Significance of Operations Management

8/2/2019 Significance of Operations Management

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Significance of Operations

Management

Submitted by,Abhijith

Abhilash

Amruta

Anup

Aparanji

charan


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Operations management is:

The business function responsible for planning,

coordinating, and controlling the resources

needed to produce products and services for a

company.


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Continued...

A management function.

An organizations core function.

In every organization whether Service or

Manufacturing, profit or Not for profit


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Operations function consists of all activities

directly related to producing goods or

providing services.

Organization

Finance Production/Operations

Marketing


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Typical organisational chart


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Role of OM

OM Transforms inputs to outputs.

Inputs are resources such as

People, Material, and Money,

Outputs are goods and services


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Examples of operations

Operations

Goods Production

Storage / Transportation

Exchange

Entertainment

Communication

Examples

Farming, Mining, Construction,Manufacturing, Power Generation

Warehousing, Trucking, Mail Service,

Moving, Taxis, Buses, Hotels, Airlines

Retailing, Wholesaling, Banking,Renting, Leasing, Library, Loans

Films, Radio, Television, Concerts,Recordings

Newspapers, Radio and Television,Newscasts, Telephone, Satellites


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OMs Transformation process


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Feedback and control

Physical Flow InformationFlow

Measurements taken at various points in thetransformation process for control purposes are calledfeedback.

The process of comparing outputs to previouslyestablished standards to determine if corrective actionis needed is called controlling.


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OMs Transformation role:

To add value

Increase product value at each stage.

Value added is the net increase between output product

value and input material value.

Provide an efficient transformationEfficiency means performing activities well for least

possible cost


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Food processor

Inputs Processing Outputs

Raw Vegetables Cleaning Canned Vegetables

Metal Sheets Making Cans

Water Cutting

Energy Cooking

Labor Packing

Building Labeling

Equipment


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Hospital process

Inputs Processing Outputs

Doctors Examination Healthy PatientsHospital Surgery

Medical Supplies Monitoring

Equipment Medication

Laboratories Therapy


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Manufacturing and Service

Characteristicscharacteristics manufacturing Service

Output Tangible Intangible

Customer contact Low High

Uniformity of input High Low

Labour content Low High

Uniformity of output high Low

Measurement of

productivity

Easy Difficult

Opportunity to correct

quality problems

high low


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On the other hand..

Both use technology

Both have quality, productivity, & response issues

Both must forecast demand

Both will have capacity, layout, and location issues

Both have customers, suppliers, scheduling and

staffing issues

Manufacturing often provides services Services often provides tangible goods


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Hybird organisations

Some organizations are a blend ofservice/manufacturing/quasi-manufacturingQuasi-Manufacturing (QM) organizations.

QM characteristics include

Low customer contact & Capital Intensive


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OM decisions

All organizations make decisions and follow a

similar path

First decisions very broad Strategic decisions

Strategic Decisions set the direction for the entire

company; they are broad in scope and long-term innature


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OM decisions

Following decisions focus on specifics - Tactical

decision

Tactical decisions: focus on specific day-to-day issues like

resource needs, schedules, & quantities to produce are frequent

Strategic decisions less frequent

Tactical and Strategic decisions must align


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Operations managers and decision

making

Tools for Decision Making

Analysis of trade offs

System approach

Quantitative approaches


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Analysis of tradeoffs

Buying a new machine Additional Investment

Having more inventory

Higher Carrying Costs

More Obsolescence

Higher Productivity

Better Quality

More Flexibility

Better CustomerService


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Systems approach

Any business or other organization must bedescribed by an open system model that includesinteractions between the enterprise and its

external environment.

Inputs

Transformation process

Communication system

Outputs


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Quantitative approach

Linear programming

Transportation model

Inventory models Waiting line models

Statistical models


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Recent Trends

Global Competition Global Market

Global Suppliers

Operations Strategy Quality based

Time based

Flexibility Variety of products

High Volume as well as Low Volume

Cycle Time Reduction The less time RM (Raw Material), WIP (Work In Process), FG (Finished Goods)

spend in the Manufacturing and Logistics process, the less opportunity they haveto absorb costs.


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Recent trends

Business Process Re-engineering Value added and NVA activities

Supply Chain Management NOT from RM storage to FG warehouse

From the original suppliers to final consumers

Workers Involvement Workers are not costs, they are assets

Lean Manufacturing Inventory is waste

Total Quality Management


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Thank

you

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Significance of Operations Management