Name of the Student: a ] __ Issued on: Roll No: Select Readings On “Operation Management” (For Internal Circulation Only) Subject Code: CMS0303 S. Y. BMS (Sem. IID) (FOR STUDENTS OF) ST. XAVIER’S COLLEGE - AUTONOMUS BMS CO-ORDINATOR PROF. SONIGEORGE | Compiled by: Prof. Yogesh Zaveri | (These notes are meant aly for the use of student for whom it is being issued. Under no circumstances it is to be Circulated or Photo Copied or Electronically Transmitted by the concerned student for the benefit of others withoutspecific permission from the facultyas they are not complete in its own without the class room teaching, This is not a text book JOperations Management [15 lectures each unit] SYLLABUS Learning Objectives: « Tohelp students understand the process of transformation of a range of inputs into the required products/services having the requisite quality level. To introduce them to the planning, implementation and control of industrial production processes to ensure smooth and efficient operation. * To introduce them to The Operations Management, Facilities planning, Capacity planning, Factory layout and location. © To help students understand the concept of design function in an organization. To introduce to the world of Project Management. UNIT -I [15 lectures] Introduction to the concept of operations and Operation Management - Development of Production Function. Relation of Production with other Functions like design function, purchase function, plant layout, maintenance etc. - Production classification, product selection (steps in identifying the product for manufacturing), Product development (market pull, technology push, inter functional approach). - Brief description/importance of research development and design of a product. Types of Production Systems. UNIT - I [15 lectures] Facilities planning (how much to produce, level of automation, facilities required for manufacturing, where to produce, arranging required facilities, how to produce etc.) production systems - Plant layout: difference between various types of layouts (Product layout, Process layout, Cellular layout, Static layout etc.) - Various types of material Handling systems: their guidelines/principles, distinguishing features, uses - Overview of various types of maintenance systems - Meaning/functions/ nature of production, planning and controlUNIT - I [15 lectures] Factors Affecting Plant Location, Plant Location: Location Evaluation Methods-I, Location Evaluation Methods-II. Facility Layout and Planning-I, Facility Layout and Planning-II, Factors Influencing Plant Layout, Material Flow Patterns, Tools and Techniques used for Plant Layout Planning. Production Planning and Control, Process Planning, Aggregate Production Planning, Capacity Planning: Introduction, Capacity Planning: Examples. UNIT - IV [15 lectures] What does Product and Service do? Objectives of Product and Service Design. Other issues in Product and Service design. Designing for mass customization, Reliability and Robust design. Designing for manufacturing and concurrent engineering, Designing for services and differences between product and service design, Quality function deployment. Quantifying Reliability, and Introduction to Project Management, Project life cycle, Work Breakdown structure, and the role of Project Management in various aspects of Business. Continuous Internal Assessment : Mid semester test Project Work- Presentation Reference Books: Sr. | Title Author Publisher no. =< ie Principles of Operation Jay Heizer Prentice Hall Management 2. The Lean Manufacturing Pocket | Kenneth W. DW handbook Daile Publishing 3. The Toyota Product James M. Morgan | Productivity Development System: and Jeffrey K. Press Integrating people, process and | Liker technology og 4, The Toyota Production System: | Taiichi Ohno and | Productivity |__| Beyond large scale production _| Norman Bodek _| Press 5. _ | Operations management: Larry P. Ritzman, | Pearson | Processes and Supply Chains Lee J. Krajewski, | Prentice Hall and Manoj K. __ MalhotraProductivity and Inventory Donald Fogarty, | South— Management John H Western Blackstone, College Thomas R Hoffman. Production and inventory George William _ | Prentice Hall Control : Principles and Plossl Techniques . Production Planning and W Bolton Addison Control Wesley Longman | Limited Journal on Material and Supply chain, materials management | Review (MMR), Indian Institute | of Materials Management, | Bangalore | Material Management: An P Gopalakrishnan | Prentice Hall — | Integrated approach and M international Sundaresan | Operation Management:, Kostas. N. McGraw-Hill | Dervitsiotis International Company. _| Operations Management RS. Russell, and | Pearson | B.W. Taylor Education | Industrial Engineering and | Martand T. S. Chand &/ Production Management Telsang Company Ltd. | |14 |Production & Operations |S. N. Chari McGraw Hill | Management | Publications5 OPERATIONS MANAGEMENT SYBMS - SEM. III INDEX. oH T PAGE on. DESCRIPTION pany o 0 [Syllabus REFERENCE BOOKS 3 4 |PRODUCTION AND OPERATIONS MANAGEMENT 13 |DEVELOPMENT OF PRODUCTION FUNCTION 14 [an Over View of Production Management i noun to Producion Management and Poaudion Funds & Brat soy 5 Producion- Creation of Utils and Serves, Manufacturing / Serve Industes 16 |Basic difference between Goods and Services 16 [Characteristics of Services Z |Services dominate the modern economy, Why is the Service Sector growing? 17. Reason for the growth of Senien Sector pa aT [Wy ts necessary to study Preducton Manapenent a3] 1.08 [Peter Drucker detiton of Producten Manaperent 20 1.09 _ [Value addition defined. 20 7.10 [Production and Opeatans Vanagon Dtilion by EGvood Ba 20 it [Tree bas fatorsfelerents of Producion Management 30 112 [Production and Marketing relatviy and sul form of conTSane z 713 [Fedor afecing A Bsiess Stor 3 114 Business Stems Ts 15 Jams ofa Preducion Siem 3 ie [bution ef ecieress and ana = Lit [urns aoaved for aching Etecvenesy and TORT 30 Fa ]utiple Opecves of Producion Managoren a 15 [ose Onjeaves / potance nrelten to he FR Oganeaton 30 fF 125 nprtanas te Producion Management oGusomers and Sooe = [aor prooverion svarem = is Deprierta elstraip of Prodoion wih ae Flare areas a? 202 |Marageren 2 55 oa coneap a rodion Funes 3 SS ane = 06 fob Tipe Precucon System " Foe fesah pe Proaucn Sat = Zar [Mass reduction Stor = 20 Proaess reduction Sysom 7 05 —[Corpatson of vation prodidon ions 3 20 [Fanon of Producten Management &Prodicion Se 386 cH. Nos. DESCRIPTION 2.11 _| Classifications of Decision areas [Technology Selection and Management [Capacity Management [System Maintenance [Scheduling / Timing Time Allocation 2.16 [Production Cycle a 72.17 [Production Cycle - Planning - Operations Control a 2.18 [Planning a2 219 _|Operations a2 220 _|Contro! 3 3 '3.00_|PRODUCT DEVELOPMENT. PRODUCT & PROCESS DESIGN-CLASSIFICATION 4 3.01 |Produet Development 3.02 [Stages of Product Development 3.03 [Research, Development and Design of a Product a7 3.03 [Product Design a2 3.04 [Factors to be considered in designing of the product 46, 3.05 [Steps involved in Product Design a7 3.05 [Product Selection / Steps of dentfying the product for manufacturing 3.07 [Elimination of Cause of Product Failure 49 3.08 [Strategies for New Product introduction 49 3.09 [Market Pull Technology Push, Inter - Functional Approach 3.10 [Product and Process Design and New Product Development (NPD) : 3.11 [Product Design 3.42 [Steps involved in Product Design By 35 3.13 [Process Design 6 3.14 [Levels of Product 3.15 [Product Classifications “4.00 _|FACILITY PLANNING - PLANT LOCATION & LAYOUT 4.01 _ [Strategic Facities Planning issues 402 |Facity Planning Objectives 5 5 38 a] | a 4.03 [Level of Automaton 7 4.04 [Advantages and Osadvantages of Alomaton a] 105 _[Faaity Planing forthe manufacturing 5 406 [Pant = Definion s 407 [locaton = Detniion sua 1.08 [Facors tobe considered forthe Seaton of Pa aN 5] 409 [Primary & Secondary Facors 7] 410 [Locaton Evaluation based on ranking Ire Voraus weghied FAG cs] 4:11 [Step5n setecton of the laation es] 2:12 [tayo forthe Pant a] =——7 4.13 |Factory Layout 70 414 [Plant Layout - Objectives of Plant Layout 71 4.15 _ [Factors to be considered at the time of designing Plant Layout 7 4.16 [Principles of Plant Layout 72 4.17 [Advantages of Scientific Plant Layouts 72 4.18 _ [Material Flow Systems 72 4.19 [Types of Piant Layout 73 4.20 _[Process/Functional Layout - Characteristics, Advantages & Disadvantages 73 421 _ [Product Layout or The Product Line Layout - Characteristics, Advantages 7 4.22 _ [Product or Product Line Layout - Disadvantages 75. 423 [Mined oF Combined Layout | 4.24 Static Product Layout or Project Layout a 425 [Cellular Layout 75 Ez 4.26 __|Conclusion (of plant layouts) a 3 5.00__ |MATERIALS HANDLING 77 5.01 [Objectives of Material Handing 77 5.02 [Principles of Materials Handling 77 5.03 _|Types of Material Handling Equipment & Auxliary Equpment 78 . 6.00 | PRODUCTION PLANNING & CONTROL. 73 6.01 [Planning — Definition 73 6.02 _|Importance of Planning 380. 6.03 [Types of Planning 30 6.04 [Planning by Time Frame, Objecives fal 6.05 _ [Planning by Purpose and Group/People-Object of Planning-Production. Planning 81 6.06 [Time Factor and Inter Relativity from Long Term to Short Term Planning 32 6.07 _ [Relativity between Production System and Time based Planning 82 6.08 _ [Factors and Resources involved in Production Planning a3 6.09 _ [Overall Objectives of PPC(Production Planning and Control) 83 6.10 [Production Functions and Planning Process 34 6.11 [Actives involved in the Production Planning Process 85 6.12 [Steps involved in the Planning Process ss 6.13 [Different Approaches fo Planning % 6.14 [Standing or Single Use Plans, Inside - Out and Outside -In Plann 36 6.15 [Top Down Vs Bottom - Up Planning 35 6.16 [Planning Perioa 36 6.17 _ [Commitment Principle in Planning Process 87 6.18 [Production Control a78 CH. Nos. | DESCRIPTION 6.19 _ Definition of Production Control Objectives of Production Control [sa] iol 6.21 |Scope of Production Cont 22 |Factors determining the Production Control Procedures 6.23 [Organization of Production Planning and Control 6.24 _ [Production Planning Vs Production Control ction 6.25 [Master Schedule, Purchasing Stores and Inspe Routing, Tool Keeping, Scheduling and machine loading, Dispatching, Follow-up or 626 } JExpediting, Make or Buy Decisions [Stages of Control [MAINTENANCE MANAGEMENT [Maintenance Management [Objects of Maintenance Management and Availabilty [Availabilty [Measures to improve Availabilty of Plants [The Functions of Maintenance Management [Types of Maintenance, Classifications of Maintenance [Corrective or Breakdown Maintenance Preventive Maintenance 7.09 [Planning for Preventive Maintenance 7.10 |Renefits of Preventive Maintenance 7.11 Cost Factor in reference 1o Preventive Manienance 7.12 _|Cost justification of Preventive Maintenance [foie on Tos of aan an eeioTneeana py ——— showing, Total Cost of Maintenance and efec of ineeased PUT fPenana ot evenne Matteranc Fenweney | of Preventive Maintenance Frequency [Calendar Days Method for Preventive Maintenance Utiization Measures Method for Preventive Mainteraner Repair Cycle [Replacement Policies 7.19 [Maintenance Policies, = Maintenance | 7:21 |Aavantages of Preciaive Matonance [otal Productive Maintenance (TPM [Seven Stes to reach ful autonomous TaTNGTSTES Defects-Zero Breakdowns oO [roanzatonal Support ora beer WarTanancs anagem 7.08) uu airDESCRIPTION OPERATIONS MANAGEMENT NOTES FOR UNITS 3 & 4 SYLLABUS FOR PART —IIl N pT |__| 8.00 _[ptant Location -—f Facility Location And Layout For Services 8.02 _ |Location Of Facilities For Service Business | Lt 114 [03] Factors For Selection Of The Senvce Location [805 nsrtan onsceaion Wie Seecg relocate} ;_ 808 sate omenstons or Section Ost For oesionOTSenee]—————— ; fer esting tm serers pee | 2 8 [Gerace Demand eee eS] [| 8.09 ]oemang Management aturang the Soran Developing Foxe Redera ner competitive Gunanp Location Of Soa Or Non POT SOATES Various Techniques For The Session GTTSGTTS Factor Rating Math ear B12 8.13 [Center-of-gravity method [Graphs of Center-of gravity method [Geographic Information Systems (GIS) Locational Cost-Volume (Break Value) Analysis Transportation Model Service Facility Layout [Service Layout For Traders, [Concept Of Servicescapes (Service Setting) [Types Of Servicescapes Depending On Who Is Performing The Senice Service Layout Design Varies For The Different Types Of Services Classification of Services Facility layout Defined Facility Layout Process Factors considered important for the Services Facility Layout Decisions Designing of Service Store Layouts [Concerns while Designing Service Layouts [Store Layouts And Circulation Patterns [Free Form (Boutique or Flow) Layout [Grid Layouts10 DESCRIPTION CH. NOS. Spine layout 9.16 [Loop Layout or (Race Track Design) 9.17 [Herringbone Circulation 9.18 [Designing Layouts (Slims & Cosmos) 9.19 [The Types Of Layouts 9.20 [Process or Functional Layout: 9.21 [Designing of Process Layouts: 9.22 [Block Diagram _|_9.23_|Relationship Diagramming (Muther’s Grid) 9.24 _|ALDEP - Automated Layout Design Program 9.25 _|Richard Muther- Muther's Grid [9.26 [ater 9.27 _|Computerized layout Solutions 2.28 _| CRAFT - Computerized Relative Allocation of Facilitice Technique [ 9.29 |CORELAP 147 9.30_|PROMODEL and EXTEND: 9.31__|Product or Line Layout 9.32 [Fixed Position Layout E 1 sas Jeunes 10 | “0.00 |AGGREGATE Capac PLANNING FOR SERVICES 10.01 _]Role of Aggregate Planning in the Management 10.02 [Aggregate Capacity Management; Definition —{10.03Treatures 104 [Techniques For Controlling the Cost Of labor in Service Industry 10.05 _{Difference in Aggregate Planning Process For’ Services 10.06, regate Planning Tactics Differences In Aggregate Planning Tactics Within The Service Sectors 148, 149 10.08 Objectives OF Aggregate Planning 10.09_|Use Of Manipulation In Aggregate Planning 153 10.10 [Capacity Planning 10.11 |What Do We Mean By Capacity? fas 154) 40.12 {Capacity Planning And Capacity Management 154 10.13 [Capacity Planning 155 10.14 |The Capacity Planner 155 10.15 [Capacity Management 10.16 {Better Utilization Of Existing Capacity 155 155 Capacity Planning Based On The Timeline Classification Of Capacity Planning Based on Strategiesul cH. PAGE Nos. DESCRIPTION NOS. 10.19 _|Lead Strategy 187 10.20 _|Lag Strategy 7 157 “[10.21_|Mateh Strategy 157 70.22 |Adjustment Strategy aa 158 10.23 _|Factors That Determine Capacity 158, “tT 10.24 [Measures Of Capacity 158, 70.25 [Capacity Utilization 159 10.26 [Peak Capacity And Effective Capacity 159 = "10.27 [Definition Of Capacity As Per Census Bureau 160 10.28 [Comparison Of Peak And Effective Capacity 160, ‘SYLLABUS FOR PART -IV 1 711,00 _ [WHAT DOES PRODUCT AND SERVICE DO? 161. 71.01 [objectives Of Product And Service Design 162 71.02 [Design For New Product Development (Ned) 362 11,03 [Survival OF A Business 163 11.04 [Designing For Services 163 11.05 [Service Design 163 11.06 [Benefits Of Service Design 164 {LOT [Ditterences Between Product And Service Design [164 aa gg. [Chat Showing Differences Between Process Design, Service Design And] 16. Product Design | 7109 other Issues In Product And Service Design 7 _| 7110 [Other Design Considerations [168 Trai [strategies For Product Or Service life Stages Marketing View P 168 THz” [strategies For Product Or Service Life Stages Product Design View Point 168 11.13 _|Standardization 71 L 3114 [Reliability 171 F115 [Reliability Is Extremely Design-Sensitive im] 11.16 [Robust Design 172 11.17 [Degree Of Newness. 173 11.18 [Design For Manufacturing (OFM) 173 11.19 [Concurrent Engineering 75 11.20_[Why Concurrent Engineering? 75 11.21 [Designing For Mass Customization 75 11.21 [common Examples Of Mass Customization 176 72 | 22.00 _[QFD— QUALITY FUNCTION DEPLOYMENT 7 12.01 [QUANTIFYING RELIABILITY al 12.02 _[The Reliability Society afe | DESCRIPTION NOS. 12.03 _[Reliability-related costs 12,04 [What must be done to have reliable products? What is reliability analysis? INTRODUCTION TO PROJECT MANAGEMENT 33.01 13.02_[Common Project Terms 13.03 _[ProjectLife Cycle 13.04_ [Project Management Cycle 13.05” [Work Breakdown Structure (WBS) [The Role Of Project Management In Various Aspects Of Business [is] RE EE OPERATION MANAGEMENT13 CHAPTER - 1 INTRODUCTION Introduction to the concept of Productions and Operation Management - Development of Production Functior ‘The Production and Operations are synonymous words however in practice production is used to express tangible production resulting throughManufacturing processes and operations is used to signify the intangible production resulting throughServices, In fact through operations production becomes integrd and subtle part of every activity of an organization or an individual. ‘The Production and Operations Management involves both the tangible (Manufacturing) and intangible (Services) production. It is an area of management which is concerned with overseein designing, and controlling the process of production and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using resources conservatéely, and effectively in order to meet customer's requirements. In fact it is concerned with managing thaprocess that converts inputs (in the forms of materials, labor, and energy)into outputs (in the form of goods and/or services). In short the set of interrelated management activities, which are involved in manufacturingyf certain products, is called as production managementand if the same concept is extended to services management, then the corresponding set of management activities is called as opations management.a) [DEVELOPMENT OF PRODUCTION FUNCTION > AN OVERVIEW OF PRODUCTION MANAGEMENT What is Production Management? Production: : an : The word production is described in various dictionaries as the act of producingmanufacturing, creation of an artistic work, a literacy production, and a presentation- as of a play or other artistic performance. Thus meaning of the word production for all practical purposes & “Creation of a Utility and/or Services”. Management: qe word management is described in the various dictionaries as managing or handling, control, direction, administrative skill, act or art of managing, to conduct the working of, ‘Thus word management for all practical purposes & “Art of Managing”. Production Management Combining both the above definitions productionmanagement is “The Art of Managing the Production”. It basically concerns itself with the conversion of inputs into outputs [TRODUCTION TO PRODUCTION & OPERATIONS MANAGEMENT AND PRODUCTION F 'UNCTION Production / operations management is the process, whichintegrates and transforms various pratuces used in the production/ operations subsystem of the organization intovalue added Product / services in a controlled and organized manner as per the policies and plans of the Qrganization. Therefore, it is that part of an organization, which is concerned sith the fransformation of a range of inputs into the required outputs (products / services) having the requisite quality level. oe Geommed suliee Bo act of persisted ceumgecon gcciviie, which me beeteed in manufacturing certain products, is called as production managementand if the same concept is extended to services management, then the corresponding set d management activities ie celle] as operations management. Brief History: jf over two centuries’ production and operations management has been recognized as an important factor in ay country’s economic growth. att traditional view of manufacturing management began in eighteenth century whentdam Smith recognized the economic benefits of ‘Specialization of Labour’. Ile. recommended breaking of jobs down into subtasks and recognizingworkers to specialized tasks inwhich they would become highly skilled and efficient.In the early twentieth century, F.W. Taylor implemented Smith’s theories and developed ‘Scientific Management’, From then till 1930, many techniqueswere developedand prevailed as the traditional view. Production managementbecame the acceptable term from 1930s to 1950s. As. W. Taylor’s works become more widely known, managers developed techniques thafocused on economic efficiency in manufacturing. Workers studied in great deail their work to eliminate wasteful efforts and achieve greater efficiency. At the same time, psychologists, socialists andother social scientists began to study people and human behaviour in the working environment addition, economists, mathematicias, and computer socialists contributed newer, more sophisticated analytical approaches. From 1970s two distinct changes emerged in our views. First and the most obvious of these, reflected in the new name ‘operations management’. This was a shift in the service and manufacturing sectors of the economy. As service sector became more prominent, thechange from ‘production’ to ‘operations’ emphasized the broadening of our field to service organizations. The second, moresuitable change was the beginning of an emphasis orfsynthesis, rather than just analysis’, in management practices.PRODUCTION Creation of Utilities and Services Utilities Production Services Production (Manufacturing Industry) (Service Industry) MANUFACTURING INDUSTRIES Manufacturing industry refers to those industries which are involved in the manufacturing and processing of items and indulge in either creation of new commodities or in achieving value addition. The manufacturing industry accounts for a significant share of the industrial sector in developed countries. The final products either serves as a finished goods for sale to customers’ ot as intermediate goods used in the production process. Output of manufacturing industries are mainly tangible products. All electrical appliances, automobiles, textiles, furniture, chemicals, etc. are examples of manufacturing products. SERVICE INDUSTRY Any business, trade, profession or organization that provides services to others instead of manufacturing goods or agriculture products is service industry. Service products by nature are intangible products. Health care and entertainment business, law firms and educational institutes and colleges are examples of Service Industries. BASIC DIFFERENCES BETWEEN GOODS AND SERVICES | PHYSICAL GOODS SERVICES ] (UTLITY PRODUCTS) (SERVICE PRODUCTS) | Tangible Not Tangible _ | Homogeneous Heterogeneous | Production and distribution are separated from | Production, distribution and consumption are | consumption : simultaneous process | ‘A physical thin ‘An activity or process Core value produced in the factory Core value produced in buyer-seller - interactions Customers do not participate in the production | Customers participate in the production | process = | Can be kept in stock Can'tbe stocked | Transfer of ownership = No transfer of ownership17 CHARACTERISTICS OF SERVICES: Basic characteristics of services are as follows: 1 INTANGIBILITY: Services are intangible in nature; it is difficult to experience their benefits before they are bought. They are not a physical object. The buyer lacks the opportunity to see, touch, hear, smell or taste before they buy, enjoy or use the services. 2. INSEPERABILITY: Services and their provider are closely associated and hence are not separable; they are often interlinked with one another. Donald Cowell while describing ‘The marketing of Services’ says “Goods are produced, sold and then consumed, whereas services are sold, produced and then consumed.” cy PERISHABILITY: Services are linked to time factor. Services have a high levelof Perishability and they cant be stored, or re-use them with effective returns. Services are also perishable with related time. Any services proviéd are usually limited with a particular time period agreed between service provider and service receiver. 4. DIVERSITY / HETROGENEITY: Services are diversified in nature. Same type of. services cannot be sold to all the consumers, even if they pay the same price. It is impossible to set any standard for any service. 5. OWNERSHIP: A service is an activity or benefit that one party canoffer to another, which is essentially intangile, and does not result in theownership of anything. 6. QUALITY DIMENSION: Quality aspect is the nucleus of any service dealing. The service industry requires a measurable tool for qualitymeasurement. The service provided can be measured as per the level of satisfaction at which the customersare satisfied. Services can be distinguished on the quality of services provided by the service provider to the serviceeceiver. 1 FLEXIBILTY / NATURE OF DEMAND: Services are often related to flexibility. Nature of service is often fluctuating for instance; themobility of passenger isincreased during the vacation time. Tourists go tohill stations during the summer season hene it is a high time for travel and tourism industry. Whereasrainy season is often considered as anoff-season. This clearly indicates that flexibility is an essential dimensiorof the service industry. SERVICES DOMINATE THE MODERN ECONOMY: ‘The service sectoris going through almost revolutionary change, which dramatically affects the way in which we live and work. New services are launched to satisfy our existing needs and to meet needs that we did not even know we had. Services make up the growing bulk of tody’s economy and also account for most of the growth in new jobs. The size of the service sector is increasing in almost all the economies around the world. Even in emerging economies, service output is growing rapidly and often represents at least half of the GDP. In developed countries, knowledge based services, defined as those that are intensive users of high technology and/or have relatively high skilled work forces are providing the most dynamic components. In numerous countries, increased productiviy and automation in agriculture and industry, combined with growing demand both for new and traditional services, have jointly resulted in a continuing increase over time in the percentage of the labour force that is employed in services. ‘There is a hidden service sector within many large corporations that are classified by government statisticians as being in manufacturing, agricultural, or natural resources industri s. These so\ 18 vncto , \ i ivitic ing recruitnent, j, it i ide range of activities including _ rec al called ine services cover a wide ange of ssivites including eet. pan resource developmen agement, advertisement and publicity, resagft aintenance, SU} g s ad pr ; eee and many other kinds of services. In recent tim, organizations are increasingly | Shoosing to outsource the intemal services that can be performed more efficiently by a spevaig subcontractor. [Among the forces that shape service markets are government poliies, social changes, business trends, advanees in information technology and internationalization/globalization. 1, Government Polices: ; = Change in regulations + Privatization New rules to protect Customers, Employees and the Environment « New agreements on trades in service 2. Social Changes: Rising Consumer Expectations " More Affluence "More People- Short of Time * Increased desire for buying Experiences Vs Things * Rising ownership of computers and Mobile Phones. = Immigration 3. Business Trends: * Manufacturers Add Value through Service and sell Services More Strategic Alliances Marketing Emphasis by Nonprofits Relaxation of Professional Association Standards Quality Movement Emphasis on Productivity and Cost Savings Growth of Franchising * Innovative hiring practices 4, Advances in Information Technology: Convergence of Computers and Telecommunications Greater Bandwidth + Miniaturization creates more Compact Mobile Equipment * Wireless networking + Faster more Powerful Software Digitization of Text, Graphics, Audio and Video Growth of the Internet 5. Internationalization: More Companies operating on Transnational Basis f Increased Intemational Travel Intemational Mergers and Alliances WHY IS THE SERVICE SECTOR GROWING? REASONS FOR GROWTH OF SERVICE SECTOR: 1. Affluence: The increase in per capita income has left the ifividuals with more surplus funds. Itis not only indicator of the increase in general affluence level but has resulted in increased purchasing power for individuals empowering them to seck services not availed hence before by them, giving rise to such sewices.: | 19 2. Leisure Times: People are now days keen on spending some time to travel and holiday and therefore there is spurt in the economy of pleasure and travel sectors. 3. Life Expectancy: The health programs have significantly contributed to an increase in life expectancy, giving rise to services like old age homes, nursing home health caretc. Health Consciousness: As health consciousness is becoming widespread services such as health clubs, dieticians, gyms, yoga, meditationetc. have come up. Working Women: As more and more women work the need for day care for children has increased and also of packed and ready to use food and home delivery. Product Complexity: A large number of product: are now being purchased in households which can be serviced only by specialized technicians, giving rise to repairs and maintenance service providers. Life’s Complexity: As the daily routine gets busier, individuals find it difficult to manage things on their own. These leads rise to services of tax consultants, legal advisors, property dealers, investment advisorsetc. Resource Scarcity and Ecology: As the natural resources are depleting and need for conservation is increasing, consultants for water mangement, alternate energy such as wind and solar powered energy sources are increasing. ‘New Produets: The development in Information Technology has given rise to services like IT related educational, training and awarenessprograms, Mass Medias and Audio Video and TV have pushed the exponential growth in the entertainment sectors. 10.Increased Need for Communication: Progressive economy has created never before urgencies of communications. This has increased demands for PCOs, Cyber Cafes, Cellular phone providers etc. Why it is necessary to study production and operations management? Is it necessary to study the subject of Production and Operations Management even if one is not interested in manufacturing business or activities? It has been explained earlier that “PRODUCTION” is not restricted to only manufcturing activities as normally visualized. End products of production system may result into finished components or consumer products, completed paper work or documentations, serviced customers or serviced patients. In short it has to be some kind of value added* products so that outputs are worth more than just the sum of individual inputs. Peter Ferdinand Drucker (November 19, 1909 — November 11, 2005): He was an Austrian-born American managementconsultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corporatiorHe was also well-known for providing leadershipin the development of management education He has wonderfully defined the meaning of‘Production.’ Definition of Production as per Peter Drucker is as follows: According to Peter Drucker “Production is not the application of tools to materials but is the application of logic to work.” ‘Small Story:alt} ‘ i shru, an eminent lawyer and: the Se ribune, it was) Motilal Nebr. Wy : Aceonding to a report in The Tribune, it \ pan ene eae Teseradary father of Jawaharlal Nehru, who brilliantly nlayed si ihe ee i rile ig fine hi who Hi ing ish officer's: AIBC. The fending his eli s charged with blowing up a British ¢ defending his client who was charged wit itish oicer's horse carriage magistrate ordered the young man to be hanged in public, Surprisingly ra lan ti judament and walked away. On the day of the conviet's execution, as soon as he a a in ee rescued him, When the matter was taken court, Nehru pleaded not guilty. In favor of his plea, he argued that the magistrate had written th him”. And the man had been hung, The sentence did not sa defendant could not be tried on the sume ch conviction, That is called Double jeopardy. After capital punishment had inserted “hi death sentence as “hang ng him until death”. Soa rges following 2 legitimate acquittal or a subs it amendment to the law for ww.inuth.com/india/hereswhy-the-phrase-to-be-hanged-till-death-is-used-in-death- wivw.inuth.conv/india/whyjudyes-break-the-nib-of-theirpen-while-awarding-death) *Value addition detined as follows: When output is worthier than the sum total of all inputs, it is called Value Addition. Objectivity of all production system is always to do Value Additionwhich helps organizations to bring the profit. Value equalization results into no loss-no profit, as if the organization is running for charity, even charitable organ s aim to do Value Addition so thathey can serve more and more beneficiaries. Opposite to Value Addition is Value Subtractions, which results into organization running into bss, if the concemed organization for whatever reason, does not take quick remedial steps to reverse the situation and start bringing Value Additions i the countdown for the organization towards getting finished. Obviously we all may be falling in any one or both of these categories and involved in the Production funetion. Hence itis very vita and important to know all aspeets ofthis management Science with proper depth and detail and empower us with the skills of production managemerto SEE as 8 Versatile and efficient managert will not be out of place to mention that production is Omnipresent in every activity we camry out and hence it is also Known ae operations Marae. Production word isnormally associated with the tangble products and operat with the intangible products, beginning of ns Production and Operations Management: Production and operations management conce! transformation of inputs into outputs, nor r tof inp using physical resources, so as to provide the desired utility/utilities - of form, place, possession, time or state or a combination thereof — to the customer while meeting the objectives of effectiveness, adaptability or customer satisfuction & efficiency, Production is also defined as “the step-by-step conversion of one form of man form through chemical or mechanical pros ‘ial into another cess (0 create or enhance the uility of the products to the user.” Thus production is a value addition proct value addition. At each stage of processing, there will be Edwood Buffa defines production as ‘a process by which goods and services are created’.