Ch 1 Pom Basic Final

8/8/2019 Ch 1 Pom Basic Final

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Production

Production is the creation of goods

O.M. is the set of activities that create value

in the form of goods and services bytransforminginputs into outputs.

Operations Management(O.M.)


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Operations Management

DefinitionAn 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 that are useful, and could fetch revenue to the operations system


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Production

Production is the creation of goods

O.M. is the set of activities that create value

in the form of goods and services bytransforminginputs into outputs.

Operations Management(O.M.)


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Operations ManagementOperations Management

The management of systems or processesthat create goods and/or provide services


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Organizational

Functions

MarketingGets customers

Operationscreates product or service

Finance/AccountingObtains fundsTracks money

1995 Corel Corp.


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Why study OM?

OM is one of three major functions(marketing, finance, and operations) of anyorganization.

We want (and need) to know how goods andservices are produced.

We want to understand what operationsmanagers do.


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A business education is incompleteA business education is incompletewithout an understanding of modernwithout an understanding of modernapproaches to managing operations.approaches to managing operations.

OM provides a systematic way of lookingOM provides a systematic way of lookingat organizational process.at organizational process.

Why study OM?.. Contd


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Value Addition - ConceptValue Addition - Concept


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Production system

A production system uses operation resources to

transform inputs into desired outputsOperation resources- 5 Ps

OPERATIONS MANAGEMENT

Inputs Outputs

People Plants Parts Process

Planning and controlling system

PRODUCTION SYSTEM


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Manufacturing or Service?Manufacturing or Service?

Tangible Act


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Goods V/s Services CharacteristicsG OODS

TangibleConsistent product

definition

Production usually

separate fromconsumption

Can be inventoried

Low customer interaction

SERV I C E S

Intangible

Inconsistent product definition

Produced & consumed at

same time.

Cant be inventoried

High customer interaction

O ften unique


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Goods and Services

AutomobileComputer

Installed carpeting

Fast-food meal

Restaurant meal/auto repair

Hospital care

Advertising agency/investment management

Consulting service/teaching

Counseling

Percent of Product that is a GoodPercent of Product that is a Good Percent of Product that is a ServicePercent of Product that is a Service

100%100% 7575 5050 2525 00 2525 5050 7575 100%100%|| || || || || || || || ||


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Responsibilities of OperationsResponsibilities of OperationsManagerManager

P roducts & services

Planning C apacity

Location

Make or buy Layout

Scheduling

Controlling/Improving Inventory Quality

Organizing

P rocess selection

Staffing

Hiring/laying off

Directing

Job assignments

C osts


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Key Decisions ofOperations Managers

What

What resources/what amounts

When

Needed/scheduled/orderedWhere

Work to be done

HowDesigned

Who

To do the work


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New Challenges in OM From

Local or national

focus

Large shipments

Lengthy product

development

Standard products Job specialization

Low cost

To

Global focus Just-in-time

Rapid product

development.

Mass customization Empowered

employees, teams

Environmental

sensitive


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Past Causes FutureLocal ornationalfocus

Low-cost, reliable worldwidecommunication andtransportation networks

Global Focus

Batch (large)shipments

Cost of capital puts pressure onreducing investment in

inventory

J ust-in-timeshipments

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,collaborative

designs


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Past Causes FutureStandardizedproducts

Affluence and worldwide markets;increasingly flexible production

processes

Masscustomization

Jobspecialization

Changing sociocultural milieu.Increasingly a knowledge andinformation society.

Empoweredemployees,teams, and lean

productionLow costfocus

Environmental issues, ISO 14000,increasing disposal costs

Environmentallsensitiveproduction,

Greenmanufacturing,recycledmaterials,

remanufacturin


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Decision Making in OM

Strategic Decisions

Tactical Decisions

Operational Decisions


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Strategic DecisionsLong-term significance for the organization.

Become the fixed conditions or operating

constraints for intermediate or short term

decisions.

Examples include deciding-

How will we make the product?

Where to locate a new factory?How much capacity do we need?


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Tactical Decisions

These decisions are necessary if the ongoingproduction of goods and services is to satisfymarket demands and provide profits.

Examples include deciding: How many workers do we need? when do we need them ? how much finished-goods inventory to carry

The tactical decisions, in turn, become the operatingconstrains under which operational planning andcontrol decisions are made.


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Operational Decisions

These decisions concern the day-to-day activitiesof workers, quality of products and services,production and overhead costs, and machine

maintenance.

Examples include deciding:What jobs do we work on today or this week?

Whom do we assign to what task?What jobs have priority?


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Hospital ProcessHospital Process

Inputs Processing Outputs

Doctors, nurses Examination Healthy

patientsHospital SurgeryMedical Supplies MonitoringEquipment MedicationLaboratories Therapy


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Refrigerator manufacturing

Inputs Processing OutputsRaw material Assemble Refrigerators with

Machines Polishing -good cooling

Tools Fabrication -less consumptionLabor of electricity

Capital - genuine prices

Office -new advanced

features


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MBA Institute

Inputs Processing outputRaw minds lectures -decision

Faculty presentations making

Classrooms assignments -improvedLibrary case studies communication

Lab role plays good analytical

Projector,LCD ability.

Furniture computer skills

stationary


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Functions -

Manufacturer

OperationsFinance/

AccountingMarketing

ManufacturingPurchasing

Production

ControlQualityControl

Manufacturing


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OperationsFinance/

AccountingMarketing

Check

Clearing

Teller

Scheduling

Transactions

ProcessingSecurity

Commercial Bank

1984-1994

T/Maker Co.

Functions-Bank


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Functions Airline

OperationsFinance/

AccountingMarketing

Ground

Support

Flight

Operations

Facility

MaintenanceCatering

Airline

Documents

Ch 1 Pom Basic Final