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.

Back office operation in a bank

Kitchen unit manufacturing operation

They are all operations

Retail operation

Take-out / restaurant operation

3

A GENERAL MODEL OF OPERATIONS MANAGEMENT

ENVIRONMENT
Operations strategic objectives

Operations strategy Input transformed resources Materials Information Customers Design Input resources Planning and control Improvement

The operations competitive role and position

Output products and services

Customers

Facilities Staff Input transforming resources

ENVIRONMENT
4

CORE SERVICES DEFINED

Core services are basic things that customers want from products they purchase

CORE SERVICES PERFORMANCE OBJECTIVES

Quality

Flexibility

Operations Management

Speed

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

VALUE-ADDED SERVICE CATEGORIES

Problem Solving

Information

Operations Management

Sales Support

Field Support

WHERE DOES THE BUSINESS GET ITS COMPETITIVE ADVANTAGE?

The technological specification of its product/service?

Product/ Service Technology

The way it produces its goods and services?

Marketing
The way it positions itself in its market?

Operations

THE THREE FUNCTIONS WORKING TOGETHER .... e.g. SWATCH

Further innovations Innovative plastic design with few parts Product/ service design

which gives allows

which funds

which funds etc.

Mass fashion orientation

Extended range

Standardize, Marketing Operations easy to make product at high volume so low cost but also Increased variety does not increase costs

but because volume is high

10

CORE AND SUPPORT FUNCTIONS

Core functions

Engineering/ technical function

Product/services development function

Support functions

Accounting and finance function

Others
Operations function Marketing function

Human resources function

Information/ technical (IT) function

A broad definition of operations management

11

THE POSITION OF THE OPERATIONS FUNCTION

Marketing Church Fast food chain Furniture manufacturer Process perspective

Call on newcomers

Accounting and finance

Manage appeals

Product development
Retranslate scriptures

Operations
Conduct weddings

Advertise on television
Sell to stores

Pay suppliers
Pay staff

Design hamburgers
D esign new furniture

Make hamburgers
Assemble furniture

Identify needs

Raise capital

D evelop product

Make and 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 elegant products which can be flat-packed efficiently Site selection for stores of an appropriate size in the most effective locations Maintain cleanliness and safety of storage area

Design a store layout which gives smooth and effective flow

Ensure that the jobs of all staff encourage their contribution to business success

IKEA STORE

Continually examine and improve operations practice

Arrange for fast replenishment of products

Monitor and enhance quality of service to customers

14

ALL OPERATIONS ARE TRANSFORMATION PROCESSES

TRANSFORMED RESOURCES MATERIALS INFORMATION CUSTOMERS

ENVIRONMENT

INPUT
FACILITIES STAFF
TRANSFORMING RESOURCES

TRANSFORMATION PROCESS

GOODS OUTPUT AND SERVICES

ENVIRONMENT
15

OPERATIONS MANAGEMENT BASIC PRINCIPLES

Materials Information Customers

Operations management is concerned with producing and delivering products and services

Products and services

All types of enterprise have an operations function, even if it isnt called operations. Most operations produce both products and services.

16

THE OUTPUT FROM MOST TYPES OF OPERATION IS A MIXTURE OF GOODS AND SERVICES
Crude oil production

Pure goods
Aluminium smelting Specialist machine tool manufacturer

Restaurant

Computer systems services

Tangible Can be stored Production precedes consumption Low customer contact Can be transported Quality is evident

Psychotherapy clinic

Intangible Cannot be stored Production and consumption are simultaneous High customer contact Cannot be transported Quality difficult to judge

Management consultancy

Pure services
17

THE ACTIVITIES OF OPERATIONS MANAGEMENT

OPERATIONS STRATEGIC OBJECTIVES THE OPERATIONS COMPETITIVE ROLE AND POSITION

ENVIRONMENT
INPUT TRANSFORMED RESOURCES MATERIALS INFORMATION CUSTOMERS

OPERATIONS STRATEGY Operations management DESIGN

Operations strategy

IMPROVEMENT

INPUT
FACILITIES STAFF INPUT TRANSFORMED RESOURCES

PLANNING AND CONTROL

GOODS OUTPUT AND SERVICES

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