2. Learning Outcomes
In this unit we will discuss about:
⢠What is operation Management?
⢠Critical Responsibility of a Manager,
⢠Transformation Process,
⢠Operation as service,
⢠Historical Development of Operation Management,
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3. Learning OutcomesâŚ.
In this unit we will discuss about:
⢠JIT & TQC,
⢠Quality and Productivity,
⢠TQM and Quality Certification,
⢠Business Process Re-Engineering,
⢠Supply Chain Management.
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5. Operations Management
⢠What is operations?
â The part of a business organization that is responsible for
producing goods or services
⢠How can we define operations management?
â The management of systems or processes that create
goods and/or provide services
6. Goods are physical items that include raw materials, parts,
subassemblies, and final products.
â˘Automobile
â˘Computer
â˘Oven
â˘Shampoo
Services are activities that provide some combination of time,
location, form or psychological value.
â˘Air travel
â˘Education
â˘Haircut
â˘Legal counsel
Good or Service?
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Operations Management is:
⢠A management function
⢠An organizationâs core function
⢠In every organization whether Service or Manufacturing,
profit or Not for profit
8. Why Study OM?
⢠Every aspect of business affects or is affected by operations
⢠Many service jobs are closely related to operations
â Financial services
â Marketing services
â Accounting services
â Information services
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9. OM and Career Opportunities
⢠Operations manager
⢠Supply chain manager
⢠Production analyst
⢠Schedule coordinator
⢠Production manager
⢠Industrial engineer
⢠Purchasing manager
⢠Inventory manager
⢠Quality manager
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11. Scope of Operations Management
⢠Operations Management includes:
â Assuring quality
â Motivating employees
â Deciding where to locate facilities
â Supply chain management
â . . .
12. Importance of operation management
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Reduce
Cost
Increase
Revenue
Reduce
Investment
Innovation
Building
13. Operations
⢠Goods Producing
⢠Storage/Transportation
⢠Exchange
⢠Entertainment
⢠Communication
Examples
⢠Farming, mining, construction
⢠Warehousing, trucking, mail service,
moving, taxis, buses, hotels, airlines
⢠Retailing, wholesaling, banking,
renting, leasing, library, loans
⢠Films, radio and television, concerts,
recording
⢠Newspapers, radio and television,
newscasts, telephone, satellites
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14. Critical Responsibility of a Manager
⢠Strategic Decision Making
⢠Implement & Use ERP
⢠Automate Process
⢠Enhance the R&D effort.
⢠Reduce lag in implementation of projects
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15. Critical Responsibility of a ManagerâŚ.
⢠Protect the Environment
⢠Act as a member in New Product Design & Development
⢠Strategic Relationship with Suppliers
⢠Technology Management
⢠Internal Quality Audit
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16. 16
What is Role of OM?
⢠OM Transforms inputs to outputs
â Inputs are resources such as
⢠People, Material, and Money
â Outputs are goods and services
17. All parts of the organizations are operations
⢠Operations as a function :
Part of the organization which produces the products and services
for the organization's external customers.
⢠Operations as an activity :
Any processing of input resources in order to produce products
and services, for either internal or external customers.
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19. Characteristics of operation processes Inputs
Inputs â Transformation - Outputs
But these activities do differ in:
⢠V = The Volume of their output
⢠V = The Variety of their output
⢠V = The Variation in demand
⢠V = The degree of Visibility which customers have of the
product/service
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20. The Volume Dimension
High Volume Operations
⢠The transformation is highly
⢠Repeatability leads to
Specialization
⢠Specialization leads to
customization
⢠Customization is capital
intensive
⢠High volume leads to lower
unit cost
Low Volume Operations
⢠There is low repetition in
the repeatable
transformation process
⢠Employees perform more
than one task
⢠More tasks require less
systemization
⢠Low volume leads to high
unit costs
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21. The VARIETY dimension
Low Variety Operations:
⢠The transformation process
is well- defined
⢠Well-defined processes
requires standardized
processes
⢠Standardized
transformation processes
are very routinely by nature
⢠Low variety in the
transformation
processes leads to a
lower unit cost
High Variety Operations:
⢠The transformation process
can be highly flexible
⢠The transformation can
be highly complex
⢠The transformation
process meets the
customerâs specific
needs
⢠High variety operations
lead to high unit costs
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22. The VARIATION dimension
Low Variation Operations:
⢠The transformation process is stable
⢠The demand and output are
predictable
⢠There is a relatively high utilization of
inputs
⢠Low variation leads to low unit costs
⢠Organization must be able to change
capacity.
High Variation Operations:
⢠Operations needs to consider the
changing demand patterns
⢠Operations must be highly flexible.
⢠High unit cost
⢠Anticipation of customer behavior is
required
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23. The VARIATION dimension
Low Visibility Operations:
⢠Time lag between production and
consumption.
⢠The output from the transformation
is highly standardized.
⢠Employees in the process do not
require a high level of contact
(personal) skills.
⢠Low unit cost services.
High Visibility Operations:
⢠There is a short waiting tolerance.
⢠A high degree of customer contact
skills is required.
⢠There is a high degree of variety
present.
⢠The per-unit cost is very high.
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24. The implications of the four Vâs
Implications for the cost of creating the product or service:
⢠High volume, low variety, low variation and low visibility help
to keep transformation costs down.
⢠Low volume, high variety, high variation and high visibility
carry a cost penalty for the transformation process and
organization as a whole.
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