Operations Webinar

A Webinar by PR cell for preparation of WAT-PI Admissions process 2016.Presenter : Dixit Aggarwal (PGP06 Batch)

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What is Operations ?• The business function responsible for

- Planning- Coordinating- Controlling

the resources needed to produce products and services for a company.

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Need for operations ?Transform inputs to output.

Inventory Management

Production management

Incremental Value addition

Cost Control

Materials Planning

Distribution & Logistics

Staffing

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Importance of operations

Marketing Finance

HR

Operations

Marketing - Sales

Finance - Operating capital

HR- Staffing

Operations – Day to day operations

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Manufacturing vs Service Industry

MANUFACTURING- Tangible Products

- Quantification is easy- Capital Intensive

- Inventories

SERVICES- Intangible Products

- Quantification is easy- Labour Intensive- No Inventories

SIMILARITIES- Demand Driven

- Concepts of quality, productivity, capacity, scheduling, staffing

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Example (Operations in service industry) – Telecom Industry

QOS

Peak Demand

Towers Require

d

Tower Location

Load Distribu-

tion

Cells

Hands-off

Outsour-cing

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Some important terms• Inventory & its types• Outsourcing, when to outsource• Bottleneck and its implications• Available Capacity and used capacity• Lead time• Flow time• Fixed costs & Variable costs• ERP (Enterprise resource Planning)

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InventoryInventory refers to the goods and materials that a business holds for the ultimate purpose of resale or repair.

• Chemicals• Talc• Silica

Raw Material

• Uncompleted Products

• Soap Liquid

WIP• Soap• Shampoo• Detergent

Finished Goods

Why Inventory?

BecauseUncertain demandValue Appreciation

Time LagsEconomies Of Scale

Types of Inventory

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Assembly Line• An assembly line is a manufacturing process in which parts are

added as the semi-finished assembly moves from workstation to work station where the parts are added in sequence until the final assembly is produced.

• Introduced by Ford in 1913 for their model T.• His innovation reduced the time it took to build a car from

more than 12 hours to two hours and 30 minutes.

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Time taken Between ordering & delivering.

= WIP / cycle time

Lead Time

Average time between successive deliveries

Bottleneck time

Cycle Time

Time spend by an item in WIP

Production lead time

Flow Time

Total units of a products that can be produced in a given time period

=Time available/ Cycle time

Capacity

Order Placement

Operation #1

Time = 2

Operation #2

Time = 3

Operation #3

Time = 1

Transportation

Time = 2Delivery

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Six Sigma• Implicit goal is to improve all processes.• Formal Definition : Six Sigma seeks to improve the quality of the

output of a process by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. Below 3.4 defects per million opportunities.

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Supply Chain Management• Supply chain management is a cross-functional approach that includes managing

the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer

• Activities of SCM-- Product Development- Sourcing- Production- Logistics- Synchronising supply & demand.- IT

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Lean operations – Just in time• Just in time is a method of planning and control and an operations

philosophy that aims to meet demand instantaneously with perfect quality & no waste.

• Advantages- Reduced inventory costs.- Product customisation.- No need for scheduling.Example – Toyota – At the Toyota’s San Antonio plant, Toyota has relations with various with various suppliers with close proximity of the plant, which supplies components to the assembly line Just In Time.

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Product Life Cycle

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Determining profitable customers• 80% of a company’s profits come from its top 20% customers.• Matrices to identify profitable customers-

- Activity Based Costing system- Customer Management System- Retention- Advocacy- Expanding Purchasing

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ERP (Enterprise Resource Planning)Enterprise resource planning (ERP) is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfilment or billing.

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Thank You • Questions ?