This action might not be possible to undo. Are you sure you want to continue?
Introduction Historical Milestones in OM Factors Affecting OM Today Different Ways of Studying OM WrapWrap-Up: What World-Class Producers Do World-
Operations management is the management of an organization¶s productive resources or its production system which converts inputs into the organisation¶s products and services. The production system includes raw materials, personnel, machinery, buildings, technology, cash, information and other resources The conversion process is the predominant activity of a production system. The primary concern of an operations manager is the activities of the conversion process.
Introduction Operations Management in the 21st century has become more challenging because of Globalisation of trade and business Computer and Information Technology revolution Automation in manufacturing and services industry Internet 4 .
Organizational Model Finance Sales HRM OM Marketing MIS QA Engineering Accounting 5 .
EntryEntry-Level Jobs in OM Purchasing planner/buyer Production (or operations) supervisor Production (or operations) scheduler/controller Production (or operations) analyst Inventory analyst Quality specialist 6 .
Historical Milestones in OM The Industrial Revolution PostPost-Civil War Period Scientific Management Human Relations and Behaviorism Operations Research The Service Revolution 7 .
labor.The Industrial Revolution The industrial revolution began in England in the 1700s which substituted human and water power with machine power. 8 . Adam Smith¶s The Wealth of Nations in 1776 touted the economic benefits of the division of labour and specialization of labor. The industrial revolution also paved way for the factory system. Thus the late-1700s factories had not only machine latepower but also ways of planning and controlling the tasks of workers.
9 . The first great industry in the US and England was the textile industry.The Industrial Revolution The industrial revolution spread from England to other European countries and to the United Sates. developed the concept of interchangeable parts. the old cottage system of midproduction had been replaced by the factory system. By the mid-1800s. Eli Whitney. In 1790. parts. In the 1800s the development of the gasoline engine and electricity further advanced the revolution.
The following developments set the stage for the great production explosion of the 20th century: century: abolition of slavery the expanded urban workforce increased capital and production capacity new Western US markets an effective national transportation system 10 . occurred.PostPost-Civil War Period During the post-Civil War period in the US great postexpansion of production capacity occurred.
His shop system employed these steps: Each worker¶s skill. 11 . and learning ability were determined. Supervisors were carefully selected and trained. Incentive pay systems were initiated. strength.Scientific Management Frederick Taylor is known as the father of scientific management ± popularised the concept of efficiency. Material specifications. work methods. Stopwatch studies were conducted to precisely set standard output per worker on each task. and routing sequences were used to organize the shop.
workers. foremen.Scientific Management Scientific management¶s thrust was at the lower levels of the organisations heirarchy ± the shop floor. superintendents Mass production and efficiency were the main focus 12 .
Ford Motor Company¶s operation embodied the key elements of scientific management: standardized product designs mass production low manufacturing costs mechanized assembly lines specialization of labor interchangeable parts Eg. Ford¶s Model T car 13 .Scientific Management In the 1920s. Eg.
Every work task was broken into smaller parts.Scientific Management at Ford¶s plant The assembly line technique was adopted where small parts gradually became larger and larger. Net result It had taken 728 hours to assemble a Model T now took only 93 minutes Cash balance increased from $2 million to $673 million Price of the model reduced from $780 to $360 14 .
From the work of behavioralists like Abraham Maslow. researchers in the 1927Hawthorne Studies realized that human factors were affecting production. In the 1927-1932 period.Human Relations and Behavioralism Factory workers were uneducated. undisciplined and fresh from the farms. unskilled. Fredrick Herzberg and others came a gradual change in the way managers thought about and treated workers. workers. 15 . They were severely disciplined by the factory managers.
equipment.Operations Research During World War II. government. «) had to be deployed. supplies. operations researchers found their way back to universities. enormous quantities of resources (personnel. industry. After the war. OR helps operations managers to replace intuitive decisions making for large complex problem with an approach that identifies optimal or best solutions 16 . Military operations research (OR) teams were formed to deal with the complexity of the deployment. and consulting firms.
Investment per office worker now exceeds the investment per factory worker. more than two-thirds of the workforce is twoemployed in services which contributes to about twotwothirds of the country¶GDP. There is a huge trade surplus in services. 17 . country¶GDP.The Service Revolution The creation of services organizations accelerated sharply after World War II. Today. Thus there is a growing need for service operations management.
better decisions over greater distances 18 .The Computer Revolution Explosive growth of computer and communication technologies Easy access to information and the availability of more information Advances in software applications such as Enterprise Resource Planning (ERP) software Widespread use of email More and more firms becoming involved in EEBusiness using the Internet Result: faster.
Computer revolution Robotics and numerical control Computer aided design Statistical process control for quality (TQM) JIT manufacturing Benchmarking ISO standards Time based competition Process reengineering Outsourcing Supply chain management Virtual organisations 19 .
and Cost Challenges Rapid Expansion of Advanced Technologies Continued Growth of the Service Sector Scarcity of Operations Resources SocialSocial-Responsibility Issues 20 .Today's Factors Affecting OM Global Competition Quality. Customer Service.
Today's Factors Affecting OM ³To succeed in global competition. fast and onon-time delivery.´ delivery. companies must make a commitment to customer responsiveness and continuous improvement toward the goal of quickly developing innovative products and services that have the best combination of exceptional quality. 21 . and low prices and costs.
Studying Operations Management Operations as a System Decision Making in OM 22 .
Operations as a System Production System Conversion Subsystem Control Subsystem Inputs Outputs 23 .
Personnel. Customer Desires. Social. Economic. Product Info. Utilities 24 .Inputs of an Operations System External Legal. Primary Resources Materials. Capital. Technological Market Competition.
Conversion Subsystem Physical (Manufacturing) Locational Services (Transportation) Exchange Services (Retailing) Storage Services (Warehousing) Other Private Services (Insurance) Government Services (Federal) 25 .
Outputs of an Operations System Direct Products Services Indirect Waste Pollution Technological Advances 26 .
personnel Compiles data. tools. transformed into workers. supplies information. accountant. Raw materials are paints. equipment. office. computes taxes Automobiles Accounting firm Audited financial statements College / university 27 . stocks. personnel.Some examples Production system Department store Primary inputs Buildings. computers. finished products buildings. customers Conversion subsystem Attracts customers stores goods and sells Outputs Marketed goods Automobile factory Raw materials. information.
Decision Making in OM Strategic Decisions Operating Decisions Control Decisions 28 .
Examples include deciding: the design for a new product¶s production process where to locate a new factory whether to launch a new-product development plan new 29 .Strategic Decisions These decisions are of strategic importance and have longlong-term significance for the organization.
Examples include deciding: how much finished-goods inventory to carry finishedthe amount of overtime to use next week the details for purchasing raw material next month 30 .Operating Decisions These decisions are necessary if the ongoing production of goods and services is to satisfy market demands and provide profits.
Control Decisions These decisions concern the day-to-day activities of day-toworkers. quality of products and services. and machine maintenance. Examples include deciding: labor cost standards for a new product frequency of preventive maintenance new quality control acceptance criteria 31 . production and overhead costs.
management must take corrective action to maintain control of the system 32 . and the inputs is fed back to management. the conversions.What Controls the Operations System? Information about the outputs. This information is matched with management¶s expectations When there is a difference.
and Control 33 .WrapWrap-Up: World Class Practice OM important in any organization Global competition forces rapid evolution of OM Decision based framework focus of course Strategic. Operating.
Assignment Look up the internet and visit the site of ³Fortune´ magazine List the top 10 companies and indicate to which industry category each company belongs. conversion sub-systems and the outputs. write the production inputs. Note the current Fortune ranking of the company For two companies. sub- 34 .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.