Operations System

• Operations system refers to any of the methods used in industry to create

goods and services from various resources. 
• Operations system consists of three main components viz., Inputs,
Conversion Process and Output.
• Operations system utilizes materials, funds, infrastructure, and labor to
produce the required output in form of goods.

BIKASH_RANA _MPhil_KU_MBA_TU 2
Example of Operation System
• Tangible goods :
• Consider an example of a manufacturing industry like a Sugar Industry. Here,
sugarcane is first used as an input, then the juice of sugarcane is processed
through a conversion process, finally to get an output known as a refined
sugar (used for mass consumption).
• Intangible goods :
• Consider an example from a service industry that of a hospital. Here, initially,
doctor and nurses are used as an inputs. These doctor and nurses perform
different activities like surgery, medication, therapy which are provided to
patients with a user-friendly interface through a conversion process. Finally,
an output is made available in form of an healthy patients.

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BIKASH_RANA _MPhil_KU_MBA_TU 6
• Draw input and output model for each of the
following:
i. A university
ii. A hospital
iii. A noodle manufacturing company
Modern Practice in Production Management
1. Total quality management
2. Supply chain management
3. Lean production
4. Agile manufacturing
5. Service economy and environmental awareness
6. E – commerce
7. Worker involvement
 1. Total Quality Management
– Total quality management approach has been adopted by many firms
to achieve customer satisfaction by never – ending quest for
improving the quality of goods and services.
 2. Supply Chain Management
– Management of supply chain, from suppliers to final customers
reduces the cost of transportation, warehousing, and distribution
through out the supply chain.
– Suppliers can contribute unique expertise, operation managers are
outsourcing and building long term partnership with critical players in
the supply chain.
 3. Lean Production
– Operation system have become lean production systems which used
minimal amount of resources to produce a high volume of high
quality goods with some variety.
– The system used flexible manufacturing system and multi – skilled
workforce to have advantages of both mass production and job
production.
 4. Agile Manufacturing
– The ability to adopt quickly to changes in volume of demanded, in the
product mix demanded, and in product design or in delivery
schedules, has become a competitive strategy and a competitive
advantage to the firms
5. Service Economy and Environmental Awareness
– Service industries have grown rapidly compared to manufacturing
service operation face almost all the problems confronted in
manufacturing. So, operation management has become all the
important in service sector.
– There is increasing emphasis on reducing waste, recycling waste,
using less – toxic chemicals and using biodegradable materials for
packaging.
 6. E - commerce
– Trade that occurs the internet (or any computer network) is called
electronic commerce or e – commerce. E – commerce can take the
form of trade between business, between consumers, between
business and consumers.
– Business to Business (B2B) trade typically involves companies and
their suppliers.
– Business to Consumers (B2C) trade can take the form of online
retailing.
– Consumers to Business (C2B) customers post what they want and
business accept and reject their offers.
 7. Worker Involvement
– The recent trend is to assign responsibility for decision making and
problem solving to the lower level in the organization. This is known
as employee involvement and empowerment.
– Examples of workers involvement are quality circles and use of work
teams or quality improvement teams.
 Work Study
• Work Study is a generic term for management services and system engineering
techniques, used to investigate:

– Methods of performing work (Method Study).

– The time taken to do it (Work Measurement).

• It is systematic and analytical study of work process and work methods with the
objective of increasing efficiency and reducing costs.
 Work Measurement
• Work measurement is the application of techniques designed
to establish the time for an average worker to carry out a
specified manufacturing task at a defined level of performance.
• It is concerned with the length of time it takes to complete a
work task assigned to a specific job.
• It helps to determine how long it should take to do a job.
 Technique of Work Measurement
1. Historical Data Method
2. Time Study
3. Work Sampling
4. Synthesis Method
5. Predetermined Motion Time Systems
6. Analytical Estimating
1. Historical data method - It uses the past performance
data to set performance standards.
2. Time study - It uses stop watch and is best suited for
short-cycle repetitive jobs.
3. Work sampling - Here, workers are observed many times
at random.
4. Synthesis method - Here, the full job is divided into
element or parts.
5. Predetermined motion time system (PMTS) - Here,
normally, three times are fixed for one job namely;
normal, fast, and very-fast.
6. Analytical estimating - It is used for fixing the standard
time for jobs, which are very long and repetitive.
 Study Method
• Work methods analysis or Method Study is a scientific
technique of observing, recording and critically examining the
present method of performing a task or job or operation with
the aim of improving the present method and developing a
new and cheaper method.
• It is systematic recording and critical examination of the way of
doing a task/job/work and determination of the best method.
 Procedure/technique to accomplish method study,
called "SREDIM" shall be as follow:
1. Select: the job or operation that needs improvement,
2. Record: all facts, how work is done by chart methods,
3. Examine: every aspect of the job by asking; what,
why, where, when, who and how
4. Develop: review ideas, eliminate, simplify, combine,
re-arrange, make new method which more safe, chart
new method, submit for approval,
5. Install: the new method, consider best time to
introduce, convince all, train users,
6. Maintain: check frequently, match results, correct
deviations.
 Product Design
– Product design refers to transforming new, innovative and effective
ideas into a product through a process.
– Entrepreneurs conceive ideas, analyze them, implement them
through the feasibility studies and system’s approach and then,
finally, convert those ideas into a tangible product and intangible
service.
 Product Design Criteria
• Designing for the Customer

House of Quality

Ideal
Quality Function Value Analysis/
Deployment
Customer Value Engineering
Product
Quality Function Deployment (QFD)
• Quality Function Deployment (QFD) is a structured approach to
defining customer needs or requirements and translating them
into specific plans to produce products to meet those needs.
• The “voice of the customer” is the term to describe these
stated and unstated customer needs or requirements.
• House of Quality
– It is a process of listening to customers, translating their desires into a
written plan, prioritizing steps of execution based on what is most
important to the customer, and putting a realistic plan on paper.
 Quality Function Deployment
– Identify customer wants
– Identify how the good/service will satisfy customer wants
– Relate customer wants to product hows
– Identify relationships between the firm’s hows
– Develop importance ratings
– Evaluate competing products
– Compare performance to desirable technical attributes
QFD House of Quality
Interrelationships
Customer
importance
How to satisfy
ratings
customer wants

Competitive
assessment
What the Relationship
customer matrix
wants

Target values Weighted

rating
Technical
evaluation
QFD
 Value Analysis and Value Engineering
• Value analysis is a systematic review of the production, purchasing and product
design processes to reduce overall product costs.
• Value engineering can be defined as an organized effort directed at analyzing
designed building features, systems, equipment, and material selections for the
purpose of achieving essential functions at the lowest life cycle cost consistent
with required performance, quality, reliability, and safety.
• Achieve equivalent or better performance at a lower cost while maintaining all
functional requirements defined by the customer
– Does the item have any design features that are not necessary?
– Can two or more parts be combined into one?
– How can we cut down the weight?
– Are there nonstandard parts that can be eliminated?