OPERATIONS MANAGEMENT-OVERVIEW

Project and ProductionProject:

Concrete entityIdea Facory Design BuildingPlan Highway

PrototypeProductsServices

PROJECTS PRODUCTIONAutomobile factory Produce

automobilesBuild a house Operate house

holdsConstruct hospital Treat PatientsConceive new product ManufactureDevelop prototype Produce multiples

DONE ONCE DONE REPETITIVELY

MIX OF PROJECTS AND PRODUCTIONProjects and production are intimately

interwoven in real life.ProjectsStarts production and solve problems relating

to-operation, maintenance, house keeping-Marketing, Distribution, quality

ISSUES FOR DISCUSSIONPervasiveness of projects and productionGrowing organizational complexityProducts vs servicesValue addition in operationsGeneralized model of productionProductivity and other performance

indicatorsKinds of production systemKey decisions in the life cycle of a production

system

AIM OF PRODUCTIONTo provide goods and services for mankind-in the right quantity-at the appropriate place-at the desired time-with the required quality-at a reasonable cost

Nature of productionInputs

OutputTransformation

Nature of productionInputs

Outputmen Desirablemachines Undesirablematerials moneyinformationenergy------

Transformation

Nature of productionInputs

Outputmen Desirablemachines Undesirablematerials feedbackmoneyinformationenergy------

Transformation

Nature of productionInputs Output

men Desirablemachines Undesirablematerials feedbackmoneyinformation Environmentenergy social------ economicpolitical

Transformation

VALUE ADDITION THROUGH TRANSFORMATIONSOperations is the process of changing inputs

into outputs and thereby adding value to some entity. This constitutes the primary function of virtually every organization.

HOW VALUE ADDITION TAKES PLACE?ALTER-physical-sensual-psychological• TRANSPORT• STORE• INSPECT

KINDS OF TRANSFORMATIONSPhysical as in

manufacturingLocation as in transpotationExchange as in retailingStorage as in warehousingPhysiological as in hoapitalAttitudinalas in readingInformational as in

entertainment

GROSS MEASURES OF PRODUCTIONPRODUCTION=OUTPUT/TIMEPRODUCTIVITY=OUTPUT/INPUT(in a given

time)EFFICIENCY= ACTUAL/TARGETEFFECTIVENESS= CAPACITY TO ACHIEVE

DESIRED GOALFLEXIBILITY=CAPACITY TO RESPOND TO

CHANGES (internal and external)

ECONOMIC MEASURES OF PERFORMANCEInvestment(initial and phased)Profit(gross and net after taxes)RevenueTurn overNet present valueBenefit/cost valueInternal rate of returnPayback period

NEW CHALLENGES IN PRODUCTION

COMPETITION

• More producers• Demanding

customers

price quality

ReducedLead time

Greatervariety

Customer

satisfaction

PRODUCTION AS PART OF THE SUPPLY CHAIN

TRANSFORMATIONPROCESS

VENDORS

WAREHOUSES RE

TAILERS

FEATURES OF SERVICE ORGANIZATIONSCustomer participationServices not inventoriedService capacity time perishableCustomer governs locationGenerally labour intensiveIntangible nature of service

OPERATIONS MANAGEMENTThe performance of managerial activities inSelectingDesigningOperatingControlling and UpdatingProductive systems