Introduction to
Production & Operations Management
Organizations on Product/Process Continuum
Product tangible & identifiable result of a series of transformation processes subjected to it. Service Intangible Process The customer is processed .
Automobile manufacturers
Automobile retailers Photocopier Banks Consultancies manufacturers & service providers Restaurants Airlines Undertakers
Product Pure Manufacturing What the customer buys
Orientation Industry Emphasis
Deposit Schemes Credit Cards Monetary Instruments
Process Pure Service How it is provided
Reports of findings, analysis & recommendation
After Sales Service / Information / Warranty Service / Onsite Service
A continuous sequence / series adjacent elements not perceptibly different from each other although the extremes quite distinct.
The Transformation Process
Quality of inputs monitored Random disturbances Quality of outputs monitored
INPUTS
Transformation Process
OUTPUTS
Feedback Mechanisms
The Transformation Process For a Service Organization (An MBA Institute)
Random disturbances Strikes of students, teachers or staff Undue interference of the government in the working of institutions
Raw minds (students) Teachers Class rooms Computer lab Library Projectors (OHP, LCD etc) Administrative staff
Quality of inputs monitored
Quality of outputs monitored
Transformation Process
Enlightened students with: Good communication skills Pleasant personalities Leadership qualities Good analytical ability Team spirit Decision making abilities Computer skills
INPUTS
Feedback Mechanisms Success at placement interviews Grades obtained in examinations Rising career graph of alumni in the industry Number of applications for admission in the institute Ratings of surveys
OUTPUTS
The Transformation Process For a Hybrid Service & Manufacturing Organization (A Restaurant)
Random disturbances High turnover of chefs, waiters, etc. Inflation Governments taxation policy
Customers
Building Chef Vegetables Furniture
Quality of inputs monitored
Quality of outputs monitored
Mutton, chicken, pork, etc.
Cooking oil, Spices, etc. Waiters Manager
Transformation Process
Customers satisfied with: Good preparation of the food Pleasant behavior and personality of the waiter Genuine prices charged
INPUTS
Feedback Mechanisms Rising Revenues Repeat Customers Appreciation of customers
OUTPUTS
The Transformation Process For a Purely Manufacturing Organization (A Refrigerator Manufacturer)
Random disturbances High turnover of workers and managers Recession Governments taxation policy Strikes instigated by trade unions Transformation Process
Machines & Equipments
Building Components, parts, subassemblies, etc. Workers Office infrastructure (computers, furniture, etc.) Packaging material Capital Managers
Quality of inputs monitored
Quality of outputs monitored
Customers satisfied with: Good cooling performance Less consumption with electricity Good after-sales service New advanced features
INPUTS
Feedback Mechanisms Rising sales volume Lesser customer complaints Positive response of customers in the feedback forms
OUTPUTS
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Production & Operations Management (POM)
Defined
Production & Operations Management is defined as the design, operation, and improvement of the transformation process, which converts the various inputs into desired outputs of products and services.
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Product/Process Choice Service Operations Management Business Process Outsourcing and Off-shoring
Steps in the production/operations process from the point of view of an entrepreneur
Facility Location Planning
Facility Layout Planning
Facility Capacity Planning
Project Management
Inventory Management for Independent Demand Items
Materials Requirement Planning (MRP)/ Just-In-Time (JIT) System/ Supply Chain Mgt. (SCM)
Total Productive Maintenance (TPM)
Steps in the production/operations process from the point of view of an entrepreneur
Aggregate Production/ Operations Planning
Work Design
Operations Scheduling
Quality Management
Demand Forecasting
Operations Strategies
Concepts in Product Design
Manufacturability
Reverse Engineering Research & Development
Standardization Concepts in Product Design
Product Life Cycle
Robust Design
Concurrent Engineering Computer Aided Design (CAD)
Modular Design
Concepts in Product Design
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Concepts in Product Design
1. Research & Development fundamental research Advancement of state of knowledge e.g. Law of Gravity Applied research for developing commercial applications e.g. space rocket propulsion, high speed elevators etc on law of gravity 2. Reverse Engineering carefully dismantling competitors existing product in steps to understand unique underlying concept Competitors of Sony Corp handycam, digicam 3. Manufacturability Designing in such a way that manufacturing can be done easily considering existing capabilities low investments
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Concepts in Product Design
4. Standardization less variety new products with no major variation from existing products e.g. Keyboards low design cost & easy availability of components lack of standardization e.g. OS Windows, Linux, etc. compatibility? 5. Modular Design type of standardization designing in parts & modules modules are subassemblies of components reduces efforts & time in designing & inventory management entire module can be replaced in case of defect 6. Robust Design Designing a product that can be operational in varying environments easier than changing environment to suit product - Jeep vs. Car
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Concepts in Product Design
7. Concurrent Engineering design team includes marketing, engineering, production, finance, materials to advise on respective feasibilities opposite to classical sequential approach saves time & efforts . 8. Computer Aided Design (CAD) a software to help making 3D design can be seen at different places through intranet-internet Earlier (without CAD) front, top & side views to be drawn tedious & time consuming
9. Product Life Cycle 5 stages
demand low as customer unaware
Awareness increases demand stabilizes Rise in Demand slows down
New features added over time
demand reducing
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Process Design
Types of Processes
Continuous Process
Semi-continuous (Repetitive/Assembly) Process
Intermittent Process
Project
Batch Process
Job Shop
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Type of processes
Continuous Process unceasing in nature set up time for starting very long after start continue for long duration products highly standardized with almost no variety & measured on continuous basis (tons per day meters per day, etc.) rather than discrete units e.g. urea, chemicals, steel, plastic, sugar, textiles, detergents, etc. Such industries called process industries. 1. 2. Semi-continuous Process - are assembly processes repetitive in nature produce high volume of output products have little variety e.g. automobiles, electronics, white goods, etc. Highly Specialized machines, Semiskilled labor, low cost per unit
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Type of processes
3. Intermittent Process stop at regular interval of time Product needs processing on various machines Products are of different varieties Production process slower than earlier two processes 2 types Batch Process & Job Process
3.1 Batch Process adopted when batches / lots to be produced using same set of machines in same sequence e.g. bakery batches in oven salted biscuits chocolates breads. Same equipment same steps but cleaning & adjustment after each production run.
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Type of processes
Job Shop process can handle larger variety than batch process Products quite different from each other So, need varied processes, on different machines, different sequences & different processing time. Batches vary from large to small size (many to single unit) e.g. restaurant different cooks / recipes / utensils etc. Low volume of output So, costlier products 3.2
4.
Project process handles very complex & unique set of activities or tasks It shall be completed in limited span of time. e.g. R&D projects, construction of plants, building complexes, implementation of specialized software, etc.
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Automation
Machines take exactly the same time in repetitive tasks Behavioral problems in humans like boredom, frustration, fatigue, etc. can be avoided by using machines Industrial relations problems like strikes, lockouts, etc. can be avoided
State-of-the-art fully automated plants increase the market value of the firm/ improve client base in international markets More reliable and consistent performance than that of humans Usually more expensive than the human work force
Advantages
Automation
Disadvantages
Loss of creativity on the part of workers due to inflexibility in automation
Less flexible than the humans; even small changes in the process are expensive
Leads to unemployment/ retrenchment of the labor force
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Emerging Role of the Production & Operations Manager in India today
To act as internal quality auditors in certification program like ISO 9000 Increased attention to technology management in view of JVs of MNCs with domestic companies To act as supply chain managers in forging longterm strategic relationships with suppliers To act as a member of the concurrent engineering team in new product design To take part in strategic decision making of the organization To implement total productive maintenance (TPM) program To take part in the implementation & use of ERP software in the organization
New Responsibilities of Operations Managers
To automate the processes according to the requirements of the organization To enhance R&D effort of the organization for becoming self-reliant in developing new technologies
To take decisions regarding outsourcing/ offshoring of business processes
To implement the environmental and pollution norms established by the government from time to time
To oversee timely implementation of projects (like commissioning of facilities, launching of new products/ services, etc.) in view of the increased competition
To take care of issues relating to services operations management 19
