Operations Analysis -

Introduction
Priyank Sinha
About the course and other modalities
• Sessions will be taken in blocks.
• Will soon uploaded “about the course” document on Moodle.
• Taking down notes is essential
• No attendance
• Breadth coverage hence no perquisite
• Heterogeneous group of students
• Student subscription
• First five minutes of every class to address doubts.
Objective of OA
• Primary Goal of Operations Analysis is to convert materials and labor
into goods and services as efficiently as possible.
• Production Function:
• Inputs are: labor, capital, materials, energy, information, time, etc.
• Processes are series of actions which directly affect the F in the
production function.
• For this purpose, OA involves planning, organization, supervision of
production activities.
Some Industry examples:
• Manufacturing Example: Automative Industry
a. Inputs: Steel, plastic, rubber, labor, machinery, and energy.
b. Processes: Assembly line production, quality control check.
c. Outputs: Finished cars.
d. Operations Analysis focus: Optimizing assembly line efficiency,
reducing material waste, timely delivery of components.
Examples continued..
• Service Example: Hospital
a. Inputs: Medical staff, equipment, medication, patient data, facilities
b. Processes: Patient admission, diagnosis, treatment, surgery,
discharge.
c. Outputs: Patient care and health outcomes.
d. Operations Analysis focus: Efficient patient flow, minimizing waiting
times, managing inventory of medications and supplies.
History of development
• Ancient Production System - Characteristics.
a. Craftsmanship – skilled craftsmen, production by rudimentary tools.
Examples: Pottery making, blacksmith forging tools and weapons.
b. Small-scale production – Often within families or small workshops.
Examples: Pottery making in ancient Greece and Rome done by families.
c. Lack of standardization – product were unique and varied in quality.
Examples: Handcrafted goods had variations due to lack of standardized
production techniques.
d. Localized operations: Production is localized and consumed within small
geographical areas.
 History of development
• Ancient Production System - Operations View
a. Skill labor dependency – only few individuals are skilled, so output is
limited.
b. Raw material availability – Production was limited by the
availability of local resources.
c. Efficiency – low.
d. Operations Management – operations were managed informally
without any systematic analysis.
History of development
• Guild System – Characteristics
a. Standardized Training – Guilds were associations of artisans and merchants
which provided apprenticeships.
b. Quality Control – Guild set quality standards for product to ensure
consistency. Quality inspections are done periodically.
c. Regulation of Production – Guild regulated the method and materials in
production.
d. Market access control – only guild members can produce and sell goods in
local market.
e. Collective Bargaining – negotiated favorable trade conditions and
protection with the local authorities.
History of development
• Guild System – Operations View
• Improved Training and skills – Apprenticeship programs ensured
consistent level of skills among craftsmen.
• Enhanced quality control – more consistent and reliable products.
• Monopolistic Practice – Due to monopolistic control, competition and
innovation was limited. But better scale of operation.
History of development
• Impact of Early Industrial Economists, and Industrial Revolution I
• Wealth of Nations (1776) – Adam smith introduced the concept of division
of labor, which is regarded as foundation to industrial economics and
operations analysis.
• Breaking down a production processes into specialized tasks and allowing
workers to specialize dramatically increases output, productivity, and
efficiency.
• Development of nation closely related to division of labor.
• Division of labor highlighted the need for organizing and managing
production more systematically. Operations management is born with
emphasis optimizing workflows and labor allocation.
History of development
• Industrial Revolution I (1760-1840) – Major developments and
trends
a. Introduction to machinery powered by water and steam engines.
b. Shift from home based production system to factory based system.
Examples: large textiles mill with power looms in England.
c. Development of canals and road networks for improved
transportation.
d. Increased production capacity and efficiency.
e. Growth in urban centers and cities.
History of development
• Industrial Revolution I – Emphasis of Operations Analysis
a. Parts and process standardization – Emphasis on reproducibility and
interchangeability.
b. Production Planning and Scheduling – Developments of methods for
production planning, and scheduling of resources.
c. Quality Control – Initial efforts to implement quality control for
ensuring product consistency.
History of development
• Impact of Taylor and Industrial Revolution II
a. Principles of Scientific Management – Systematic approach to measure and
improve labor productivity.
b. Emphasis on Time and motion studies – Standardization of tasks and
performance based pay system.
c. Laid the foundations of modern operations management by introducing
methods to analyze and optimize work processes.
d. Initial focus was on areas like job design, production planning, and quality
control.
e. Industrial economics theories greatly helped operations planners to make
the production system more efficient.
History of development
• Industrial Revolution II (1870-1914) - Major developments and
trends
a. Widespread use of electricity to power machines and factories –
Introduction of electric motors and lighting in factory.
b. Mass Production – Assembly line techniques, mass production of
goods.
c. Advancement in communication- Invention of telegraph and
telephone, transcontinental telegraph and telephone network.
History of development
• Industrial Revolution II (1870-1914) – Emphasis for Operations
Management
a. Principles of time and motion study, measuring work content,
appropriate pay compensation, etc.
b. Use of linear programming, calculus based methods, statistical
methods, etc. to solve complex operational problems.
c. Initial concepts of supply chain management emerged focusing on
efficient movement and storage of goods.
History of development
• Industrial Revolution III (1950-2000) – Major developments and
trends.
a. Automation and Computerization – Introduction of CAD, CAM,
robotics, CNC machines.
b. Widespread use of computers and IT – Development of ERP systems
c. Globalization – Expansion of global trade and multinational
corporations.
d. Focus on flexibility and customization in production system.
e. Growth in service industries.
History of development
• Industrial Revolution III (1950-2000) – Emphasis for Operations
Analysis.
a. Adoption of lean manufacturing principles to eliminate waste and
improve efficiency- Toyota Production System, JIT inventory.
b. Quality Management – Emergence of TQM, Six Sigma. Motorola’s
implementation of six sigma to reduce defects and variability.
c. Supply Chain Integration – Supply chain integration to enhance the
coordination and collaboration.
History of development
• Industrial Revolution IV (2000-present) – Major developments and
trends.
a. Digitalization – Pervasive use of digital technologies including
internet of things (IoT), big data analytics, and artificial intelligence.
Example – smart factories.
b. Emergence of additive manufacturing (3D printing), rapid
prototyping, custom manufacturing.
c. Emergence of Cyber-Physical Systems – Integration of physical
processes with digital system enabling real time monitoring and
control.
History of development
• Industrial Revolution IV (2000-present) – Emphasis of operations
management.
a. Implementing smart manufacturing system – flexibility, efficiency,
and responsiveness enhancement, IoT and AI to predict
maintenance.
b. Sustainable Operations – Adoption of circular economy principles to
reduce waste and improve resource efficiency.
c. Resilient Supply Chain – Using digital twins and simulation models to
enhance supply chain resilience and agility.