Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

MODULE 3

Introduction To Operations Management Buyer Power Of The Threat Of Substitution Both Influence The Price

Organizational Network

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

The Value Chain

V, A And T Plants (Cont..) V Plant V Plant

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

V, A and T Plants (Cont..) A Plant

V, A and T Plants (Cont..) T Plant

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

The Operations System

Relationship Of Operations Decisions

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Process Selection

• Determine type of productive process

• Mass or Batch ? • (high volume) (low volume)

• Integrate with market or supply?

• (restaurant) (ore, crude)

Process Decision Affects

• Cost

• Quality

• Delivery

• Flexibility

• Involves choice of equipment, labor • Limits future strategic options

Process Classification

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Type Of Product Flow-Line, Batch And Project Affects

• products ( Volume, flow, variety)

• Labour, capital (investment, inventory, equipment)

• Objectives (flexibility, cost, quality, delivery) &

• PPC Six Factors Influence Process Selection Market condition

What do you want – high variety, flexibility,

quick response, Precision?

Capital requirements

How much can you invest?

Labor

Skill level? Involvement ? Management Skills

Raw Material

What quality do you get - steady or fluctuating?

Technology

Can you forecast technology? Do you foresee obsolescence?

New Developments ?

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Process Management Selection of operations work flow and methods for production

Process Decision

• Process decision required when • New / modified product is introduced • Quality needs to be improved • Change in competitive priorities occurs • Demand changes • Current performance is inadequate • Competitors gain by new process / technology • Cost of availability of inputs changes

Major Process Decisions

• Process choice – line, job, etc., • Vertical Integration • Resource Flexibility

Technology • Choice, change, competitive advantage, human factors.

Designing Process

• Process ReengineeringProcess Improvement

• Method study approach

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

• Key questions:

• What?

• When?

• Who?

• Where?

• How? • How long? • Flow Diagram • Flow Process chart

• Analysis of Process flow • Analysis of Information Flow

• Critical process • Strong leadership • Cross functional teams

• IT

• Clean Slate Philosophy • Process Analysis

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Process – Product Matrix

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Choice Of Technology

Definition of Technology

• The application of knowledge to solve human problems

Narrower definition

• That set of processes, • tools, • methods, • procedures, and • equipment used to produce goods or services

Socio-Technical Systems Design Technology and Society

• Businesses worry about the money that must flow back as capital

• But what about nature’s capital ?

• Appropriate Technology • Voluntary Simplicity • ‘Small is beautiful’

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Factory Of The Future

Types Of Manufacturing Systems

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Product Design • Strategies for new product introduction • Market ‘pull’ – make what is needed • Technology ‘push’ - sell what you can make • Inter functional – cooperation : marketing, operations and design

New product development process

• Idea generation • product selection • Preliminary product design • prototype construction • Testing • Final design

Product Design (Contd.)

• Technology development process • Helps you know what is possible

• Quality Function Deployment (QFD) • Translates customer requirements to technical

Specifications

• e.g.: “soft ride” => good springs / suspension

• Robust Design – To minimize variation around a target performance

• Value Analysis – Objective, basic function, secondary function, Functional

value, Aesthetic value

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Modular Design

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

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Data\Microsoft\Templates\Normal.dot Title: BUYER POWER OF THE THREAT OF SUBSTITUTION

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