1 / 219

OPERATIONS MANAGEMENT

Operations Management is the management of transforming inputs into outputs through the efficient use of resources. This includes the design of products and processes, acquisition of resources, and distribution of goods and services. Learn about the importance, decisions, and evolution of operations management.

taggart
Download Presentation

OPERATIONS MANAGEMENT

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. OPERATIONS MANAGEMENT +

  2. Introduction ………………………………………………….

  3. Operations Management • Operations Management deals with Management of transforming inputs to outputs. • Operation management is management of Direct Resources i.e. • MEN MATERIAL MACHINE • OM deals with • Design of Products & Processes • Acquisition of Resources • Transformation of Resources into Output • Distribution of Goods & Services

  4. Operations Management • Traditional view perceives Operations Management as a system that is involved with the manufacture and production of goods and services • Modern view perceives OM as a system designed to deliver Value

  5. Operations Management Importance of Operations Management - • Organizations need to offer superior quality product /services at competitive price & still survive. • This calls for efficiently managed operations • Upto 1970, basic focus of OM was Cost Reduction • Since 1990 focus is shifted to Value Creation

  6. Operations Management Typical Operations Management Decisions • Capacity Decisions – Type, Quantum and Flexibility • Facility decision – Location and its size • Workflow and Technology decisions – Type of production processes and layout of facilities • Materials and Inventory decisions • Quality Decisions – Level and how to achieve it

  7. Production Systems • Production function is concerned with transformation of various inputs into required output • Production System is the way in which this production function is carried out • Selection of production nsystem is based on criteri like • What will each alternative cost in short term and long term • What will it provide in terms of cost, quality,time and availability of output • What will require in terms raw material, energy, infrastructure, managerial talent and other inputs

  8. Classification of Production Systems Prod./Opera. volume Continuous Production Mass production Mass Production Batch production Batch production Job-shop Production Job-shop Production Output/Product Variety

  9. OM in Organization Chart

  10. OM in Organization Chart • In Manufacturing Firm Operations would include • Prod. Control, Scheduling and Materials control • Purchasing • Manufacturing • Quality Assurance • Engineering Support • Warehouse Management • In Service industry it may differ according to the type of service offered

  11. Product and Service

  12. Operations as Service • Emerging model is every organization is in service business • In manufacturing such services can be divided • As Core Service • Manufacturing and delivering customized product correctly at required time at competitive price • As Value-added Service • Information • Problem-solving • Sales Support • Field Support

  13. HISTORICAL EVOLUTION • Adam Smith -- Division of Labor • Assigning workers to tasks based on their SKILLS • Production Management was re-titled as OPERATIONS MANAGEMENT (70’s) to enlarge the Field

  14. HISTORICAL EVOLUTION • Taylor’s Scientific Management • Task to workers based on skills • Output time should be used for Plan & Schedules • Standardized & written specifications, Job-Instructions • Training of Supervisors & Workers • Monetary Incentive for Motivation • Working for Maximum Output, rather than Restricted output • Developing all workers to the fullest extent possible

  15. HISTORICAL EVOLUTION • Moving Assembly Line • Applying Taylor’s Principle in Automobile production line in Ford Motors, Assembly time was reduced drastically. • This increased popularity of Scientific Management • Hawthorne Studies -- by Elton Mayo • Introduced Human Dimensions • Illumination Studies implied the effect of group and work environment on productivity of workers

  16. HISTORICAL EVOLUTION • Operations Research -- Started with World War II Mathematical Technique to Deploy Limited Resources. • Computers • 50’s – Salary & Accounting Statements • 60’s – L.P. to analyze operational problems • 70’s -- Mnfrg. Information System • Material Requirement Planning (MRP) • 80’s -- CAD CAM FMS AS/RS • 90’s – Robots for Repetitive & Hazardous tasks

  17. HISTORICAL EVOLUTION • 1980 - Manufacturing Strategy Just In Time (JIT) TQC Service Quality and Productivity • 1990 - TQM and Quality Certification Business Process Reengineering (BPR) Supply Chain Management (SCM) E - Commerce

  18. Shift in Emphasis • Operations Management underwent three key shifts in emphasis • From Cost and Efficiency to Value Creation • From Mass Production to Agility and Customization • From Functional Specialization to a Systems approach to achieve high performance

  19. Current Issues in OM • Coordinating the relationship between mutually supportive but separate organizations • Optimizing Global SCM • Increased co-production of goods and services • Operational Challenges • Process Design and Improvements • Employee diversity • Human Resource scarcity • Global workforce

  20. Current Issues in OM • Challenges at Marketplace • Market fragmentation • Vocal Customers • Customer-Supplier relationship • Technological Challenges • Technological changes • Bio-genetic • Miniaturization • Societal Challenges • The Environment • Intellectual Property

  21. Operations Strategy & Competitiveness ………………………………………

  22. OPERATIONS STRATEGY • STRATEGY is a Plan consistent with the Objectives to eliminate external threats or to take advantage of Opportunities. • Levels of Strategy • Corporate Strategy • Business Strategy • Functional Strategy  Operations Strategy • Operations Strategy is influenced by Product / Services Market served

  23. Corporate Strategy Design Process • Firm should develop comprehensive strategy that integrates Finance, Marketing and Operations • Financial Perspective : two basic strategies • Growth • Build the Franchise – Develop new sources of revenue • Increase customer value • Productivity • Improve cost structure • Improve asset utilization

  24. Corporate Strategy Design Process • Customer Perspective – Find ways to differentiate itself in the marketplace • Product Leadership • Customer intimacy • Operational excellence • Internal Perspective • Defines business process • Specifies desired outcomes and the process to achieve them

  25. Corporate Strategy Design Process • Learning and Growth Perspective – Defines intangible assets needed • Strategic Competencies • Strategic Technologies • Climate for action

  26. Strategy • Organizations should have Resources and capabilities to execute and support the strategy • The extent to which organization is matching its resources and capabilities with the opportunities in external environment is Strategic Fit • Strategy is delivered through a set of tailored activities

  27. Operations Strategy • Operations Strategy specifies how operations can help implement firm’s corporate strategy. • Operations Strategy involves linking design decisions and operating decisions • Cross-functional interaction must occur for implementing any functional strategy. • Operation Strategy must be linked vertically to the customer and horizontally to other parts of enterprise

  28. Operations Competitive Dimensions Competitive priorities – Four Groups • COST Low cost operations, Commodity type products • QUALITY High performance design, Consistent Quality. • TIME Fast delivery time, On time Delivery Development Speed • FLEXIBILITY Volume flexibility, Customisation, Varieties of product Special services to augment the sale

  29. ELEMENTS OF OPERATION STRATEGY • Designing the Production System • Product / Service Design & Development • Technology Selection & Process Development • Allocation of Resources to Strategic alternatives • Facility Planning

  30. DEVELOPING AN OPERATIONS STRATEGY • Should be in line with Organization Strategy And Organization Strategy should be in line with Corporate vision • Aim is to achieve Long Term goals of Business strategy • Operations Strategy should be Flexible to support product through its Lifecycle. • Operations Strategy should be consistent with strategies of other functional areas.

  31. Long Term Operation Strategy Decisions concerned with • Developing New Product • Determining appropriate production capacity • Establishing new production facilities • Adopting new technologies • Locations of Plant & Warehouses

  32. Operations Strategy as Weapon in Competition • Identify distinct Competencies • Expertise in Product (ITC) / Process / Marketing (P&G) / Supply (HLL) expertise • Shorter Product Cycle – Fast entry & Growth (CD Mnfrg) • Production Flexibility (Garment manufacturing lines) • Low Cost Process (Labor Intensive Jobs) • Convenience & Location ( HLL vis a vis Sara Lee) • Product variety & Facility Size • Quality

  33. Productivity • The productivity is the measure of efficiency. • Productivity is a ratio of Output to Input. • Higher the ratio, higher the efficiency Two basic types of Productivity Total Productivity – Considers all the Inputs & Ratio is Total Output / Total Input Gives very little indication about Input areas needing improvement. It requires all variables to be expressed in same unit. Partial Productivity – Considers only Specific Input (like Labor, R.M.) and Ratio is total Output / Partial Input • Partial Productivity ratio is more preferred.

  34. Productivity • Productivity ratios are used to measure efficiency of operation and comparison of same with reference to Time, Industry. • Here it gains importance as control measure. To improve productivity we look at factors affecting productivity • Time spent on unproductive activity • Social or legal obligations • Unrest in employees • Learning new skills It is easy to measure the productivity of quantifiable tasks. But for Knowledge workers where tasks are • Not quantifiable • Intangible • Dependent on many other factors • Such that results are not directly attributable to tasks and results come up after a long period

  35. Example of Productivity Measures • Input & Output Data Output • Fin. Units Rs. 10000 • WIP 2500 • Dividends 1000 Total 13500 Input • Human Rs. 3000 • Material 153 • Capital 10000 • Energy 540 • Other expenses 1500 Total 15193 • Total Measure • Multifactor Measures • Partial Measures

  36. Learning Curve • Learning Curve is a line displaying relationship between unit production time and cumulative units produced • Learning Curve Theory is based on three assumptions • The amount of time required to complete a given task will be less each time the task is undertaken • Unit time will decrease at a decreasing rate • The reduction in time will follow a predictable pattern

  37. Limited Passenger Service No baggage transfer No meals No seat assignment Frequent Reliable Departures Lean and highly productive ground and gate crews

  38. Process Analysis +++++++++++

  39. Process Analysis • Process is any part of the organization that takes inputs and transforms them into output expected to be of greater value • By analyzing process we can understand • Handling capacity • Serving time • Changes required to increase capacity • How much does the process cost • We must clearly define the purpose of analyzing the process

  40. Process Analysis • Process Analysis generally involves following tasks • Decide process boundaries that mark the entry point of the process inputs and exit points of the process outputs • Construct process flow diagram showing various process activities and their interrelationships • Determine capacity of each step in the process • Identify the bottlenecks • Evaluate further limitations in order to quantify the impact of the bottlenecks • Use the analysis to make operating decisions and improve the process

  41. Process Flowcharting • Process Flow-charting is a tool that categorizes each activity & provides operational details to understand the process • Good way to start analyzing a process is with diagram showing the basic elements of process • Tasks • Flows • Storage • Decision points • Some times diagram is separated into different horizontal or vertical bands to allow separation of tasks

  42. Types of Processes • Single –stage process • Multi-stage process • May be buffered internally • Buffering refers to storage area between stages • Buffering allows stages to operate independently • If no buffering, it is possible that Blocking or Starving may happen • Processes by Market Orientation • Make to stock - generally standard products • Make to order – generally customize products • Hybrid – combination of both above

  43. Types of Processes • Processes by Production Systems • Project • Job-Shop • Batch Production • Assembly Line • Continuous Flow • Cell Manufacturing • Flexible Manufacturing System • Pacing – refers to the fixed timings of movement of the items through the process

  44. Multistage Process Alternate Paths Multistage Process with Buffer

  45. Measuring Process Performance • Utilization =Actual utilized time / Available time • Efficiency = Actual output of the process / standard • Run-time – time required to produce a batch of parts • Set-up time – time required to prepare a machine to make a particular item • Operation time – sum of set-up and run-time for a batch • Cycle time – time elapsed between starting and completing a job

  46. Measuring Process Performance • Throughput time – time that a unit spends actually being worked on together with time spent waiting in a queue • Throughput rate – Output rate that a process is expected to produce • Process Velocity – Ratio of total throughput time to the value-added time • Value-added time – time in which useful work is actually being done on the unit

  47. Throughput Time Reduction • Perform activities in parallel • Reduce back and forth movements • Change the sequence of activities • Reduce interruptions • Eliminate redundant activities • Combine activities wherever possible

  48. Product Design /\/\/\/\/\/\/\/\/\/\/\/\/\/\

  49. Product Design • Starts with conceptualization with objectives of • Providing value to the customer • Return on Investment to the company • Competitiveness in the market • Product design has impact on • Materials & components used • Processes used for manufacturing • Machines used for processing • Methods of storage • Ways of transportation • Production / Operations Strategies • Marketing Strategies

  50. Product Design • Design for Customer • Achievement of purpose for which it is required, expressed or implied • Features • Ease of operation • User-friendly • Reliability • Consistency • Conformance to specification • Competitive price • Serviceability • Safety • Aesthetic • Environmental friendly • Disposal value • Durability

More Related