Lesson 03

Operations Management
Operations Management: Functions and Scope

Dr. Inderdeep Singh

Department of Mechanical and Industrial Engineering

1
Basic Functions of the Business Organization

Organization

Finance Operations Marketing

Source:-https://s3.amazonaws.com/ppt-download/chap001
Activities of Operation Department

 Convert available capital into physical resources

 Convert the physical resources into saleable goods and

services

Source:-https://s3.amazonaws.com/ppt-download/chap001
Activities of Operation Department
Additional activities required to fulfill the previous
activities
 Production of goods at the right time and sufficient
quantity to meet the demand
 Production of goods at minimum cost
 Production of goods of acceptable quality

Source:-https://s3.amazonaws.com/ppt-download/chap001
Function of Operation personnel

• Forecasting the demand for the products

• Arranging for the procurement of required factors of
production
• Arranging for the services such as maintenance, store
keeping material handling, inspection and quality
control etc.
Source:-https://s3.amazonaws.com/ppt-download/chap001
Function of Operations personnel

• Utilizing effectively the factors of production

and service facilities available to produce the
product.

Source:-https://s3.amazonaws.com/ppt-download/chap001
Scope of Operations Management
• Scope of operations management depends on
decisions (strategic and tactical decision)
• The strategic level decisions are:
- New product identification and design
- Process design and planning
- Facilities location and layout planning
- Design of material handling system
- Capacity planning
• The tactical (operational) level decisions are:
- Production planning
- Production Control
- Other activities such as Inventory control, maintenance and
replacement cost reduction and cost control and work system
design
Operations Management Frame Work
• Operations Management framework is
divided into 5p’s
- Product
- Plant
- Programme
- Processes
- People
Product
- It is link between production and marketing.
A product must have:
- Performance
- Quality and reliability
- Aesthetics and ergonomics
- Quantity and selling price
- Delivery schedule
Plant
• The plant accounts for major investment (fixed assets)
• The plant is concerned with;
- Design and layout of building and offices
- Reliability and maintenance of equipment
- Safety of operations
• Plant layout must allow smooth movement of men and
material.
• Type of layout dependent on production type, volume of
demand etc.
Process
• Methods used to create a product
Selection of a particular process depends on following factors;
- Available capacity
- Manpower skills available
- Type of production
- Layout of plant
- Safety
- Maintenance required
- Manufacturing cost
Programme
• Programme refers to the timetable of production.

• Programme prepares schedule for;

- Purchasing
- Transforming
- Maintenance
- Cash
- Storage and transport
People
• People are part of organization. Progress of organization
depends on attitude and skills of working people
• Job satisfaction of people depends on good match between
people and jobs
It is possible by:-
- Motivation
- Training of employees
- Condition of work/safety
- Proper wages/salary