SESSION

OPERATIONS MANAGEMENT

Production and Operations Management - R B Khanna Prentice Hall India

NEED FOR ORGANISATIONS

NEEDS

ORGANISATION

SATISFIERS (Products or Services)

CUSTOMER

Production and Operations Management - R B Khanna Prentice Hall India

CUSTOMER
NEED
STAGE 1 IDENTIFY NEED AND FORECAST REQUIREMENT

SATISFIERS
STAGE 5 DISTRIBUTE PRODUCT OR DELIVER SERVICE

EXPLICIT FORECASTS STAGE 2 ANALYSE AND DESIGN PRODUCT OR SERVICE

PRODUCT OR SERVICE STAGE 4 TRANSFORM INTO PRODUCT OR SERVICE

RESOURCE ESTIMATES
Production and Operations Management - R B Khanna Prentice Hall India

STAGE 3 PROCURE RESOURCES

RESOURCES Materials Machines Men Money Minutes

CUSTOMER

Product Service FINANCE

Needs MARKETING PERSONNEL

Sales and demands requirement

Organisations ability to meet sales and demands requirement Availability Manpower Requirement Numbers and Skills

Operational needs and financial requirements

Financial Status

PRODUCTION OPERATIONS

Production and Operations Management - R B Khanna Prentice Hall India

Services & Products

Services: Intangible product No inventories High customer contact Short response time Labour intensive Products: Tangible product Can be inventoried Low customer contact Long response time Capital intensive

Production and Operations Management - R B Khanna Prentice Hall India

OM Defined
Operations management: The business function responsible for planning, coordinating, and controlling the resources needed to produce a companys products and services

Production and Operations Management - R B Khanna Prentice Hall India

DEFINITIONS
A field of study that focuses on the planning, scheduling, use and control of a manufacturing or service organisation, through the study of design engineering, industrial engineering, management information systems, quality management, production management, accounting and other functions as they affect the operation. (APICS Dictionary 1995.) is concerned with the efficient conversion of an organisations resources into the goods and services that it has been set up to provide. Barnett, 1996.

Production and Operations Management - R B Khanna Prentice Hall India

DEFINITIONS
is concerned with creating, operating and controlling a transformation system which takes inputs of a variety of resources and produces outputs of goods and services which are needed by the customer. Naylor, 1996. is concerned with all activities involved in making a product or providing a service: it is responsible for the transformation of various kinds of inputs to useful outputs. Waters, 1991. is the management of systems or processes that create goods and/or provide services. Stevenson, 1993.
Production and Operations Management - R B Khanna Prentice Hall India

Value Added Defined

Value Added by Process Transformation Process

Inputs in Rs

Outputs in Rs

Production and Operations Management - R B Khanna Prentice Hall India

OM Decisions
Strategic decisions:
Decisions that set the direction for the entire company. Broad in scope & long-term in nature

Tactical decisions:
Short-term & specific in nature Bound by the strategic decisions

Operational Decisions
Day to day decisions.
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5 Ps OF PRODUCTION
PRODUCT PROCESS PLANT PROGRAMMES PEOPLE

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STEPS IN THE DESIGN PROCESS PRODUCT

Conception or Idea Generation Acceptance or Feasibility Study Execution or Preliminary Design Translation or Production Design Pre-operation or Final Design

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Production Design
Simplification Standardisation Modularity Usability

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SIMPLIFICATION
Reduces the number of parts, assemblies or options in a product. Designs are simplified by using lesser number of parts Reduction of costs. Increases efficiency of the production process. Reduces time required per unit. Increases productivity. Better automation
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Simplification
Polish Tin Design
Ex-website designer turned inventor, Mark Sheahan, designed a revolutionary new packaging technology called squeezeopen after his mother, who suffered from arthritis, complained about not being able to open a shoe-polish tin. The novel concept is a new form of easy to open container. It is senior-friendly because it involves applying only gentle pressure to the lid to open it, while closing the container, by simply lightly pressing the cap to seal it, is equally as stress-free.

Notice the butterfly opening lever on the side.

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STANDARDISATION
It is a tool to promote the use of minimum number of parts to serve the maximum number of purposes consistent with the economical manufacture, minimum whole life costs and the quality and reliability necessary to ensure optimum effectiveness.

Production and Operations Management - R B Khanna Prentice Hall India

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RELIABILITY
The probability of successful performance of a product or a component over a specific period of usage under specified conditions. Successful performance implies no more than a specified number of failures. Reliability of a product is a function of the reliability of its components
Production and Operations Management - R B Khanna Prentice Hall India

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Parts in Series

Reliability of the product = R1 R2 R3 0.9 0.9 0.9 0.729

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Redundancy
0.9 0.9 0.9

Reliability 1 (1 R1 )(1 R2 )(1 R3 ) 1 (1 0.9)(1 0.9)(1 0.9) 0.999

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VALUE ENGINEERING
It is a cost reduction technique. Reduces the cost of products and services by optimising their basic design. Cost of a system can be reduced by using different materials, improving the design or the manufacturing processes. However, these changes should not affect the basic functions of the system.
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EXAMPLES
Water flushing tanks used in toilets. A firm was manufacturing 5 lakh door hinges per year by the process of stamping and forming. Various alternative processes like casting, forging, welding, and rolling were considered. Possibility of using plastic hinges instead of steel hinges was also explored. Finally it was decided to manufacture hinges by the rolling process resulting in a saving of cost of Re 1/- per hinge. (1980 prices).
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EXAMPLES
Caustic soda and caustic potash manufactured by a chemical unit, were being packed in a mild steel drum (24 gauge) of capacity 150 kg. The cost of each drum was Rs 36/- and the annual consumption was 1,00,000. The drum was replaced by a polythene bag of 50 kg capacity through value analysis. The cost of the polythene bag was Rs 3.10 each. As can be seen, the change resulted in saving of 33 per cent costs in packing and also facilitated storage and handling.

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ERGONOMICS
The application of biological sciences in conjunction with engineering sciences to the worker and his working environment so as to obtain maximum satisfaction for the worker which at the same time enhances productivity.

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Example of Loads
Load Physical Accompanied by expenditure of physical energy Perceptual Caused by sensory input Static Dynamic Steady pressure on a spring Fixing a job on a lathe loaded device

(a) Visual (b) Aural

(c) Tactile

Watching dials indicating a Seeing changes in traffic steady a state of progress signals Constant hum of generator
Holding on to a hand rail

Hearing an alarm signal

Holding a rope which is slipping through ones hand

Mental

Memorising facts to take a Evolving new ideas or quiz test later designs
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Production and Operations Management - R B Khanna Prentice Hall India

Physical Loads
Sit rather than stand Natural working position Support arms and feet Permit a change in position Keep movements symmetrical Work place Free hands from holding work
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Production and Operations Management - R B Khanna Prentice Hall India

Working Environment
Colour
Yellow - drawing attention Orange alertness Red danger Green safety Blue - caution White - cleanliness

Illumination Ventilation, temperature and humidity

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Characteristics of Services
Intangibility Perishability Heterogeneity Simultaneity

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Service Design
Service Concept
Customer Desired service experience Targeted customer

Service Package
Physical items Sensuous benefits Psychological benefits

Design Specifications
Activities Facility Provider skills Cost and time estimates

Performance Specifications
Customer requirements Customer expectations

Delivery Specifications
Schedule Deliverables Location
Production and Operations Management - R B Khanna Prentice Hall India

Service

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Classification of Services
Personal Services
High contact and interaction Customer is throughput Beautician, optician, driving coach

Professional Services
Low contact and high interaction Adaptive customisation Accountant, architect
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Classification of Services
Mass Services
High contact and low interaction Choice and Customisation Bus service, hotel, rail

Service Shops
High contact and high interaction Customisation varies College
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Classification of Services
Service Factories
High contact and high interaction Adaptive Customisation Banks, Postal services

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