FIRST MODULE

Is that what you mean

by Operations Management huh???

Then tell me what is OM

• EVERYWHERE YOU LOOK: CONFINED TO OPERATIONS FUNCTION

• EXCITING: CHANGES

• CHALLENGING :CREATIVITY

PRODUCTION AND OPERATIONS FUNCTION

Functions•Planning•Organizing •Controlling

Planning

• Product Design and Development• Production process selection• Planning facility location• Planning facility layout• Capacity planning • Production planning

ORGANIZING

• Work Study: Time and Motion study• Material Management• Purchasing Management

CONTROLLING

• Stores Management• Value Analysis• Quality Control• Maintenance Management• Inventory Management

PRODUCTION

Production is a process or a set of procedures to be executed in order to convert or transform a set of inputs into a predetermined set of outputs in accordance with the objectives assigned to the production system.

Functions of Productions and Operations Management

• It is not only concerned with the productions of goods and services but also all activities concerned with production.• In the past emphasis was on

manufacturing management, which subsequently changed into Production Management.• Due to wide range of scope

the name was changed from production management to Operations Management.

• OM with its widened scope , is responsible for the management of productive systems ; that is , it is responsible for systems which either create goods or provide service or both.

• The variety of jobs operations group will oversee will differ from one organization to the other.

• But the basic task is coordinating the use of resources through the management process, which involves:

• PLANNING• ORGANISING• STAFFING • DIRECTING• CONTROLLING

Manufacturing and Non- Manufacturing Operations

All operational activities can be classified into several types.

• Manufacturing Operations• Service Operations• Merchandising Operations• Project Management Operations• Contract Management Operations

TYPES OF MANUFACTURING OPERATIONS

• Job production: The whole product is looked at as one job which is to be completed before going to the next.

• Batch production: if qualities of more than one are manufactured , it is sometimes convenient to split the production into a series of manufacturing stages or operations.

• Flow production: when there is a continuous demand for the product, it is sometimes worthwhile setting up facilities to manufacture just that product.

• Intermittent production: two examples of this kind are machine shop production and building constructions work.

• Continuous production: few standard products are manufactured with predetermined sequence of operations with inflexible material handling devices.

Flow production Job production

Batch production

Types of non manufacturing operations

• Service operations: custom services / standard services

• Merchandise operations: wholesale / retail• Project management operations• Contract management operations

Operation strategy as a part of corporate strategy

Strategy: it is a planned methodology to complete a given job.

In other words, the strategy is the pre decided procedures and practices to be followed by all members of the org.

• First step is to identify the objective and formulate the policy plan.

• Next step is to collect all the resources and do all that is necessary to convert the plan into a reality.

• the corporate strategy views the entire system as interconnected parts of the functional areas to achieve the required results.

Important ingredients of strategic plans

• Market environment • Expertise and resources• Strategic policy• Design and development

IMPORTANCE OF STRATEGIC PLANS

• The success of the business is directly proportional to the success of strategic implementation.

• The strategy must never be rigid• MIS• Right strategic approach

FORMULATION OF STRATEGY

• Identifying the overall objectives• Preparing the list of strength and

weakness and comparing them with the available resources and evaluating alternative opportunities that could be explored.

• Preparing a detailed execution plan by laying down the procedures and practices to be followed starting from the sub unit level.

• Making a priority plan

• Fixing the targets for each department

• Exercising checks and controls at the sub unit level.

• Carrying out periodic evaluation.

STRATEGIC LEVELS

• CORPORATE LEVEL: long term planning is done by the top management.

• INTERMEDIATE LEVEL: unit level strategy is made to suit the specific requirement of the business unit keeping in mind the present condition.

• OPERATIONAL LEVEL: it is the functional level strategy refers to the procedural matters to be followed by each departments like design, production, sales etc

IMPLEMENTATION OF STRATEGY PLAN

• Define the overall aims and objectives of the organization.

• Prepare the action plan and lay down charter of duties down to the lowest level.

• Issue the target –dated production plan for every subunit.

• Make the head of the department accountable to fulfill the targets and render the periodic reports to the head office.

• Review the output standards periodically and issue revisions for improvement .

DEVELOPMENT OF OPERATIONS STRATEGY

• Proper coordination at the functional level.

• Company response is based on the market environment.

• Market analysis• Competitive priorities• Suitable checks and amendments• Timely initiatives and quick decision

The development strategy can make a very significant impact on the following

• Product quality and variety• Variety of designs• Innovative goods• Improvement in service standards

Strategic development ladder

1.MARKET ANALYSIS2.DESIGN REVISION3.PRIORITISATION4.ACCEPTANCE OF REVISED OFFER5.NEW AVENUES

BENEFITS OF STATEGIC PLANNING

• CLEAR POLICY PLAN• IMPROVES THE FRAME WORK• IT UNDERLINES THE PROCEDURES

AND PRACTICES• PRIORITISATION OF JOBS• PROVIDES GUIDELINES• INSTITUTES EFFECTIVE CHECKS AND

CONTROLS

• IMPROVES REPORTING AND FEEDBACK SYSTEM

• CREATES SENSE OF ACCOUNTABILITY• IMPROVES QUALITY MGMT ND INFO

SYSTEMS• PROMOTES DECISION MAKING• PROVIDES TOOLS TO IMPROVE

PRODUCTIVITY• IMPROVES JOB SATISFACTION• SPELLS OUT PROCEDURE FOR MARKET

SURVEYS• HELPS IN ACHIEVEMENT OF COST

EFFECTIVENESS

• TEACHES HOW TO MAKE PROFIT WHILE COMPETATIVE

• IMPROVES CUSTOMER SATISFACTION• DEFINES ACHIEVEMENT ANALYSIS• MEETING COMPANY AIMS AND

OBJECTIVES• PROVIDES OPPORTUNITIES FOR NEW

AVENUES.

CUSTOMER ORIENTED OPERATIONS STRATEGY

• The customer driven strategy is formulated at the corporate level and it ensures that at the functional level, decisions and initiatives are taken in that direction.

• It ensures the availability of resources to develop the core process by employing superior techniques and high standards.

• Corporate strategy also carries out market analysis to identify the prospective customer base and act accordingly.

OPERATIONS PLANNING AND CONTROL

• The scope for planning for mass production extends beyond the production system itself.

• Market research, advertising ,transportation, licensing and tariffs must all be considered to set up mass production.

• Mass production planning not only lower costs but also leads to significant improvements in uniformity and quality of products.

• Large volume ,standardized design, materials and processes enable control and inspection techniques to ensure production and quality control.

The basic principle of mass production are listed as follows:

• Division of work into specialized tasks

• Simplification and standardization• Development and use of specialized

tools• Systematic engineering and planning

SCHEDULING

• IT COMPLETES THE PLANNING PHASE OF PRODUCTION PLANNING AND CONTROL.

• THE NEXT STEP IS “DISPATCHING “ AFTER WHICH THE NEXT STEP IS THE CONTROL PHASE OR CONTROL OF PRODUCTION , WHICH CONSISTS OF TWO PARTS :a)progress reporting .b) corrective action

• A control system involves four stages ,:ObservationAnalysisCorrective actionPost operation evaluation

DISPATCHING

• It executes the planning function• It is concerned with getting works started• The dispatcher transports the order to various

shops.• Dispatching function determines by whom the

job shall be done and coordinates production.• It is the key point of a production

communication system.• It creates a link between production and sales

DISPATCH PROCEDURE

• Store issue order• Tool order• Job order• Time ticket• Inspection order• Move order

CENTRALISED AND DECENTRALISED DISPATCHING

• In centralized dispatching: the department orders directly to the work station. It maintains a full record.

• In Decentralized dispatching: the shop supervisor performs the dispatch function. He decides the sequence of handling the otrders.

ROUTING

• It lays down the flow of work in the plant. It determines what work is to be done , where and how it will be done. It decides the path from raw materials to finished product

PROGRESS CONTROL

• The system of progress control should be such that , it furnishes timely, accurate and adequate info about the progress made ,delays and under –or over-loading.

CHARTS FOR WORK ACCOMPLISHMENT

• THE BAR CHART• THE CURVE CHART• THE GANTT CHART

BAR CHART

GANTT CHART

FOLLOW UP OR EXPEDITING

• Follow up or expediting regulates the progress of materials and the components through the production process

• It serves as a catalyst agent • It is concerned with reporting the production

date and the investigating of any deviation form the predetermined production schedules.

LINE BALANCING

• The assembly line should be balanced .each work station should have the same operating time and the various operations should be sequenced properly.

ROUTING AND SCHEDULING

A combination of route and schedule chart showing the fabrication parts , sub assemblies and the final assembly in proper sequence upon a time scale proves to be very advantageous , especially when there is smooth flow of work.

LINE OF BALANCE [ LOB] It is a manual planning and scheduling

technique similar in nature to MRP

LOB technique

• Objective chart• Programme plan• Progress chart• Line of balance• Analysis of progress

OPERATIONS FORECASTING METHODS

Meaning of forecasting Allen defines forecasting as a systematic

attempt to probe the future by inference from known facts .

Demand forecastingMethods and types of forecasting: • Qualitative method includes Executive and

Delphi method1. Executive opinion method

2.Delphi method• Time series method that includes trend

projection method and moving average method.

UNCERTAINITIES IN DEMAND FORECASTING • Data about past and present market• Lack of standardization• Few observations• Influence of abnormal factors

LIMITATIONS IN forecasting

• Inability to handle unquantifiable factors• Unrealistic assumptions• Excessive data requirements

ENVIORNMENTAL UNCERTAINITIES

• Technological changes• Shift in govt policy• International developments• Discovery of new sources of raw materials• Unpredictable mansoon

SALES FORECASTING• SURVEY OF BUYERS INVENTIONS OR THE USERS

EXPECTATION TECHNIQUE• COLLECTIVE OPINION OR SALES FORCE COMPOSITE

TECHNIQUE• GROUP EXECUTIVE JUDGEMENT OR EXCECUTIVE JUDJEMENT

TECHNIQUE• EXPERTS OPINION TECHNIQUE• MARKET TEST TECHNIQUE• TREND PROJECTION TECHNIQUE• DIRECT METHOD• INDIRECT METHOD• MOVIBNG AVERAGE TECHNIQUE