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Lesson 01 - introduction

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12 views

Lesson 01 - introduction

Uploaded by

acemovithecrash
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We take content rights seriously. If you suspect this is your content, claim it here.
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01- Introduction to...

Why Study Operations


Management?
Systematic Approach To
Organizational Processes

Better Operations
Better Career
Business Management Opportunities
Education

Cross Functional
Field
Why is “Operations”
Important?
 Operations as a transformation process

 Operations is a basic business function

 Operations is the technical core

 Operations uses / controls many assets

 Operations provides many jobs


Production as basic
funtion
 There are four basic functions in most business
organization
Marketing
Finance
Production
HRM
What is production
 Production is any process or procedure
developed to transform a set of inputs like man ,
machine, material, management, money and
method into a specified set of output like finished
products and services in proper quality, thus
achieving objectives of an organization.
Operations As A
Transformation Process

INPUT Transformation OUTPUT


process

Material Feedback Goods


Machines or
Labor Services
Management
Capital
Transformation Processes
 Physical (manufacturing)
 Locational (transport/storage)
 Exchange (retail)
 Physiological (healthcare)
 Psychological (entertainment)
 Informational (communications)
Goods Versus Services
GOODS SERVICES
  Reselling unusual
Can be resold
  Difficult to inventory
Can be inventoried
  Quality difficult to measure
Some aspects of quality
measurable  Selling is part of service
 Selling is distinct from production  Provider, not product is
 Product is transportable transportable
 Site of facility important for
 Site of facility important for cost
customer contact
 Often easy to automate  Often difficult to automate
 Revenue generated primarily  Revenue generated primarily
from tangible product
from intangible service
Goods versus Service
Characteristic Goods Service
Output Tangible Intangible
Customer contact Low High
Uniformity of input High Low
Labour content Low High
Uniformity of output High Low
Measurement of productivity Easy Difficult
Opportunity to correct quality High Low
problems before delivery to
customer
Transformation Example:
Food Processor
Inputs
Raw Vegetables Cutting
Metal Sheets Cooking
Packing
Water Outputs
Labeling
Canned vegetables
Energy Processing
Cleaning
Labor
Making
Building cans
Equipment
Transformation Example:
Hospital
Inputs
Doctors, nurses
Processing
Hospital
Examination Outputs
Medical Supplies Surgery Healthy patients
Monitoring
Equipment
Medication
Laboratories Therapy
Patients
Definition of POM
 Pro. Management of the conversion process
which converts land, labour, capital and
management inputs in to outputs of goods and
services.

 OM is the set of activities that creates goods


and services by transforming inputs into
outputs.

Management
Planning, Organizing, Staffing, Leading, Controlling.
 Efficiency
 Effectiveness
 Global competition
What is
production/Operations
Classical View
 Production = produce goods
 Operations = perform service

New View
 Often confusion in trying to classify organization as manufacturer
or service
 Facilitating good concept avoids this ambiguity
 All organizations defined as service
 The tangible part of the service is defined as facilitating good
 Pure Services
What Does the Production
Mgr Do ?
 Planning
 Organizing
 Staffing
 Leading
 Controlling

really no different than the functions you learned in


Principle of Management:
System concept of
Production
 The system is an arrangement of interdependent
component designed to achieve a
predetermined objectives
 They all share a unique relationship with each
other
 A system always exist with environment
 A system is usually a complete with sub system
Types of Production
systems

 Make and assemble to stock

 Make to stock, assemble to order

 Make and assemble to order

 Engineer, make and assemble to order


The Production System
Organization Chart
M anufacturing Organization

Operations Finance/Accounting M arketing

Facilities Disbursements & Sales Promotion


Production & Credits Advertising
Inventory Control Funds M anagement Sales
Quality Assurance Capital Requirements M arket Research
& Control
Procurement
Engineering Design
Industrial Engineering
Process Engineering
Operations As The Technical
Core
Capital Markets, Stockholders

Finance

Personnel
Suppliers
Purchasing

Workers
Operations

Marketing

Customers
Why study POM ?
All firms want to increase productivity.
(Productivity = Efficiency + Effectiveness)
 Reduce costs
Increase output
Increase customer satisfaction
Increase profit
Efficiency = Output / Input
Effectiveness – A measurement of goal attainment,Profit,
Productivity Drivers
 Standardization
 Specialization
 Simplification
 Motivation
Rewards
Recognition
Responsibility
 Enjoyment
 Intellectual Satisfaction
Standardization
 Uniformity of parts,Materials,Tools,processes
and Labour

 Allow mass production and assembly


Specialization
 Specialized machinery, tools, materials ( 5P’s –
People,parts, process, planning &control)

 Individuals becomes more effective and efficient


in focused tasks.
Simplification
 Analyze task

 Divide task into parts

 Eliminate wasted motion

 Streamline processes
Historical Events In POM

 Industrial Revolution
 Scientific Management
 Human Relations
 Management Science
 Quality Revolution
 Information Age
 Globalization
Historical Events In POM
Industrial Revolution
Steam engine 1769 James Watt
Division of labor 1776 Adam Smith
Interchangeable parts 1790 Eli Whitney

Scientific Management
Principles 1911 Frederick W. Taylor
Time / motion study 1911 Frank & Lillian Gilbreth
Activity scheduling chart 1912 Henry Gant
Human Relations
Hawthorne studies 1930 Elton Mayo
Motivation theories 1940s Abraham Maslow
1950s Frederick Hertzberg
1960s Douglas McGregor

Management Science
Linear programming 1947 George Dantzig
Digital computer 1951 Remington Rand
Simulation, PERT/CPM, 1960 Research groups
Waiting line theory
Quality Revolution
Lean production 1970s Taiichi Ohno
JIT 1980s and Toyota
TQM 1980s W. Edwards Deming,
1990s Joseph Juran, et. al.
Information Age
EDI, EFT, 1970s Numerous
CIM 1980s individuals and
1990s companies
World Wide Web 1990 Tim Berners-Lee
and NCSA
Globalization
Worldwide markets 1990s Numerous individuals
and operations and companies
Globalization
 Take advantage of favorable costs

 Gain access to foreign markets

 Reduced trade barriers

 Changing markets
Risks In Globalization
 Weak infrastructure

 Distinct languages, customs, trade barriers

 Inefficient distribution channels

 Instability of governments

 Poor economic conditions


Issues & Trends In
Operations
1. Intense competition
2. Global markets, global sourcing, and global financing
3. Importance of strategy
4. Product variety and customization
5. More services
6. Emphasis on quality
7. Flexibility
8. Advances in technology
9. Worker involvement
10. Environmental and ethical concerns
Task of Production/operation
manager
 System designing
Forecasting
Product and service planning
System capacity planning
Location and layout of facility
Acquisitions of equipment
 System operation
Management of work force
Inventory management
MRP
Scheduling
Project management
Quality assurance
END
Thank you

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