9258_Operations Management-Framework.ppt

8/10/2019 9258_Operations Management-Framework.ppt

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Operations Management Framework

Session-1

Professor Winfred S.William

Xavier Institute of Management

Bhubaneswar



What is Operations Management?

Production is the creation of goods and services.

Operations Management is the set of activitiesthat creates value in the form of goods andservices by transforming inputs into outputs.



COST FOCUS

QULALITY FOCUS

CUSTOMIZATION FOCUS

Significant Events In Operations Management

Early concepts (1776-1880)

Labor specialization

(Smith , Babbage)

Standardize parts ( Whitney)

Scientific management Era (1880-1910)

Gantt Charts

Motion and time studies

Process Analysis (Taylor)

Queuing Theory

Mass production Era (1910-1980)Moving Assembly Line (Ford/Sorensen 1913)

Statistical sampling (Shewhart)

Economic Order Quantity (Harris)

Linear Programming (Dantzig)

PERT/CPM (Dupont 1957)

Material Requirement Planning (Orlicky 1960)

Mass customization Era (1995---------)

Enterprise Resource Planning

Learning Organization

International Quality Standard

Supply Chain Management

Agile Manufacturing

Services Supply Chain

Lean Production Era (1980-1995)

Just –in time

Compute aided Design(1970)

Electronic Data Interchange

Total quality management

Kanbans

Theory Of Constraint (TOC)



Counseling

Consulting services/teaching

Hospital care

Investment management

Advertising agency

Auto repair

Automobile

Computer

Restaurant meal

Fast-Food meal

Installed carpeting

1000

75 50 25 2550

75 100

ServicesGoods



The Operations Management System

Customer or Client

Participation

Operations and transformations

Inputs

Workers

Managers

Equipment

Facilities

Materials

Services

LandEnergy

Outputs

Goods

Services

1

2

3

4

5

Information on

Performance

External environment



Maximizing Value Added in Operations



Transformations

• Physical--manufacturing

• Locational--transportation

• Exchange--retailing

• Storage--warehousing

• Physiological--health care

• Informational--telecommunications



Types of Operations Decisions

– Strategic (long-range)• Needs of customers

(capacity planning) – Tactical (medium-range)

• Efficient scheduling ofresources

– Operational planningand control (short-range)• Immediate tasks and

activities



Ten Critical Decisions

1. Service and product design2. Quality management

3. Process, capacity design

4. Location

5. Layout design

6. Human resources, job design

7. Supply-chain management

8. Inventory management

9. Scheduling

10. Maintenance.



10

Classification of Productive

Systems

• Project

• Job Shop

• Batch

• Line Flow

• Continuous Flow

Job Shop

Flow Shop



Project

• Flow - no flow

• Flexibility - very high

• Products - unique

• Capital investment for transformation - very low

• Variable cost - very high

• Labor content and skill - very high

• Volume - one



Job Shop

• Flow - jumbled flow

• Flexibility - high

• Products - many

• Capital investment - low

• Variable cost - high

• Labor content and skill - high

• Volume - low



Batch Process

• Flow - disconnected, with some dominant flows

• Flexibility - moderate

• Products - several

• Capital investment - moderate

• Variable cost - moderate

• Labor content and skill - moderate

• Volume - moderate



Assembly Line Process

• Flow - connected line

• Flexibility - low

• Products - a few

• Capital investment - high

• Variable cost - low

• Labor content and skill - low

• Volume - high



Continuous Flow Process

• Flow - continuous

• Flexibility - very low

• Products - one

• Capital investment - very high

• Variable cost - very low

• Labor content and skill - very low, but with skilled

overseers• Volume - very high



16

Classification of Productive Systems

Productive systems can be classified as Project ,Job Shop, Batch, Mass

and Continuous Production.

Batch Production

Job Shop

Production

Continuous

Production Mass

Production

Volume

Variety

Project



17

Example

• Project – construction of a building

• Job shop - print shop

• Batch process - bakery

• Assembly line - automobile production line

• Continuous flow - oil refinery



18

Process

Flexibility

Jumbled Flow.

Process segments

loosely linked.

Disconnected Line

Flow/Jumbled Flow but a dominant flow

exists.

JOB SHOP

(Commercial Printer,

Architecture firm)

BATCH

(Heavy Equipment,

Auto Repari)

LINE FLOWS

(Auto Assembly,

Car lubrication shop)

CONTINUOUS

FLOW

(Oil Refinery)

Product

Variety Low

Low Standardization

One of a kindLow VolumeMany ProductsFew Major ProductsHigh volume

High Standardization

Commodity Products

Connected Line

Flow (assembly line)

Continuous, automated,

rigid line flow.

Process segments tightly

linked.

High

Low

High

Product-Process Matrix



19

Products and Services

• Make-to-order

• Make-to-stock

• Assemble-to-order

• Engineer-to-order



20

Classification of Processes by Customer Interface

S

U P P L I E R

C L I E N T

Make-to-Stock

Assemble-to-Order

Make-to-Order

Engineer-to-Order

Raw Material Components Semifinished Finished

Forecast Order



21

MAKE-TO-STOCK VERSUS MAKE-TO-ORDER

CHARACTERISTICS MAKE-TO-STOCK MAKE-TO-ORDER

ProductProducer-specified

Low variety

Inexpensive

Customer specified

High variety

Expensive

Objective

Main operation

problems

Manage delivery

lead times and

Capacity

Balance inventory,

Capacity, and Service

Quality

Lead time

Forecasting

Planning production

Control of inventory



22

Push/Pull Strategies

• Hybrid of “push” and “pull” strategies to overcome

disadvantages of each• Early stages of product assembly are done in a “push”

manner

– Partial assembly of product based on aggregate demand

forecasts (which are more accurate than individual product

demand forecasts) – Uncertainty is reduced so safety stock inventory is lower

• Final product assembly is done based on customer

demand for specific product configurations

• Supply chain timeline determines “push-pull boundary”

Supply Chain Timeline

Raw

Materials

End

Consumer

Push Strategy Pull Strategy

Push-

Pull

Boundary“Generic” Product “Customized” Product







25

Organizational Model

POM

Marketing

MISEngineering

HRM

QA

Accounting

SalesFinance



Thank You

Documents

9258_Operations Management-Framework.ppt