services mgt

7/28/2019 services mgt

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UNIT 1

OPERATIONS MANAGEMENTAN OVERVIEW

Roshan K Gnyawali

MANAGEMENT OF MACHINES AND MATERIALS (MS-5)


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THE ORGANIZATION

Three Basic Functions

Operations

FinanceMarke

ting


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OPERATION MANAGEMENT

Operation: The process ofchanging inputsinto outputs (transformation process) and

thereby adding value to some entity.

Operation Management: The management

(design, operation, and improvement) ofsystems or processes that create goodsand/or provide services


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VALUE ADDITION

Alter: Steel Industry, Hospital, University

Transport: People, Goods, Garbage

Store: Cold Storage, Banks, Warehouse

Inspect: Hospital, Workshops

Value Addition: Difference between thecost of input and the value or price of

the output.


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VALUE ADDITION

Stage of Production ValueAdded

Valueof

Product

Farmer produces andharvests

$0.15 $0.15

Wheat transported to mill $0.08 $0.23

Mill produces flour $0.15 $0.38

Flour transported to baker $0.08 $0.46

Baker produces bread $0.54 $1.00

Bread transported to grocerystore

$0.08 $1.08

Grocery store sells bread $0.21 $1.29

Total Value-Added $1.29


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SYSTEMS CONCEPT

Inputs

LandLabor

Capital

Transformation/

Conversion

process

Outputs

GoodsServices

Control

Feedback

FeedbackFeedback

Value added

System: A purposeful collection of people,objects and procedures for operating within an

environment.


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SYSTEMS CONCEPT

INPUT

Labor, Material, Land, Capital, Machine,

Technology, Management, Method,

OUTPUT

Service or Goods

Pollution, Waste


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SYSTEMS CONCEPT

Inputs Conversion Outputs

Fruits Cleaning Bottle of JuiceMetal Sheets Making bottleWater Cutting

Energy MixingLabor PackingBuilding LabelingEquipment

XYZ Juice Company


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SYSTEMS CONCEPT

XYZ Hospital

Inputs Conversion Outputs

Doctors, nurses Examination HealthypatientsHospital Surgery

Medical Supplies MonitoringEquipment MedicationLaboratories Therapy


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GOODS vs SERVICE

Automobile assembly, steel making

Home remodeling, retail sales

Automobile Repair, fast food

Computer repair, restaurant meal

Song writing, software development

Goods Service

Surgery, teaching















Surgery, teaching




















Surgery, teaching







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GOODS vs SERVICE

Tangible Act


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GOODS vs SERVICECharacteristic Goods ServiceCustomer contact Low High

Uniformity of input High Low

Labor content Low High

Uniformity of output High Low

Output Tangible Intangible

Measurement of productivity Easy Difficult

Opportunity to correct problems High Low

Inventory Much Little

Evaluation Easier Difficult

Patentable Usually Not usual

Demand Can be Forecasted Variable

Location Any Near to User


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PRODUCTIVITY

Productivity = Output/ Input

Labor Productivity = Output/ Labor Input

Efficiency with which we are converting the inputsinto outputs


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OBJECTIVES IN OM

1. Performance Objectives

a) Efficiency (Productivity)

b) Effectiveness

c) Quality

d) Lead time/ Throughput time

e) Capacity Utilizationf) Flexibility


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OBJECTIVES IN OM

2. Cost Objectives

a) Explicit Cost

Material Cost, Direct/Indirect Labor Cost,Scrap/Rework Cost, Maintenance Cost

b) Implicit Cost

Cost of Inventory, Inspection, Material Handling

Cost of stock-out, delayed delivery

Downtime Cost

Opportunity Cost

Goodwill


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OM DECISIONS

WhatWhat resources/what amounts

WhenNeeded/scheduled/orderedWhere

Work to be done

HowDesigned

WhoTo do the work


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OM DECISIONS

OM Decisions

Periodic Decisions Continual Decisions

Selection Design Updating Operating - Controlling

Operational (Short-term) DecisionStrategic (Long-term) Decisions


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OM DECISIONS

PlanningCapacity Planning, Location Planning, Layout

Planning, Product and Process PlanningForecasting, Aggregate Planning, Scheduling

OrganizingStaffing, Job Design, Work Measurement,

Production Standards

Controlling Inventory, Quality, Cost, Maintenance, MRP


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TYPES OF PRODUCTION

SYSTEMMass Production / Flow Line Production

Straight line flow Arranged according to sequence of operations Standardized product (one plant for one product)No interruption in the production flow

Example: Automotive assembly, Cement factory,Paper factory


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TYPES OF PRODUCTION

SYSTEMBatch Production

Variety of products with small volume

Shared production lineSet-up Between batches (Time and cost ) Dimension of the batch depends on the machineQuantity larger than the customer request is

produced according to batch size. The unsold quantity is added to stock

Example: Textile, Mechanical production, Painting


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TYPES OF PRODUCTION

SYSTEMJob Shop Production

No unique product, unique flow and no fixed size Flows are extremely interwoven Labor is often the critical resource Each product has its own TECHNOLOGICAL

CYCLE, that defines a route through several typesof machines

Examples: Mechanical workshops, Vehicle service

centres


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TYPES OF PRODUCTION

SYSTEMUnit Production/ Project Form

The demand of the product is not repetitive Product fixed and manpower, facility flows CPM/ PERT scheduling tools used

Exact requested quantity is produced

Example: Boat, Industrial Facility, Plane


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HISTORY OF OM

Industrial revolution (1770s)

Scientific management (1878)

Mass production Interchangeable parts

Division of labor

Human relations movement (1920-60) Decision models (1915, 1960-70s)

Influence of Japanese manufacturers


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SCOPE OF OM

Product Selection andDesign

Process Selection andPlanning

Facility Location

Layout and MaterialHandling

Capacity planning

Scheduling

Inventory Control

Quality AssuranceWork & Job Design

Maintenance

Cost Control

And Many More


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DISCUSSION

Discuss with suitable examples, the role ofthe Operations Manager in todays

context. Do you agree that operationsmanagement is a multi-disciplinaryfunction? Discuss

Identify three disciplines that will contribute

in a major way to the development ofProduction and Operations Management.


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DISCUSSION

Describe the Operations Managementdecisions and their classifications.

What do you mean by ManagementProcesses? Discuss Planning, Organizing,Controlling and; Motivating and Leading.


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DISCUSSION

Why does the proper operations strategy

keep changing for companies that are

world class competitors?


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End of Unit 1

UNIT 2: Product Selection
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