3. Scope of Discussions / Objectives
Understanding the basic Concepts of Operational
Activities of Organisations in Manufacturing and
Services Sectors
4. Learning Outcomes
On successful completion of the Course, the Students
should be able to do the following : -
• Student should be able to differentiate how different Operations
Strategies lead to achieve Competitiveness
demonstrate
• Ability toProcesses differences between Manufacturing and
Service
of Product
Service Design
• Discusstothe Processthe Concepts and SCM, TQM, JIT Tools and
of
• Ability describe overall purpose in the Organisation
Techniques and it’s
Demonstrate understanding
• of Project Management of Planning and Control Processes
6. Customer Retention Key Issues
A Recent Survey says –
90 %
•“More thando notof unsatisfied
customers
complain”
times
•“It costs 5than it more to get a anew
customer
does to keep
current customer”
6
7. 7
What is Operations Management?
Defined
Operations management (OM) is
defined as the design, execution
and improvement of the systems
that create and deliver the firm’s
primary products and services
9. 9
What is a Transformation
Process?
Defined
A transformation process is defined
as a user of resources to transform
inputs into some desired outputs
12. 12
Operations as a Process
Energy
Materials
Labor
Capital
Information
Transformation
(Conversion)
Process
Feedback information for
control of process inputs
and process technology
Goods or
Services
14. 14
What is a Service and What is
Goods?
“If you drop it on your foot, it won’t
hurt you.” (Goods or service?)
“Services never include goods and
goods never include services.” (True
or false?)
15. 15
OM in the Organization Chart
Finance
Operations
Operations
Marketing
Plant
Plant
Manager
Manager
Operations
Operations
Manager
Manager
Director
Director
Manufacturing, Production control,
Manufacturing, Production control,
Quality assurance, Engineering,
Quality assurance, Engineering,
Purchasing, Maintenance, etc
Purchasing, Maintenance, etc
17. Relation of Operations to its
Environment
SOCIETY
Human
Engineering Marketing
Resources
Suppliers
Operations transformation system
Accounting
Finance
External
Environment
CUSTOMERS
MIS
GOVERNMENT
COMPETITORS
18. Functions of Operations Managers
Planning
•
•
•
•
•
Plan product and service mix
Location & Capacity Planning
Plan equipment procurement
Generate Master Schedule – What products to make and when
Decide number of shifts/ number of hours
Organizing
•
•
•
•
•
Centralized or Decentralized operations
Design hierarchical structure
Assign responsibility for every activity
Organize supplier/ subcontractor networks
Establish maintenance policies
19. Functions of Operations Managers
Controlling
•
•
•
•
Compare costs to budget
Inspect the Quality levels
Compare work progress to schedule
Compare actual labor hours to standards
Directing
•
•
•
•
Establish provisions of union contracts
Establish personnel policies
Establish employment contracts
Issue Job assignments and instructions
20. Functions of Operations Managers
Motivating
•
•
•
Provide specific objectives/ Goals & challenges
Encourage through praise, recognition of job achieved
Motivate through tangible Reward System
Coordinating
•
•
•
Coordinate through use of forecasts and master schedule
Report, inform and communicate (through MIS Reports)
Recommend corrective actions/ necessary improvement on
performance achieved
Training and development
•
•
•
Support employees in training programs
Encourage suggestion schemes
Facilitate people involvement/ empowerment
25. 25
The Importance of
Operations Management
Synergies
must exist with other
functional areas of the
organization
Operations account for 60-80%
of the direct expenses that
burden a firms profit.
26. Historical Evolution of Operations
Management
26
Scientific Management
– F. W. Taylor – “ The Principles of Scientific Management”
Moving Assembly Line
– In 1911- Henry Ford applied the principles of Scientific
Management (Model T)
Hawthorne Studies
– Research Team from HBS – under the leadership of Elton Mayostudy conducted at Western Electric Company’s Hawthorne
Plant (Chicago)
Operations Research
– Operations Research teams formed in military operations to
smoothen the complex logistics issues (USA & Europe)
27. 27
Historical Development of OM
• JIT and TQC
• Manufacturing Strategy Paradigm
• Service Quality and Productivity
• Total Quality Management and Quality
Certification
28. 28
Historical Development of OM
(cont’d)
• Business Process Reengineering
• Supply Chain Management
• Electronic Commerce
29. 29
Current Issues in OM
• Coordinate the relationships between
mutually supportive but separate
organizations.
• Optimizing global supplier, production,
and distribution networks.
• Increased co-production of goods and
services
30. 30
Current Issues in OM (cont’d)
• Managing the customers
experience during the service
encounter
• Raising the awareness of
operations as a significant
competitive weapon
31. 31
Question Bowl
A major objective of this book is to show how smart
managers can do which of the following?
a.
Improve efficiency by lowering costs
b.
Improve effectiveness by creating value
c.
Increasing value by reducing prices
d.
Serving customers well
e.
All of the above
Answer: e. All of the above
32. 32
Question Bowl
In the Input-Transformation-Output Relationship,
a typical “input” for a Department Store is
which of the following?
a.
Displays
b.
Stocks of goods
c.
Sales clerks
d.
All of the above
e.
None of the above
Answer: e. None of the above (The above are
considered “Resources” of a department store.
The correct answer is “Shoppers”.)
33. 33
Question Bowl
In which of the following decades did the
concept of quality control originate?
a. 1920’s
b. 1930’s
c. 1940’s
Answer: b. 1930’s (Tools such
d. 1950’s
as sampling inspection and
e. 1970’s
statistical tables where first
developed by Walter
Shewhart, H. F. Dodge, and H.
G. Romig.)
