Master of Business Administration - MBA Semester III OM0013 –Advanced Production & Operations Management 4 Credits (Book ID: B1235) Assignment

- Set- 1 (60 Marks) Name: Roll No: Manish Rajan Rajput 571012050


or service life cycle. and lenders. a service firm is defined as one that derives more than 50 percent of its sales from providing services. Product Life Cycle For example. RCA's service revenues now exceed its revenues from electronic manufacturing. you may purchase a hamburger (facilitating good) that someone else cooked for you (service). shareholders. and procedures used to provide the service and maintain quality and delivery standards. employers. The service revolution relates to the shift in the United States to a service economy and the proliferation of service automation 2 .Q1. A service package is a bundle of explicit and implicit benefits performed with a supporting facility and using facilitated goods. layout. The product life cycle. The service concept is the perception and expectations of the service itself in the minds of the customers. Explain with an example the impact of product or service life cycle on operation strategy. The service system is the equipment. Figure below shows the stages involved in product/service life cycle. can have a big influence on the operational strategy of an organization. When you eat at a fast food restaurant (supporting facility).

so that the organization reaches its strategic goals. cultures. Stage 2 (Functional Strategies): This stage is a selection of decision rules in each functional area. Stage 5 (Detailed Tasks): In this stage each work unit in the action plan is assigned to a skilled worker. Developing the flexibility to cope with any changes in output volume. and operations strategy). Maintaining quality levels so as to stabilize the performance of the product / service. Stage 3 (Manufacturing Priorities): This stage helps in implementing the Production Planning Process. An Action plan typically includes deciding who is going to do what. c. Introduction Stage: When the product is first introduced into the market. 2. Stage 4 (Action Plans): This stage helps in formulating the action plans for an organization. Each function within the business can then derive its own strategy in support of the firm's overall business strategy (financial strategy. Proficient firms can formulate their vision as expressed through the mission statement. Stage 6 (Evaluation of the Methodology): This stage is concerned with selecting and evaluating the methods. considering the uncertainty inherent in the market at the initial stage. and in what order. the environment. which is the main basis for competitiveness. and the firm's own strengths. Relation with Product life Cycle and Operational Strategy 1. basically its reason or purpose for existence.Operation Strategy steps (changed with Product life Cycle) Stage 1 (Business Strategy / Business Unit Strategy): This stage is concerned more with how a business competes successfully in a particular market. This statement expresses the organization’s values and aspirations. This business strategy is a long-term plan for accomplishing the mission set forth in the mission statement. strengths and weaknesses of competitors. 3 . Two examples of these functional areas are marketing strategy and financial strategy. marketing strategy. Based on this mission statement the firm will formulate its business strategy. weaknesses. and resources and analyzed. Developing the flexibility to cope with any changes in the specification of the product or service. Development Stage: After collectively considering the products and services demanded by customers. the operations management of the company can best contribute to competitiveness by: a. by when. The overall goal of selecting an evaluation method is to get the most useful information so that key decision makers can make the most realistic and cost-effective decisions. b.

Some early competitors might have left the market. Demand starts to drop. 1 4. Thus. Standardization is necessary. The industry then settles down and is ruled by a few larger companies. In this phase. 4 . balancing supply and demand proves to be the main preoccupation of organizations which have products or services in the growth phase. there is a decline in sales and fewer customers in the market. as it allows the operations to supply rapidly to an evergrowing market. 3 o New regulatory requirements. This increasingly competitive and price-conscious environment means that a company is forced to cut down on its operations to reduce costs. such as environmental protection laws. The design of the products or services also stabilises to a few standard types. which leads to a shortage of supply. either by proper maintenance of projects or by price cutting. 1 o Changes in customer preferences. Maturity stage: After a period of rapid growth. 2 o Global competition. Successfully. The increasing competition also means that the company cannot afford to let its quality levels drop as it ramps up its level of activity. Growth Stage: As different customer groups start to emerge in the growing market. Decline Stage: This stage is characterized by fast declining sales revenue and fewer customers. It is generally caused by: 0 o Obsolescence. products and services lose their novelty and become mature in the market. 2 3 5. there is a need for standardization in the design of the product or service. Competition becomes intense.1 3. with an emphasis on price. or both. the operational objectives are still be dominated by cost. During this period. or value for money.

Explain the major competitive dimensions of operations strategy. 5 . 3  Sales support: It is the ability to enhance sales and marketing efforts by demonstrating the technology. equipment. Explain the types of value added factory services. Caterpillar promises to make repair parts available anywhere in the world within 48 hours) or to replenish stocks quickly to avoid downtime or stock outs (for example. many companies provide quality data sheets documenting actual product testing and field quality performance to field sales and service personnel. vacuum cleaner and other products. a retail chain is linked to its Hong Kong textile mills via a sophisticated computer system that signals factories to begin producing fast selling items as soon as weekly sales figures are collected). or production system the company is trying to sell.Q2. For example. For example. who then use the data to improve their own operation or products. process parameters and cost to internal groups (such as Research and Development) and to external customers. Answer: Value added factory services can be classified into four broad categories. For example. 4  Field support: It is the ability to replace defective parts quickly (for example. Eureka Forbes organizes Kiosks in busy area to demonstrate its water purifier. they are: 1 • Information: It is the ability to furnish critical data on product performance. This helps them join with shop floor personnel on remedial efforts. a metal and fabricator company sends factory workers out with sales people to troubleshoot quality problems. 2  Problem solving: It is the ability to help internal and external groups solve problems especially in quality.

Other decisions such as how much inventory is needed to meet required service levels. Indeed in many cases it is easier to copy a firm’s product than to create the value added service infrastructure to support. or the inventory carried in these facilities is owned by the firm and requires a significant investment. 6 .Competitive Dimensions of a Firm 5 Value added services provided to external customers yield two benefits. an operations centre. Each asset . how many plants there should be and where to locate them and whether or not certain operations should be outsourced are major topics of operations management. these services build relationships that bind customers to the organization in a positive way. it helps them to differentiate the organization from the it a plant. Secondly. Firstly. a warehouse. relate directly to the asset investment. The design and ongoing management of a firms operation have a significant impact on the financial success of the firm. Decisions such as how big a plant should be. The firm’s owners and shareholders want a return on this investment. The firm’s strategy is implemented with a design that is portrayed financially in the assets of the firm.

In practice. Benchmarking is „the process of learning from others and involves comparing ones own performance or methods against other comparable operations. Performance can be defined as the extent to which an operation fulfils the five performance objectives which are quality. speed. flexibility and cost at any point in time so that the customers can be satisfied. dependability. such as customer satisfaction. most organizations choose to use performance targets from a larger range.Q3. financial objectives achievement. The aggregated performance measures have greater strategic significance. The performance of the operation is assumed to be derived from the actions taken by its management and the performance can be defined as the extent to which an operation fulfils the five performance objectives at any point in time so that the customers are satisfied. bad or completely different. What is the meaning of performance measure? Explain with an example. they do provide a more descriptive and complete picture of what should be and what is happening within the operation. overall service level or operations agility. This helps to draw a picture of the overall performance of the business. List the different types of benchmarking? Answer : Performance measurement is the process of quantifying action. where measurement means the process of quantification and the performance of operation is assumed to be derived from the actions taken by its management. although by doing so they will necessarily include many influences outside those that operations performance imp movement would normally address. These composite measures are further aggregated using measures such as „market objectives achievement. speed. The five common performance objectives are quality. where measurement means the process of quantification. flexibility and cost that can be split into more detailed measures. 7 . and although they provide a limited view of an operation’s performance. The more detailed performance measures are usually monitored closely and more often. dependability. Some kind of performance measurement is a prerequisite for judging whether an operation is good. operations objectives achievement and even „overall strategic objectives achievement. or aggregated into composite measures. Performance measurement can be the process of quantifying action.

For example.Types of benchmarking The following are the different types of benchmarking: 1  Internal benchmarking: It involves comparing operations or parts of operations within the same total organization. flexibility and cost against other organizations performance in the same dimensions. 8 . 6 7  Competitive benchmarking: It involves comparing directly between competitors in the same or similar markets. speed. 2 3  External benchmarking: It involves comparing an operation and other operations that are part of a different organization. and those adopted by another operation. 4 5  Non-competitive benchmarking: It is involves benchmarking against external organizations that do not compete directly in the same markets. For example. a large retail store could compare its systems and procedures for controlling stock levels with those used by another department store. For example. or way of doing things. a large motor vehicle manufacturer with several factories could choose to benchmark each factory against the others. 10 11  Practice benchmarking: It involves comparing an organizations operations practices. 8 9  Performance benchmarking: It involves comparing the levels of achieved performance in different operations. an operation could compare its own performance in terms of some or all of its performance objectives such as quality. dependability.

FMS allows a product to be made in a number of variations and in different volumes over a period of time. Name and explain the different types of plant layouts by 9 . success with FMS is not just about investment in technology. such as Computer Numerically Controlled machines that perform a wide range of operations. loading and unloading stations where completed or partially completed components are housed and worked upon. A typical FMS includes the following: 1 • A number of workstations. Since a standard line is practically unable to satisfy the market requirements of variety and flexibility. However. FMS enables speed and flexibility in terms of rapid changes to products.Q4. The activities in a flexible manufacturing system are the following: 1  Control of each workstation 2  Distribution of control instructions to workstations 3  Production control 4  Traffic control 5  Tool control 6  System performance monitoring . 3  A comprehensive computer control system that coordinates all the activities. If the volume is very high and the product variability is minimal. to be made with precision and consistency of reliability. an FMS is introduced. that is. This provides benefits for both manufacturer and customer. Any organization has to invest in human resources to gain benefits from FMS. then a line process would be most applicable. FMS cells are arranged around a group of products where some variety of the product is required even though volume is high. Q5. What is Flexible Manufacturing System? How does it help in improving the manufacturing process? Answer: Flexible Manufacturing Systems (FMS) In the earlier topic we learned what Flexible Manufacturing Systems (FMS) are. 2  A transport system which moves material from one machine to another.

accident and emergency. especially department stores. Since few patients have identical problems and they do not receive identical treatment. This layout type is commonly used in hospitals. where low volumes of products such as furniture. Fixed Position Layout In a fixed position layout1. the production of heavy. There is no pre-specified ‘standard’ flow. Fixed-position layouts are used in services. high-fashion clothing and jewellery is produced to individual 10 . In manufacturing. X-ray facilities. etc. Workers come to the product (or to the production location) instead of the product moving between workers and work centers. for example. for example. Process Layout In a process layout. where the product does not move in a specified sequence but is moved to particular areas as and when required. The same occurs in manufacturing operations such as precision engineering. specific types of operations are grouped together within the manufacturing or service facility. product and hybrid or cell layouts. Workers carry out single or multiple activities to modify a product or provide a service until completion.providing examples for each. where the customers move between areas dedicated to different goods. such as kitchenware. Fixed position layouts are associated generally with lower volume process types – most usually projects (as in construction). bulky or fragile products. while operations take place around it. The three basic layout types – fixed. pediatrics wards. such as ships and airplanes. where specialties are grouped together. Answer: The layout determines where and in what sequence activities that make up a process are located. Products move around according to processing requirements. in dental or surgical treatments where the patient remains in a single location while being treated. Many retail operations. wards and departments are laid out to accommodate a wide range of potential patient requirements. process. allowing a variety of products to be made. a process layout is commonly associated with jobbing production. use a process layout. and most construction projects take place with the people and machines moving around the product. the product or person being acted on remains in one place. but sometimes with jobbing processes (specialized contractors in construction) and batch processes (as with the production of airplanes or construction of many types of the same house on a housing development). furniture and clothing. In manufacturing.

In general. people and machines are dedicated to a single product or small range of similar products. In a product layout. low-volume batch production is also associated with process layout. as an extension of the principles of scientific management in the context of assembly-line production. A typical product layout is as shown in Figure 11 . each of which require specialist people or machines. Product Layout The product layout was developed during mass production.requirements. and each stage is separate from the next stage. Each workstation is laid out in a sequence that matches the requirements of the product exactly. although high volume batch production may follow the product layout that is described next. This layout is ideal for handling small batches of products or a wide variety of tasks.

workstations need to be located close together to minimize materials movement. Answer: 12 . this layout can be found in high volume. People have to follow a pre-defined route through the store. space restrictions often dictate that a straight line cannot be used. This focuses attention on removing and preventing recurrence of the problem. where one activity in the line cannot be started unless the previous activity has already been completed.The sequence of operations in a product layout follows a straightforward sequence. Q6. has a product layout for its stores. standard services. Explain the ingredients of a Business Process. Furthermore. In services. if a single work centre is not operating the entire line comes to a halt very rapidly. Because each workstation is dependent on the next. In this way IKEA achieve rates of customer throughput that few other retailers can match. the furniture retailer. In manufacturing. In line operations. such as fast-food preparation. especially where there is a tangible element. The operation does not need to be laid out in this manner – indeed. the speed of the entire line is determined by the workstation with the lowest capacity. Materials flow and control is critical. IKEA. especially in ensuring that there is a steady flow of work to do and that both stock-outs (where materials run out) and large piles of Work-In Process (WIP) are minimized. which would be hidden if the line were allowed to continue working. any worker can stop the line. the product layout is common in automobile assembly and other high volume applications. Japanese automotive manufacturers have made a feature of this for some time – if there is a problem with any part of the operation. from one area to another.

The business system contains a combination of people and the applications organized to meet business objectives. evaluation. software tools.Business Process (BP) is the overall response that a business undertakes in utilizing resources and delivering outputs that create value for the customer. BPM is synonymously used for the software tools also. Because of the extensive use of various software programmes for all these activities. 4  Decisions that modify and enhance the value of data during the process. even when data are available easily for verification and/or confirmation. maximize the earnings and keep its head above competition. Designers and programmers put together the data and processes to provide optimum benefits. products. We have some behavioral aspects of the business process. The ingredients that go into a business process can be briefly outlined as: 1  Necessary data needed to accomplish the desired business objective. teams and organizational units that perform and are responsible for tasks. All the elements like activities. 2  Acquisition. mainly the decision making process where humans are involved. and control of data across tasks in the process. 3 • Persons. The applications are automated to enable information and reporting system to be accurate. improve the processes. delivery systems and performance measurement have to be structured and controlled for the purposes of analysis. Business Process Management (BPM) defines a set of activities1 undertaken to optimize the business process for improving the organization’s performance. 5 13 . modification. implementation and correction. Selective recall means a tendency to bring out of memory the facts that reinforce our assumptions and biased evaluation and a tendency to accept evidence or fact as absolute which supports our hypotheses. parts. data. storage. These factors result in faulty decision making and being aware and avoiding them consciously. deliver better value to the customer. processes. people. Another reason is a tendency to act on assumptions. The same can be listed as under. The architecture should be flexible to adapt new methods. Decision failures are common and research has shown that it is because of biases in perception and fallacies in reasoning. timely and efficient. This is what we study under Business Process Modeling. and put in place the architecture which is capable of addressing these needs. The Business Process: 1  Has a goal 2  Uses specific inputs 3  Delivers specific outputs 4  Collects resources 5  Performs a number of activities in some order 6  Creates value for the customer. processes and even business plans. distribution.

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