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Operations Management: Quality, Improvement and Productivity

Prof. V. K. Gupta Prof. Kunal Ganguly

IMT Ghaziabad

Institute of Management Technology Ghaziabad


Course Background and Objectives:
Operation is the most basic function in any organization, be it manufacturing or service. In fact, one can not imagine an organization without an operation function. Hence, a basic knowledge of operation is mandatory for every student pursuing a management course. This knowledge helps a manager to better understand and handle the intricacies of his job whatever be his function of specialization. The objective of this course is to provide students with the knowledge of advanced concepts relating to planning and control issues in the management of manufacturing as well as service operations. It also seeks to familiarize students with issues of contemporary interest in production and operations management. The study of Operations Management is one of the oldest business disciplines. Operations Management holds the key to competitive advantage for many organizations. It is increasingly recognized as a significant factor to contribute to the effective strategic management of firms both large and small, domestic or international covering both profit and non-profit making sectors. The service sector and even public section institutions recognize its value and worth. Future and potential managers in the form of post-graduate management students need to appreciate the degree of complexity involved with such competition and the key contemporary issues that are likely to face upon joining an organization.

Objectives:
1. 2. 3. 4. 5. 6. 7. To provide an awareness of the role of Operations Management in the functioning of a business organization To give an insight into the relationships that exist between various factors that affects the operations of a business organization. To give insight into Quality Management System and Statical Process Control. To understand the process of Product and Service Design To plan capacity for product and service and also optimum layout design for improving capacity utilization. To understand Project Management as a methodology for managing and controlling projects To equip students with tools and techniques for analyzing, designing and improving the functioning of an operations system.

Course Design The course has been structured in following modules Module I Overview of Operations Management and Operations Strategy Module II Quality Management Module III Product and Service Design

Module IV Capacity and Facility Planning, Process and Technology decisions Module V Project Management

Pedagogy
The pedagogy will be a mix of lectures, experience sharing, real life case discussion, assignments and industry/research based projects. The course is focused on strategic issues with cases as the primary vehicle for learning. In addition to the reading materials, additional readings and cases will be distributed in the class from time to time. Students are also expected to prepare and analyze all the cases as class participation is very important.

Course Requirements
i. Since much of the course material requires class discussion, it is important that you are prepared for the class and present and defend your ideas. Preparation for class includes having read the assigned material. We will use a number of cases in this course. Cases are a great educational experience but they absolutely require that you be ready for the class. When cases are assigned, you should come to class ready to discuss the issues of the case. For each case, you should: a) identify the major problem, b) give your recommendation to resolve this problem (both short and long term), and when appropriate d) provide supporting analysis (both qualitative and quantitative) for your recommendations. Answering the questions provided for each case should help in this effort. The class will be divided into a number of groups.. For all cases, each group will submit case analysis report and power point presentation one day before scheduled class. There will be several home assignments assigned throughout the term along with a number of unannounced quizzes. Late homework will not be accepted and there will be no make-up quizzes. Each group is expected to take up a live problem related to operations management. You are expected to solve the problem based on tools and techniques discussed in the class and submit your report. Each group will be required to give a presentation. Evaluation for this assignment will be done based on individual as well as group performance. Class participation will be based on the value you add to the class through your questions, statement, and comments. It is the quality of these that is more important than the quantity.

ii.

iii. iv.

v.

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Evaluation
Quizzes : End Term : Assignments and Projects : 20% 50% 30%

Group Project

The group project will be one of the most important learning tools of the course. Each group will comprise of three to four students. Project guideline is given on Page No 8.

Assignments
i. ii. Short Case Report: A 3-4 page (plus exhibits if any) short case report has to be submitted on one of the cases. All case reports are due before the class discussion. Additional assignments may be given during the course.

Text Book
1. Operations Management along Supply Chain, Russell & Taylor, Sixth Edition, 2010, Wiley

Reference Books
1. Competitive Manufacturing Hal Mather Butterworth Heinmann, New Delhi Operations Management : Processes and Value Chains Lee J. Krajewski, Larry P. Ritzman, Prentice Hall India Strategic Management : An Integrated Approach Charles W.L. Hill, Gareth R. Jones Biztantra, New Delhi

2. 3.

4.

Operations Management Norman Gaither and Greg Frazier Thomson South-Western 5. Operations Strategy by Slack and Lewis, 2nd Edition Pearson Education 6. Quality Planning and Analysis, J.M. Juran and Frank M. Gryna, 1995 7. Tata McGraw-Hill Publishing Company Limited, New Delhi

8. Project Management by Clifford F. Gray and Erik W. Larson, published by Tata McGraw-Hill. 4th Edition 9. Project Management A Managerial Approach by J.R. Meredith, S.K. S.J. Mantel, Jr., Wiley India Edition 2009 10. Proejct Management Planning and Control by Albert Lester, Butterworth Heinemann 2007 11. Project Management by Harvey Maylor, Pearson Education 2006 12. Project Management Achieving Competitive Advantage Jeffrey K. Pinto, Pearson Education 2009 13. Project Management for Business and Technology Principles and Practice by John M. Nicholas, published by PHI, 14. Effective Project Management by J.P Clements and J. Gido, published by Thomson Learning.
15. The management and the control of quality, Sixth edition, James R. Evans & William M. Lindsay

Journals
Harvard Business Review European Management Journal Journal of Operations Management California Management Review Administrative Science Quarterly International Review of Retail, Distribution and Consumer Research Productivity Industrial Engineering Sloan Management Review International Journal of Logistics Management

Websites
Useful websites to be visited for the course www.ascet.com

Sessions / Topic / Reading Material


Module I Overview of Operations Management and Operations Strategy Sessions 1-3 Objectives and learning outcome To enable students to understand what is Operations Management and how it affects overall performance of an organization. How Operations Management is relevant for all business functions such as Marketing, Finance, Services, International Business, IT and HR etc. How to design operations systems and improve. How are operations strategy and Business Strategy linked?

Session 1 - Operations Management and how it relates to other functional areas of an organization.

Readings:
Chapter 1 - Operations and Supply Chain Management Introduction HBR Article Are you having trouble keeping your operations focused? By Robert S Huckman Session 2- Value addition process. Different transformation process in operations management

Case Problems - 1.1, 1.2, 1.3, 1.4


Case : Green Mountain Coffee Case questions What do operations and supply chain managers do? How efficient operations and value driven management achieves higher profits for the organization? What are various types of transformation processes? How was operations management evolved over past few centuries? What is impact of globalization on operations management decisions? Session 3 - Operations Strategy Readings Chapter 1 Operations Strategy by Slack and Lewis Caselet : Singapore Airlines What are the major operations management areas of Singapore Airlines? How the focus on operations management helped Singapore airlines? What are the issues in operations management? How has this airline maintain its profitability constantly in a highly competitive business? HBR Article Rationalizing the design of Tyota Production System, Module II Quality Management Sessions 4-7 Objectives and learning outcomes To enable students to learn how quality is planned and managed What is Quality Management System? What is Statistical Process Control? What are QC Tools and where to use these? What is Process capability and how to measure it? What is Six Sigma improvement process?

Session 4- Quality Management System Readings:


Chapter 2 - Quality and Quality Management Case Problems - 2.1, 2.2

Case Problems - 2.3, 2.4 Case : Nestle : Quality on the Boardroom Agenda Questions Why quality management needs to be considered from top management perspective? What is the impact of not fulfilling quality promise to customers? What are the lessons learnt from the quality problems by leading global companies? What steps Nestle plans to take to prevent a quality problems form occurring in the first place?

Session 5 - Statistical Process Control and Process Capability Improvement Readings Chapter 3 Process Capability and Statistical Process Control Case problems - 3.1,3.2 and 3.3

Session 6 - Six Sigma methodology for quality improvement Readings Chapter 2 Quality and Quality Improvement

Case Six Sigma Quality at Flyrock tyres Case Questions If the process setting is accurate, what proportion of products would be within specification? What upper and lower limit should be specified to operators for a three sigma process? In the case if the standard deviation is 1.667 thou, what proportion will be within specifications? Session 7 - Business Models for measuring productivity and Organizational Excellences through Quality Readings Chapter 2 Quality and Quality Management
Chapter 3 Philosophies and Frameworks , The Management and Control of quality by Evans and Lindsey Case : Sona Koyo Steering System Ltd. Spearheading competitiveness in Indias Auto Component Industry Case Questions What is Operations Management? How Sona achieved competitiveness through operational excellence? What is Quality Management at Sona Koyo? What is Statistical Process Control? How Sona Koyo managed design and development of new products? Module III Design of products and services Sessions 8-9 Objectives and learning objectives What is the process of product design? What is the process of services design? What is impact of product or process designs on organizational performance? Session 8 - Designing products

Readings Chapter 4 Designing products Case 4.1 HBR Article : The new new product development game, Takeuchi and Nanaoka Case : Samsung Electronics : Innovation and Product Design Strategy Questions Should design process be outsources? How does it affect development cost and time to market? What are the real concerns? What are the possible benefits and risks? Session 9 - Designing of services Readings Chapter 5 Designing services Cases 5.1, 5.2, 5.3, 5.4 Article: Service Blueprinting: A practical technique for service innovation What is service development and design process? What are the components of service blueprint? How to build a service blueprint?

Module IV Capacity Planning and Facility Design for products and services, Process and Technology decisions Sessions 10-14 Objects and learning outcomes How to plan capacity for manufacturing products? How to match capacity and demand? How to design layouts for maximum capacity utilization for products and services delivery? Process designs to match changing customers requirements? Technology decisions? Session 10: Processes design

Readings:
Chapt.6 - Processes design and Technology decisions HBR Article : A framework for process development Questions How does process development result in superior performance of a company? What is the relation between process development and product type? What are the challenges faced by a company having single plant vs many plants spread out geographically? Session 11: Technology decisions

Readings:

Chapter 6 - Processes design and Technology decisions Case problems 6.1, 6.2 and 6.3 HBR Article How to build risk in your business model by Karan Girotra and Netessine Session 12: Strategies for managing capacity to meet demand

Readings:
Chapter 7 Capacity and Facility Planning Case Problems 7.1, 7.2, 7.3 Session 13: Facility and layout Planning

Readings:
Chapter 7 Capacity and Facility Planning Case Problems 7.1, 7.2, 7.3

Session 14: Facility Location Models Decision Support Tools

Readings:
Chapter 7 Supplement - Facility Location Models Decision Support Tools

Case Problem S 7.1


Module V Project Management Session 15-18 Objectives

The broad objectives are to learn: What is project management and why we need to use it How it relates to organization Strategy Process of Project portfolio management Project scope management Principles of work breakdown structure Project time and cost management Leadership and team building in projects Projects life cycle Project activity cost and time estimation and scheduling Projects monitoring and control Risk management in projects and how to prevent project from failing
Session 15: Project Planning

Readings: Case - The Delhi Metro Project: Effective Project Management in the Indian Public Sector

Case questions
What are the preliminary activities to be taken up before a large infrastructure project can be started? What is the significance of the role of a project manager in project execution? What is the importance of the right work culture in successful project management? What is the importance of managing the various stakeholders in a project? What are the difficulties involved in the execution of large infrastructure projects in developing countries, and how these can be overcome?

Case : Project Scorpio The making of Indias first indigenous SUV Questions How did Scorpio help M&M to emerge as a major Indian SUV co? What was the role of suppliers in development of Scorpio? How was M&M able to manage Project Scorio well within time and cost estimates?
Chapter 9 Managing Projects HBR Article: Why good projects fail anyway? Session 16: PERT/CPM analysis

Readings:
Chapter 9 Managing Projects Case Problems 9.1, 9.2 Session 17: Managing resources and project crashing

Readings:
Chapter 9 Managing Projects Chapter 8 and 9, Project Management by Grey and Larson Session 18 : Managing risks in projects Readings Chapter 9 - Project Management Chapter 7 Risk Management Project Management by Gray and Larson

Session 19 & 20 Project Presentations Group Project


The group project will be one of the most important learning tools of the course. This is a highly interactive real life project, which requires a high degree of analysis and tangible recommendations. Your group is required to identify a company as well as project. The deliverables of the project include:

1. 2. 3. 4. 5.

Project proposal Interim Report Final Report A Case Study Presentation

Project Proposal Format


Your proposal should include following: Introduction/Background of the project Rational for taking the project Objective of the study Scope of the study Methodology (provide flow diagram) Expected outcome Project schedule

Interim Report Format


Interim report is like progress report and should be about 10 pages (maximum). following: Introduction/Background of the study Objective of the study Scope of the study Methodology (provide flow diagram) Existing System Data collection Data analysis It should include

Final Report Format


The final report has to be prepared and submitted in the format encompassing the areas mentioned here under the heading of Contents. Executive Summary Acknowledgements List of Abbreviations List of Tables List of Figures 1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction/Background of the study Objective of the study Scope of the study Methodology (provide flow diagram) Existing System Data collection Data analysis Proposed System Recommendations

References App.endix

Ground Rules
The entire report must be in the range of 30-40 pages. The Final Report format as mentioned in the heading Contents is not sacrosanct. It is subject to change depending on the sector specific requirements that need to be incorporated and highlighted so as to improve the understanding of service operations management. Please use Summer Project Guidelines as Style Manual for writing the report. Grading of the report will be done on the strength of the analysis and explanation therein. No graphs, which is basically a reproduction of the data provided, are to be included as part of the report. Please incorporate diagrams wherever possible. Please follow the guidelines of the summer project in terms of report submission.

Case Study
This shall consist of a 4-5 page (A4 size, Times New Roman, 11 font, single spacing) case on one or more issues related to services operations management practices of anyone Indian player in the Sector under study. Typical area(s) on which the case should focus on include strategy formulation, service design, delivery design, locations, layouts, Quality in service operation, measurement of performance in services, to mention a few. The case should clearly highlight the imperatives driving the service operations management initiatives, benefits envisaged and methodology followed.

Presentation
The presentation should cover both the analysis of primary and secondary data. Each presentation will be of 20 minutes with 12 minutes given to the group to highlight the key findings and 8 minutes for open discussion with the students.

Additional Readings

Case : A&D High Tech : Managing Projects for Success Questions What is project management? What is project management life cycle? How to prepare a project plan? How it schedule resources? How to manage risk in a project?