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Introduction to OPERATIONS MANAGEMENT P. Rajendran MBA [Ph.

D]
Associate Professor Management Studies SNS College of Engineering COIMBATORE India

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT Chapter 1

Curriculum of Anna University Chennai

Operations Management
Defined Nature, Importance,

Road Map
A system perspective Functions Challenges Current priorities Recent trends Operations Strategy
- Strategic fit - Framework

Historical development Transformation processes Differences between services and goods


MBA @ SNS College of Engineering

Supply Chain Management


Curriculum of Anna University Chennai

OPERATIONS MANAGEMENT

PRODUCTION SYSTEMS
Production is crucial among all functions. Production is the process by which raw materials and other inputs are converted into finished goods. Synonymous: Manufacturing. Manufacturing: Producing Tangible Goods. Production: Producing both Tangible and Intangible Goods. System: Collection of interrelated components or entities. Conversion/transformation of inputs into outputs.
MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

Curriculum of Anna University Chennai

NATURE OF PRODUCTION
Production as
A System
Set of inter-related concepts which converts inputs into outputs

An Organisational Function
Delegation of authorities and responsibilities; Production is the primary function of any business.

A Conversion or Transformation Process Creating Utility


MBA @ SNS College of Engineering Curriculum of Anna University Chennai

OPERATIONS MANAGEMENT

PRODUCTION AS A SYSTEM
System: Converting inputs into outputs through a process. Production itself is a system: It converts Raw Material (Inputs) into Finished Goods (outputs). Production System Model (Concepts) comprises:
1. 2. 3. Production System Conversion sub-system and Control Sub-system
DEFINITION A System whose function is to convert a set of inputs into a set of desired outputs. A sub-system of the larger production system where inputs are converted into outputs.

CONCEPT Production System Conversion sub-system

Control sub- A sub-system of the larger production system where a portion of the output system is monitored for feed back signals to provide corrective action if required.
Curriculum of Anna University Chennai

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

PRODUCTION AS A SYSTEM
System: Converting inputs into outputs through a process. Production itself is a system: It converts Raw Material (Inputs) into Finished Goods (outputs). Production System Model (Concepts) comprises:
1. 2. 3. Production System Conversion sub-system and Control Sub-system
DEFINITION A System whose function is to convert a set of inputs into a set of desired outputs. A sub-system of the larger production system where inputs are converted into outputs.

CONCEPT Production System Conversion sub-system

Control sub- A sub-system of the larger production system where a portion of the output system is monitored for feed back signals to provide corrective action if required.
MBA @ SNS College of Engineering Curriculum of Anna University Chennai

OPERATIONS MANAGEMENT

RECENT TRENDS IN PRODUCTION / OPERATIONS MANAGEMENT


1. Global Market Place
Operating in many countries Economic Advantage Increase in competition

4. Flexibility (for Competitive Advantage)


Adapt quickly to
Changes in volume of demand Product mix and Product design Delivery Schedules Agile Manufacturing

2. Production/Operation Strategy
Overall success begins with operations strategy

5. Time Reduction
Manufacturing cycle Speed to market to break competition Shorter lead time
Curriculum of Anna University Chennai

3. Total Quality Management


Customer Satisfaction is the primary focus Quality, Quality Control to TQM
MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

RECENT TRENDS IN PRODUCTION / OPERATIONS MANAGEMENT


6. Technology 8. Re-engineering
Advance in technology lead to Redesigning the business array of new products (choices) process Automation, computerisation, Drastic measures or improve the communication technologies and performance of a firm robotics 9. Environmental Issues Faster, Better and Cheaper Concerned with pollution control 7. Worker Involvement & Waste disposal in protection of environment and CSR. Lower levers are assigned with decision-making responsibility Emphasis on reducing or recycling waste & less toxic Referred to be Employees chemicals empowerment with quality workforce/team Using bio-degradable materials
MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

Curriculum of Anna University Chennai

RECENT TRENDS IN PRODUCTION / OPERATIONS MANAGEMENT


10. Corporate Downsizing or Right sizing
Reduce costs Improving productivity

10. Lean Production


Minimal amounts of resources to produce high volume of high quality goods with variety. Use flexible manufacturing systems and multi-skilled work force to have advantages of
Mass production and job production

11. Supply Chain Management


Timely delivery Reducing cost of
Transportation Warehousing and Distribution

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

Curriculum of Anna University Chennai

ROLE OF OPERATIONS IN STRATEGIC MANAGEMENT


Strategy
Way of doing some thing Any action taken to achieve the goal Includes: formulation of a goal and set of action plans for accomplishing the goal

Strategic Management
The process of formulating, implementing and evaluating strategies to achieve organisational goals

Strategic Management Process: Steps


1. 2. Vision, mission and goals Environment Analysis (SWOT) Environmental Analysis
3. Formulation

4.
3.

Implementing Procedures,
programs, budgets & Governance Evaluation & Control Curriculum of Anna University Chennai

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

ROLE OF OPERATIONS IN STRATEGIC MANAGEMENT


Strategy
Way of doing some thing Any action taken to achieve the goal Includes: formulation of a goal and set of action plans for accomplishing the goal

Strategic Management
The process of formulating, implementing and evaluating strategies to achieve organisational goals

Strategic Management Process: Steps


1. 2. 3. Vision, mission and goals Environment Analysis (SWOT) Environmental Analysis Formulation 4. Implementing Procedures, programs, budgets & Governance 5. Evaluation & Control
Curriculum of Anna University Chennai

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

FORMULATION OF STRATEGIES: AT VARIOUS LEVELS


Corporate Level: Company wants be as per the mission by 10-15 years in
at least 8 areas: Market standing, Innovation, Productivity, Physical & financial sources,
Profitability, managerial performance & attitude and social responsibility
Strategies Description

Growth Strategy

Internal Growth
Horizontal Integration Horizontal Diversification Conglomerate Diversification Vertical integration

Vertical Integration of unrelated business


Mergers & Strategic Alliances Stability Strategy Retrenchment Strategy Sustainability Turnaround Divestment

Liquidation
MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

Curriculum of Anna University Chennai

FORMULATION OF STRATEGIES: AT VARIOUS LEVELS


Global Level Strategy
Location Economies Experience Curve Transferring distinctive competencies Leveraging the skills of global subsidies

Business Unit Level Strategy


Market Share Productivity Customer satisfaction

Functional Level Strategy


Finance, HRM, R&D, MIS, Marketing, Production and Operations
Curriculum of Anna University Chennai

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

MBA @ SNS College of Engineering

OPERATIONS MANAGEMENT

Curriculum of Anna University Chennai