INTRODUCTION TO OPERATIONS MANAGEMENT

Prof. Kaushik Paul

Associate Professor
Operations Area
E-Mail: kaushik.paul@igsm.in
Phone: 43559308
 OBJECTIVES

 To recognise that Operations Management exists

 To understand the concepts of core and value added services

 To understand how Operations management is used in

practice

 To understand how the transformation process works.

2
 Back office Kitchen unit
operation in manufacturing
a bank operation

They are all

operations

Take-out /
Retail restaurant
operation operation
3
 A GENERAL MODEL OF OPERATIONS MANAGEMENT
Operation’s
ENVIRONMENT strategic
objectives

Operations
The operation’s
strategy
competitive role
and position
Input
transformed
resources
Materials Design Improvement
Information
Customers Output
Input
products and Customers
resources
services
Facilities
Staff
Planning and
Input control
transforming
resources

ENVIRONMENT

4
 CORE SERVICES DEFINED

Core services are basic things that customers

want from products they purchase

5
 CORE SERVICES PERFORMANCE OBJECTIVES

Quality

Operations
Flexibility Speed
Management

Price (or cost

Reduction)

6
 VALUE-ADDED SERVICES DEFINED

Value-added services differentiate the organization from

competitors and build relationships that bind customers
to the firm in a positive way

7
 VALUE-ADDED SERVICE CATEGORIES

Problem Solving

Operations Sales Support

Information
Management

Field Support

8
WHERE DOES THE BUSINESS GET ITS COMPETITIVE ADVANTAGE?

The
“technological”
specification of Product/
its Service
product/service Technolog
? y
The way it
produces its
goods and
Marketing Operation services?
s
The way it
positions
itself in its
market?
9
THE THREE FUNCTIONS WORKING TOGETHER .... e.g. SWATCH

Further
innovations
Innovative
plastic design
which
with few parts
gives which
Product/ funds which
allows service funds etc.
design

Standardize,
Mass fashion Marketing Operations easy to make
product at high
orientation
volume so low
Extended cost
range but Increased variety
also does not increase
costs
but because
volume is high

10
 CORE AND SUPPORT FUNCTIONS
Core functions Engineering/
technical
Support functions
function
Accounting
and finance Product/services
function development
function

Others
Operations Marketing
function function

Human
resources
function
Information/
technical (IT) A broad definition of
function operations
management
11
 THE POSITION OF THE OPERATIONS FUNCTION

Accounting Product
Marketing Operations
and finance development

Call on Manage Retranslate Conduct

Church newcomers appeals scriptures weddings

Fast food Advertise on Pay Design Make

chain television suppliers hamburgers hamburgers

Furniture Sell to Design new Assemble

Pay staff
manufacturer stores furniture furniture

Process Identify Raise Develop Make and

perspective needs capital product distribute

12
The best way to start understanding the nature of “Operations” is
to look around you

Everything you can see around you (except the flesh and blood) has
been processed by an operation

Every service you consumed today (radio station, bus service,

lecture, etc.) has also been produced by an operation

Operations Managers create everything you buy, sit on, wear, eat,
throw at people, and throw away

13
 SOME OPERATIONS MANAGEMENT ACTIVITIES AT IKEA

Design a store layout

Design elegant
products which can be
flat-packed efficiently
Site selection for
stores of an
appropriate size in
the most effective
locations
which gives smooth Ensure that the jobs of
and effective flow all staff encourage their
contribution to
business success
IKEA STORE
Continually examine
and improve
operations practice

Maintain
Monitor and enhance
cleanliness and
quality of service to
safety of storage
customers
area Arrange for fast
replenishment of
products

14
 ALL OPERATIONS ARE TRANSFORMATION PROCESSES

TRANSFORMED ENVIRONMENT
RESOURCES

MATERIALS
INFORMATION
CUSTOMERS

TRANSFORMATION GOODS
INPUT OUTPUT AND
PROCESS
SERVICES
FACILITIES
STAFF

TRANSFORMING
RESOURCES
ENVIRONMENT

15
OPERATIONS MANAGEMENT – BASIC PRINCIPLES

Materials Operations
management is
concerned with
Information Products and
producing and services
delivering products
Customers and services

All types of enterprise have an operations function, even if

it isn’t called ‘operations.
Most operations produce both products and services.

16
 THE OUTPUT FROM MOST TYPES OF OPERATION IS A
MIXTURE OF GOODS AND SERVICES

Pure goods
Crude oil production

Tangible
Can be stored
Aluminium smelting

Specialist machine tool Production precedes

consumption
Low customer
manufacturer

contact
Can be transported
Quality is evident
Restaurant

Computer systems
services

Intangible
Management

Psychotherapy clinic
consultancy
Cannot be stored
Production and
consumption are
simultaneous
High customer contact
Cannot be transported
Quality difficult to
judge
Pure services
17
 THE ACTIVITIES OF OPERATIONS MANAGEMENT

OPERATIONS
STRATEGIC
ENVIRONMENT
OBJECTIVES
THE
INPUT OPERATIONS
TRANSFORMED OPERATIONS Operations COMPETITIVE
RESOURCES STRATEGY strategy ROLE AND
MATERIALS POSITION
INFORMATION Operations
CUSTOMERS management IMPROVEMENT
DESIGN
GOODS
INPUT OUTPUT AND
SERVICES
PLANNING AND
FACILITIES CONTROL
STAFF
INPUT
TRANSFORMED
RESOURCES ENVIRONMENT

18
 Operations Activities as Feedback Loops
Design activities set the basic configuration
Planning & control activities guide short/medium term changes
Improvement activities guide longer term changes

Design

Planning & Control

Improvement
19
 HISTORICAL DEVELOPMENT OF OM

 JIT and TQC

 Manufacturing Strategy Paradigm
 Service Quality and Productivity
 Total Quality Management and Quality Certification
 Business Process Reengineering
 Supply Chain Management
 Electronic Commerce

20
 OBJECTIVES

 To recognise that Operations Management exists

 To understand the concepts of core and value added services

 To understand how Operations management is used in

practice

 To understand how the transformation process works.

21
References:
1) ‘Operations Management’ By Nigel Slack et al.
2e

2) ‘Operations Management for Competitive

Advantage’
By Chase, Jacobs & Aquilano, 10e

HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE

THANK YOU