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Chapter 1
Introduction to Production & Operation Management

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OBJECTIVES
Production & Operations Manag ement Why Study POM? Transformation Processes Defined Operationsas a Service The Importanceof Operations

Management
Historical Development of OM Current Issues in OM

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What is Operations Management? Defined
Operations management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services Production & Operations Management Production manag ement is the processof planning , organizing, directingand controllingthe activitiesof the production function. Production functions are the conversion of raw materials into finished products

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machines etc. Input Output Materials Labour Machines Energy Process Transformation Products Services Information nareshsukhani@gmail. and the outputs are goods and services.com 6 .com 4 Slide 5 5 Production System Transformation Process: • Product Design • Process Planning • Production Control • Maintenance Inputs: • Men • Material • Machine • Information • Capital Output: • Product • Service Continuous Feedback: • Inventory • Quality • Cost nareshsukhani@gmail. nareshsukhani@gmail. The inputs are various resources like raw materials.Slide 4 4 What is Operations Management? Defined Production & Operations Manag ement Production manag ement is concerned with those processes which convert the inputs into outputs.com 5 Slide 6 6 Production & Operations Manag ement Production manag ement is concerned with those processes which convert the inputs into outputs. men .

com 8 Slide 9 9 Why Study Operations Management? Systematic Approach to Org.com 7 Slide 8 8 Production & Operations Management (1 ) Ultimate Objectives The primary or ultimate objective of the manufacturing activity is to produce a product at a pre-established cost.Slide 7 7 Production & Operations Manag ement Objectives of production management Objectives of production management are classified as under : (1 ) Ultimate Objectives (2) Intermediate Objectives nareshsukhani@gmail.com 9 . Processes Business Education Operations Management Career Opportunities Cross-Functional Applications nareshsukhani@gmail. according to the specified quality and within the stipulated time schedule. (2 ) Intermediate Objectives Control Information Social Responsibility Services nareshsukhani@gmail.

com 10 Slide 11 11 Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications nareshsukhani@gmail.com 11 Slide 12 12 What is a Service and What is a Good? “ If you drop it on your foot. it won’ t hurt you.Slide 10 10 What is a Transformation Process? Defined A transformation process is defined as a user of resources to transform inputs into some desired outputs nareshsukhani@gmail.” (True or false?) nareshsukhani@gmail.com 12 .”(Good or service?) “ Services never includegoods and g oods never includeservices.

Purchasing. Production control. etc nareshsukhani@gmail.com 13 Slide 14 14 Core Services Defined Core services are basic things that customers want from products they purchase nareshsukhani@gmail. Quality assurance. Engineering.Slide 13 13 POM in the Organization Chart Finance Operations Marketing Plant Manager Operations Manager Director Manufacturing.com 14 Slide 15 15 Core Services Performance Objectives Quality Flexibility Operations Management Speed Price (cost Reduction) nareshsukhani@gmail.com 15 . Maintenance.

com 16 Slide 17 17 Value-Added Service Categories Problem Solving Information Operations Management Sales Support Field Support nareshsukhani@gmail.com 18 .Slide 16 16 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 nareshsukhani@gmail. nareshsukhani@gmail.com 17 Slide 18 18 The Im portance of P roduction & Operations Manag em ent  Synergies must exist with other functional areas of the organization  Operations account for 60-80% of the direct expenses that burden a firms profit.

com 19 Slide 20 20 Historical Development of OM (cont’d) Business Process Reengineering Supply Chain Manag ement Electronic Commerce nareshsukhani@gmail. and distribution networks.com 21 .Slide 19 19 Historical Development of OM JIT and TQC Manufacturing Strategy Paradigm Service Quality and Productivity Total Quality Manag ement and Quality Certification nareshsukhani@gmail. production.com 20 Slide 21 21 Current Issues in OM Coordinate the relationships between mutuallysupportive but separate organizations. Optimizingglobal supplier. Increased co-production of g oods and services nareshsukhani@gmail.

com 22 .Slide 22 22 Current Issues in OM (cont’d) Managing the customers experience during theservice encounter Raising the awareness of operations as a significant competitive weapon nareshsukhani@gmail.

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