1. A. F. Concepts -Introduction to operations Management

8/6/2019 1. A. F. Concepts -Introduction to operations Management

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Introduction toIntroduction toOperations ManagementOperations Management

Session 1. A & F


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Introduction to OperationsIntroduction to Operations

A.A. OverviewOverview

B.B. ConceptsConcepts

C.C. Productivity of conversion processProductivity of conversion process

D.D. Objectives of production and operationsObjectives of production and operationsmanagementmanagement

E.E. Major components of production functionMajor components of production function

F.F. Short history of production managementShort history of production management

G.G. Organization of production managementOrganization of production management

H.H. Manufacturing methodsManufacturing methods

I.I. Product life cycle concept.Product life cycle concept.


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Historical mile stones in P&OMHistorical mile stones in P&OM

Factors affecting operations managementFactors affecting operations management

Operations as a systemOperations as a system

Decision makingDecision making

World class organizations ; what they doWorld class organizations ; what they do

Introduction to OperationsIntroduction to Operations


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Over viewOver view ToTo remainremain competitivecompetitive inin anan everever changingchanging globalglobal marketmarket

placeplace..

OrganizationOrganization shouldshould havehave anan efficientefficient operationoperationmanagementmanagement..

OperationsOperations managementmanagement isis thethe managementmanagement ofof ananorganizationsorganizations productive productive resourcesresources oror itsits productionproductionsystemsystem whichwhich convertsconverts inputsinputs intointo anan organizationorganizationproductsproducts oror servicesservices..

InputsInputs:: RawRaw materialmaterial TechnologyTechnologyManpowerManpower MoneyMoney

MachinesMachines InformationInformation

BuildingsBuildings Other Other resourcesresources

P&OMP&OM ProductionProduction andand OperationsOperations ManagementManagement

Operations ManagementOperations Management


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ManufacturingManufacturing

Plant managementPlant management

Factory managerFactory manager

Production controlProduction control Materials managementMaterials management

Quality controlQuality control

PersonnelPersonnel HRDHRD

Administration & SecurityAdministration & Security Finance & AccountingFinance & Accounting

Departments in a ProductionDepartments in a ProductionOrganizationOrganization

Production EngineeringProduction Engineering

Process planningProcess planning

Tool designTool design

StandardsStandards Industrial engineeringIndustrial engineering

Finished goodsFinished goods

WarehouseWarehouse

The departments can do a line

function or a staff function.


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17641764 James wattJames watt The steam engineThe steam engine

17901790 Ele whitneyEle whitney Concept of Interchangeable partsConcept of Interchangeable parts

18121812 Textile IndustryTextile Industry

18001800 Petrol Engine ; ElectricityPetrol Engine ; Electricity

19001900 J P MorganJ P Morgan

Jay GouldJay Gould

Cornelius Vander BuiltCornelius Vander Built

Start of Industrial EmpiresStart of Industrial Empires

19001900

19601960

F W TaylorF W Taylor Scientific ManagementScientific Management

Frank B GilberthFrank B Gilberth Time and Motion StudyTime and Motion Study

Henry L.GanttHenry L.Gantt Gantt ChartsGantt Charts

Harrington EmersonHarrington Emerson Principles of efficiencyPrinciples of efficiency

19201920 Henry FordHenry Ford Automobile revolutionAutomobile revolution

Pioneers in Industrial RevolutionPioneers in Industrial Revolution


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Scientific management applied from the lowerScientific management applied from the lower

echelons of the organization contributed toechelons of the organization contributed toimproved productivity, efficiency and costimproved productivity, efficiency and cost

reduction through mass production.reduction through mass production.

Pioneers in Industrial RevolutionsPioneers in Industrial Revolutions


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HawthorneHawthorne studiesstudies conductedconducted atat westernwestern ElectricElectricCompanyCompany ((19271927 19321932)) helpedhelped recognizingrecognizingPsychologicalPsychological andand sociologicalsociological factorsfactors contributingcontributingtoto motivationmotivation andand ProductivityProductivity..

OperationsOperations ManagersManagers mustmust createcreate anan atmosphereatmosphere //climateclimate thatthat encouragesencourages employeesemployees toto devotedevote theirtheir

energy,energy, ingenuityingenuity andand skillskill toto achieveachieve thetheorganizationalorganizational objectivesobjectives

Human Relations and BehavioralismHuman Relations and Behavioralism


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OrganizationsOrganizations useuse enormousenormous quantitiesquantities ofof manpower,manpower,supplies,supplies, materialsmaterials andand otherother resourcesresources..

DuringDuring thethe postpost worldworld warwar thethe conceptsconcepts ofof aa totaltotal

systemssystems approach,approach, crosscross functionalfunctional team,team, andand complexcomplex

mathematicalmathematical techniquestechniques werewere developeddeveloped for for

scientificallyscientifically developingdeveloping optimaloptimal solutionssolutions forfor

efficientefficient useuse ofof resourcesresources

AA fewfew ofof suchsuch techniquestechniques followedfollowed areare::LenierLenier programmingprogramming

PERTPERT // CPMCPM

ForecastingForecasting modelsmodels etcetc..

Operational ResearchOperational Research


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Characteristics of OperationCharacteristics of Operation

ResearchResearch1. OR approaches problem solving and decisionmaking from the total systems perspectives.

2. OR does not necessarily use interdisciplinary teams,

but it is interdisciplinary; it draws a on techniquesfrom sciences such as biology, physics, chemistry,

mathematics, and economics and applies the

appropriate techniques from each field to the system

being studied.

3. OR does not experiment with the system itself but

constructs a model of the system on which to

conduct experiments.


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ModelModel buildingbuilding andand mathematicalmathematical manipulationmanipulation

provideprovide thethe methodologymethodology thatthat hashas perhapsperhaps beenbeen thethe

keykey contributioncontribution ofof OROR..

TheThe primaryprimary focusfocus isis onon decisiondecision makingmaking..

ComputersComputers areare usedused extensivelyextensively..

Characteristics of OperationCharacteristics of OperationResearchResearch


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The Service SectorThe Service Sector::

Service organizations have now become as importantService organizations have now become as important

as Production Organizations.as Production Organizations.

More than 2/3More than 2/3rdrd of employees work in service sector.of employees work in service sector.

Evolution of OperationsEvolution of Operations

ManagementManagement


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Some Service IndustriesSome Service Industries::

The telecom industryThe telecom industry

Postal departmentPostal department

RailwaysRailways

Road transport undertakingsRoad transport undertakings

BanksBanks AirlinesAirlines

Hospitality industryHospitality industry

Transport & freight forwardingTransport & freight forwarding

Evolution of OperationsEvolution of OperationsManagementManagement


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Some Manufacturing IndustriesSome Manufacturing Industries::

Automotive IndustriesAutomotive Industries

Steel MillsSteel Mills

Chemical FactoriesChemical Factories

Pharmaceutical IndustriesPharmaceutical Industries

Heavy Engineering IndustriesHeavy Engineering Industries Machine Building IndustriesMachine Building Industries

PetroPetro-- Chemical Industries, etc.Chemical Industries, etc.

Evolution of OperationsEvolution of OperationsManagementManagement


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The recent developments in IT have contributedThe recent developments in IT have contributed

enormously in developing information systems,enormously in developing information systems,

decision support systems, helped in improving thedecision support systems, helped in improving the

speed of data processing and communication.speed of data processing and communication.

Real time computersReal time computers

ERP SystemERP System

Internet & eInternet & e--commercecommerce

RFIDRFID

Automated Storage and retrieval systemsAutomated Storage and retrieval systems

Information TechnologyInformation Technology


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Robotics & NC&CC MachinesRobotics & NC&CC Machines

CADCAD -- Computer Aided DesignComputer Aided Design

CAMCAM -- Computer Aided ManufactureComputer Aided Manufacture SPCSPC Statistical Process ControlStatistical Process Control

JIT/KANBANJIT/KANBAN Lean ManufacturingLean Manufacturing

ISO/QS/TS standardsISO/QS/TS standards

Time Based CompetitionTime Based Competition

New Developments in OperationsNew Developments in OperationsManagementManagement


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Process EngineeringProcess Engineering

Out SourcingOut Sourcing

Vendor Managed InventoriesVendor Managed Inventories

Third Party Logistics & 4PLThird Party Logistics & 4PL

BenchmarkingBenchmarking

Balanced Score CardBalanced Score Card

New Developments in OperationsNew Developments in OperationsManagementManagement


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Global competitionGlobal competition

QualityQuality customer servicecustomer service

Intelligent customer with high expectationIntelligent customer with high expectation

Rapid technological changesRapid technological changes

High growth of service sectorHigh growth of service sector

Scarcity of resourcesScarcity of resources

Social responsibility investmentSocial responsibility investment

From domestic to global markets.From domestic to global markets.

Factors Effecting OperationsFactors Effecting OperationsManagementManagement


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To face the above challenges, companies must makeTo face the above challenges, companies must make

A commitment to customer responsivenessA commitment to customer responsiveness

Continuous improvementContinuous improvement Faster development of innovative productsFaster development of innovative products

World class manufacturing & serviceWorld class manufacturing & service

Exceptional qualityExceptional quality

Fast and on time deliveryFast and on time delivery

Competitive pricesCompetitive prices

Factors Effecting OperationsFactors Effecting OperationsManagementManagement


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OperationsOperations systemsystem usesuses inputsinputs

AddsAdds valuevalue throughthrough conversionconversion andand createscreates anan

outputoutput

OutputOutput isis monitoredmonitored throughthrough thethe controlcontrol systemsystem..//

TheThe diagramdiagram showsshows aa SystematicSystematic ProductionProduction ModelModel


A systems ApproachA systems Approach


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Inputs :Inputs :

ExternalExternal

MarketMarket

Primary resourcesPrimary resources

Outputs of Production System :Outputs of Production System :

Direct OutputsDirect Outputs

Tangible goodsTangible goods

Intangible OutputsIntangible Outputs




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Typical Production andTypical Production and

Operating SystemsOperating Systems


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The core of Production System is conversionThe core of Production System is conversion/ value addition subsystem./ value addition subsystem.

The main departments are :The main departments are :

ManufacturingManufacturing

RetailingRetailing

TruckingTrucking

Value AdditionValue Addition


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Operation Managers have to take several decisionsOperation Managers have to take several decisions

for efficient functioning .for efficient functioning .

These can be strategic, operations and controlThese can be strategic, operations and control

decisions.decisions.

Strategic Decisions

Strategic Decisions ::ProductProduct

ProcessProcess

FacilitiesFacilities

Operating DecisionsOperating Decisions :: Plan Production to meetPlan Production to meet

demanddemand

Control DecisionsControl Decisions : Planning Operations &: Planning Operations &

Controlling OperationsControlling Operations

Decision MakingDecision Making


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Worlds 20 Largest CorporationsWorlds 20 Largest Corporations

CompanyCompany Home CountryHome Country Annual RevenuesAnnual Revenues

($ billions)($ billions)

General MotorsGeneral Motors U.S.U.S. 177177

WalWal--mart storesmart stores U.S.U.S. 167167

Exxon MobilExxon Mobil U.S.U.S. 164164

Ford MotorFord Motor U.S.U.S. 163163

Daimler ChryslerDaimler Chrysler GermanyGermany 160160

MitsuiMitsui JapanJapan 119119

MitsubishiMitsubishi JapanJapan 118118Toyota MotorToyota Motor JapanJapan 116116

General ElectricGeneral Electric U.S.U.S. 112112

ItochuItochu JapanJapan 109109


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CompanyCompany Home CountryHome Country Annual Annual

RevenuesRevenues

($ billions)($ billions)

Royal Dutch / Shell GroupRoyal Dutch / Shell Group NetherlandsNetherlands 105105

SumitomoSumitomo JapanJapan 9696

Nippon Telegraph & TelephoneNippon Telegraph & Telephone JapanJapan 9494

MarubeniMarubeni JapanJapan 9292

AXAAXA FranceFrance 8888

International Business MachinesInternational Business Machines U.S.U.S. 8888

BP AmocoBP Amoco United KingdomUnited Kingdom 8484

CitigroupCitigroup U.S.U.S. 8282

VolkswagenVolkswagen GermanyGermany 8080

Nippon Life InsuranceNippon Life Insurance JapanJapan 7979

Worlds 20 Largest CorporationsWorlds 20 Largest Corporations


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Source:Operations Management

Chapter No. 1, ,Page No. 5 to 31

by Norman Gaither, Greg Frazier

Publisher: Thomson South Western

1. A. F. Concepts -Introduction to operations Management

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