INTRODUCTION TO OPERATIONS

CHAPTER-1
MANAGEMENT CONCEPT

(Source: text book-Chase and Jacobs ,oscm)

 PARADIGM SHIFT

GOODS ………….SERVICES

PRODUCTION ……………OPERATIONS
 PRODUCTION AND OPERATIONS
MANAGEMENT
The term “Production and operations management ” is
being increasingly replaced by simply operations
management , as the production function relating to
the manufacturing organizations has become the part
of operations

Operations management is a broad term which

includes manufacturing as well as service organization
 OPERATIONS MANAGEMENT

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
TRANSFORMATION PROCESS
 TRANSFORMATION IN COMPETITIVE ARENA

PRODUCT OR SERVICES TRANSORMATION

TRANSFORMATION ……………GENERATING VALUE

 OPERATIONS AND OTHER BUSINESS
FUNCTIONS

Finance /
Accounting

Suppliers Operations Marketing

Human
resource

Source: Chase and Jacobs: Mcgraw hill education

 MAJOR FUNCTIONS OF OPERATIONS MANAGEMENT

 Operations strategy formulation

 Materials management
 Manufacturing Process management
 Production planning
 Capacity management
 Quality management
 Design innovations
 Supply chain and logistics management
 Lean in manufacturing/waste management
 Information technology in operations
TIME-LINE
 HISTORICAL DEVELOPMENT OF OM-
TIME LINE

Time line of OM
Late 1970’s Manufacturing strategy developed
Early 1980’s Just in time production
Mid 1980’s Service quality and productivity
Early 1990’s Six sigma quality
Late 1990’s Supply chain management
Early 2000 Electronic commerce
Mid 2010 Business analytics

(Source: Text book-Chase and Jacobs – OSCM, chapter -1 )

THE MAJOR CONCEPTS THAT DEFINE THE
OSCM FIELD
Manufacturing strategy
 Emphasizes how a factor y’s capabilities could be used
strategically to gain advantage over a competing company
(Source: Chase and Jacobs – OSCM, chapter -1 )

Six-sigma
 A statistical term to describe the quality goal of no more than
3.4 defects out of every million units. It refers to quality
improvement philosophy and program
(Source: Chase and Jacobs – OSCM, chapter -1 )

Just-in-time
 An integrated set of activities designed to achieve high-volume
production using minimal inventories of parts that arrive exactly
when they are needed
(Source: Text book-Chase and Jacobs – OSCM, chapter -1 )
THE MAJOR CONCEPTS THAT DEFINE THE
OSCM FIELD
Supply chain management
 The focus is on optimizing core activities to maximize the speed
of response to change in customer expectations
(Source: Chase and Jacobs – OSCM, chapter -1 )

Electronic commerce
 The use of the internet as an essential element of business
activity
(Source: Chase and Jacobs – OSCM, chapter -1 )

Business analytics
 The use of current business data to solve business problems
using mathematical analysis
(Source: Text book-Chase and Jacobs – OSCM, chapter -1 )
 CURRENT TRENDS

 Coordinating the relationship between mutually supportive but

separate organizations
 Optimizing global supplier , production network
 Managing customer touch points
 Raising senior management awareness of OSCM as a
significant competitive weapon
 Sustainability and triple bottom line - ongoing economic,
employee and environmental viability
(Source: Text book-Chase and Jacobs – OSCM, chapter -1 )
 EFFICIENCY AND EFFECTIVENESS

Ef ficiency :
 A ratio of the actual output of a process relative to some
standard. Also being efficient means doing something at the
lowest possible cost

Ef fectiveness:
 Doing the things that will create the most value for the
customers

(Source: Text book-Chase and Jacobs – OSCM, chapter -1 )