operations management unit 1 ppt

8/13/2019 Operations Management Unit 1 PPT

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Operations

Management



Productivity:

Productivity measures the effectiveness of a

conversion process. It is the ratio of the units of

output to the units of input.

Output

Productivity = _______

Input

Thus,productivity is a measure of the efficiency

with which inputs are converted into outputs.



Productivity vs. Throughput

Throughput measures the rate of out put; It

quantifies how fast an organization

develops and produces products. Productivity is about the efficiency of

production while throughput is about the

production cycle time.

Throughput’s dimension is ‘output per

week’



Productivity vs. Throughput

Productivity is important, but Throughput

should not be ignored.

DISCUSSION



How to improve Productivity?

Chose the right capacity of the plant.

R&D

Right plant location Right plant layout

Right plant, machinery, equipments

Right production process

Right quality of raw material



How to improve productivity?

Scientific management techniques

Attitude & willingness of employees

Knowledge of employees acquired through training &

education

Improved skill level of employees

Workers participation

Conducive work environment

Effective Leadership

Strategic decisions



Objectives of productionmanagement

Discussion

Efficiency objective

Effectiveness objective Quality objective

Lead time objective

Capacity utilization objective

Cost objective



Functions of an organization

Financing function

Purchasing function

Production function Marketing function

Personnel function

R&D ALL OTHER FUNCTIONS REVOLVE AROUND

PRODUCTION FUNCTION.



Definition: OperationsManagement

O.M. is the planning, scheduling and

controlling of the activities that transform

inputs by way of raw materials, capital,machinery, labour, information,

enterprise(i.e.,management) and time into

outputs in the form of goods and services

of higher value than the inputs.



Evolution of Production /Operations Management

Adam Smith: Brought out his book ‘Wealth

of Nations’ in 1776. Advocated ‘Division of

Labour’ Division of labour:

Repetitive job -> higher skills ->greater output

-> improved quality -> savings of time ->improved productivity




Charles Babbage: Brought out his book ‘The

Economy of Machinery and Manufacture’ in

1883. – Demonstrated the benefits of

specialisation – studied the operations involved

in a Pin manufacturing industry and found

specialisation in the specific tasks improves

productivity- His emphasis on specialisationlater developed into ‘Workmen Trades’ (fitter,

welder, painter, machinist etc.,)




F.W. Taylor ( 1859 – 1915)

-scientific management

-emphasised the importance of training- developed ‘Methods Study’

- developed ‘Time & Motions Study’




Henry Ford:

Mass Production & Conveyor based

assembly line – (1913) HarringtonEmerson:

-Book: The twelve principles of efficiency

(1913) - Suggested labour efficiency as the basis

for payment of wages.




Henry Gantt:

-Introduced Gantt Chart (1913) as a practical

tool for charting the production schedules &machine loading schedules.

F.W. Harris:

-Developed Economic Lot Size & EOQ(Economic Ordering Quantity), a scientific

method of inventory control system.




Walter Shewhart:

-Introduced the concept of statistical Quality

Control to industry; Pioneered the concept of

control charts for monitoring production. ( 1924)

F.H. Dodge, H.G. Roming & W. Shewhart:

- Developed the concept of sampling inspection &

published statistical sampling tables. (1931)




L.H.C. Tippeh:

- Developed the concept of ‘Work sampling’-a

statistical sampling method – made a large no.

of random spot observations – observed distinct

types of work activities – estimated the time

devoted to each given activity. ( 1937)

- 1950 – ‘Operations research’ techniques wereextended from military to Industry. Helped in

better decision making.




L.D. Miles:

- developed Value Engineering & Value analysis -

1950’s)

1958 – CPM & PERT techniques were

introduced.

1960 – Concept of Production Management was

amplified to include non-manufacturing organizationslike hospitals, transport organizations, banks,

educational institutions etc., The word ‘Production mgt’.

Was replaced with ‘Operations Mgt.’




1970’s : number of computer packages

were introduced.

1980’s: JIT ( Just in time)

Quality Circles

CAD / CAM

GT(Group technology)

FMS ( Flexible Manufacturing System)

CMS (Cellular Manufacturing System)



Functions of Production Management

Planning: (Planning the conversion process)

Consists of: Product selection & design, Process selection,

facility location, facility layout and materials handling,

forecasting, capacity planning, production planning.Organising (Organising for conversion)

Consists of work study and job design

Controlling: (Controlling the conversion process)

Consists of production control, inventory control, quality

control, maintenance & replacement, cost control




1990’s onwards……………

Integration of Production & Operation

Management with Commerce, Economics,Technology etc.,, Now, a production

manager should have knowledge in all

these domains.



Challenges facing OperationsManagement

Impact of Globalisation

Influence of Social Responsibility

Influence of environmental responsibility Evolution of new technologies

Role of knowledge management

Adapting to changes in a dynamic businessenvironment



Challenges facing OperationsManagement (Globalisation)

Different parts of the world have different cultures,

economic conditions, market needs, demography etc.,

Business process Outsourcing (BPO) has become a

common feature. Operational practices which were successful in one part

of the world may fail to succeed if implemented ‘as it is’

in another part of the world; minor modifications may be

necessary. Production units in different parts of theworld may be required to develop their own area-

specific approach to operations management in order to

survive and perform well.



Challenges facing OperationsManagement (Social Responsibility)

Operations must result in profit for the business

and value for shareholders; but operations must

not result in bad impact for the community or

social environment within the country orglobally.

Operations should ensure safety of

workers/employees and should ensurewellbeing of consumers.

Should avoid ethically ambiguous activities.



Challenges facing Operations Management(Environmental responsibility)

Pollution prevention

Waste minimization

Recycling

Identification of environment-friendly production

process

Relationship with regulators

Knowing the environmental rules/regulations of the

region/country

Conducting environmental audits



Challenges facing OperationsManagement (New Technologies)

Adapting to the latest technology

Developing a versatile R & D strategy and culture

Problem with new technology: Technologists

view a new technology largely in terms of itsfunctionality; Operations managers on the other

hand are concerned with the practical usability

of the technology,how it can be integrated into

the existing operating system, its cost-benefit

conditions, its overall impact etc.,



Challenges facing Operations Management(Knowledge management)

Operation managers must equip

themselves with all-round business

operation knowledge and should build ateam with members having such

knowledge.

Knowledge about global market.

Ability to think globally



Challenges facing Operations Management(Dynamic Business environment)

Competitive Business Environment

Changing customer needs and requirements

Govt. rules & regulations Unpredictable product life cycle

Changing financial markets, economy and

political conditions

Customers’ demand for more and more value of

products/services.



Product vs. Service

Products are tangible entities; Services are intangible

entities.

Products are generally standardized in nature and

hence they can be mass-produced and stored; Servicescustomized and hence can not be mass produced or

stored.

Products have more of material component and their

production is more machine intensive than labourintensive; Services have less or no material component

and they are more labour intensive.



Product vs. Service

Manufacturing processes of products require

none or very limited customer participation;

Service requires participation of customer.

Measuring the quality of a product is

comparatively easier than measuring the quality

of a service since service has both objective

and subjective elements. Products are returnable; Services are not

returnable.

operations management unit 1 ppt

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