1 Introduction to Operations Mgt

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IntroductionName Junaid Nasir

Qualification BE ( Mechanical) NED

MBA IBAPGD Comp. Science IBA

Experience 29 years in Engineering

Sector at top managementpositions, teaching and

consultancy at reputable

university and organizations



Introduction

• COO of Alupak Ltd and Alucan Ltd

• Ex Deputy Managing Director of

Adamjee Engineering (Pvt.) Ltd

• Travelled 20 countries for trainings, business

development, procurement of Plants, Machines

and Raw Materials

• Visited more than 150 companies including

65 foreign companies to get trainings, business

development and for auditing QMS.



RESPECT

DISCIPLINE

TENSION FREE



By : Junaid Nasir

Reference Books

• Productions & Operations Management

by Barry Render and Jay Heizer

• Productions & Operations Management

by Stevenson

• Modern Production & Operation

Management by Elwood S. Buffa and

Rakesh K Sarin



By : Junaid Nasir

Course Plan

• Introduction, Production/OperationsSystem, Operation Strategy

• Decision Making

• Case Study• Process Management

• Management of Technology

•

Work Force Management• Learning Curves

• Total Quality Management



By : Junaid Nasir

Course Plan

• Inventory Control• Statistical Process Control

• Location and Layout

• Capacity• Supply Chain Management

• Forecasting

•Project Management

• Network Analysis, CPM & PERT



By : Junaid Nasir

Advise from Rector

Attendance

• All absences will be strictly recorded. No late comings

will be allowed and will be considered as an absence.

• For Executive sessions (Saturday and Sunday), of 3

hours each, 2 absences are allowed out of 15 sessions.

•

Any student exceeding this limit would be awarded an FGrade and the faculty has to bring this to the notice of

the concerned Head of the Department and Academics

Department.



By : Junaid Nasir

Advise from Rector

Dress Code• IoBM expects its students to reflect its values and

standards in every way, and especially in the way they

dress and conduct themselves. This will enable them to

make a positive impression and project a professionalimage wherever they go.

• In order to achieve the above stated objectives, the

following guidelines must be strictly observed:

· All clothing worn by students should be well laundered.

· Clothes should be inoffensive in terms of cuts and

style, or by way of messages printed on them.



By : Junaid Nasir

Advise from Rector

• ·Female students may only wear jeans provided their tops are of mid-thigh length. They should also be modest

and avoid transparent materials and short lengths for

sleeves and trousers/ shalwars.

• ·Only light make up, jewelry and perfume is permitted.

• ·Male students are only allowed full length trousers or

jeans. For footwear, they must wear dress shoes,

moccasins, joggers or sandals with back straps.

• ·Male students should maintain proper haircuts and

refrain from piercing their ears and faces.• No variations or violations in all of the above will be

permitted and students doing so will be marked absent in

their respective classes.



By : Junaid Nasir

Advise from Rector

Mobile Phones• Students should not be allowed to use or play with

mobile phones in the classroom. In case they are

using one, phones should be confiscated and

handed over to the Administration Department.

Absences during mid-terms

• Students tend to miss classes during examinations.

This must be discouraged by awarding a penalty inthe form of marks as well as attendance.



By : Junaid Nasir

Examination

• N –

1 policy is no longer in place andnow only two mid-terms and final

examination will take place.

• Marks Distribution

• 40% Final

• 30% Mid terms (15% each)

• 30% Sessional



By : Junaid Nasir

Examination

Sessional Marks

• Two quizzes 10 (4th and 9th weeks)

• Assignments 10 ( 4 assignments to

be submitted in

5th, 8th, 10th and

12th weeks, no late

submission is

allowed)

•

Presentations 10



By : Junaid Nasir

Operations Management

Operations management is the set of activities that creates value in the form of

goods and services by transforminginputs into outputs

Production is the creation of goods andservices



By : Junaid Nasir

Operations Management

• Essential functions:

–Marketing – generates demand

–Operations –

creates the product

–Finance/accounting – tracks

organizational performance, pays

bills, collects money



By : Junaid Nasir

Organizational Functions

• Marketing

– Gets customers

Operations creates product or service

Finance/Accounting Obtains funds

Tracks money © 1995 Corel Corp.



By : Junaid Nasir

Why Study OM?

• OM is one of three major functions(market ing , f inance, and operat ion s ) of

any organization.

• We want (and need ) to know howgoods and services are produced.

• We want to understand what operations

managers do.• OM is such a costly part of an

organization.



By : Junaid Nasir

Why Study OM?

• What Operations Managers Do

• Plan - Organize - Staff - Lead - Control



By : Junaid Nasir

Ten Critical Decisions

1. Service, product design2. Quality management

3. Process, capacity design

4. Location5. Layout design

6. Human resources, job design

7. Supply-chain management8. Inventory management

9. Intermediate and short term scheduling

10.Maintenance



By : Junaid Nasir


• Serv ice and product design – What product or service should we offer?

– How should we design these products and

services?

• Qual ity management

–

Who is responsible for quality? – How do we define quality?



By : Junaid Nasir


• Process and capaci ty design

– What processes will these products

require and in what order? – What equipment and technology is

necessary for these processes?



By : Junaid Nasir


• Locat ion

– Where should we put the facility

– On what criteria should we base thislocation decision?

• Layou t design

– How should we arrange the facility? – How large a facility is required?



By : Junaid Nasir


• Human resources and job design – How do we provide a reasonable work

environment?

–

How much can we expect our employeesto produce?

• Supp ly chain management

–

Should we make or buy this item? – Who are our good suppliers and how many

should we have?



By : Junaid Nasir


• Invento ry , material requ iremen ts planning,

– How much inventory of each item should

we have?When do we re-order?

• Intermed iate, short term, and pro ject

schedul ing

– Is subcontracting production a good idea?

– Are we better off keeping people on thepayroll during slowdowns?



By : Junaid Nasir


• Maintenance

– Who is responsible for maintenance?

–

When do we do maintenance?

Si ifi E i O i



Significant Events in OperationsManagement

Th H it f



The Heritage of Operations Management

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

Standardized parts (Whitney 1800)

Scientific Management (Taylor 1881)

Coordinated assembly line (Ford/Sorenson/Avery 1913)

Gantt charts (Gantt 1916)

Motion study (Frank and Lillian Gilbreth 1922

Quality control (Shewhart 1924; Deming 1950)

Computer (Atanasoff 1938)

CPM/PERT (DuPont 1957)

Th H it f O ti



The Heritage of OperationsManagement

Material requirements planning (Orlicky 1960)

Computer aided design (CAD 1970)

Flexible manufacturing system (FMS 1975)

Baldrige Quality Awards (1980)

Computer integrated manufacturing (1990)

Globalization(1992)

Internet (1995)



Significant Events in OM

Division of labor (Smith, 1776)

Standardized parts (Whitney, 1800)

Scientific management (Taylor, 1881)Coordinated assembly line (Ford 1913)

Gantt charts (Gantt, 1916)

Motion study (the Gilbreths, 1922)

Quality control (Shewhart, 1924)



Significant Events

CPM/PERT (Dupont, 1957)

MRP (Orlicky, 1960)

CAD Flexible manufacturing systems (FMS)

Manufacturing automation protocol (MAP)

Computer integrated manufacturing (CIM)



New Challenges in OM

Local or national focus

Batch shipments

Low bid purchasing

Lengthy product

development

Standard products

Job specialization

Global focus

Just-in-time

Supply chain

partnering Rapid product

development,

alliances

Masscustomization

Empowered

employees, teams

From To



Characteristics of Service

Intangible product

Produced & consumed

at same time

Often unique High customer

interaction

Inconsistent productdefinition

Often knowledge-

based

Frequently dispersed

© 1995 Corel Corp.



Goods Versus Services

Can be resold

Can be inventoried

Some aspects of

quality measurable

Selling is distinctfrom production

Reselling

unusual

Difficult toinventory

Quality difficult

to measureSelling is part of

service

Goods Services

G d V S i



Goods Versus Services -Continued

Product istransportable

Site of facilityimportant for cost

Often easy to

automateRevenue generated

primarily fromtangible product

Provider, notproduct istransportable

Site of facilityimportant for customer contact

Often difficult to

automateRevenue generated

primarily fromintangible service.

Goods Services

Ch i Ch ll f th



Changing Challenges for theOperations Manager

Past Causes FutureLocal or nationalfocus

Low-cost, reliable worldwidecommunication andtransportation networks

Global Focus

Batch (large)

shipments

Cost of capital puts pressure on

reducing investment ininventory

Just-in-time

shipments

Low-bidpurchasing

Quality emphasis requires thatsuppliers be engaged in productimprovement

Supply-chainpartners

Lengthyproductdevelopment

Shorter life cycles, rapidinternational communication,computer-aided design, andinternational collaboration

Rapid productdevelopment,alliances,collaborativedesigns

Ch i Ch ll f th



Changing Challenges for theOperations Manager

Past Causes FutureStandardizedproducts

Affluence and worldwide markets;increasingly flexible productionprocesses

Masscustomization

Job

specialization

Changing sociocultural milieu.

Increasingly a knowledge andinformation society.

Empowered

employees,teams, and leanproduction

Low costfocus

Environmental issues, ISO 14000,increasing disposal costs

Environmentallysensitiveproduction,

Greenmanufacturing,recycledmaterials,remanufacturing



The Productivity Challenge

The Economic System Transforms



The Economic System TransformsInputs to Outputs

The economic system

transforms inputs to outputs

at about an annual 2.5%increase in productivity

(capital 38% of 2.5%), labor

(10% of 2.5%), management

(52% of 2.5%)

Land, Labor,

Capital,

Management

Goods and

Services

Feedback loop

Inputs Process Outputs



Typical Impact of Quality Improvement

Parts per man hour

95

100

105

110

115

Year A Year B Year C

Cost per unit decreased

$1.50

$1.75

$2.00

$2.25


Average worker's annual

cash compensation

increased

24000

25000

26000

27000


As productivity improved Costs were pared Wages increased



Measure of process improvement

Represents output relative to input

Only through productivity increases can

our standard of living improve

Productivity

Productivity Units produced

Input used =



Multi-Product Productivity

Productivity =

Output

Labor + material + energy + capital + miscellaneous



Measurement Problems

Quality may change while the quantity of

inputs and outputs remains constant

External elements may cause an increase or decrease in productivity

Precise units of measure may be lacking



Productivity Variables

Labor - contributes about 10% of the annual

increase

Capital - contributes about 32% of the annualincrease

Management - contributes about 52% of the

annual increase

Key Variables for Improved Labor



Key Variables for Improved Labor Productivity

Basic education appropriate for the labor

force

Diet of the labor force

Social overhead that makes labor available

Maintaining and enhancing skills in the midst

of rapidly changing technology andknowledge



Service Productivity

Typically labor intensive

Frequently individually processed

Often an intellectual task performed by

professionals

Often difficult to mechanize

Often difficult to evaluate for quality



By : Junaid Nasir

Productivity

ProblemA company makes 2000 (9000 per dayGeneral

tyre) tires per day with the following resources

Labour 400 hours per day @ Rs 50 per hour ( 8 hour shift)

Raw material 20,000 kg per day @ Rs 100 per kg

Energy Rs 100,000 per dayCapital Rs 200,000 per day



By : Junaid Nasir

Productivity

ProblemWhat is the labour productivity per labour hour?

What is the multifactor productivity for thesetires?

What is the percent change in multifactor productivity if labour hours is reduced to 380,

material is reduced by 10% and energy cost is

reduced by 30% for the same production?



By : Junaid Nasir

Productivity

Answers• 5 tire per labour hour

•

•

0.000862 tire per rupee

• Multiple productivity tire 0.0009574 per rupee

(11.07% increase in productivity)



By : Junaid Nasir

Productivity

ProblemThree employees processed 600 insurance

policies last week. They worked 8 hours per day,

5 days per week. Calculate labour productivity

for the week.

A team of workers made 400 units of a product

which has a cost of Rs 10. The labour, materialand over head costs of making the product are

Rs 400, Rs 1000 and Rs 300. Calculate

multifactor productivity.



By : Junaid Nasir

Productivity

Answers

• 5 policies per labour hour

• 2.35

1 Introduction to Operations Mgt

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