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Production and Operation Management

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Adil Hassan
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19 views

Production and Operation Management

Uploaded by

Adil Hassan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Production and Operation Management

Operations Management
The business function responsible for planning, coordinating, and controlling the
resources needed to produce products and services for a company.
(OM) is the process of planning, organizing, and supervising the production, manufacturing,
or delivery of services. Its main objective is to ensure that business operations are efficient
in terms of using resources (such as raw materials, Labor, and technology) and effective in
terms of meeting customer requirements.

What is Role of OM?


The role of Operations Management (OM) is to ensure that a company’s production or
service processes run efficiently and effectively. OM oversees the transformation of
resources like materials, Labor, and technology into finished goods or services. Key
responsibilities include:
 Process and Resource Management: Designing efficient processes and managing
resources to optimize productivity.
 Quality Control: Maintaining high standards in products or services.
 Supply Chain and Inventory Management: Ensuring timely delivery and balanced
inventory.
 Cost Efficiency: Reducing operational costs and increasing overall efficiency.
 Customer Satisfaction: Meeting customer needs through timely and quality outputs.
In essence, OM focuses on optimizing operations to achieve the company’s goals while
satisfying customer demands.

Manufacturers vs Service Organizations


Similarities for Service/Manufacturers
 Both use technology
 Both have quality, productivity, & response issues
 Both must forecast demand
 Both can have capacity, layout, and location issues
 Both have customers, suppliers, scheduling and staffing issues

OM Decisions
 All organizations make decisions and follow a similar path
 First decisions very broad – Strategic decisions
 Strategic Decisions – set the direction for the entire company; they are
broad in scope and long-term in nature
 Following decisions focus on specifics - Tactical decision
 Tactical decisions: focus on specific day-to-day issues like resource needs,
schedules, & quantities to produce
 are frequent
 Strategic decisions less frequent
 Tactical and Strategic decisions must align
……………………………………………………………………………………………………………………………………………….

Competitiveness:
How effectively an organization meets the wants and needs of customers relative to others
that offer similar goods or services

Businesses Compete Using Marketing


 Identifying consumer wants and needs
 Pricing
 Advertising and promotion
Businesses Compete Using Operations
 Product and service design
 Cost
 Location
 Quality
 Quick response
 Flexibility
 Inventory management
 Supply chain management
 Service
Why Some Organizations Fail
 Too much emphasis on short-term financial performance

 Failing to take advantage of strengths and opportunities


 Failing to recognize competitive threats
 Neglecting operations strategy
 Too much emphasis in product and service design and not enough on improvement
 Neglecting investments in capital and human resources
 Failing to establish good internal communications
 Failing to consider customer wants and needs

 Strategies
 Plans for achieving organizational goals
 Mission
 The reason for existence for an organization
 Mission Statement
 Answers the question “What business are we in?”
 Goals
 Provide detail and scope of mission
 Tactics
 The methods and actions taken to accomplish strategies
Examples of Strategies

 Low cost

 Scale-based strategies

 Specialization

 Flexible operations

 High quality

 Service

Strategy and Tactics


 Distinctive Competencies
The special attributes or abilities that give an organization a competitive edge.
 Price
 Quality
 Time
 Flexibility
 Service
 Location

Operations Strategy
 Operations strategy – The approach, consistent with organization strategy, that is
used to guide the operations function.
Strategy Formulation
 Distinctive competencies
 Environmental scanning
 SWOT
 Order qualifiers
 Order winners

Order qualifiers
• Characteristics that customers perceive as minimum standards of acceptability to be
considered as a potential purchase
Order winners
• Characteristics of an organization’s goods or services that cause it to be perceived as
better than the competition

Key External Factors


 Economic conditions
 Political conditions
 Legal environment
 Technology
 Competition
 Markets
Key Internal Factors
 Human Resources
 Facilities and equipment
 Financial resources
 Customers
 Products and services
 Technology
 Suppliers
 Productivity
 A measure of the effective use of resources, usually expressed as the ratio
of output to input
 Productivity ratios are used for
 Planning workforce requirements
 Scheduling equipment
 Financial analysis
 Partial measures
 output/(single input)
 Multi-factor measures
 output/(multiple inputs)
 Total measure
 output/(total inputs)

…………………………………………………………………………………………………………………………………………
Product and service design is a critical area in operations management that focuses on
creating new products or services or improving existing ones to meet customer needs and
market demands. This chapter covers the process, principles, and considerations involved
in developing products and services.
1. Importance of Product and Service Design
 Competitive Advantage: Well-designed products and services give a firm an edge in
the market.
 Customer Satisfaction: The design must meet customer needs and expectations,
balancing quality, functionality, and aesthetics.
 Efficiency and Cost: Design affects production costs, ease of manufacturing, and
operational efficiency.
2. Key Stages in Design Process
 Idea Generation: Brainstorming or gathering ideas based on customer feedback,
market trends, or technological innovations.
 Feasibility Study: Assessing technical, operational, and financial viability of the
product or service.
 Prototype Development: Creating a working model for testing and evaluation.
 Testing and Refinement: Evaluating the prototype to identify improvements or
necessary changes before final production.
 Final Design: Once refined, the design is finalized and ready for production or
implementation.
3. Factors in Product and Service Design
 Customer Needs: Understanding and prioritizing the features that are most
important to customers.
 Cost: Balancing design innovation with the need to keep production and operating
costs low.
 Quality: Ensuring the product or service meets desired standards and is free of
defects.
 Sustainability: Designing products and services with an emphasis on environmental
impact, such as using recyclable materials or energy-efficient processes.
 Time-to-Market: Developing the product or service quickly enough to take
advantage of market opportunities.
4. Design for Manufacturing and Assembly (DFMA)
 Focuses on simplifying the product design to make manufacturing and assembly
easier, faster, and cost-effective.
5. Service Design
 Differences from Product Design: In services, customer interaction and experience
are vital. Service design must consider factors like customer engagement, service
delivery process, and employee-customer interaction.
 Blueprinting: A method used in service design to visually map out the service
process, identifying each step, customer touchpoints, and areas for improvement.
6. Product Life Cycle and Design
 Products and services go through stages: introduction, growth, maturity, and
decline. Design considerations must evolve at each stage to adapt to changes in
demand, competition, and technology.

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