Management Science II Dr.T.T.

Narendran

MODULE 3

Introduction To Operations Management

Buyer Power Of The Threat Of Substitution Both

Influence The Price

Organizational Network

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The Value Chain

V, A And T Plants (Cont..)

V Plant
V Plant

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V, A and T Plants (Cont..)

A Plant

V, A and T Plants (Cont..)

T Plant

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Management Science II Dr.T.T.Narendran

The Operations System

Relationship Of Operations Decisions

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Process Selection
• Determine type of productive process

• Mass or Batch ?

• (high volume) (low volume)

• Integrate with market or supply?

• (restaurant) (ore, crude)

Process Decision Affects

• Cost

• Quality

• Delivery

• Flexibility

• Involves choice of equipment, labor

• Limits future strategic options

Process Classification

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Type Of Product Flow-Line, Batch And Project

Affects

• products ( Volume, flow, variety)

• Labour, capital (investment, inventory, equipment)

• Objectives (flexibility, cost, quality, delivery) &

• PPC

Six Factors Influence Process Selection

Market condition

What do you want – high variety, flexibility,

quick response, Precision?

Capital requirements

How much can you invest?

Labor
Skill level? Involvement ?

Management Skills
Raw Material
What quality do you get - steady or fluctuating?

Technology
Can you forecast technology?

Do you foresee obsolescence?

New Developments ?

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Process Management
Selection of operations work flow and methods for production

Process Decision
• Process decision required when

• New / modified product is introduced

• Quality needs to be improved

• Change in competitive priorities occurs

• Demand changes

• Current performance is inadequate

• Competitors gain by new process / technology

• Cost of availability of inputs changes

Major Process Decisions

• Process choice – line, job, etc.,

• Vertical Integration

• Resource Flexibility

Technology
• Choice, change, competitive advantage, human factors.

Designing Process
• Process ReengineeringProcess Improvement

• Method study approach

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• Key questions:

• What?

• When?

• Who?

• Where?

• How?

• How long?

• Flow Diagram

• Flow Process chart

• Analysis of Process flow

• Analysis of Information Flow

• Critical process

• Strong leadership

• Cross functional teams

• IT

• Clean Slate Philosophy

• Process Analysis

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Management Science II Dr.T.T.Narendran

Process – Product Matrix

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Choice Of Technology
Definition of Technology

• The application of knowledge to solve human problems

Narrower definition

• That set of processes,

• tools,

• methods,

• procedures, and

• equipment used to produce goods or services

Socio-Technical Systems Design

Technology and Society

• Businesses worry about the money that must flow back as capital

• But what about nature’s capital ?

• Appropriate Technology

• Voluntary Simplicity

• ‘Small is beautiful’

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Factory Of The Future

Types Of Manufacturing Systems

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Product Design
• Strategies for new product introduction

• Market ‘pull’ – make what is needed

• Technology ‘push’ - sell what you can make

• Inter functional – cooperation : marketing, operations and design

New product development process

• Idea generation Æ

• product selection Æ

• Preliminary product design Æ

• prototype construction Æ

• Testing Æ

• Final design

Product Design (Contd.)

• Technology development process

• Helps you know what is possible

• Quality Function Deployment (QFD)

• Translates customer requirements to technical

Specifications
• e.g.: “soft ride” => good springs / suspension

• Robust Design – To minimize variation around a target performance

• Value Analysis – Objective, basic function, secondary function, Functional

value, Aesthetic value

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Modular Design

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Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

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BOTH INFLUENCE THE PRICE
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