mb202 pom unit 1 gurdeepak dec 2011
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Operations Management
MB 202Production and Operations Management
Unit 1
Operations Management
Operations Management: Concepts, Product, ProcessSlide 1 of Unit 1MB-202 POM ~Gurdeepak 2011~
William J. Stevenson
8th edition
Gurdeepak Singh
GJIMTMohali
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Unit1
Operations Management
Outline the importance of
production and operations
management.
Process Selection
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Operations Management: Concepts, Product, ProcessSlide 2 of Unit 1MB-202 POM ~Gurdeepak 2011~
OM Concepts and Functions
Product Design and Development
Product Development process and
Techniques
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Production is the creation of goods and services
OperationsOperations managementmanagement (OM)(OM) isis thethe setset ofofactivitiesactivities thatthat createscreates valuevalue inin thethe formform ofof goodsgoodsandand servicesservices byby transformingtransforming inputsinputs intointo outputsoutputs
What Is Operations Management?What Is Operations Management?
Operations Management: Concepts, Product, ProcessSlide 3 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Operations ManagementOperations Management
The management of systems or processes
that create goods and/or provide services
Organization
Operations Management: Concepts, Product, ProcessSlide 4 of Unit 1MB-202 POM ~Gurdeepak 2011~
Finance Operations Marketing
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ValueValue--AddedAdded
The difference between the cost of inputsand the value or price of outputs.
InputsOut uts
Value added
Operations Management: Concepts, Product, ProcessSlide 5 of Unit 1MB-202 POM ~Gurdeepak 2011~
anLabor
Capital
Conversion
process
GoodsServices
Control
Feedback
FeedbackFeedback
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Steel production
Automobile fabrication
Home remodeling
Retail sales
Auto Repair
Appliance repair
Maid Service
Manual car wash
Teaching
Lawn mowing
GoodsGoods--service Continuumservice Continuum
Operations Management: Concepts, Product, ProcessSlide 6 of Unit 1MB-202 POM ~Gurdeepak 2011~
High percentage goods
Low percentage service
Low percentage goods
High percentage service
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Examples of Production SystemsExamples of Production Systems
S ystem In p u ts C o n versio n O u tp u t(desired)
Hospital PatientsMD s, NursesMedical SuppliesEquipment
Health Care HealthyIndividuals
Operations Management: Concepts, Product, ProcessSlide 7 of Unit 1MB-202 POM ~Gurdeepak 2011~
Restaur ant Hungry CustomersFood, ChefServersAtmosphere
Prepare FoodServe Food
SatisfiedCustomers
AutomobileP lant
Sheet SteelEng ine P arts
Tools, Equ ipm entWorkers
Fabricationand A ssem bly
of Cars
High Q ualityAutomobiles
University High School GradsTeache rs, BooksClassroom
Transferringof Knowledgeand Skills
EducatedIndividuals
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Manufacturing or Service?Manufacturing or Service?
Tangible Act
Operations Management: Concepts, Product, ProcessSlide 9 of Unit 1MB-202 POM ~Gurdeepak 2011~
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What about McDonalds?What about McDonalds?
Service or Manufacturing?
Operations Management: Concepts, Product, ProcessSlide 10 of Unit 1MB-202 POM ~Gurdeepak 2011~
products
Why then would we consider McDonalds aservice business?
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Manufacturing vs ServiceManufacturing vs Service
Characteristic Manufacturing Service
Output
Customer contact
Uniformity of input
Tangible
Low
High
Intangible
High
Low
Operations Management: Concepts, Product, ProcessSlide 11 of Unit 1MB-202 POM ~Gurdeepak 2011~
Labor contentUniformity of output
Measurement of productivity
Opportunity to correct
Low
High
Easy
High
High
Low
Difficult
Lowquality problems
High
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Operations Management includes:
Forecasting
Capacity planning
Scheduling
Scope of Operations ManagementScope of Operations Management
Operations Management: Concepts, Product, ProcessSlide 12 of Unit 1MB-202 POM ~Gurdeepak 2011~
Assuring quality
Motivating employees
Deciding where to locate facilities And more . . .
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The operations function
Consists of all activities directly related to
producing goods or providing services
Operations Management: Concepts, Product, ProcessSlide 13 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Types of OperationsTypes of Operations
Operations Examples
Goods Producing Farming, mining, construction,manufacturing, power generation
Storage/Transportation Warehousing, trucking, mailservice, moving, taxis, buses,
Operations Management: Concepts, Product, ProcessSlide 14 of Unit 1MB-202 POM ~Gurdeepak 2011~
hotels, airlinesExchange Retailing, wholesaling, banking,renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recordingCommunication Newspapers, radio and television
newscasts, telephone, satellites
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TIPIf you do not understandsomething,
ask me!
Operations Management: Concepts, Product, ProcessSlide 15 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Responsibilities of Operations ManagementResponsibilities of Operations Management
Products & services
Planning Capacity
Location
Make or buy
Organizing Degree of centralization
Process selectionStaffing Hiring/laying off
Operations Management: Concepts, Product, ProcessSlide 16 of Unit 1MB-202 POM ~Gurdeepak 2011~
ayou Projects
Scheduling
Controlling/Improving
Inventory Quality
Use of OvertimeDirecting Incentive plans
Issuance of work orders
Job assignments
Costs
Productivity
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Key Decisions of Operations ManagersKey Decisions of Operations Managers
What
What resources/what amounts
When
Needed/scheduled/ordered
Operations Management: Concepts, Product, ProcessSlide 17 of Unit 1MB-202 POM ~Gurdeepak 2011~
WhereWork to be done
How
Designed
Who
To do the work
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Decision MakingDecision Making
System Design capacity
location arrangement of departments
roduct and service lannin
Operations Management: Concepts, Product, ProcessSlide 19 of Unit 1MB-202 POM ~Gurdeepak 2011~
acquisition and placement ofequipment
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Decision MakingDecision Making
System operation personnel
inventory scheduling
ro ect
Operations Management: Concepts, Product, ProcessSlide 20 of Unit 1MB-202 POM ~Gurdeepak 2011~
management quality assurance
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Decision MakingDecision Making
Models
Quantitative approaches
Analysis of trade-offs
S stems a roach
Operations Management: Concepts, Product, ProcessSlide 21 of Unit 1MB-202 POM ~Gurdeepak 2011~
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ModelsModels
A model is an abstraction of reality.
Physical Schematic
Mathematical
Operations Management: Concepts, Product, ProcessSlide 22 of Unit 1MB-202 POM ~Gurdeepak 2011~
What are the pros and cons of models?
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TIPIf you do not understandsomething,
ask me!
Operations Management: Concepts, Product, ProcessSlide 23 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Quantitative ApproachesQuantitative Approaches
Linear programming
Queuing Techniques Inventory models
Operations Management: Concepts, Product, ProcessSlide 24 of Unit 1MB-202 POM ~Gurdeepak 2011~
Project models
Statistical models
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Operations InterfacesOperations Interfaces
IndustrialEngineering
MaintenanceDistribution
Operations Management: Concepts, Product, ProcessSlide 25 of Unit 1MB-202 POM ~Gurdeepak 2011~
Public
Relations
Accounting
Operations
Personnel
Purchasing
MIS
Legal
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1-26Historical Evolution of OperationsHistorical Evolution of Operations
ManagementManagement
Industrial revolution (1770s)
Scientific management (1911) Mass production
Interchan eable arts
Operations Management: Concepts, Product, ProcessSlide 26 of Unit 1MB-202 POM ~Gurdeepak 2011~
Division of labor
Human relations movement (1920-60)
Decision models (1915, 1960-70s) Influence of Japanese manufacturers
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Suppliers
SuppliersDirect
Suppliers Producer DistributorFinal
Consumer
Simple Product Supply ChainSimple Product Supply Chain
Operations Management: Concepts, Product, ProcessSlide 27 of Unit 1MB-202 POM ~Gurdeepak 2011~
Supply Chain: A sequence of activitiesAnd organizations involved in producing
And delivering a good or service
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Stage of Production Value
Added
Value of
ProductFarmer produces and harvests wheat 1.80 1.80
Wheat transported to mill 1.00 2.80
A Supply Chain for BreadA Supply Chain for Bread
Operations Management: Concepts, Product, ProcessSlide 28 of Unit 1MB-202 POM ~Gurdeepak 2011~
Mill produces flour 1.90 4.70
Flour transported to baker 1.00 5.70
Baker produces bread 6.70 12.40
Bread transported to grocery store 1.00 13.40Grocery store displays and sells bread 2.60 16.00
Total Value-Added 16.00
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Stage of Production Value
Added
Value of
ProductFarmer produces and harvests wheat 1.80 1.80
Wheat transported to mill 1.00 2.80
A Supply Chain for BreadA Supply Chain for Bread
Operations Management: Concepts, Product, ProcessSlide 29 of Unit 1MB-202 POM ~Gurdeepak 2011~
Mill produces flour 1.90 4.70
Flour transported to baker 1.00 5.70
Baker produces bread 6.70 12.40
Bread transported to grocery store 1.00 13.40Grocery store displays and sells bread 2.60 16.00
Total Value-Added 16.00
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Stage of Production Value
Added
Value of
ProductFarmer produces and harvests wheat 1.80 1.80
Wheat transported to mill 1.00 2.80
A Supply Chain for BreadA Supply Chain for Bread
Operations Management: Concepts, Product, ProcessSlide 30 of Unit 1MB-202 POM ~Gurdeepak 2011~
Mill produces flour 1.90 4.70
Flour transported to baker 1.00 5.70
Baker produces bread 6.70 12.40
Bread transported to grocery store 1.00 13.40Grocery store displays and sells bread 2.60 16.00
Total Value-Added 16.00
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TIPIf you do not understandsomething,
ask me!
Operations Management: Concepts, Product, ProcessSlide 31 of Unit 1MB-202 POM ~Gurdeepak 2011~
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UNIT1
Operations Management: Concepts, Product, ProcessSlide 32 of Unit 1MB-202 POM ~Gurdeepak 2011~
Service Design
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Major factors in design strategy
Cost
Quality
Time-to-market
Product and Service DesignProduct and Service Design
Operations Management: Concepts, Product, ProcessSlide 33 of Unit 1MB-202 POM ~Gurdeepak 2011~
Customer satisfaction Competitive advantage
Product and service design or redesign should beclosely tied to an organizations strategy
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Translate customer wants and needs into productand service requirements
Refine existing products and services Develop new products and services
Formulate ualit oals
Product or Service Design ActivitiesProduct or Service Design Activities
Operations Management: Concepts, Product, ProcessSlide 34 of Unit 1MB-202 POM ~Gurdeepak 2011~
Formulate cost targets Construct and test prototypes
Document specifications
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Objectives of Product and Service DesignObjectives of Product and Service Design
Main focus
Customer satisfaction
Secondary focus Function of product/service
Operations Management: Concepts, Product, ProcessSlide 35 of Unit 1MB-202 POM ~Gurdeepak 2011~
Quality
Appearance
Ease of production/assembly
Ease of maintenance/service
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StandardizationStandardization
Standardization
Extent to which there is an absence of variety
in a product, service or process
Standardized products are immediately
Operations Management: Concepts, Product, ProcessSlide 36 of Unit 1MB-202 POM ~Gurdeepak 2011~
available to customers
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Mass customization:
A strategy of producing standardized goods
or services, but incorporating some degree
of customization
Mass CustomizationMass Customization
Operations Management: Concepts, Product, ProcessSlide 37 of Unit 1MB-202 POM ~Gurdeepak 2011~
Delayed differentiation Modular design
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P d t D iP d t D i
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Product DesignProduct Design
Product Life Cycles
Robust Design
Concurrent Engineering
Operations Management: Concepts, Product, ProcessSlide 39 of Unit 1MB-202 POM ~Gurdeepak 2011~
ompu er- e es gn
Modular Design
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Lif C l f P d t S iLif C l f P d t S i
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Life Cycles of Products or ServicesLife Cycles of Products or Services
Maturity
Saturation
Operations Management: Concepts, Product, ProcessSlide 40 of Unit 1MB-202 POM ~Gurdeepak 2011~
Time
Introduction
Growth
Deman
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R b t D iR b t D i
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Robust Design: Design that results in
products or services that can function over
a broad range of conditions
Robust DesignRobust Design
Operations Management: Concepts, Product, ProcessSlide 41 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Concurrent EngineeringConcurrent Engineering
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Concurrent EngineeringConcurrent Engineering
Concurrent engineering
is the bringing together
of engineering design and
Operations Management: Concepts, Product, ProcessSlide 42 of Unit 1MB-202 POM ~Gurdeepak 2011~
manufacturing personnelearly in the design phase.
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ComputerComputer Aided DesignAided Design
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ComputerComputer--Aided DesignAided Design
Computer-Aided Design (CAD) is productdesign using computer graphics.
increases productivity of designers, 3 to 10times
Operations Management: Concepts, Product, ProcessSlide 43 of Unit 1MB-202 POM ~Gurdeepak 2011~
creates a database for manufacturinginformation on product specifications
provides possibility of engineering and cost
analysis on proposed designs
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Modular DesignModular Design
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Modular DesignModular Design
Modular design is a form of standardization inwhich component parts are subdivided into
modules that are easily replaced orinterchanged. It allows:
Operations Management: Concepts, Product, ProcessSlide 44 of Unit 1MB-202 POM ~Gurdeepak 2011~
easier repair and replacement
simplification of manufacturing and assembly
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TIPIf you do not understand
something,
ask me!
Operations Management: Concepts, Product, ProcessSlide 45 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Phases in Product Development ProcessPhases in Product Development Process
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Phases in Product Development ProcessPhases in Product Development Process
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
Operations Management: Concepts, Product, ProcessSlide 46 of Unit 1MB-202 POM ~Gurdeepak 2011~
5. Prototype development
6. Design review
7. Market test
8. Product introduction9. Follow-up evaluation
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Operations Management: Concepts, Product, ProcessSlide 47 of Unit 1MB-202 POM ~Gurdeepak 2011~
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Idea GenerationIdea Generation
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Idea GenerationIdea Generation
Supply chain based
Operations Management: Concepts, Product, ProcessSlide 48 of Unit 1MB-202 POM ~Gurdeepak 2011~
IdeasCompetitor based
Research based
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Reverse EngineeringReverse Engineering
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Reverse EngineeringReverse Engineering
Reverse engineering is the
dismantling and inspectingof a competitors product to discover
Operations Management: Concepts, Product, ProcessSlide 49 of Unit 1MB-202 POM ~Gurdeepak 2011~
product mprovements.
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ManufacturabilityManufacturability
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ManufacturabilityManufacturability
Manufacturability is the ease of fabrication
and/or assembly which is important for:
Cost
Operations Management: Concepts, Product, ProcessSlide 51 of Unit 1MB-202 POM ~Gurdeepak 2011~
Quality
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RecyclingRecycling
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Recycling: recovering materials for future use
Recycling reasons
Cost savings
Environment concerns
RecyclingRecycling
Operations Management: Concepts, Product, ProcessSlide 53 of Unit 1MB-202 POM ~Gurdeepak 2011~
Environment regulations
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Service DesignService Design
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Service DesignService Design
Service is an act
Service delivery system
Facilities
Processes
Operations Management: Concepts, Product, ProcessSlide 54 of Unit 1MB-202 POM ~Gurdeepak 2011~
Skills Many services are bundled with products
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Service DesignService Design
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Service DesignService Design
Service design involves
The physical resources needed
The goods that are purchased or consumed by
the customer
Operations Management: Concepts, Product, ProcessSlide 55 of Unit 1MB-202 POM ~Gurdeepak 2011~
Explicit services Implicit services
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Humor in Product DesignHumor in Product Design
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As Marketinginterpreted it.
As the customerwanted it.
Humor in Product DesignHumor in Product Design
Operations Management: Concepts, Product, ProcessSlide 56 of Unit 1MB-202 POM ~Gurdeepak 2011~
As Engineeringdesigned it.
1984-1994 T/Maker Co.
As Operationsmade it.
1984-1994 T/Maker Co.
1984-1994 T/Maker Co. 1984-1994 T/Maker Co.
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TIPIf you do not understand
something,
ask me!
Operations Management: Concepts, Product, ProcessSlide 57 of Unit 1MB-202 POM ~Gurdeepak 2011~
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UNIT1
Operations Management: Concepts, Product, ProcessSlide 58 of Unit 1MB-202 POM ~Gurdeepak 2011~
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IntroductionIntroduction
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Process selection
Deciding on the way production of goods or
services will be organized
Major implications
Operations Management: Concepts, Product, ProcessSlide 59 of Unit 1MB-202 POM ~Gurdeepak 2011~
Capacity planning Layout of facilities
Equipment
Design of work systems
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Process StrategyProcess Strategy
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Key aspects of process strategy
Capital intensive equipment/labor
Process flexibility
Ad ust to chan es
Operations Management: Concepts, Product, ProcessSlide 61 of Unit 1MB-202 POM ~Gurdeepak 2011~
Design
Volume
technology
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Process SelectionProcess Selection
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Variety
How much
Flexibility What degree
Job Shop
Batch
Repetitive
Operations Management: Concepts, Product, ProcessSlide 62 of Unit 1MB-202 POM ~Gurdeepak 2011~
Volume Expected output
Continuous
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Process TypesProcess Types
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Job shop
Small scale
Batch
Moderate volume
Operations Management: Concepts, Product, ProcessSlide 63 of Unit 1MB-202 POM ~Gurdeepak 2011~
Repetitive/assembly line High volumes of standardized goods or services
Continuous Very high volumes of non-discrete goods
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ProductProduct Process MatrixProcess Matrix
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Process Type
Job Shop Appliance repairEmergency
room
Notfeasible
Batch Commercialbakery
Operations Management: Concepts, Product, ProcessSlide 64 of Unit 1MB-202 POM ~Gurdeepak 2011~
assroom
LectureRepetitive Automotive
assembly
Automaticcarwash
Continuous(flow)
Notfeasible
Oil refineryWater purification
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ProductProduct Process MatrixProcess Matrix
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Dimension Job Shop Batch Repetitive Continuous
Job variety Very High Moderate Low Very low
Processflexibility
Very High Moderate Low Very low
Operations Management: Concepts, Product, ProcessSlide 65 of Unit 1MB-202 POM ~Gurdeepak 2011~
Unit cost Very High Moderate Low Very low
Volume ofoutput
Very Low Low High Very high
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AutomationAutomation
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Computer-aided design andmanufacturing systems (CAD/CAM)
Numerically controlled (NC) machines
Robot
Operations Management: Concepts, Product, ProcessSlide 67 of Unit 1MB-202 POM ~Gurdeepak 2011~
Manufacturing cell Flexible manufacturing systems(FMS)
Computer-integrated manufacturing (CIM)
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Operations Management: Concepts, Product, ProcessSlide 68 of Unit 1MB-202 POM ~Gurdeepak 2011~