P&O Class Slides
-
Upload
biju-kumar-thapalia -
Category
Documents
-
view
228 -
download
0
Transcript of P&O Class Slides
-
8/6/2019 P&O Class Slides
1/52
Lecture SlidesDr. Biju K Thapalia
Management Campus
Purbanchal University, Nepal
-
8/6/2019 P&O Class Slides
2/52
8/5/2011 2Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
3/52
` Activities related to producing goods in an
organisation is called Production functions.
` It is mainly related to manufacturing of tangible
goods` Basically a conversion function
` Example -A Biscuit factory- producing biscuits
for commercial purpose
`
8/5/2011 3Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
4/52
` What does a Hotel produce? -Services
` To increase the scope of the field the termOperations is used.
` The Operations functions consist of all the activitiesthat are directly related to producing goods orproviding services.
` List all the activities of a College and a noodlecompany. Are there any similarities?
8/5/2011 4Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
5/52
8/5/2011 5Dr. Biju K Thapalia
InputsInputs OutputsOutputs
ConversionConversion
SubsystemSubsystem
Production SystemProduction System
ControlControlSubsystemSubsystem
-
8/6/2019 P&O Class Slides
6/52
FinanceFinance
MarketingMarketing
8/5/2011 6Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
7/52
` Nature of output
` Customer involvement
` Labor involvement` Consumptions of output
` Uniformity of output
` Measurement of productivity
8/5/2011 7Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
8/52
` The Industrial Revolution
` Post-Civil War Period
` Scientific Management
` Human Relations and Behaviorism` Operations Research
` The Japanese influence
` New trends
8/5/2011 8Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
9/52
` The industrial revolution developed in England in
the 1700s.
` The steam engine, invented by James Watt in
1764, largely replaced human and water power
for factories.
` Adam Smiths The Wealth of Nations in 1776
touted the economic benefits of the specialization
of labor.
` Thus the late-1700s factories had not onlymachine power but also ways of planning and
controlling the tasks of workers.
8/5/2011 9Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
10/52
` The industrial revolution spread from England to otherEuropean countries and to the United Sates
` In 1790 an American, Eli Whitney, developed the concept ofinterchangeable parts. Forced consistent production of parts.Variation evil.
` In the 1800s the development of the gasoline engine andelectricity further advanced the revolution.
` By the mid-1800s, the old cottage system of production hadbeen replaced by the factory system.
` Development of rail lines provided quick, cheap transportationof goods.Also influx of labor from farm to urban centers.
` . . . more
8/5/2011 10Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
11/52
` During the post-Civil War period great
expansion of production capacity occurred.
` By post-Civil War the following developments
set the stage for the great productionexplosion of the 20th century: increased capital and production capacity
the expanded urban workforce
new Western US markets
an effective national transportation system
8/5/2011 11Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
12/52
` Frederick Taylor is known as the father of scientificmanagement. His shop system employed thesesteps: Each workers skill, strength, and learning ability were
determined.
Stopwatch studies were conducted to precisely setstandard output per worker on each task. Material specifications, work methods, and routing
sequences were used to organize the shop. Supervisors were carefully selected and trained. Incentive pay systems were initiated.
` Gilbreth couple time and motion study
` Henry Gantt- system of scheduling (Gantt chart)
8/5/2011 12Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
13/52
` In the 1920s, Ford Motor Companys
operation embodied the key elements of
scientific management:
standardized product designs mass production
low manufacturing costs
mechanized assembly lines
specialization of labor
interchangeable parts
8/5/2011 13Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
14/52
` In the 1927-1932 period, researchers in the
Hawthorne Studies realized that human
factors were affecting production.
` Researchers and managers alike wererecognizing that psychological and
sociological factors affected production.
` From the work of behavioralists came a
gradual change in the way managers thoughtabout and treated workers.
8/5/2011 14Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
15/52
` During World War II, enormous quantities ofresources (personnel, supplies, equipment, )had to be deployed.
` Military operations research (OR) teams were
formed to deal with the complexity of thedeployment.` After the war, operations researchers found their
way back to universities, industry, government,and consulting firms.
` OR helps operations managers make decisionswhen problems are complex and wrong decisionsare costly.
` Quantitative methods use like LP, Forecasting,Inventory management and many more
8/5/2011 15Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
16/52
` Quality focus
` Continuous improvement
` Elimination of waste
` Customization` Total quality management
` JIT
8/5/2011 16Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
17/52
` Globalization and global competition
` Cost reduction
` Computerization
` Rapid advancement of IT` Automation
` Out sourcing
8/5/2011 17Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
18/52
` Cost Ryanair- no baggage facility, direct hall, second
airport of the city Nano Car
` Quality Toyota Quality comes first
` Flexibility Colgate Toothpaste- 10 variety in Indian market
` Speed DHL- quick delivery Sony- new products always
` Differentiation Ncell Blackberry service, wide coverage
8/5/2011 18Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
19/52
8/5/2011 19Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
20/52
` Make-to-Order products and services are made to customer specifications
after an order has been received
` Make-to-Stock products and services are made in anticipation of demand
` Assemble-to-Order products and services add options according to customer
specifications
8/5/2011 20Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
21/52
` Project one-at-a-time production of a product to customer order
` Batch Production systems process many different jobs at the same time in
groups (or batches)` MassProduction
large volumes of a standard product for a mass market
` ContinuousProduction used for very high volume commodity products
8/5/2011 21Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
22/52
8/5/2011 22Dr. Biju K Thapalia
Source:Source:
Adapted fromAdapted fromRobert HayesRobert Hayes
and Stevenand Steven
Wheelwright,Wheelwright,
Restoring theRestoring the
CompetitiveCompetitive
Edge:Edge:
CompetingCompeting
ThroughThrough
ManufacturingManufacturing(New York:(New York:
John Wiley &John Wiley &
Sons, 1984), p.Sons, 1984), p.
209209
-
8/6/2019 P&O Class Slides
23/52
` Capacity strategic decisions include: When, how much, and in whatform to alter
capacity
` Facility strategic decisions include:Whether demand should be met with a few largefacilities or with several smaller ones
Whether facilities should focus on serving certaingeographic regions, product lines, or customers
Facility location can also be a strategic decision
8/5/2011 23Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
24/52
` What are the skill levels and degree ofautonomyrequired to operate production system?
` What are the training requirements and selectioncriteria?
` What are the policies on performance evaluations,
compensation,
and incentives?` Will workers be salaried, paid an hourly rate, or
paid a piece rate?` Will profit sharing be allowed, and if so, on what
criteria?` Will workers perform individual tasks or work in
teams?` Will they have supervisors or work in self-
managed work groups?` How many levels of management will be required?` Will extensive worker training be necessary?` Should workforce be cross-trained?` Wha
t efforts will be made in terms of retention?8/5/2011 24Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
25/52
` What is the target level of quality for ourproducts and services?
` How will it be measured?` How will employees be involved with quality?` What will the responsibilities of the quality
department be?` What types of systems will be set up to ensure
quality?` How will quality awareness be maintained?` How will quality efforts be evaluated?` How will customer perceptions of quality be
determined?` How will decisions in other functional areas
affect quality?
8/5/2011 25Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
26/52
` Vertical Integration degree to which a firm produces parts that go into its
products` Strategic Decisions
How much work should be done outside the firm? On what basis should particular items be made in-
house? When should items be outsourced? How should suppliers be selected? What type of relationship should be maintained with
suppliers? What is expected from suppliers?
How many suppliers should be used? How can quality and dependability of suppliers be
ensured? How can suppliers be encouraged to collaborate?
8/5/2011 26Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
27/52
` Production and productivity are different in
concept.
` Its wrong to think that higher production leads to
higher productivity
` Production is related to the activity of producing
goods or services. It is a process (or system) of
converting input into some useful, value-added
output
` Productivity is related to the efficient utilization of
input resource into produced in the form of value
added goods or services
8/5/2011 27Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
28/52
` Productivity
` Productivity is an arithmetic ratio of amount
produced and the resources used during the
process of production.
` Therefore productivity implies efficient
resource utilization
8/5/2011 28Dr. Biju K Thapalia
InputOutput!
-
8/6/2019 P&O Class Slides
29/52
8/5/2011 29Dr. Biju K Thapalia
` Production means aprocess of transformationof raw materials and otherinputs into finished goodsand services.
` Production is transforminginputs into outputs, byadding values.
`
Production= value additionto new materials
` Production denotes
surplus generation.
` Productivity is defined in
terms of input output
relationship; productivity
is to get higher output
over given input.
` Productivity = efficiency ofproduction
-
8/6/2019 P&O Class Slides
30/52
` Methods` Capital
` Quality
` Technology
`
Management
Improve Productivity by-` Develop measures
` Analysis system to find bottleneck
` Improve methods- process and management
` Reasonable goals
` Incentives
8/5/2011 30Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
31/52
` Better utilization of resources
` To earn good profit because of reduction in
costs
` Competitive in market` Higher wages
` reduced prices for customer
8/5/2011 31Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
32/52
` A company is manufacturing 24,000
components per month by employing 100
workers in 8 hour shift. The company gets
additional order from government to supplyadditional 6000 components. The
management decides to employ additional
workers. What will be production and
productivity level when the number of aadditional workers employed are: (i) 30 (ii) 25
(iii) 20
8/5/2011 32Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
33/52
` Forecasting is a statement about the future` Forecast or Prediction?
Features of forecasting
`
Forecasting is rarely perfect` All forecasting techniques assume that there is
some degree ofstability in the system
` what happened in the past will continue tohappen in the future
` Forecasting for a group of items is moreaccurate than the forecast for individuals.
` 4. Forecasting accuracy decreases as timehorizon increases.
8/5/2011 33Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
34/52
` Timely: Forecasting horizon must cover the timenecessary to implement possible changes.
` Reliable: It should work consistently.
` Accurate: Degree of accuracy should be stated.
` Meaningful: Should be expressed in meaningfulunits.Production should know how many units to beproduced, and schedulers need to know whatmachines and skills will be required.
` Written: to guarantee use of the same information
and to make easier comparison to actual results.` Easy to use: users should be comfortable working
with forecast.
8/5/2011 34Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
35/52
Information
Planning thesystems
Schedulingthe system
Controllingthe system
Demandforecast foroperations
8/5/2011 35Dr. Biju K Thapalia
Output
-
8/6/2019 P&O Class Slides
36/52
` In Planning the system Product design
Process design
Equipment investment
Capacity planning
` In Scheduling the system Aggregate production planning
Operation scheduling
` In Controlling the system Production control
Inventory control
Labour control
8/5/2011 36Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
37/52
Qualitativex based on experience,
x Judgment
x Knowledge and opinion
Quantitative
x based on data
x statistics
8/5/2011 37Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
38/52
Qualitative Methods` Uses when situation
is vague and littledata available
`
New products` New technology` Involves knowledge
and judgement` Example:
forecasting newlyintroduced onlinesales
8/5/2011 38Dr. Biju K Thapalia
Quantitative Methods
` Used in stablesituations
` Historical data
available` Existing products
` Current technology
` Involves mathematical
techniques` Example: Example:
sales of color TVs
-
8/6/2019 P&O Class Slides
39/52
1. Executive Opinions Group of upper-level managers (read expert) makes
collective opinion about future Useful for long-range forecast or new product
2. Sales Force Composite
estimates from sales individuals are reviewed forreasonableness (may tend to make under estimates),then aggregated
3. Consumer Surveys asking the customers may give best forecasts but it is
higher in cost, difficult to apply
4. Delphi method The Delphi technique was developed at RAND
Corporation in the 1950s to help capture the knowledgeof diverse experts while avoiding the disadvantages oftraditional group meetings.
8/5/2011 39Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
40/52
(a) Panel of experts queried.(b) Chosen experts to participate should be of a variety
of knowledgeable people in different areas (finance,marketing, production etc). They are unknown to anyone, except for the coordinator.
(c) Through questionnaire the coordinator obtainsestimates from all participants.
(d) Coordinator summarizes results and redistributesthem to participants along with appropriate newquestions.
(e) Summarize again and refine forecasts and developnew question(f) Continue till 2-3 times before getting almost similar
answer from all
8/5/2011 40Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
41/52
` Time Series Quantitative methods Simple average
Exponential smoothing
` Causal Quantitative methods Regression analysis
Economic modeling
8/5/2011 41Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
42/52
` Based on past data Simple average
Simple moving average
Weighted moving average
Exponential smoothing
x The pattern of weights is exponential
x Demand of latest period is weighted most heavily
x And weights on subsequent periods are decreased
exponentially
8/5/2011 42Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
43/52
8/5/2011 43Dr. Biju K Thapalia
periodtheistandwhere
FDF ttt
,10
)1( 11
ee
E
EE
What should be the value of ?
When the demands are stable over the period than .1-.3 are ok
When the demands are very unstable than .7-.9 are ok
When the demands are slightly unstable than .4-.6 are ok
-
8/6/2019 P&O Class Slides
44/52
The sales for the ABC company are as follows-
Forecast September sales
a) A five-month moving averageb) Exponential smoothing with smoothing
constant equal to 0.2, assuming a Marchforecast of19000
8/5/2011 44Dr. Biju K Thapalia
Month Sales (in thousand units)
Feb 19
March 18
April 15
May 20June 18
July 22
Aug 20
-
8/6/2019 P&O Class Slides
45/52
-
8/6/2019 P&O Class Slides
46/52
8/5/2011 46Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
47/52
` When there is some kind of trend than first order exponentialsmoothing is not so good tool for forecasting
` If the trend is linear than we can use Trend equation
` Develop a straight line equation through which we forecast
future value
8/5/2011 47Dr. Biju K Thapalia
linetheofSlope
0
!
!!
!
!
!
b
tatyofValuea
tperiodforForecasty
periodstimet
where
btay
t
t
t
-
8/6/2019 P&O Class Slides
48/52
8/5/2011 48Dr. Biju K Thapalia
n
tbya
ttn
yttynb
!
!
22 )(
-
8/6/2019 P&O Class Slides
49/52
8/5/2011 49Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
50/52
8/5/2011 50Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
51/52
8/5/2011 51Dr. Biju K Thapalia
-
8/6/2019 P&O Class Slides
52/52
8/5/2011 52Dr Biju K Thapalia