Intro om,-strategy,_productvity-copy
-
Upload
pooja-chauhan -
Category
Presentations & Public Speaking
-
view
23 -
download
0
Transcript of Intro om,-strategy,_productvity-copy
1
Introduction Introduction
to to
Operations ManagementOperations Management
Prof Amal S RoyProf Amal S Roy
2
AgendaAgenda
Historical Development of OM Historical Development of OM Taylor, Henry Ford, Hawthorne Studies Taylor, Henry Ford, Hawthorne Studies Operations Research, Computers & Adv. Opn. Technology.Operations Research, Computers & Adv. Opn. Technology.
OM in the Organisation ChartOM in the Organisation ChartSix Basic Functions of BusinessSix Basic Functions of Business O M. DefinitionO M. DefinitionScope of Operations Mgmt.Scope of Operations Mgmt.
Mfg. Industry v/s Service IndustryMfg. Industry v/s Service Industry
Production SystemsProduction Systems““Input –Transformation –Output” Relationships Input –Transformation –Output” Relationships Productivity MeasurementsProductivity MeasurementsDecisions & Activities in OM Decisions & Activities in OM
Business Business
What’s the purpose of business ? What’s the purpose of business ?
Why are we in business ? Why are we in business ?
………………. to create wealth . to create wealth (Adam Smith ) (Adam Smith )
3
4
OM in the Organisation ChartOM in the Organisation Chart
SIX BASIC FUNCTIONS OF BUSINESSSIX BASIC FUNCTIONS OF BUSINESS
1.1. CREATIONCREATION : : Product Selections / Idea GenerationProduct Selections / Idea Generation
2.2. FINANCEFINANCE : : Managing Resources, Capital Acqn., Managing Resources, Capital Acqn., keeping Financial Records.keeping Financial Records.
3.3. PERSONNEL PERSONNEL :: H.R., Labour Relations.H.R., Labour Relations.
4.4. PURCHASINGPURCHASING : : Buying of required Buying of required
(Eqpt. + Material + Services)(Eqpt. + Material + Services)
5.5. CONVERSION/ CONVERSION/ : : Changing Raw Materials Changing Raw Materials
((PRODUCTION)PRODUCTION) to Economic Goods. to Economic Goods.
6.6. DISTRIBUTION DISTRIBUTION : : Selling & Marketing (Selling & Marketing (reaching the Customer) .reaching the Customer) .
5
Historical Development of OMHistorical Development of OM
In olden days, did Production Systems exist ?In olden days, did Production Systems exist ? Great Wall of China, Great Wall of China, Egyptian Pyramids, Egyptian Pyramids, Taj MahalTaj Mahal Village ActivitiesVillage Activities
Features of Old production activitiesFeatures of Old production activities Cottage System Cottage System Hand Work Hand Work UnorganizedUnorganized UniqueUnique..
6
Evolution of OMEvolution of OM
Phases in evolution of OMPhases in evolution of OM
Craft ProductionCraft Production
Mass ProductionMass Production
Lean Management Lean Management
Mass CustomisationMass Customisation
7
Historical Evolution of OMHistorical Evolution of OM
F.W. TaylorF.W. Taylor (1856-1915) – (1856-1915) –
Father of Sc. Management Father of Sc. Management Each worker to be trained for suitable job Each worker to be trained for suitable job
(according to his skill, strength, and learning ability (according to his skill, strength, and learning ability
Divn. of Labour Divn. of Labour Synergy Effect Synergy Effect ) ) Standard Output Norms Standard Output Norms set per worker.set per worker. Instructions Card, Routing Sheets, Material SpecsInstructions Card, Routing Sheets, Material Specs
-All -All Standardized.Standardized. Supervision Supervision …. Not for keeping watch, but to arrange facilities. …. Not for keeping watch, but to arrange facilities. Incentive for motivationIncentive for motivation & increasing productivity & increasing productivity
8
Historical Evolution of OMHistorical Evolution of OM
Henry FordHenry Ford (1913) – (1913) –
Moving Assembly Line Moving Assembly Line concept concept Standardized Standardized product design product design Mechanized assembly Mechanized assembly line line Specialized labour Specialized labour InterchangeableInterchangeable parts parts
Result : Result : Av. labour per chassisAv. labour per chassis
reduced from 12.5 hrs to 93 min. reduced from 12.5 hrs to 93 min.
9
O. M. Definition O. M. Definition
Operations Management is the Operations Management is the effective and efficient effective and efficient management of processes.management of processes.
A PROCESS has an input and value added output.A PROCESS has an input and value added output.
The objective of a process is to The objective of a process is to add value by conversion add value by conversion from input to output. from input to output.
10
What does Operations Manager Do?What does Operations Manager Do? Operations -Operations -
a function or system that a function or system that transforms transforms
inputs into outputs inputs into outputs of greater valueof greater value Transformation Process -Transformation Process -
a series of activities along a a series of activities along a value chainvalue chain
extending from supplier to end-customerextending from supplier to end-customer activities that do not add value are superfluous activities that do not add value are superfluous
and should be eliminatedand should be eliminated What is Operations Management?What is Operations Management?
design, conversion, and improvement of productive design, conversion, and improvement of productive systemssystems
11
Physical : Physical : as in manufacturing operationsas in manufacturing operations Locational : Locational : as in transportation operationsas in transportation operations Exchange : Exchange : as in retail operationsas in retail operations Physiological: Physiological: as in health careas in health care Psychological: Psychological: as in entertainmentas in entertainment Informational: Informational: as in communicationas in communication
Is there any Business / Industry Is there any Business / Industry
where an operation is not involved?where an operation is not involved?
Transformation ProcessesTransformation Processes – Diff. forms – Diff. forms
12
INPUT •Material•Machines•Labor•Management•Capital
TRANSFORMATIONPROCESS
OUTPUT •Goods•Services
FeedbackFeedback
Operations as a Transformation ProcessOperations as a Transformation Process
LAND, BLDG
PLANT, M/C
MATERIAL ENERGY MANPOWER
PRODUCTS AND SERVICES
OUTPUT
INPUT RESOURCES
OPERATIONS MANAGEMENTObtains the factsPlans,Directs,Coordinates,Controls,Motivatesin order to PRODUCE
14
Mfg. v/s Services – What’s the difference?Mfg. v/s Services – What’s the difference?
Mfg. Industry Service Industry
Creation of Goods
Providing Services
Production MgmtOperations Mgmt
Business Organization
15
Mfg. v/s Services – What’s the difference?Mfg. v/s Services – What’s the difference?
Manufacturing Services1. Step by step conversion of Material Service to satisfy customer
2. Tangible & Stockable Output Non-Stockable Output
3. Mass Production with few variations Max. Customisation
4. More M/c Oriented, Less Labour More Mind Skill / Labour Oriented
5. Factory Location – Near RM or Market, or Better Facilities
Near Customer
6. Low / No Customer involvement in Conversion Process
Direct interaction between Customer and Process
16
A Systems View of OperationsA Systems View of Operations
Manufacturing System (e g. Television)Manufacturing System (e g. Television)
Inputs Inputs :: Equipment, labour, parts, etcEquipment, labour, parts, etc Conversion Process:Conversion Process: Producing parts, Assembling Producing parts, Assembling Output:Output: Television setTelevision set Feedback:Feedback: Defect rates, Customer responseDefect rates, Customer response
Service System Service System (e.g. Banking)(e.g. Banking)
Inputs :Inputs : Clerks, equipment, cash, etc..Clerks, equipment, cash, etc.. Conversion Process :Conversion Process : Monetary transactions.Monetary transactions. Output :Output : Loans, and depositsLoans, and deposits Feedback :Feedback : Interest earned, Deposits receivedInterest earned, Deposits received
17
“Input –Transformation –Output” Relationships
System Primary Inputs
Resources Transformation Fn.(s) Typical Desired Output
Automobile Factory
Sheet steel, engine parts
Tools, equipment, workers
Fabrication and Assy. of cars (physical)
High-quality cars
Hospital Patients MDs, nurses, medical equipment
Health care (physiological) Healthy individuals
Restaurant Hungry customers
Food, chef, wait-staff, environment
Well-prepared, Well-served food; Stimulating environment
Satisfied customers
College or university
High school graduates
Teachers, books, classrooms
Imparting knowledge and skills (informational)
Educated individuals
Department store
Shoppers Displays of goods, sales clerks
Attract shoppers, Promote products, Fill orders (exchange)
Satisfied customers
Distribution Centre
SKUs Storage bins, stock-pickers
Storage and redistribution Fast delivery, availability of SKUs
10/31/14 [email protected]
Scope of Operations Mgmt.Scope of Operations Mgmt.
Long Term / Strategic DecisionsLong Term / Strategic Decisions
1.1. Product Selection & DesignProduct Selection & Design2.2. Process Selection & PlanningProcess Selection & Planning3.3. Facilities LocationFacilities Location4.4. Facilities Layout Facilities Layout 5.5. Capacity PlanningCapacity Planning
Short Term / Operational DecisionsShort Term / Operational Decisions
11. . Production Planning & ControlProduction Planning & Control2. 2. Inventory ControlInventory Control3. 3. Quality ControlQuality Control4.4. Method Study / Work StudyMethod Study / Work Study5. 5. Maintenance & ReplacementMaintenance & Replacement
Strategic issues Strategic issues
in in
Operations Management Operations Management
19
Operations – 80-90% HiddenOperations – 80-90% Hidden
The Value EquationThe Value Equation
price
ePerformancValue =
price
InnovationyFlexibilitTimelinessQualityValue
+++=
P
IFTQValue
+++=
Maximizing Value Added in Maximizing Value Added in OperationsOperations
Scope for Adding Value Scope for Adding Value for the Customerfor the Customer
Reduce product costs to customer.Reduce product costs to customer.
Make the product more readily available.Make the product more readily available.
Provide faster service.Provide faster service.
Provide customers with additional relevant Provide customers with additional relevant information.information.
Customize the product to the customer’s Customize the product to the customer’s specific needs.specific needs.
Strategic PrioritiesStrategic Priorities
CompetitivenessCompetitiveness
A company’s position in the marketplace relative to its A company’s position in the marketplace relative to its competition.competition.
Competitive PrioritiesCompetitive Priorities
How the manufacturing function provides a firm with a How the manufacturing function provides a firm with a competitive advantage.competitive advantage.
PrioritiesPriorities——Low cost, high quality, fast delivery, Low cost, high quality, fast delivery, flexibility, and service.flexibility, and service.
Strategic PrioritiesStrategic Priorities
Type Priority
Cost Providing low price products. Controlling costs across the board.
Quality Providing high quality products. Focus is on product and process quality.
Delivery Providing products reliably and quickly.
Flexibility Providing a wide variety of products (mass customization). How fast a firm can produce a new product line.
Service Providing “value-added” service. How products are delivered and supported.
Questions to be resolved Questions to be resolved in Op. Mg. in Op. Mg.
Location:Location: Where do we locate them? Where do we locate them?
Capacity Capacity : How big do we make the facilities?: How big do we make the facilities?
Vertical Integration:Vertical Integration: Which part of the supply Which part of the supply
chain do we choose to control ourselves?chain do we choose to control ourselves?
Process Technology Process Technology : What type of process(es): What type of process(es)
do we install to make the products?do we install to make the products?
Workforce Workforce : Whom do we hire?: Whom do we hire?
Quality Management Quality Management : How will we define, : How will we define,
measure and monitor quality in the organization?measure and monitor quality in the organization?
Policies & Procedures Policies & Procedures : How work will be : How work will be
performed and how decisions will be made?performed and how decisions will be made?
Organization Structure Organization Structure : What hierarchical : What hierarchical
structure will we choose for the organization?structure will we choose for the organization?
Productivity Concepts Productivity Concepts
29
30
Production & ProductivityProduction & Productivity
Production Production Output (in No of Units) Output (in No of Units)
OutputOutput Productivity Productivity ------------ ------------ No. of pcs./hr. No. of pcs./hr.
InputInput
Three Main Productivity IndicesThree Main Productivity Indices
31
32
Productivity MeasuresProductivity Measures( Output in terms of Input) ( Output in terms of Input)
Machines Machines - - Out put per Machine HourOut put per Machine Hour
MenMen -- Out put per Man HourOut put per Man Hour
Materials - Materials - No of units produced per input of R.M.No of units produced per input of R.M. (e.g. - No of Screws per Kg of wire)(e.g. - No of Screws per Kg of wire)
Power - Power - No of Pcs. per KW Unit of El. PowerNo of Pcs. per KW Unit of El. Power
Boiler Boiler - - Kgs. of Rubber cured / Kg of steam Kgs. of Rubber cured / Kg of steam usedused
33
Productivity of an OrganizationProductivity of an Organization
Sugar Mill - Sugar Mill - Kg. of sugar produced / Kg. of sugar produced /
Ton of sugar-cane crushedTon of sugar-cane crushed
Fabrication -Fabrication - Tons of Fabrication / Tons of Fabrication /
Kg. of Welding RodKg. of Welding Rod
34
Productivity of a Service Function
Transporter - Transporter - Ton-km / Vehicle/ Month.Ton-km / Vehicle/ Month.
OROR
Ton-km / 1000 Lit. Diesel Ton-km / 1000 Lit. Diesel
Pharma. Marketing Div. -Pharma. Marketing Div. -
Rs Order booked / MR /Month Rs Order booked / MR /Month
35
Service Industry : Service Industry : Productivity Measures
BusinessBusiness Productivity MeasureProductivity Measure
RestaurantRestaurant Customers (meals) per hourCustomers (meals) per hour
Retail StoreRetail Store Sale per Sq. footSale per Sq. foot
Chicken farmChicken farm Kg. of meat per kg. of feedKg. of meat per kg. of feed
Utility plantUtility plant Kilowatts per ton of coalKilowatts per ton of coal
Paper millPaper mill Tons of paper per ton of woodTons of paper per ton of wood