1 Opn Mgt Introduction (1)

8/12/2019 1 Opn Mgt Introduction (1)

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Operations ManagementIntroduction, Current Issues & Trends

By

H.S.Pundle


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Operations Management

Definition An operations system is defined as one in which several

activities are performed

to transform a set of inputs into useful output

using a transformation process

Operations Management is a systematic approach to

address all the issues pertaining to

the transformation process that converts some inputs into output thatare useful, and

could fetch revenue to the operations system


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Operations Management (OM)Salient Aspects

OM is a systematic approach

using scientific tools & techniques and solutionmethodologies to analyze problems

OM is about addressing several issues

varying in terms of time horizon, nature of decisions

Transformation processes are central to Operations

Focusing on keeping costs to the minimum

Developing a set of measures to assess performanceof the system


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Operations Management (OM)

Salient Aspects

Production Operations Management is managing ofproductive resources (Men, Material, Equipments &Facilities) Efficiently & Effectively.

MBA graduates are expected to help organizationsgain competitive advantage by excelling in meetingcustomer needs.

Whether you are in Marketing, Finance or

Operations; effectively serving customers will needknowledge of Operations Management. Servingcustomers means meeting the requirement in time,with exceptional quality at lowest cost.


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Transformations

Physical--manufacturing

Locational--transportation

Exchange--retailing

Storage--warehousing

Physiological--health care

Informational--telecommunications


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Operations SystemSystem Primary

InputResources Primary

TransformationFunction

DesiredOutput

Hospital Patients Doctors,Nurses,Medicines,Equipments

Healthcare HealthyIndividuals

Restaurant HungryCustomers

Food items,Chef,

Waiters,Environment

Well prepared,Well served food

SatisfiedCustomers

AutomobileManufacturing

Sheet Metal,Steel, Parts

Tools,Equipments,Workers

Fabrication,Assembly.

High qualitycars.


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Operations SystemSystem Primary

InputResources Primary

TransformationFunction

DesiredOutput

College,

University

High school

Pass outs

Teachers,

Books,Classrooms.

Imparting

Knowledge, Skills

Educated

Individuals

Departme-ntal Store

Shoppers Stock ofgoods,Display, Salespersons

Attract shoppers,Promoteproducts.

Sales tosatisfiedcustomers.

Airline Travelers Aero planes,Crew, Fuel.

Move todestination

On timesafedelivery to

destination.


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Indian Manufacturing

Export Potential of SectorsSectorIndustry

CurrentExportUS $ Bn

PotentialExportUS $ Bn

Strength Weakness

ElectricalElectronics

1.25 15-18 Design &Engineering skills

Lack of scale, Lowdomestic demand

ApparelManufacture

6.1 25-30 Vertical integration,Skilled Labour,Design skills

Lack of scale,Operationalexpertise

Autocomponents

1.1 20-25 Engineering &continuousimprovement ofskills

Fragmentedindustry, Poor OEMlinkage

Specialtychemicals

1.6 12-15 Low costmanpower &process innovationskills

Application R&D,Marketing


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Service Operations

Salient Features Service is intangible while goods is a physical

output.

In service direct customer involvement increating output is essential.

Customers are on the shop floor whenconsuming service. Shop floor may be called

front office, dinning area, passenger cabin.


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Manufacturing & Service

Similarities & Differences

DifferencesManufacturing Organization Service Organization

Physical, durable product Intangible, perishable productOutput can be inventoried Output can not be inventoried

Low customer contact High customer contact

Long response time Short response time

Regional, National, Intentional

national market

Local market

Large facility Small facility

Capital intensive Labour intensive

Quality easily measured Quality not easily measured


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Manufacturing & Service

Similarities & Differences

Similarities Is concerned about quality, productivity & timely

response to its customers Must make choices about capacity, location, layout

Has suppliers to deal with

Has to plan its operations, schedules and resources

Balance capacity with demand by a careful choice ofresources

Has to make an estimate of demand


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FunctionsDesign of Operations Operational Control

Product design & control Forecasting

Process design Production planning & control

Quality Management Supply chain management

Location & Layout facilities Maintenance management

Capacity planning Continuous improvement ofOperations.


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Challenges Competitive Pressures due to economic reforms

Tariff reduction has exposed Indian companies to global competition.

Chelliah Committee tax reforms proposed during 1992 94 triggeredthis process

Abolition licensing policies had enabled several new playersto enter into business increasing domestic competition andcapacity build up.

Examples include liberalization of two wheelers and LCV segment inearly 1980s and passenger car segment in early 1990s.

Indian customers are more demanding in terms of quality,cost and delivery of goods & services


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Operations ManagementChallenges

Growing customer expectations

Examples: Tariff plans and options provided by

mobile operators, options in passenger car Customers tend to demand more and refine their

expectations

Manufacturing & Service organizations must learn

to respond to these expectations Need to develop capabilities to bring newer

products and services faster and yet profitably


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Todays businesses are constantly challenged by therapid technological advancements Example 1: ATMs & Internet Banking. Customers need not visit a bank

branch. Drafts and cheques replaced with electronic payment gateways &fund transfer mechanisms.

Example 2: Buying a train ticket. By visiting a Web site likehttp://www.irctc.co.in/, a customer can accomplish all tasks pertaining toticket booking and cancellation at leisure.

Example 3: Procurement of goods & services. A manufacturingorganization can procure goods & services by organizing a reverse auction

on the Internet. In 3 to 4 hours, the best price for a component and thesupplier willing to provide the component at a desired quality can belocated.

Example 4: New Product Development. A team of design personnel fromacross different geographical locations can participate in new productdevelopment using technological tools.


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Environmental Issues

When Government of India announced a scheme for special economiczones (SEZs), it generated controversies and social concerns.

Growing industrialization raises concerns regarding the depletion of natural

resources and the waste generated from production systems and end-of-lifeproducts.

Growing urbanization creates societal problems arising out of scarcity ofavailable resources and generation of solid wastes.

Consumption of energy and water in countries like India is on the rise. Sucha situation requires better practices and newer methods of addressing these

requirements using better operational practices. Increasingly, firms are under pressure to take responsibility of restoring,

sustaining, and expanding the planets ecosystem instead of merelyexploiting it.

OM practices must address environmental concerns in order to ensurea sustainable world


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Operations ManagementImplications & Priorities

Relate operations system to Customer/Market

Acquire Capabilities to tolerate productproliferation

Develop systems and procedures thatpromote learning

Develop Green Manufacturing Practices


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Operations Management:Trends & Issues - Highlights

Operations Management is a systematic approach to address allissues pertaining to the transformation process that convertssome inputs into useful output

Globally, India is emerging as an important manufacturing base. Several recent studies point to emerging opportunities for

Indian manufacturing to grow and attain a global presence.

From an operations management perspective, the notion of apure product and pure service is just the two ends of the

spectrum. In reality, a vast majority of operations share a continuum of

products and services.


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Operations Management:Trends & Issues - Highlights

Despite several important differences between products &services, from an OM perspective there are several similaritiesbetween the two

Decision context in operations management can be broadlyclassified as

Design and operations control issues

Long term and short term decisions

Some of the challenges faced by operation firms include

Need to address increased competition due to economicreforms

Addressing the growing expectations of the customers

Rapid technological advances

Emerging environmental concerns

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