Introduction To Operations Management
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INTRODUCTION TO OPERATIONS MANAGEMENT
Prof. Kaushik Paul Associate Professor Operations Area E-Mail: [email protected] Phone: 43559308
OBJECTIVES
To recognise that Operations Management exists
To understand the concepts of core and value added services
To understand how Operations management is used in practice
To understand how the transformation process works.
2
Back office operation in a bank
Kitchen unit manufacturing operation
They are all operations
Retail operation
Take-out / restaurant operation 3
A GENERAL MODEL OF OPERATIONS MANAGEMENT ENVIRONMENT
Operation’s strategic objectives
Operations strategy
The operation’s competitive role and position
Input transformed resources Materials Information Customers
Facilities Staff Input transforming resources
Design
Improvement Output products and services
Input resources
Customers
Planning and control
ENVIRONMENT 4
CORE SERVICES DEFINED
Core services are basic things that customers want from products they purchase
5
CORE SERVICES PERFORMANCE OBJECTIVES
Quality
Flexibility
Operations Management
Speed
Price (or cost Reduction) 6
VALUE-ADDED SERVICES DEFINED
Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way
7
VALUE-ADDED SERVICE CATEGORIES
Problem Solving
Information
Operations Management
Sales Support
Field Support
8
WHERE DOES THE BUSINESS GET ITS COMPETITIVE ADVANTAGE?
The “technological” specification of its product/service ?
Product/ Service Technolog y
Marketing The way it positions itself in its market?
The way it produces its goods and Operation services?
s
9
THE THREE FUNCTIONS WORKING TOGETHER .... e.g. SWATCH Further innovations Innovative plastic design with few parts
which gives allows
Mass fashion orientation Extended range
Product/ service design
which funds
which funds etc.
Standardize, Marketing Operations easy to make product at high volume so low cost but also
Increased variety does not increase costs
but because volume is high 10
CORE AND SUPPORT FUNCTIONS Core functions
Engineering/ technical function
Accounting and finance function
Support functions
Product/services development function
Others Operations function
Human resources function
Marketing function
Information/ technical (IT) function
A broad definition of operations management 11
THE POSITION OF THE OPERATIONS FUNCTION
Marketing
Accounting and finance
Product development
Operations
Church
Call on newcomers
Manage appeals
Retranslate scriptures
Conduct weddings
Fast food chain
Advertise on television
Pay suppliers
Design hamburgers
Make hamburgers
Furniture manufacturer
Sell to stores
Pay staff
Design new furniture
Assemble furniture
Process perspective
Identify needs
Raise capital
Develop product
Make and distribute
12
The best way to start understanding the nature of “Operations” is to look around you Everything you can see around you (except the flesh and blood) has been processed by an operation
Every service you consumed today (radio station, bus service, lecture, etc.) has also been produced by an operation
Operations Managers create everything you buy, sit on, wear, eat, throw at people, and throw away
13
SOME OPERATIONS MANAGEMENT ACTIVITIES AT IKEA
Design elegant products which can be flat-packed efficiently Site selection for stores of an appropriate size in the most effective locations Maintain cleanliness and safety of storage area
Design a store layout which gives smooth and effective flow
IKEA STORE
Arrange for fast replenishment of products
Ensure that the jobs of all staff encourage their contribution to business success
Continually examine and improve operations practice
Monitor and enhance quality of service to customers
14
ALL OPERATIONS ARE TRANSFORMATION PROCESSES
TRANSFORMED RESOURCES
ENVIRONMENT
MATERIALS INFORMATION CUSTOMERS
INPUT
TRANSFORMATION PROCESS
GOODS OUTPUT AND SERVICES
FACILITIES STAFF TRANSFORMING RESOURCES
ENVIRONMENT 15
OPERATIONS MANAGEMENT – BASIC PRINCIPLES
Materials Information Customers
Operations management is concerned with producing and delivering products and services
Products and services
All types of enterprise have an operations function, even if it isn’t called ‘operations. Most operations produce both products and services.
16
Psychotherapy clinic
Tangible Can be stored Production precedes consumption Low customer contact Can be transported Quality is evident
Management consultancy
Computer systems services
Restaurant
Specialist machine tool manufacturer
Pure goods Aluminium smelting
Crude oil production
THE OUTPUT FROM MOST TYPES OF OPERATION IS A MIXTURE OF GOODS AND SERVICES
Intangible Cannot be stored Production and consumption are simultaneous High customer contact Cannot be transported Quality difficult to judge
Pure services 17
THE ACTIVITIES OF OPERATIONS MANAGEMENT OPERATIONS STRATEGIC OBJECTIVES
ENVIRONMENT INPUT TRANSFORMED RESOURCES MATERIALS INFORMATION CUSTOMERS
INPUT FACILITIES STAFF INPUT TRANSFORMED RESOURCES
OPERATIONS STRATEGY Operations management
Operations strategy
IMPROVEMENT
DESIGN PLANNING AND CONTROL
THE OPERATIONS COMPETITIVE ROLE AND POSITION
GOODS OUTPUT AND SERVICES
ENVIRONMENT 18
Operations Activities as Feedback Loops Design activities set the basic configuration Planning & control activities guide short/medium term changes Improvement activities guide longer term changes
Design
Planning & Control
Improvement 19
HISTORICAL DEVELOPMENT OF OM
JIT and TQC
Manufacturing Strategy Paradigm
Service Quality and Productivity
Total Quality Management and Quality Certification
Business Process Reengineering
Supply Chain Management
Electronic Commerce
20
OBJECTIVES
To recognise that Operations Management exists
To understand the concepts of core and value added services
To understand how Operations management is used in practice
To understand how the transformation process works.
21
References: 1) ‘Operations Management’ By Nigel Slack et al. 2e 2) ‘Operations Management for Competitive Advantage’ By Chase, Jacobs & Aquilano, 10e HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE
THANK YOU
Prof. Kaushik Paul Associate Professor Operations Area E-Mail: [email protected] Phone: 43559308
OBJECTIVES
To recognise that Operations Management exists
To understand the concepts of core and value added services
To understand how Operations management is used in practice
To understand how the transformation process works.
2
Back office operation in a bank
Kitchen unit manufacturing operation
They are all operations
Retail operation
Take-out / restaurant operation 3
A GENERAL MODEL OF OPERATIONS MANAGEMENT ENVIRONMENT
Operation’s strategic objectives
Operations strategy
The operation’s competitive role and position
Input transformed resources Materials Information Customers
Facilities Staff Input transforming resources
Design
Improvement Output products and services
Input resources
Customers
Planning and control
ENVIRONMENT 4
CORE SERVICES DEFINED
Core services are basic things that customers want from products they purchase
5
CORE SERVICES PERFORMANCE OBJECTIVES
Quality
Flexibility
Operations Management
Speed
Price (or cost Reduction) 6
VALUE-ADDED SERVICES DEFINED
Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way
7
VALUE-ADDED SERVICE CATEGORIES
Problem Solving
Information
Operations Management
Sales Support
Field Support
8
WHERE DOES THE BUSINESS GET ITS COMPETITIVE ADVANTAGE?
The “technological” specification of its product/service ?
Product/ Service Technolog y
Marketing The way it positions itself in its market?
The way it produces its goods and Operation services?
s
9
THE THREE FUNCTIONS WORKING TOGETHER .... e.g. SWATCH Further innovations Innovative plastic design with few parts
which gives allows
Mass fashion orientation Extended range
Product/ service design
which funds
which funds etc.
Standardize, Marketing Operations easy to make product at high volume so low cost but also
Increased variety does not increase costs
but because volume is high 10
CORE AND SUPPORT FUNCTIONS Core functions
Engineering/ technical function
Accounting and finance function
Support functions
Product/services development function
Others Operations function
Human resources function
Marketing function
Information/ technical (IT) function
A broad definition of operations management 11
THE POSITION OF THE OPERATIONS FUNCTION
Marketing
Accounting and finance
Product development
Operations
Church
Call on newcomers
Manage appeals
Retranslate scriptures
Conduct weddings
Fast food chain
Advertise on television
Pay suppliers
Design hamburgers
Make hamburgers
Furniture manufacturer
Sell to stores
Pay staff
Design new furniture
Assemble furniture
Process perspective
Identify needs
Raise capital
Develop product
Make and distribute
12
The best way to start understanding the nature of “Operations” is to look around you Everything you can see around you (except the flesh and blood) has been processed by an operation
Every service you consumed today (radio station, bus service, lecture, etc.) has also been produced by an operation
Operations Managers create everything you buy, sit on, wear, eat, throw at people, and throw away
13
SOME OPERATIONS MANAGEMENT ACTIVITIES AT IKEA
Design elegant products which can be flat-packed efficiently Site selection for stores of an appropriate size in the most effective locations Maintain cleanliness and safety of storage area
Design a store layout which gives smooth and effective flow
IKEA STORE
Arrange for fast replenishment of products
Ensure that the jobs of all staff encourage their contribution to business success
Continually examine and improve operations practice
Monitor and enhance quality of service to customers
14
ALL OPERATIONS ARE TRANSFORMATION PROCESSES
TRANSFORMED RESOURCES
ENVIRONMENT
MATERIALS INFORMATION CUSTOMERS
INPUT
TRANSFORMATION PROCESS
GOODS OUTPUT AND SERVICES
FACILITIES STAFF TRANSFORMING RESOURCES
ENVIRONMENT 15
OPERATIONS MANAGEMENT – BASIC PRINCIPLES
Materials Information Customers
Operations management is concerned with producing and delivering products and services
Products and services
All types of enterprise have an operations function, even if it isn’t called ‘operations. Most operations produce both products and services.
16
Psychotherapy clinic
Tangible Can be stored Production precedes consumption Low customer contact Can be transported Quality is evident
Management consultancy
Computer systems services
Restaurant
Specialist machine tool manufacturer
Pure goods Aluminium smelting
Crude oil production
THE OUTPUT FROM MOST TYPES OF OPERATION IS A MIXTURE OF GOODS AND SERVICES
Intangible Cannot be stored Production and consumption are simultaneous High customer contact Cannot be transported Quality difficult to judge
Pure services 17
THE ACTIVITIES OF OPERATIONS MANAGEMENT OPERATIONS STRATEGIC OBJECTIVES
ENVIRONMENT INPUT TRANSFORMED RESOURCES MATERIALS INFORMATION CUSTOMERS
INPUT FACILITIES STAFF INPUT TRANSFORMED RESOURCES
OPERATIONS STRATEGY Operations management
Operations strategy
IMPROVEMENT
DESIGN PLANNING AND CONTROL
THE OPERATIONS COMPETITIVE ROLE AND POSITION
GOODS OUTPUT AND SERVICES
ENVIRONMENT 18
Operations Activities as Feedback Loops Design activities set the basic configuration Planning & control activities guide short/medium term changes Improvement activities guide longer term changes
Design
Planning & Control
Improvement 19
HISTORICAL DEVELOPMENT OF OM
JIT and TQC
Manufacturing Strategy Paradigm
Service Quality and Productivity
Total Quality Management and Quality Certification
Business Process Reengineering
Supply Chain Management
Electronic Commerce
20
OBJECTIVES
To recognise that Operations Management exists
To understand the concepts of core and value added services
To understand how Operations management is used in practice
To understand how the transformation process works.
21
References: 1) ‘Operations Management’ By Nigel Slack et al. 2e 2) ‘Operations Management for Competitive Advantage’ By Chase, Jacobs & Aquilano, 10e HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE
THANK YOU
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