BPO1 Module 5 OPERATIONS MANAGEMENT

Business Process Outsourcing 1 (BPO1)
(Module 5)
Operations
Management
(Module 5)
1
(Module 5)
TOPICAL OVERVIEW
 Operations Management, definition of
 Operations Management Decisions
 Operations: Policy and Strategy
 Managing Technology in OM
 Effective Product Design
 Process Design and Analysis
 Total Quality Management
OVERVIEW 2
(Module 5)
OPERATIONS MANAGEMENT, definition of
• the administration of business practices to create the highest

level of efficiency possible within an organization.
• concerned with converting materials and labor into goods
and services as efficiently as possible to maximize the profit
of an organization.
Operations Management Definition | Investopedia http://www.investopedia.com/terms/o/operations-management.asp#ixzz3w9VkCbZN
OPERATIONS MANAGEMENT 3
(Module 5)
OPERATIONS MANAGEMENT DECISIONS

Operations management requires making many strategic and tactical
decisions.
 Capacity planning — The process of determining the production capacity
needed by an organization to meet changing demands for its products.
Different types are:
o design capacity is the maximum amount of work that an organization is capable of
completing in a given period;
o effective capacity is the maximum amount of work that an organization is capable
of completing in a given period due to constraints such as quality problems, delays,
and material management.
http://www.ftpress.com/articles/article.aspx?p=2167438&seqNum=3
OPERATIONS MANAGEMENT DECISIONS 4

(Module 5)
 Efficiency — Performing activities at the lowest possible cost.

 Enterprise Resource Planning (ERP) — Large, sophisticated software
systems used for identifying and planning the enterprise-wide resources
needed to coordinate all activities involved in producing and delivering
products.
 Forecasting — The process of predicting future events, including product
demand.
 Just-in-time — A philosophy designed to achieve high-volume production
through elimination of waste and continuous improvement.

(Module 5)
 Lean systems — Sometimes synonymous with just-in-time, it is a

philosophy that takes a total system approach to creating efficient
operations through the elimination of waste.
 Location analysis — Identifying the best location for facilities.
 Mass customization — The ability of a firm to highly customize its goods
and services at high volumes through its operations management
function.
 Product design — The process of deciding on the unique and specific
features of a product.

(Module 5)
 Process selection — The process of identifying the unique features of the

production process that will give the product its unique characteristics
that should go hand in hand with product design.
 Productivity — A measure of how efficiently an organization converts
inputs into outputs.
 Quality management — The process used to ensure the quality of a
product, including measuring quality and identifying quality problems.

(Module 5)
 Reengineering — The process of redesigning a company’s processes to

increase efficiency, improve quality, and reduce costs.
 Scheduling — The process of deciding on the timing and use of resources
within an operation; it addresses questions such as who will work on what
work schedule and in what sequence jobs will be processed.
 Total quality management (TQM) — A philosophy that seeks to improve
quality by eliminating causes of product defects and by making quality the
responsibility of everyone in the organization.
 Value added — A term used to describe the net increase created during
the transformation of inputs into outputs designed to create value added
in the transformation process.

(Module 5)
OPERATIONS: POLICY AND STRATEGY
 Introduction
 very important for an organization to have well defined objective.
 facilitates development of strategies and policy thereby creating value
for customers.
 Operation Strategy
 essential to achieve operational goals set by organization in alignment
with overall objective of the company.
 design to achieve business effectiveness or competitive advantage.
http://managementstudyguide.com/operations-policy-and-strategy.htm
OPERATIONS: POLICY AND STRATEGY 9

(Module 5)
Operational strategy is planning process which aligns the following:

Production/
Organization Business SWOT Operations
Service
Goal Goal Analysis Strategy
Goal
In this global competitive age organization goal tend to change from time to
time therefore operations strategy as a consequence has also be dynamic in
nature. A regular SWOT analysis ensures that the organization is able to maintain
competitive advantage and business leadership.

(Module 5)
 Strategic Management Process for Production and Operation

In order to build strategy management process, a sequential process as
below is followed:
 Competition Analysis: company evaluates and studies current
competition in the market and practices that are followed in the
industry for operations and production vis-à-vis company policies
 Goal Setting: involves narrowing down the objective towards which the
organization wants to move towards.

(Module 5)
 Strategy Formulation: breaking down of organizational goals into

operations and production strategies.
 Implementation: convert operations and production strategies into day
to day activities like production schedule, product design, quality
management etc.
As organizations are always customer-centric, production and operation
strategy for organization are built around them

(Module 5)
 Productivity
 sum of total output per employee or per day
 has two (2) essential parts: labor and capital
 provides ready report card to measure status against company’s
production objective
 Wastivity
 reciprocal of productivity as not 100% of input would be converted to
output (examples: defective products and services, idle capacity of
material, man-power, equipment etc.)

(Module 5)
MANAGING TECHNOLOGY IN OM
 Introduction
 technology has changed the way organization conduct their business.
 advent of technology in operation management has increased
productivity of the organization.
 Technology and Operations Management
 The scope of Technology has moved from development of products into
design, management and improvement of operating system and
processes.
 technology has reduced the cost, improved the quality of the process
and focus on customization, thereby creating value for customers.
MANAGING TECHNOLOGY IN OM 14
(Module 5)
 Integration of Technology with Production System

Technology drives efficiency in organization and increases’ productivity of
the organization. However, bringing technology in the production system is
highly complex process, and it needs to following steps:
 Technology Acquisition: technology acquired should align with overall
objectives of the organization and should be approved after elaborate
cost-benefit analysis.
 Technology Integration: technology affects all aspects of production i.e.
capital, labor and customer, therefore, a solid technology integration
plan is required.
(Module 5)
 Technology Verification: once technology is integrated, it is important to

check whether technology is delivering operational effectiveness and is
been used to its fullest.
 Automation in Production and Operations
 reduces manual intervention in the manufacturing process
 increases productivity and reduces margin of error thereby facilitating
economies of scale
 disadvantages
o unemployment
o high breakdown cost, and
o initial capital investment.
(Module 5)
EFFECTIVE PRODUCT DESIGN

 Introduction
 Organization success is dependent on customer satisfaction and delight.
 Customer satisfaction is achieved through development of product and
service, which have all attributes required by the customer.
 A success product or services do not only have attractive package design
but should be also able to provide robust performance.
 Product design must be practical enough for production and powerful
enough to provide a competitive advantage.
EFFECTIVE PRODUCT DESIGN 17

(Module 5)
 Product Design
A good product design has following common features:
 Utility: The product design should make product utility as per
expectation of customers and provide steady performance through the
product life.
 Aesthetics: Product aesthetics is important in success of the product.
The product aesthetics is dependent on market and end customer.
 Producible: Product design should enable effective production of
product through available production methods.
 Profitability: Product design should make economic sense as to deliver
value to customer and sustainability to the organization.
http://managementstudyguide.com/operations-policy-and-strategy.htm EFFECTIVE PRODUCT DESIGN 18
(Module 5)
 Differentiable: A good product design should enable product to be

differentiate among its competition. This can be achieved by attractive
packaging and also by providing additional service on the product.
 Objectives of Product Design
 to satisfy customer and maximizes the value for the customer at
minimum cost
 product or service should also be able to meet primary needs and desire
of the customer
o may not require development of new product, but enhancement
to existing product or service.
EFFECTIVE PRODUCT DESIGN 19

(Module 5)
PROCESS DESIGN AND ANALYSIS

 Introduction
 The objective of organization is to provide service and product, which
satisfy customer and create value for them.
 A product and service designed is based on the customer feedback and
requirement of the market.
 Process design is where the product is broken down into parts, which
further can be helpful in the actual manufacturing process.
 A product must have an attractive packaging to provide the right
aesthetics plus has function and features, which provide value to
customers.
PROCESS DESIGN AND ANALYSIS 20
(Module 5)
 Process Planning
Achieved through the following procedures:
 Process Requirement
o collect and gather information to give structure with the end
objective
o make process requirement document highlighting various stages, risk
and stakeholders for production
o assessment of available technology, raw material requirement,
factory/plant layout and demand forecast.

(Module 5)
 Team Building: Once the process requirements are finalized, for each
objective, a team is finalized based on skill level and experience.
Function of the team is to get familiarize with the whole process.
 Planning and Implementation: Process planning team will develop
module; policies and procedure require for production, which are after
required approval internal as well as external is implemented.
 Audit: A regular audit is carried out to ensure that process thus
implemented is in line and delivering value to customers.
 End of Life: Over a course of time there may be enhancement of the
product or product may get discontinued in these circumstances,
process thus develop is discontinued.
(Module 5)
TOTAL QUALITY MANAGEMENT

 Definition
 a management approach to long–term success through customer
satisfaction with all members of an organization participating in
improving processes, products, services, and the culture in which they
work.
 The Primary Elements of TQM
 Customer-focused. The customer ultimately determines the level of
quality.
http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
TOTAL QUALITY MANAGEMENT 23

(Module 5)
 Total employee involvement.

o All employees participate in working toward common goals.
o Total employee commitment can only be obtained when
management has provided the proper environment.
o Total employee commitment can only be obtained when
empowerment has occurred such as self-managed work teams
http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
TOTAL QUALITY MANAGEMENT 24

BPO1 Module 5 OPERATIONS MANAGEMENT

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Business Process Outsourcing 1 (BPO1)

OPERATIONS MANAGEMENT, definition of

• the administration of business practices to create the highest

Operations Management Definition | Investopedia http://www.investopedia.com/terms/o/operations-management.asp#ixzz3w9VkCbZN

OPERATIONS MANAGEMENT DECISIONS

OPERATIONS MANAGEMENT DECISIONS 4

 Efficiency — Performing activities at the lowest possible cost.

OPERATIONS MANAGEMENT DECISIONS 5

 Lean systems — Sometimes synonymous with just-in-time, it is a

OPERATIONS MANAGEMENT DECISIONS 6

 Process selection — The process of identifying the unique features of the

OPERATIONS MANAGEMENT DECISIONS 7

 Reengineering — The process of redesigning a company’s processes to

OPERATIONS MANAGEMENT DECISIONS 8

OPERATIONS: POLICY AND STRATEGY

OPERATIONS: POLICY AND STRATEGY 9

Operational strategy is planning process which aligns the following:

OPERATIONS: POLICY AND STRATEGY 10

 Strategic Management Process for Production and Operation

OPERATIONS: POLICY AND STRATEGY 11

 Strategy Formulation: breaking down of organizational goals into

OPERATIONS: POLICY AND STRATEGY 12

OPERATIONS: POLICY AND STRATEGY 13

 Integration of Technology with Production System

 Technology Verification: once technology is integrated, it is important to

EFFECTIVE PRODUCT DESIGN

EFFECTIVE PRODUCT DESIGN 17

 Differentiable: A good product design should enable product to be

EFFECTIVE PRODUCT DESIGN 19

PROCESS DESIGN AND ANALYSIS

PROCESS DESIGN AND ANALYSIS 21

TOTAL QUALITY MANAGEMENT

TOTAL QUALITY MANAGEMENT 23

 Total employee involvement.

TOTAL QUALITY MANAGEMENT 24

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