Introduction to production and operations management 

Module 1

Operations Management definition • Operations Management is defined as the design, operation and improvement of the system that create and deliver the firm’s primary product and service. 

• Operations Management deals with planning and control issues in manufacturing and services. 

Topic 1. Introduction on OM

2. Demand forecasting 

3. Facility location planning 

4. Facility capacity and layout planning 

5. Material requirement planning, just‐in‐time, lean production 

6. Scheduling Models and applications

7. New product development 

8. Outsourcing and offshoring  

9. Work design 

The challenges 

• Changing market conditions• Rate of change is faster • Global competition • Need to be proactive • Increase customer focus 

The changing customer • Once satisfied with black car • Availability • Price • Quality • Variety • Wants to buy frequently • Absolutely impatient customer • Wants more value for money 

Requirements of manufacturing 

• Make an increasing variety of products, on shorter lead times with smaller runs and flawless quality. 

• Improve ROI by automating and introducing new technology in process and materials so that price can be reduced to meet local and foreign competition.

• Mechanize‐but keep schedules flexible, inventories low, capital costs minimal and work force contented (Skinner, 1985).

History of Production and Operations Management• The successful creation of the steam engine by James Watt (1736–1819), a Scottish inventor and mechanical engineer, served as aharbinger of the industrial revolution in Great Britain and the rest ofthe world.

Contd…• Charles Babbage (1772–1871), aBritish inventor, was a firmbeliever of the merits of divisionof labor. He promoted the ideaof profit sharing with workersbased on their productivity andencouraged the use of employeesuggestion schemes.

• Robert Owen (1771–1858), a British socialreformer, is remembered for his reformsregarding child labor in factories,providing meals in the factories to on‐the‐job workers, and creating suitable housingfacilities for the workers.

Contd…• Thomas Alva Edison (1847–1931), an American inventor and businessman, made several significant inventions and had set up the world’s first industrial research laboratory. Some of his prominent inventions are the long‐lasting electric bulb, motion picture camera, and the phonograph.

• Frederick Winslow Taylor (1856–1915), an American mechanical engineer, is aptly hailed as the father of scientific management. His book The Principles of Scientific Management was published in 1911 and is regarded a cornerstone of management thought. He is famous for his stop watch time studies, in which he measured the time taken by workers in performing various parts of a task.

Contd…• Henry Ford (1863–1947), an American entrepreneur, engineer and innovator, is best known for his invention of the modern assembly line. In his factory, Ford implemented several concepts of Frederick Taylor, including standardized and interchangeable parts, precision manufacturing, and division of labor.

Event in history 

• The war – Resource availability • Computers – cost and information control • Quantitative methods –doing things well • Communication –personal touch • Electronics commerce – doorsteps • Home office  

Production and Operations Management Production & Operations Management is defined as the design, operation, andimprovement of the transformation process, which converts the various inputsinto desired outputs of products and services

Transformation process • In general transformation process can be categorized as follows • Physical (as in manufacturing)• Location (as in transportation)• Exchange (in retailing)• Physiological (as in health care )• Information (as in telecommunications) 

Steps in the production/operations process from the point of view of an 

entrepreneur 

Operations Strategy

Inventory Management for

Independent Demand Items

Facility Location Planning

Facility Layout Planning

Project Management

Total Productive Maintenance

(TPM)

Facility Capacity Planning

Materials Requirement Planning (MRP)/ Just-In-Time (JIT) System/

Supply Chain Mgt. (SCM)

New Product Development

Business Process Outsourcing and Off-shoring

Aggregate Production/ Operations Planning

Work Design Quality Management Operations Scheduling

Service Operations Management

Demand Forecasting

Process design 

Types of Processes

Continuous Process

Semi-continuous (Repetitive/Assembly)

Process

Intermittent Process

Project

Batch Process Job Shop

Types of Processes

Green Operations Management• Avoidance or reduction to use of fossil fuels is the way forward to minimizecarbon emissions

• The building designs should allow as much natural light as possible inside thebuilding so as to reduce the power consumption during day time.

• Recycling is increasingly becoming an important mechanism to reduce rawmaterial consumption, energy, and pollution by processing the seemingly wasteproducts into usable products.

• It is based on the premise that the resources required to produce a product fromscratch would be much more compared to recycling the products.

Automation

Less flexible than the humans; even small

changes in the process are expensive

Automation

Machines take exactly

the same time in repetitive

tasks

Behavioral problems in humans like boredom, frustration, fatigue, etc. can be avoided by using machines

More reliable and consistent

performance than that of humans

Industrial relations problems like strikes, lockouts, etc. can be avoided

State-of-the-art fully automated plants increase the market value of the firm/ improve client base in international markets

Leads to unemployment/ retrenchment of the labor force

Loss of creativity on the part of workers due to inflexibility in automation

Advantages

DisadvantagesUsually more

expensive than the human work force