History OfOperational Management

Production and Operation Management

What is Management???

Functions Of Management Planning

Organizing

Leading

Controlling

Levels of Management

Operational Management

Definition: from msn Encarta:-

The organizing and controlling of the fundamental business activity of providing

goods and services to customers

Definition from BNET business dictionary

The maintenance, control, and improvement of organizational activities that are required to

produce goods or services for consumers.

Operations Management

Operational management is the set of activities that creates value in the form of goods and services by transforming input into output.

The Heritage of OMThe Heritage of OM

Division of labor (Adam Smith 1776; Division of labor (Adam Smith 1776; Charles Babbage 1852)Charles Babbage 1852)

Standardized parts (Whitney 1800)Standardized parts (Whitney 1800) Scientific Management (Taylor 1881)Scientific Management (Taylor 1881) Coordinated assembly line (Ford/ Coordinated assembly line (Ford/

Sorenson 1913)Sorenson 1913) Gantt charts (Gantt 1916)Gantt charts (Gantt 1916) Motion study (Frank and Lillian Gilbreth Motion study (Frank and Lillian Gilbreth

1922)1922) Quality control (Shewhart 1924; Deming Quality control (Shewhart 1924; Deming

1950)1950)

Taylor’s PrinciplesTaylor’s Principles

Matching employees to right job Providing the proper training Providing proper work methods and

tools Establishing legitimate incentives

for work to be accomplished

Management Should Take Management Should Take More Responsibility for:More Responsibility for:

New Challenges in OMNew Challenges in OM

Global focusGlobal focus Just-in-timeJust-in-time Supply chain Supply chain

partneringpartnering Rapid product Rapid product

development, development, alliancesalliances

Mass Mass customizationcustomization

Empowered Empowered employees, employees, teamsteams

ToToFromFrom Local or national Local or national

focusfocus Batch shipmentsBatch shipments Low bid purchasingLow bid purchasing

Lengthy product Lengthy product developmentdevelopment

Standard productsStandard products

Job specializationJob specialization

Levels of operational management Strategic level

tactical level

operational level

Strategic level strategic issues include determining the size

and location of manufacturing plants, deciding the structure of service or telecommunications networks, and designing technology supply chains.

Tactical Level Tactical issues include plant layout and

structure, project management methods, and equipment selection and replacement.

Operational level Operational issues include production

scheduling and control, inventory management, quality control and inspection, traffic and materials handling, and equipment maintenance policies

Importance of Operations Competing on Cost

Competing on Quality

Competing on Flexibility

Competing on Speed

Competing on Cost Elimination of all waste

Tighten productivity standards

Competing on Quality Quality in defense:

Minimize defect rate Conform to design specifications

Opportunity to please the customer Understand attitudes towards and expectations of

quality

Competing on Flexibility Ability to produce variety of products

Introduce new products

Modify existing products

Respond quickly to customer needs

Marketing wants variety for customers

Competing on Speed Fast moves

Fast adaptations

Tight linkage with suppliers

Conclusion