 Frequently dispersed
© 1995 Corel Corp.

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 Goods Service
 Can be resold  Reselling unusual
 Can be inventoried  Difficult to
 Some aspects of
quality measurable
inventory
 Selling is distinct  Quality difficult to
from production measure

 Selling is part of
service
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 Goods Service
 Product is  Provider, not product
transportable is transportable
 Site of facility  Site of facility
important for cost important for
customer contact
 Often easy to  Often difficult to
automate automate
 Revenue generated  Revenue generated
primarily from
tangible product primarily from
intangible service

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 Automobile
Computer
Installed Carpeting
Fast-food Meal
Restaurant Meal
Auto Repair
Hospital Care
Advertising Agency
Investment Management
Consulting Service
Counseling

100 75 50 25 0 25 50 75 100
Percent of Product that is a Good Percent of Product that is a Service

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 Past Causes Future
Local or Low-cost, reliable worldwide Global Focus
national communication and
focus transportation networks
Batch (large) Cost of capital puts pressure on Just-in-time
shipments reducing investment in shipments
inventory
Low-bid Quality emphasis requires that Supply-chain
purchasing suppliers be engaged in product partners
improvement
Lengthy Shorter life cycles, rapid Rapid product
product international communication, development,
development computer-aided design, and alliances,
international collaboration collaborative
designs

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 Past Causes Future
Standardized Affluence and worldwide markets; Mass
products increasingly flexible production customization
processes
Job Changing sociocultural milieu. Empowered
specialization Increasingly a knowledge and employees,
information society. teams, and lean
production
Low cost Environmental issues, ISO 14000, Environmentally
focus increasing disposal costs sensitive
production,
Green
manufacturing,
recycled
materials,
remanufacturing

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31
 Inputs Process Outputs
Land, Labor, The economic system Goods and
Capital, transforms inputs to outputs at Services
Management about an annual 2.5% increase
in productivity (capital 38% of
2.5%), labor (10% of 2.5%),
management (52% of 2.5%)

Feedback loop

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 Measure of process improvement
 Represents output relative to input

Productivity Units produced

= Input used

 Only through productivity increases can

our standard of living improve

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…He asserted that ten workers could produce
48,000 pins per day if each of eighteen
specialized tasks was assigned to particular
workers. Average productivity: 4,800 pins per
worker per day. But absent the division of
labor, a worker would be lucky to produce
even one pin per day.

34
…In 1907, Henry Ford announced his goal for
the Ford Motor Company: to create "a motor
car for the great multitude." At that time,
automobiles were expensive, custom-made
machines.
Ford realized he'd need a more efficient way to
produce the Model T in order to lower the
price. He and his team looked at other
industries and found four principles that would
further their goal:
◦ Interchangeable parts
◦ Continuous flow
◦ Division of labor
◦ Reducing wasted effort

35
…improved a five-thousand-year-old job and
had enabled bricklayers to lay brick faster
with less effort and fatigue. On one
particularly difficult type of wall, where the
previous record had been 120 bricks per
hour, his methods allowed them to lay 350
bricks, an increase in productivity of over
190%.

36
…the original notions of Total Quality
Management and  continuous improvement
trace back to a former Bell Telephone
employee named Walter Shewhart.  One of
W. Edwards Deming's teachers, he preached
the importance of adapting management
processes to create profitable situations for
both businesses and consumers, promoting
the utilization of his own creation: the SPC
chart. 

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Productivity improved Costs were pared Wages increased

Parts per man hour Cost per unit decreased Average worker's annual cash
compensation increased
$2.25
115

110 $2.00 27000

105 26000
$1.75
100 25000

95 $1.50 24000
Year A Year B Year C Year A Year B Year C Year A Year B Year C

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 Quality may change while the quantity of
inputs and outputs remains constant
 External elements may cause an increase or
decrease in productivity
 Precise units of measure may be lacking

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 Labor - contributes about 10% of the annual
increase
 Capital - contributes about 32% of the annual
increase
 Management - contributes about 52% of the
annual increase

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 Basic education appropriate for the labor
force
 Diet of the labor force
 Social overhead that makes labor available
 Maintaining and enhancing skills in the midst
of rapidly changing technology and
knowledge

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42
 Typically labor intensive
 Frequently individually processed
 Often an intellectual task performed by
professionals
 Often difficult to mechanize
 Often difficult to evaluate for quality

43
 U.S. is becoming more of a knowledge
intensive service economy
 Globalization
 Total Quality Control
 Need for flexibility and innovation

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