ppt1 operations management introduction
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Operations ManagementIntroduction Sanjay ChoudhariIndian Institute of Management Indore
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Operations as a Transformation ProcessThe transfor-mation processInput transformed resourcesMaterial Information CustomersInput transforming resourcesFacilities StaffEnvironmentEnvironmentOUTPUTINPUTOutput GoodsOutput Services
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Output: Goods & ServicesFigure 1.3TangibleOutput can be inventoriedLow customer contactConsumption after production Quality is evidentIntangibleOutput cannot be inventoriedHigh customer contactConsumption are production simultaneous Quality difficult to judgeMore like a manufacturing processMore like a service process
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Illustration of Input Output Transformation Process
Input ResourcesTransformation ProcessOutputAutomobileRaw material, workers, equipment Manufacturing Finished carAirlineAircraft, pilots, crew, passengersMove passengersTransported passengersDepartment StoreGoods for sale, staff, customerDisplay goods, sell goods, Sales adviceCustomers & goods togetherDentistDental surgeons, equipments, patientsCheck & treat teeth, give preventative advicePatients with healthy teeth & gumsZooZoo keepers, animals, customersDisplay animal, educate customers, breed animalEntertained /informed customersPolicePolice officers, information, publicPrevent / solve crime, arrest criminalLawful society, public with feeling of security
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Input: Transformed Resources Mixture of 1) Material, 2) Information & 3) Customers
Predominantly Materials processorsPredominantly Information processorsPredominantly Customer processorsAll mfg. operationsMining & extractionRetail operationsWarehousePostal servicesContainer shipping lineTrucking companyAccountantsBank headquartersMarket research companyFinancial analystsNews serviceUniv. research unitTelecom companyHairdressersHotelsHospitalsMass rapid transportsTheatresTheme ParksDentists
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Input: Transforming Resources Two types: 1) facilities and 2) staff
Ferry companyPaper manufacturerRadio stationTypes of FacilitiesShipsOn-board navigation equipmentDry docsMaterial-handling equipmentOn-shore buildingWarehousesPulp-making vatsPaper-making machinesReeling equipmentSlitting equipmentPacking machinerySteam-generating boilers, warehousesBroadcasting equipmentStudios and studio equipment transmitters outside broadcast vehiclesTypes of StaffSailors, EngineersCatering staffOn-board shop assistantsCleanersMaintenance staffOperatorsChemists & chemical engineersProcess plant engineersDisc jockeysAnnouncersTechnicians
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Different types of transformation processes
Material processorsInformation processorsCustomer processorsPhysical propertiesMfg. operations, mining & extrac.Hairdressers, plastic surgeonsInformational propertiesBank HQs, accountantsPossessionRetail operationsFinancial analysis, market research LocationPostal service, port & distrbtnTelecom companyPublic transport, taxiStorage/AccomodationWarehouseLibrary ArchivesHotelsPhysiological stateHospitals & other health carePsychological stateEducation, theatres, psychoanalysts
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Performance of Process Output / Competitive Priorities
COSTDefinitionProcess ConsiderationsExampleLow-cost operationsDelivering a service or a product at the lowest possible costProcesses must be designed and operated to make them efficientLocal Manuf., AccerQUALITYTop qualityDelivering an outstanding service or productMay require a high level of customer contact and may require superior product featuresApple Consistent qualityProducing services or products that meet design specifications on a consistent basisProcesses designed and monitored to reduce errors and prevent defectsMcDonaldsTIMEDelivery speedQuickly filling a customers orderDesign processes to reduce lead timeDell , PizzaOn-time deliveryMeeting delivery-time promisesPlanning processes to increase percent of customer orders shipped when promisedFedEx, PizzaDevelopment speedQuickly introducing a new science or a productCross-functional integration and involvement of critical external suppliersMobile companies
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Performance of Process Output / Competitive Priorities
FLEXIBILITYDefinitionProcess ConsiderationsExampleCustomizationSatisfying the unique needs of each customer by changing service or products designsLow volume, close customer contact, and easily reconfiguredThermaxVarietyHandling a wide assortment of services or products efficientlyCapable of larger volumes than processes supporting customizationFlipkartVolume flexibilityAccelerating or decelerating the rate of production of service or products quickly to handle large fluctuations in demandProcesses must be designed for excess capacityThe United States Postal Service (USPS)
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Production System Design Process Choice Strategy Competitive Priorities Strategic fitThe process chosen should reflect the desired competitive priorities
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Product-Process MatrixFor manufacturing organization it brings togetherProduct customization & Volume Process characteristicsProcess choices include job, batch, line, and continuous flow processesProduction include make-to-order (MTO), assemble-to-order (ATO), and make-to-stock (MTS)
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Product-Process MatrixProject (construction)Job Shop (machine shop)Batch Process (apparel)Assembly Line (auto assembly)Continuous Process(sugar mill)Very Jumbled FlowRigidFlowOne ofa kindLow VolumeMany ProductsHigh VolumeFew Products
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Product-Process MatrixPoorGoodManufacturing Deliverable
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Materials in Manufacturing RM : Raw materials
WIP : Work in Process FG : Finished goodExamples ?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Process SummaryMTSATOMTOCustomer Interface pointFinished ProductsWork-in-Process (WIP)Raw MaterialsCustomer response time LowModerate HighContinuous flow LineBatchLineBatchJobBatchCostDelivery speed
Product varietiesDelivery speedFlexibility (i.e. customization)Top qualityOn-time delivery Dell, BajajDell, SubwaysThermax
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Operations Managementis the process of managing resources to deliver Goods & Services to Customers
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Objectives on OM I 1) Introducing the role of operation and understanding the various operation systems and providing the basic concepts on how it can be managed to meet required competitive advantage.2) Developing the ability to analyze and map the firms operation and also measuring and improving key performance measures. 3) Proving techniques for planning strategic, tactical and operational decisions in manufacturing and service environments.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Operations : Consultant approachOperations improvement double the plant outputPlant can produce 50-60 % more with present facilities and can almost double the production by adding a few balancing equipments.Plant Layout & Materials Handling , Materials Planning and Production Planning & Scheduling, Production system from Batch to Flowline.
Faster delivery at lower cost through productivity & process improvements Production paradigm changed from purely Made-To-Order to a combination ofMade-To-Stock & Made-To-Order.
Increased Productivity & improved Quality from existing plantProcess Capability studies to address Quality issues, which led to 15% drop in and one sixth lesser Seconds Quality products generated
Production capacity increased 75% with facilities redesignConventional process based plant layout was reorganise into facilities, with some additional equipments, for Focussed Manufacturing by creating 3 Plants-Within-Plant using Pull-System of production with Kanban.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Operations : Competitive analysis
DeliveryCostQualityFlexibilityInnovativenessSpeedOn time Factory cost ReworkDefectsAttributes22 weeks60%Rs 400 per unitRs 1000016 %. Company - Current25 weeks50%Rs 350 per unit?Market20 weeks70%Rs 400 per unit?Strong competitor17 weeks75%380 per unitRs 500010 %. Company Target (1 year)OMMMQualifying /Order winning
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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Dimensions of Operations ManagementStrategy
Design/ Tactical
Control
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Example: BankStrategy ( 2-5 years)Location, Geographical Coverage, Number of OfficesNature of Services to Offer Design / Tactical (6 months 1 years)Process Steps, Layout, Number of countersCapacity Planning Application designControl ( day to 1 months activities)Queue Discipline, Control of ErrorsScheduling & ProcessingInformation Display
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.
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