Advanced Operations

Management
Introduction

Smitha
Ramachandran
What is meant by business?
Challenges facing business today
Under pressure to
Create high-quality products
Deliver products to market faster
Reduce costs
Increase flexibility by reacting to changes
Improve its workforce continually through
training and education
Industry’s top four needs
Delivering high quality products
Reducing costs
Bringing products to market faster
Making change faster and more
What is a process?
What is a system?
What are the core processes in an
organization?
What is meant by support process?
Significant Developments
Division of Labor
Standardized Parts
Scientific Management
Time and Motion Study
Efficiency Improvement
Wage Incentives
Assembly Lines
Motivation and Behavioral Issues
 Significant Developments
Operations Research
Computers and Information Technology
- Computer Aided Design (CAD)
- Computer Aided Manufacture (CAM)
- Computer Integrated Manufacture
(CIM)
Flexible Manufacturing Systems (FMS)
Cellular Manufacturing
JIT, Lean Manufacturing
Total Quality Management, Six Sigma
Mass Customization
OM in the Organization Chart

Finance Operatio
Operatio Marketi
ns
ns ng

Plant
Plant Operatio
Operatio Director
Director
Manage
Manage ns
ns
rr Manager
Manager
Manufacturing,
Manufacturing, Production
Production
control,
control, Quality
Quality assurance,
assurance,
Engineering,
Engineering, Purchasing,
Purchasing,
Maintenance,
Maintenance, etc
etc
 Operation Functions and its
Linkages
Customer Layer Operations Support
Layer
Ultimate Dealer Marketin Maintenan IT
Custome Retailer g ce
Costin Plannin Toolin IE
r s
g g g
Materi Qualit Design
al y
Core
Operations
Layer of Layer Supplier Layer
Innovatio Testin Assemb
n g ly Sub-
Innovatio Fabric Machinin contractors
n ation g Supplie
Strategy rs
Service Delivery Other Service
R&D System Providers
 Operations Management Defined
Concerns itself with the conversion of inputs
into outputs using physical resources so
as to provide the desired utility of form,
place, possession or state or a combination
thereof – to the customer while meeting the
other organizational objectives of
effectiveness, efficiency and adaptability
Operations management is concerned
with the design, management, and
improvement of the systems that create
the organisation's goods or services.
Cases Input Physical Output Type of Type of
Resourc input / utility
es output provided
to
customer
Inorgani Ore Chemical Inorgani Phy/Phy Form
c Plant, Use c
Chemica of labour Chemica
l etc l
Producti
on
Outpatie Unheal Doctor, Healthy Phy/Phy State
nt thy nurses, person
Hospital person equipmen
Ward t, facilities
Petrol Petrol Equipmen Petrol Phy/Phy Possession
Pump (posses t (possess
sion of ion of
pump vehicle
owner) owner)
 Production System
Creation of goods and services to society
Managing the productive resources
Strategic growth and competitiveness
Quality, productivity and delivery has
become the minimum, a customer
expects from a product or service
Focus or emphasis of manufacturing has
now shifted from
 market to customers
 efficiency to service and relationships
PRODUCTION SYSTEM
Steps in the production/operations process from the point of view of an
entrepreneur Operations
Strategy
New product
development
Business Process outsourcing and
offshoring
Facility location Facility layout Facility capacity
planning planning planning
Project Management
Inventory
Materials Total Productive
management
requirement Maintenance
for
planning (TPM)
independent
(MRP)/JIT/SCM
demand items
Aggregate production/operations
planning
Operations Quality
Work
Scheduling Management
design
Demand
forecasting
Service Operations Management
 Manufacturing Vs Service
Differences in terms of
Intangibility
Heterogeneity
Simultaneous Production and
Consumption
Perishability
Manufacturing Organisations Service Organisation
Differences
Physical, durable product Intangible, perishable product

Output can be inventoried Output cannot be inventoried

Low customer contact High customer contact
Long response time Short response time
Regional, national, international Local markets
markets
Large facilities Small facilities
Capital intensive Labour intensive
Quality easily measured Quality not easily measured
Similarities
Is concerned about quality, productivity and timely response to its
customers
Must make choices about capacity, location and layout
Has suppliers to deal with
Has to plan operations, schedules and resources
Production of Goods vs. Delivery of Services
Production of goods – tangible output
Delivery of services – an act
Service job categories
Government
Wholesale/retail
Financial services
Healthcare
Personal services
Business services
Education
Key Differences
1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
 Manufacturing vs Service

Characteristic ManufacturingService
Output Tangible Intangible
Customer contact Low High
Uniformity of input High Low
Labor content Low High
Uniformity of output High Low
Measurement of productivity Easy Difficult
Opportunity to correct High Low
quality problems
High
 Scope of Operations Management
Operations Management includes:
Forecasting
Capacity planning
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
The operations function
Consists of all activities directly related to
producing goods or providing services
 Types of Operations

Operations Examples
Goods Producing Farming, mining, construction ,
manufacturing, power generation
Storage/Transportation
Warehousing, trucking, mail
service, moving, taxis, buses,
hotels, airlines
Exchange Retailing, wholesaling, banking,
renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and television
newscasts, telephone, satellites
 O M as a transformation process
The systematic design, direction and control of
processes that transform inputs into services and
products for internal as well as for external customers
Exercise:
Cooking a Meal
Hospital care
I tem I nputs Processing Outputs

Food processing Raw vegetables Cleaning Canned vegetables

Metal sheets Making cases
Water, energy, Cutting ,Cooking
labour, building Packing ,labeling
equipment

Hospital Doctors, nurses, Examination, Healthy patients

hospital, surgery ,
medical supplies, monitoring,
equipment medication,
laboratories therapy
Operations Manager and the
Management Process
key fig in the operations system
Work or process or decision involved in
each management process are
Planning
Capacity
Location
Product or service
Make and buy
Layout
Projects
Scheduling
Organising
Degree of centralization, process of selection
Staffing
Hiring/Layoff
Use of overtime
Directing
Incentive plans, job assignments
Decision making
What, when, where, who, who
Controlling and improving
Productivity
Inventory
Costs
Quality
The production management responsibility
centers on two major areas
Design of the production system which
include (5P’s)
Product
Process
Plant and equipment
Programmes (purchasing, logistics,
schedules etc)
People
Development of the control system to
manage inventories, product quality,
production schedule and productivity
Production management responsibilities includes
the facilities and abilities for the detailed
consideration of such factors as..
Deign factors
The product design
Job and process design
Equipment, selection and replacement
Labour skills and training programs
Input material selection including raw materials
and subcontracting. (And supply chain
management)
Plant selection and layout and maintenance
management
Scheduling steps
Implementing and controlling schedule
Operating the production system
Control systems
Inventory – control system and
policies
Quality control policies
Production – schedule control policies
Productivity and cost control system
Maintenance system
Responsibilities of Operations Management

Planning Organizing
– Capacity –Degree of centralization
– Location – Process selection
–Products & services Staffing
– Make or buy –Hiring/laying off
– Layout –Use of Overtime
– Projects Directing
– Scheduling –Incentive plans
Controlling/Improving –Issuance of work orders
– Inventory – Job assignments
– Quality
– Costs
– Productivity
 Decision Making

System Design
–capacity
–location
arrangement
– of departments
p
– roduct and service planning
acquisition
– and placement of
equipment
 Decision Making

System operation
–personnel
–inventory
–scheduling
–project
management
–quality assurance