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OM is the area concerned with the efficiency and effectiveness of the operation in support and development of the firm's strategic goals OM include the design and operations of systems to provide goods and services OM is the planning, scheduling, and control of the activities that transform inputs (raw materials and labor) into outputs (finished goods and services). term operations management conjure up views of manufacturing environments, many of these concepts have been applied in service settings, with some of them actually developed specifically for service organizations.
18th century, agriculture was the predominant industry in every country. The advent of the steam engine and Eli Whitney's concept of standardized parts paved the way for the Industrial Revolution with its large manufacturing facilities powered by steam or water The introduction of Taylor's method of scientific management and Henry Ford's moving assembly line brought the world into an age where management was predominantly centered around the production of goods.
late 1950s and early 1960s scholars moved from writing about industrial engineering and operations research into writing about production management Production management had itself become a professional field as well as an academic discipline services are such a pervasive part of our life that the term operations management is used almost exclusively.
HISTORY - CONTRIBUTIONS
INDIVIDUAL EFFICIENCY F.w. Taylor studied the simple output to time relationship for manual labor This is precursor for “TIME-STUDY” Frank Gilbert, and his wife Lillian Gilbert examined the motion of the limbs of the workers (legs,hands,eyes) This formed precursor for “MOTION-STUDY”
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HISTORY - CONTRIBUTIONS
COLLECTIVE EFFICIENCY Previous focus on controlling the workoutput of manual laborers or machine Focused on individual efficiency Introduced Gantt chart for scheduling In 1930 inventory model for efficiency in use of materials
HISTORY - CONTRIBUTIONS
Previous quantitative aspects, now it is in qualitative aspects Quality which is an important customer service objective came to recognized for scientific analysis Included the effectiveness addition to efficiency In 1931, walter shewart came up with his theory regarding control charts for quality/process control. These charts suggests a simple graphical methodology monitor characteristics of output and how to control it. 1935, H.F. Dodge And H.G Romig exercise control over quality by applying statically principles acceptance/rejection “acceptance sampling”
HISTORY - CONTRIBUTIONS
EFFECTIVENESS AS A FUNCTION OF INTERNAL CLIMATE
experiment draws the effectiveness by increasing efficiency Explained through angle of human psychology Till now ruled by taylors theory of evaluation of task and thus the specialization in one task which found much use in Henry ford assembly line.
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HISTORY - CONTRIBUTIONS
Advent of operations research techniques World war-ii a bog boost for scientific techniques Allied force work stasticians engineers and other professionals.
management is also an academic field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service firm and their operations. concepts derived from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions.
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WHAT DO OPERATIONS MANAGERS DO?
Strategic Level (Long term)
Tactical level (Medium term)
Operational level (Lower level)
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STRATEGIC LEVEL (LONG TERM),
for or associated with making decisions about product development (what shall we make?) Process and layout decisions (how shall we make it?), Site location (where will we make it?), And capacity (how much do we need?).
TACTICAL LEVEL (INTERMEDIATE TERM),
in deciding employee levels (how many workers do we need and when do we need them?), inventory levels (when should we have materials delivered and should we use a chase strategy or a level strategy?), capacity (how many shifts do we need? Do we need to work overtime or subcontract some work?).
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OPERATIONAL LEVEL, (LOWER-LEVEL) (daily/weekly/monthly) planning and control.
Operations managers and their subordinates must make decisions regarding scheduling (what should we process and when should we process it?), sequencing (in what order should we process the orders?), loading (what order to we put on what machine?), and work assignments (to whom do we assign individual machines or processes?).
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REQUIREMENTS OF OPERATIONS MANAGER
manager must have knowledge of advanced operations technology and technical knowledge relevant to his/her industry, interpersonal skills and knowledge of other functional areas within the firm. Operations managers must also have the ability to communicate effectively, to motivate other people, manage projects, and work on multidisciplinary teams.
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SCOPE OF OPERATIONS MANAGEMENT
SUPPLY CHAINS —management of all aspects of providing goods to a consumer from extraction of raw materials to end-of-life disposal. OPERATIONS MANAGEMENT/MARKETING INTERFACE —determining what customers' value prior to product development. OPERATIONS MANAGEMENT/FINANCE INTERFACE —Capital equipment and inventories comprise a sizable portion of many firms' assets.
SERVICE OPERATIONS —Coping with inherent service characteristics such as simultaneous delivery/consumption, performance measurements, etc. OPERATIONS STRATEGY —Consistent and aligned with firm's other functional strategies. PROCESS DESIGN AND IMPROVEMENTS —Managing the innovation process.
TYPES OF MANUFACTURING SYSTEM
INTERMITTENT SYSTEM Job production Batch production CONTINUOUS SYSTEM Mass production Process production
products are produced in small quantities Machines and equipment are laid out by process Work loads are generally unbalance Highly skilled operators are required for efficient use of machines and equipment In-process inventory is large Flexible to suit production varieties Examples Machines shops, hospitals, general office
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Entire project is taken as a single operation Work is to be completed on each product before processing the next item Versatile and skilled labor is needed High capital investment Control operation are relatively simple High unit cost of production Example Ship building, dam construction, bridge building
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Unique product production Highly skilled employee Production planning is not based on sales forecast but one hat to estimate or evaluate the requirements on the basis of general business conditions, past information and future sales promotion programme. Once the orders are received, production scheduling operations begin. EXAMPLE Electronic instruments, machine tools, printing press
Problems with intermittent system
Demand can be discontinuous All operational stages may not be balanced Elaborate sequencing and scheduling is require. Needs high investment Planning, routing and scheduling changes with fresh orders Storage is necessary at each stage of production process Can adjust to new situations and specifications Inspection is not in line with production Items are manufactured according to orders
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There must be continuity of demand Product must be standardized Material should be per specifications and delivered in time All operational stages in the process must be balanced Work must conform to quality standards Appropriate plant and equipment must be provided Maintenance must be by anticipation and not by default Inspection must in line with production
large quantities and much emphasis is not given to consumers orders. Production for stock not to order System can produce only one type of product at one time.
to mass production with more stress on automation in production process. Volume of production is high Products where demand is continuous and high. EXAMPLE Petroleum products, brand of medicines
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Distinction between manufacturing system and service
POINT OF DISTINCTION •Entity •Storage •Quality •Producer •Labor intensity •life
Intangible Not possible Varies with time and person Inseparable from service Tends to be high short
Tangible Possible More standardized Can be separable Lower longer
POINT OF DISTINCTION
SERVICES Spontaneous High Essential
GOODS Time-spread Can be low May not be necessary May not be so Possible all over Near supply
•Production •Customer involment •Physical presence of the customer •Physical surrounding •Standardizati on •Facility location
Very important Only some routine service Close to customer
POINT OF SERVICES DISTINCTIO N •Facility Accommodate physical design and psychological needs •Product Environment plays a design vital role •Process Immediate effect on design customer •Scheduling As per customer interest •Production Smoothing results in planning losses
To enhance production Only physical product Customer not involved Completion dates possible
POINT OF DISTINCTION •Inventory •Quality control
GOODS Raw material Fixed Zero defect Technical Tight Average Unit-based Generally hard
Personnel Varied quality standards •Quality objective Zero defection •Worker skill Interaction •Time standard Loose •Capacity Fluctuating planning •Wage payment Time-based •Type of Generally soft technology
Role of production and operation manager
the products and services in the quantities needed, available when needed and at a controlled cost and quality. The deal with forecasting and scheduling systems and a variety of controls to ensure that the systems are continuing to function properly Decisions seem to seek balance Must try to see relationships and integrate the results.
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Functions and responsibilities
Product selection and design Process selection and planning Facilities location Capacity planning Production planning Productions controls Quality control Method analysis Proper inventory controls
Plant layout and material handling Work measurement Maintenance and replacement Cost reduction and cost control Other functions Engineering economics, stores and warehouse mgt., Maximizing labor efficiency, Price analysis - wage, incentives to workers Standardization and storage
PRODUCTION PLANNING & CONTROL
PRODUCTION PLANNING CONTROL
and planning of the manufacturing process. supply and movement of materials and labor economic and balanced utilization of machines and equipment
STAGES OF PRODUCTION PLANNING
Building, machines & equipments, Plant layout & location
Selection of work centre Designing of tools required
Input processing output
PRODUCTION PLANNING CATEGORIES
PRESCRIBE THE SEQUENCE OF OPERATIONS REQUIRED TO TRANSFORM INPUTS INTO DESIRED OUTPUT
WHEN AND WHERE EACH OPERATION OF THE PRODUCTION PROCESS IS TO BE PERFORMED
STUDIES RELATION SHIP BETWEEN LOAD & CAPACITY OF WORK CENTERS IN THE SYSTEM
is one of the techniques in scheduling Represented in the form of charts Charts portrays planned production and actual performance over a period It is a regulatory chart divided by parallel horizontal and vertical lines
Types of Gantt chart
RECORD CHARTS (available machines and the time at which various jobs are planned) CHARTS (start and completion of work)
GANTT CHART FORMAT
labour A time 2 mo. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
horizontal axis of the Gantt chart is a time scale, expressed either in absolute time or in relative time referenced to the beginning of the project. The time resolution depends on the project - the time unit typically is in weeks or months. Rows of bars in the chart show the beginning and ending dates of the individual tasks in the project.
activity to keep equipment, or other assets that a manufacturing firm possess, in working condition. OBJECTIVES To minimize long-run maintenance costs To minimize the instance of breakdown of machines and facilities To provide a safe working environment To provide reliable conditions for equipment
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must be scheduled Inventories of spare parts maintained Prescribed quality standards met Labor standards established In case of breakdowns or shutdowns of plants, sometimes, outside contract maintenance work is resorted.
CLASSIFICATION OF MAINTENANCE FUNCTIONS
The availability of plant can be defined as
A = Tup / TUP + Tdown
A = availability of a plant Tup = the cumulative time of operation in the nominal working state Tdown = the cumulative down time. (to improve the value of (A) one has to minimize the down time)
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Types of maintenance policies
MAINTENANCE MAINTENANCE MAINTENCE
is carried out at predetermined intervals and is intended to reduce the likelihood of an equipment’s condition falling below a required level of acceptability. can be time based / condition – based
TIME BASED IS EFFECTIVE The failure of any item
an equipment is timedependent. Item is expected to wear out within the life of the equipment The total costs of replacement of the item are substantially lesser than those of failure replacement repair.
CONDITION BASED IS EFFECTIVE In response to a significant deterioration in a unit as indicated by a change in monitored parameter of the unit condition or performance.
of the total down-time and consequent reduction in production losses Reduction n the number of major repairs, and consequently reduced maintenance expenses. Reduction in the number of rejects and an improvement in product quality. Reduction in the inventory of spare parts. Reduction in the number of accidents in the plant. Reduction in the unplanned or crisis management in maintenance.
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down-time of production. Replacement parts and supplies. Instruments i.e., in the case of condition monitoring. Wages of preventive maintenance technicians and staff. Minor costs such as those of recordkeeping.
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know as breakdown maintenance which is carried out when equipment fails, or falls below an acceptable condition, while in operation. Repair time depends upon the type of complexity of the equipment, management methods and engineering techniques and above all the skill of the crafts people. Difficult to forecast the level and nature of corrective maintenance load.
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at minimizing the effect of failure and at eliminating the cause of maintenance. Requires engineering action rather than maintenance action. Tries to pin point the mistakes of the design of the equipment.
Maintenance is considered as the operation of pool of resources men, spares, equipment) directed towards controlling the plant availability.
UNAVAILABILITY COSTS Loss of in-service material Production loss while in repair Waiting for repair. Undergoing preventive maintenance RESOURCE COSTS Corrective maintenance labor Preventive maintenance labor Maintenance equipment tools Spares usage and holding costs
Classification and identification of equipment Collection of information like failure characteristics of equipment, repair characteristics, consequences of failure, safety regulations Organization of maintenance resource like administrative structure, working planning system
SELECTION OF POLICY FIXED-TIME REPAIR POLICY (low cost equipment) CONDITION-BASED POLICY (complex, high cost equipment) DESIGN-OUT MAINTENANCE (all high cost maintenance items) CORRECTIVE MAINTENANCE POLICY (no preventive actions are effective.)
3 AREAS OF CONTROL
control (men,spares,equipment, work load) Plant condition control (diagnose basic causes) Maintenance cost control
Identification of the high –cost areas of plant. Monitoring the trend of maintenance effectiveness ( failures in labor utilization, machines)
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MEASURING MAINTENANCE PERFORMANCE
the operational goals Establish priorities for the improvement of maintenance techniques. Raise the morale of the maintenance department, which in our country, is being traditionally treated as a subsidiary department.
Management models in maintenance
study Operational research techniques Logical fault finding
the job Define the objective Record all the relevant facts Examine critically all the activities (why,how,what,where,when,who.) Develop the best method Install the improved method and maintain it.
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Operations research techniques
VALUE THEORY SIMULATION MODELS (The above theories widely applied for estimating break down costs and selecting appropriate maintenance policies.) WAITING LINE THEORY (establishing repair crew size, the number of facilities) RELIABILITY THEORY (failure rates of equipment and components) REPLACEMENT THEORY (determine replacement strategies for equipment)
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LOGICAL FAULT FINDING
of detection time as well as ratification time. 6 stage procedure generally followed Analysis of the symptoms of the fault Inspection of equipment Faulty stage location Removal of fault Repair and replacement Performance testing information documentation.
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application of human biological science in conjunction with engineering science to the worker and working environment, so as to obtain maximum satisfaction for the worker which at the same time enhances productivity --- ILO
The quantity of equipment and machines to be installed inside the factory buildings The risk of installing the equipment and machines in an open space The extent of costly plant and equipment involved which require special security The extent security required from the point of view of insurance and other statutory regulations The organization for the security department and the deployment of people in strategic positions The rotation of security personnel at different positions Provision of necessary equipment to security staff for protection and communication. Definition of clear-cut measures for security at different points in the factory Periodic review of security measures
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Causes of accidents
MECHANICAL FACTORS Inadequately guarded Unguarded Unsafe design or construction Hazardously arranged (overloading)
Illumination Ventilation Temperature Noise Fumes
and dust Speed of work Hours of work Spread-over of the work period Work load
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INDIVIDUAL FACTORS PSYCHOLOGICAL FACTORS
Age Marriage Schooling Health Length
of service Work performance
job Interest and difficulties Machine habits Attention or lack of it fatigue
PERSONALITY FACTORS Intellectual level Emotional maturity Adjustment Anxiety level
Size of the employee’s family Number of dependents Financial position Social status Interpersonal relationships Home environment