Assignment of

Production and Operation Management

The topic is

Objectives and importance of operation management its

practical aspects in Bangladesh for our industrial and economic
development to meet the world market competition.

Prepared by

N.M.Sanwarul Islam
(ID: 200630647)

Md Saydur Rahaman
( ID: 200630581 )

Md Samiul Haque
( ID:200630349 )

MBA (eve), 28th Batch

School of Business
Asian University of Bangladesh (AUB)

Prepared for

Dr. Md. Waliar Rahman.

Course Teacher, Production and Operation Management
Asian University of Bangladesh (AUB).

Date of submission: th April 2008.

Letter of Transmittal

To,

Dr. Md. Waliar Rahman

Course teacher, Production and Operation Management
Asian University of Bangladesh (AUB)
Uttara Campus, Dhaka-1230.

Dear Sir,
Ref.: Submission of report on objectives and importance of Operation Management
and its practical aspects in Bangladesh for our industrial and economic development to
meet the world market competition.

Reference is made to your direction for preparing a report on the topics objectives
and importance of Operation Management and its practical aspects in Bangladesh for
our industrial and economic development to meet the world market competition. We
are the following students have compiled the report for onward submission.
Thank you for giving your valuable time to assess the report.
Yours sincerely
Participants in report preparation

Name

ID

Batch

Md Saydur Rahaman
N.M.Sanwarul Islam

200630581
200630647

28th (MBA-Evening)
28th (MBA-Evening)

Md.Samiul Haque

200630349

28th (MBA-Evening)

EXECUTIVE SUMMARY

Sign.

The main purpose of this study is to find out the practical aspects in Bangladesh for
our industrial and economic development as well as global market regarding the
objectives and importance of production and operation management. It is a vital part
of any type of organization which will cover the important issues facing by operation
manager. This field of study helps to discover the evaluation of the dynamic field of
operation management. It will also help to gain understanding of what operation
manager do effectively and efficiently as well as operation management involved in
many business functions. In this regard, this report is basically consists of operation
management strategy through some operational tools.
Operation management is a mix of managing people and applying sophisticated
technology. It entails the design and control of systems responsible for the
productive use of raw materials, human resources, equipments and facilities in the
development of a product or services. Under the above circumstances, this report
consists of four major parts.
The first part of the study is the objectives of operation management. In this part we
try to give an overall concept about the objectives of operation management. The
second part of the study gives an importance of operation management which consists
of basic rules of business that is functions, finance, operations and marketing,
whether finance deals with getting the capital and equipment to start the business,
operations deals with making the product as well as marketing deals with selling and
distributing it. The third part of the research gives an overview of the current
situations of practical aspects in different industrial sectors of Bangladesh.
The forth part of the study consist of industrial and economic development to the
meet the world market competition. In this part, we discussed the total economic
development through industrial policy by the using of operational tools. This technique
packed with the export policy, import policy, industrial policy, telecommunication
policy, energy policy, foreign exchange policy, man power and labour policy etc. The
main part of our report is that we have studied during the last two weeks where the
internal operational and external operational management systems involved through
research planning regarding cost, quality, flexibility and time.

Abbreviations

CIP

Commercially Important Person

ECGS

Export Credit Guarantee Scheme

EPF

Export Promotion Fund

EPZ

Export Processing Zones

GDP

Gross domestic product

GSCM IMF
ILO
IT

Global Supply Chain Management

International monetary fund
International Labour Organization

JIT

Information Technology

R&D

Just-in-time

HRD

Research and Development

OM

Human Resource Department

QRs

Operation Management

US

Quantitative Restrictions

WTO

United States

TQM

World Trade Organization

Total Quality Management

CONTENTS
Page no.
1

Introduction

Objectives

Operation Objectives

Operation Management Classification

12

Importance

15

Nature and concept of Operational Management

16

Industrial development of Bangladesh

17

Economic Development

25

Practical aspects in Bangladesh

29

10

Conclusion

31

1. Introduction:
This study gives us an introduction to the functional area of Operation Management
(OM) as practiced in manufacturing industries and the service sectors. It includes
decision-making, project management; facility layout in both manufacturing and
services industries, waiting lines quality control, just-in-time systems, forecasting,
aggregate planning, inventory management, materials requirements are planning and
operation scheduling. The basic responsibility of an operation manager is to produce
high quality products effectively and efficiently through some operational tools.
These tools are including raw materials, human resources, equipment, proper
environment, available transformational facilities etc.
Operation Management is the design, operation and improvement of the production
system that create the firms primary product or services like marketing and finance.
Operation management is a functional field of business with clear line management
responsibilities. This point is important because operation management is frequently
confused with operations research and management science and industrial engineering.
Operation management of main business activity is the organizing and controlling of
the fundamental business activity of providing goods and services to customers. Many
of the developing countries have achieved quick development through industrial
development. Most developed countries are industrially developed. These development
activities are maintained by production and operation management. Europe and
Americas quick development came through industrial development. Many Asian
countries registered quick development by achieving industrial development. Starting
with Japan, Korea, Taiwan, Hong Kong and Singapore become economically developed
by having quick industrialization through the direct activities of operation
management. Later in late 20th century some other countries like Malaysia, Thailand,
South China, Indonesia, and also Philippines developed by quick industrial development.

2. Objectives:
Operation management is the most important topic in the business world today. This
report is the vital part for the organization which will cover the important issue facing
by operation manager. It will address the basic tools and techniques with examples
from companies. This course will help to discover the experiment of the dynamic field
of operation management. It will help to gain an understanding of what operation
manager do realize that operation management involved in many business factions and
learn about tools that operation manager use to make sound business decision.
An understanding of operation management strategy and its factions is a necessary
part of group business education. Operation management is a mix of managing people
and replying sophisticated technology. The goal is to efficiently create wealth by
supplying quality goods and services. The field of operation management ranges from
high tech manufacturing to high touch of services.

Operations management is concerned with the efficient and effective transformation

of inputs into desired outputs. Traditionally those outputs have been understood
largely in manufacturing terms and in the context of profit making organizations.
Increasingly, however, it has been recognized that the disciplines of the operations
manager can be deployed in virtually any area where a purposeful system or
organization is striving to achieve its objectives. For example, the public and nonprofit sectors have had to learn to optimize their internal processes in the context of
constrained resources; service organizations, such as insurance companies, have found
that by critically re-appraising their delivery processes they can revolutionist their
approach to their marketplace and manufacturing companies. A specific example from
the private sector is Daewoo, which has realized that it can differentiate its product
by selling an explicit bundle of benefits, including supporting services.
Operations management focuses on carefully managing the processes to produce and
distribute products and services. Usually, small businesses don't talk about
"operations management", but they carry out the activities that management schools
typically associate with the phrase "operations management." Major, overall activities
often include product creation, development, production and distribution. Operations

management is in regard to all operations within the organization. Related activities

include managing purchases, inventory control, quality control, storage, logistics and
evaluations. A great deal of focus is on efficiency and effectiveness of processes.
Therefore, operations management often includes substantial measurement and
analysis of internal processes. Ultimately, the nature of how operations management is
carried out in an organization depends very much on the nature of products or
services in the organization, for example, retail, manufacturing, wholesale, etc.
The specific objectives of the lessons are (1) to explain how the operations function is
managed, (2) to introduce some standard tools and techniques used by operations)
managers, (3) to help an appreciations for the interaction of this management activity
with other management system with the organizations, (4) to introduce some new
concepts in the field and (5) to provide an understanding of the field as a totality.

3. Operations objectives
Operations management has an impact on the five broad categories of stakeholders in
any organization. Stakeholders is a broad term but is generally used to mean anybody
who could have an interest in, or is affected by, the operation. The five groups are:

Customers These are the most obvious people who will be affected by any

business. What the chapter goes on to call the five operations performance objectives
apply primarily to this group of people.

Suppliers Operations can have a major impact on suppliers, both on how they

prosper themselves, and on how effective they are at supplying the operation.

Shareholders Clearly, the better an operation is at producing goods and

services, the more likely the whole business is to prosper and shareholders will be one
of the major beneficiaries of this.

Employees Similarly, employees will be generally better off if the company is

prosperous; if only because they are more likely to be employed in the future.
However operations responsibilities to employees go far beyond this. It includes the
general working conditions which are determined by the way the operation has been
designed.

Society Although often having no direct economic connection with the

company, individuals and groups in society at large can be impacted by the way its
operations managers behave. The most obvious example is in the environmental
responsibility exhibited by operations managers.
After making this general point about operations objectives, the rest of the chapter
goes on to look at the five performance objectives of quality, speed, dependability,
flexibility and cost.
Quality
Quality is placed first in our list of performance objectives because many authorities
believe it to be the most important. As far as this introduction to the topic is
concerned, quality is discussed largely in terms of it meaning conformance. In other
words, it conforms to its specifications. There are two important points to remember
when reading the section on quality as a performance objective.

The external affect of good quality within in operations is that the customers

who consume the operations products and services will have less to complain about.
And if they have nothing to complain about they will be happy with their products and
services and are more likely to consume them again.

Inside the operation quality has a different affect. If conformance quality is

high in all the operations processes and activities very few mistakes will be being
made. This generally means that cost is saved, dependability increases and speed of
response increases. This is because, if an operation is continually correcting mistakes,
it finds it difficult to respond quickly to customers requests. See the figure below.

Speed
Speed is a shorthand way of saying Speed of response. It means the time between an
external or internal customer requesting a product or service, and them getting it.
Again, there are internal and external affects.
Externally speed is important because it helps to respond quickly to customers. Again,
this is usually viewed positively by customers who will be more likely to return with
more business. Sometimes also it is possible to charge higher prices when service is
fast. The postal service in most countries and most transportation and delivery
services charge more for faster delivery.
The internal affects of speed have much to do with cost reduction. The examples used
are from manufacturing but the same thing applies to service operations. Usually,
faster throughput of information will mean reduced costs. So, for example, processing
passengers quickly through the terminal gate at an airport can reduce the turn round
time of the aircraft, thereby increasing its utilization.
Dependability
Dependability means being on time. In other words, customers receive their products
or services on time. In practice, although this definition sounds simple, it can be
difficult to measure. What exactly is on time? Is it when the customer needed
delivery of the product or service? Is it when they expected delivery?

Externally dependability is generally regarded by customers as a good thing.

The external affects of this performance objective are to increase the chances of
customers returning with more business.

Internally dependability has an affect on cost. There are three ways which

identifies costs are affected by saving time and therefore money, by saving money
directly, and by giving an organization the stability which allows it to improve its
efficiencies.
Flexibility
This is a more complex objective because we use the word flexibility to mean so many
different things. The important point to remember is that flexibility always means
being able to change the operation in some way. The report identifies some of the
different types of flexibility (product/service flexibility, mix flexibility, volume

flexibility, and delivery flexibility). It is important to understand the difference

between these different types of flexibility, but it is more important to understand
the affect flexibility can have on the operation.
Externally the different types of flexibility allow an operation to fit its products and
services to its customers in some way. Mix flexibility allows an operation to produce a
wide variety of products and services for its customers to choose from.
Product/service flexibility allows it develops new products and services incorporating
new ideas which customers may find attractive.
Cost
The chapter makes two important points here. The first is that the cost structure of
different organizations can vary greatly. Note how the different categories of cost
vary in the four examples given in the chapter. Second, and most importantly, the
other four performance objectives all contribute, internally, to reducing cost. This has
been one of the major revelations within operations management over the last twenty
years.
"If managed properly, high quality, high speed, high dependability and high flexibility
can not only bring their own external rewards, they can also save the operation cost."

4. Operation Management Classification

(a) Supply Chain Analysis and Design
This classification is the decisions and strategies in designing and managing supply
chains. Concepts, techniques, and frameworks for better supply chain performance are
discussed and how e-commerce enables companies to be more efficient and flexible in
their internal and external operations are explored. The major content of this class is
divided into three modules: supply chain integration, supply chain decisions and supply
chain management and control tools. A variety of instructional tools including lectures,
case discussions, guest speakers, games, videos, and group projects and presentations
are employed.

(b) Project Management

This class presents the specific concepts, techniques and tools for managing projects
effectively. The role of the project manager as team leader is examined, together
with

important

techniques

for

controlling

cost,

schedules

and

performance

parameters. lectures, case studies and projects are combined to develop skills needed
by project managers in todays environment.
(c) Productivity Management
This highly interactive class which focuses on evaluating and measuring productivity in
both manufacturing and service environments and on selecting, planning, and
implementing measures to maximize it. Overall strategies as well as specific
techniques are studied. This class examines key productivity drivers such as new and
historical approaches to management, employee motivation/ reward systems, the role
of technology as both a production environments, business process reengineering, the
role of communications, the impact of capital spending, and cutting edge thinking on
operations structuring and execution.
(d) Service Operations Management
Successful management of service organizations often differs from that of
manufacturing organizations. Service business efficiency is sometimes difficult to
evaluate because it is often hard to determine the efficient amount of resources
required to produce service outputs. This class introduces manager to the available
techniques used to evaluate operating efficiency and effectiveness in the industrial
sector. Manager gain an understanding of how to successfully manage service
operations through a series of case studies on various service industries and covering
applications in yield management, inventory control, waiting time management, project
management, site selection, performance evaluation and scoring systems. This class
assumes some familiarity with basic probability and statistics through regression.

(e) Healthcare Operations Management

The Healthcare Operations is soliciting papers for presentation that contribute to the
advancement of healthcare system design, operations, and improvement. Research on
Operations in Healthcare can draw from diverse disciplines, such as operations and
supply chain management, industrial engineering, information systems, strategy,
performance management, quality, and technology management. Diverse research
methods are also welcome, including empirical, analytical, numerical, and conceptual
approaches.
Healthcare is big business, and the expenditures for health care are continually
escalating. For example, the growth in health care spending in the U.S. has since 1998
exceeded the growth in GDP. The last two decades have seen strong efforts to curb
costs, while also attempting to reduce medical errors and improving patients
satisfaction with the health care system.
(f) Information management
Information Technology (IT) has affected to operational management of business and
organization. Nowadays, Information Technology affected market leading to global
marketing. Thus, markets open widely and rapidly growing. It affects executives and
managers to change the strategies of management as globally because it is not only
local market or domestic market emerge but also global market. Information
Technology helps supporting executives, managers and decision makers to manage and
control business and environment in many ways. The most common types of information
technology used in business organizations are such as transaction processing systems,
management information system, decision support systems. Together these systems
help executive, managers, employee in organizations accomplish both routine and
decision-making process, and special task from recording sales, to processing payrolls,
to supporting decision in various departments, to providing alternatives for large scale
projects and opportunities.

5. Importance:
Operation Management is critical importance of organization and business now a day.
It is the management of manufacturing, production, and services operations.
Operation Management is diverse. It may be defined as the design, operation, and
improvement of the production systems that create the firm's primary products or
services. However, the role of Information Technology (IT) is the most effective tool,
strategy and technique of operation management functions and support decisionmaking process of operation management. Information technology is increasing in
every business functions, especially in operation management function. This research
supports how Information technology affects to operation management from many
perspectives, such as decision-making process, communication, production systems and
management.
There are some important features of Operation Management, which is given below:

The goal is to help students become lifetime managers in todays and

competitive global environment.

Operation Management with in the whole firm.

Active learning regarding operational tools.

Emphasis on process.

Managing technology.

Updated coverage of supply chair management.

Process management for series of service.

Recourse planning.

Microsoft project

Information Technology is important to operation management because it is the

effective tool to help and support the efficiency and effectiveness of Operation
Management. High quality and leading of Information Technology could gain the
effective of production system, better business processing, high qualities of products
and services, better management, and the effective communication in the organization

and business, etc. One of the information technology risks are the highly costs of
technologies and the new rapidly technology. Thus, businesses and organizations should
consider about technologies carefully and reasonable, such as problems, costs,
investments, and opportunities in the future, etc.
Nowadays, Information Technology affected market leading to global marketing. Thus,
markets open widely and rapidly growing. It affects executives and managers to
change the strategies of Management as globally, because it is not only local market or
domestic market emerge, but also global market. Information Technology helps
supporting executives, managers, and decision markets to manage and control business
and environments in many ways. The most common types of information technology
used in business organizations are such as transaction processing systems,
management information system, decision support systems, and expert systems,
database, and other information technology tools. Together these systems help
executive, managers, employee in organizations accomplish both routine, and decisionmaking process, and special task - - from recording sales, to processing payrolls, to
supporting decision in various departments, to providing alternatives for large scale
projects and opportunities.

6. Nature and concept of Operational Management:

Operations Management is the management of the direct resources required to
produce the goods and services provided by an organization. How we manage our
productive resources to our productivity growth and competitiveness as a nation.
Operational management is the managing of these productive resources. It entails the
design and control of system responsible for the productive use of raw materials,
human recourses, equipment and facilities in the development of product or service.
This section addresses the issue of productivity and competitiveness and how the
field of operations management can provide direction in gaining and maintaining
competitive advantage.
The need to learn about operations has become quite evident in light of the following
development-

1.

International competition, especially from the Japanese has compelled North

American companies to raise the level of their game to remain competition in world
markets. Producing high quality products that can be sold at completive prices is
the basic responsibility of the operations area.

2. New operations technologies and Control System are significantly affecting the
way firms conduct their business. No matter what the business specially happens
to be knowledge of operation is critical in making informed management decision.
3. Operational management is critical to service companies as well as manufacturing
firms. The majority archived their success through well- run operations. In deed,
no service firm can be called excellent with superior operation management.
4. Entrepreneurs, if they are to survive, must have a through knowledge of how their
organizations make their products.
5. The concept and tools of operation management are widely used in managing other
functions of the business as well, for example, every manager is concerned with
quality and productivity issues.
6. Operations management offers an interesting and rewarding carrier.

7. Industrial Development
Bangladesh, a founder member of WTO, has been pursuing policies and institutional
reforms towards a free market economy in line with the prevailing world trend. The
government has embarked upon an outward looking export-led industrialization strategy
in early eighties and has been continuing the same to take advantage of liberalized world
trade regime to achieve faster rate of growth of GDP and overall economic development.
The major elements of the existing trade policy, among others are:
(a) Liberalized import and import procedures with no need of licensing.
(b) Rationalization of the tariff structure with a maximum rate of 37.5% import duty in
1999-2000.Average rate of protection dropped from 100% in 1985 to 22% in 1996.
(c) Reduction in quantitative restrictions, the coverage of which has been reduced from
42% in 1985 to only 2% percent of imports in 1996.
(d) The exchange rate policy regime is more unified, flexible and market-based. Local

currency Taka is freely convertible for current account transactions.

(e) IMF consistent counter trade/Special Trading Arrangements are allowed.
(f) Export promotion measures are specific and transparent.
Small, Cottage, Medium and Large Industries.
1.'Small Industry' means an industrial undertaking engaged either in manufacturing
process or service activity which employs less than 50 workers and/or whose fixed
capital is less than Tk.100 million.
2.'Cottage Industry' means an industrial unit either engaged in manufacturing or
servicing generally run by the family members either as full time or part time.
3.'Medium Industry' means an industrial undertaking which employs 50 to 99 workers
and/or whose fixed capital is from Tk.100 million to Tk.300 million.
4.'Large Industry' means an industrial undertaking which employs 100 workers or more
and whose fixed capital is more than Tk.300 million.
The Export Policy, Import Policy, Industrial Policy, Foreign Exchange Policy, Manpower
and Labour Policy etc. are briefly narrated below:
Export Policy
The Export Policy 1997-2002 has been designed to operate in the imperative and
opportunity of the market economy with a view to maintaining growth of export and
narrowing down the gap between import payment and export earning.
Strategy of Export Policy:
The main elements of the long term export strategy are as follows:
i) Remove all bottlenecks to achieve the objectives of export policy;
ii) Provide policy support to private sector operators on a continuous basis to ensure
competitiveness
iii) Strengthen support services and infrastructure for exports and export-oriented
industries;
iv) Priority will be given to build such infrastructure;
v) Develop managerial and entrepreneurial skills through HRD programmers;
vi) Design an appropriate export development program to broaden and diversify the

countrys export base which is central to the export strategy;

vii) Build long term capability to export by developing new products through adaptation
and increased R&D activities;
viii) Ensure maintenance of ecological balance and pollution free environment in the
production of exportable goods;
ix) Extend technical and marketing assistance for development of new products and
their marketing.
In order to achieve rapid export-led growth under private sector the Export Policy
envisaged the following incentives:

Fiscal incentives
i. Duty-free import of capital machinery for export-oriented industries outside Export
Processing Zones (EPZ).
ii. Bonded warehouse to facilitate duty-free import of raw materials for export
production
iii. Duty-drawback, if the bonded warehouse facilities are not used
iv. Sale of 20 per cent of products by the 100 per cent export-oriented industries in
the local market on payment of duties
v. Exemption of 50 per cent of income arising out of export business from income tax
vi. Tax holidays
vii. Duty-free import of samples
viii. Restructuring of the Export Credit Guarantee Scheme (ECGS)
ix. Taka has been made convertible into foreign exchange for import of goods and
exporters are allowed to retain their foreign exchange earnings gradually at higher
proportion
x. 20% of the rejected goods of the 100% export oriented industries including leather
goods and readymade garments will be admissible for sale in the local market subject to
payment of usual duties and taxes.

General incentives
i. Recognition of leather industries exporting at least 80 per cent of their products as
100 per cent export-oriented industries to enjoy the benefits of such industries and
80% export oriented other industries will get financial incentives including bank loan as
available to 100% export oriented industries with scale premises up to 20% of their
local production in the local market on payment on payment of usual duties and taxes
ii. Banning the export of crust leather to increase value addition
iii. Giving facility of entrecote trade for export;
iv. Enhancing the financial limit for dispatch of export samples abroad;
v. Product and market development support under Export Promotion Fund (EPF);
vi. Awarding national trophy for export performance;
vii. Extending quasi-diplomatic and social privileges under CIP (Commercially Important
Person) schemes;
viii. Private Export Processing Zone (PEPZ) Act passed to allow establishment of Private
EPZ by local and foreign investors;
ix. Reduced air freight for export of all crash programmed items including fruits and
vegetables and withdrawal of royalty from extending cargo service;
x. Deemed export facilities for use of local raw materials.
xi. Recognizing agricultural farms of a minimum size of 5 acres as small and medium size
agricultural industry to encourage production of vegetables, fresh flowers orchid etc.
for export.
xii. Increased import facilities for product development.
Thrust Export Sectors
The following sectors have been declared as thrust sectors in the current Export Policy:

1. Leather and Leather Goods

2. Readymade Garments
3. Computer Software
4. Agro-Processing Industry

Import Policy
The main features of the Import Policy are given below:
- Liberalization of imports through removal and significant reduction of tariff and
non-tariff barriers and gearing up customs administration for speedy clearance of
goods. At present maximum tariff rate is 37.5%.
- Rationalization of the tariff structure to remove disincentives to domestic
production arising from tariff anomalies; this involves lowering of duties, particularly
on industrial inputs and capital machinery; and
- Making foreign exchange convertible in current account transactions. A key object
of tariff rationalization was to create a neutral trade regime by eliminating antiexport bias resulting from high tariffs and Quantitative Restrictions (QRs). The
government is committed to the reduction of tariffs as part of its liberalization
programmed under WTO.
- Like tariff rationalization, significant progress has been made in removing QRs.
whereas almost 25 per cent of all items under 4-digit headings of imports were
subject to QRs in 1990, now only 119 items covering only 2 per cent of imports are so
disposed. Of these, only 27 items are restricted for trade reasons.
General provisions for Import:
Banned list: Unless other wise specified items included in this list can not be imported.

Restricted list: Any item included in this list shall be importable only on fulfillment of
the conditions specified against the item.
Freely Importable Items: Unless otherwise specified, any item which does not appear
either in Banned or in restricted list are freely importable.
Freely Importable Items: Unless otherwise specified, any item, which does not appear
either in Banned or in restricted list are freely importable.
Industrial Policy
The Fifth Five Year Plan of Bangladesh envisages that Bangladesh will have within a
decade a sizable industrial sector where manufacturing will account for at least 25
per cent of the gross domestic product (GDP) in place of present 11.3 percent and at
least 20 per cent of the employed workforce in place of present 7.7 percent.

A vibrant and dynamic private sector will be the principal actor in Bangladesh's
industrial arena. The goals of export orientation and external competitiveness imply
the pursuit of industrialization in accordance with the dynamic comparative advantage
of the economy. Given Bangladesh's resource endowment, the principle of dynamic
comparative advantage means production of labour intensive manufactures with skill
up-gradation and productivity growth as its cutting edge. Decentralized small and
medium industries will constitute important elements in the industrial scene of
Bangladesh. Industrial Policy, 1999 aims at addressing these concerns and builds on
earlier efforts and gains towards industrialization of Bangladeshi economy.
Main Objectives of Industrial Development :
- To expand the production base of the economy by significantly raising the level of
industrial investment
-To promote the private sector to lead the growth of industrial production and
investment
- To define the role of the government as facilitator in creating an enabling
environment for expanding private investment
- To focus public undertaking in those industrial activities where public sector
involvement is essential to facilitate the growth of the private sector.
-To attract foreign direct investment in both export and import substitute industries
- To ensure rapid growth of industrial employment by encouraging investment in labour
intensive manufacturing industries including investment in efficient medium, small and
cottage industries
-To generate female employment in higher skill categories through special emphasis on
skill development
-To raise industrial productivity and to move progressively to higher value added
products through skill and technology up-gradation
- To enhance operational efficiency in all remaining public manufacturing enterprises
through appropriate management restructuring and pursuit of market-oriented
policies
- To diversify and rapidly increase export of manufactures
-To encourage the competitive strength of import substituting industries for catering

to a growing domestic market

-To ensure the process of industrialization which is environmentally sound for
preventing environmental pollution and maintaining ecological balance
- And to encourage balanced industrial development throughout the country by
introducing suitable measures and incentives.
Main Targets of the Industrial Policy
Liberalization of industrial policy in Bangladesh started with the announcement of
Industrial Policy, 1982. This was followed by successive and progressive liberalization
in 1991, 1992 and 1999 to make it compatible with globalization and a competitive
market economy. The targets of the policy are to:
1) Develop the industrial sector in order to increase its contribution to GDP, income,
employment and poverty alleviation
2) Expand industries by the private sector and make role of Government promotional
rather than regulatory
3) Encourage domestic and foreign investment in overall industrial and infrastructure
development
4) Promote private sector led export- oriented growth
5) Develop export-oriented, export-linkage and efficient import-substitute industries
6) Expedite development of labour intensive industries through acquisition and
improvement of appropriate technology
7) Encourage the development of agro-based and agro-supportive industries and
Motivate investment in the intermediate and basic industries.
Foreign Exchange Policy
1) Liberalization of Exchange Control Regulations, In its bid to liberalize Bangladeshs
foreign exchange policies, Bangladeshi Taka was declared convertible for current
external transactions, on March 24, 1994.
2) To facilitate investment it has also been decided that prior approval of the
Bangladesh Bank is no longer required for :
- Remittance of profits to their head offices by foreign firms and companies
- Issuance of shares to non-residents against investments for setting up industries

- Remittance of dividends on such shares to the non-resident investors

- Remittance of dividend on portfolio investment by non-residents through stock
exchange
- Remittance of sale proceeds including capital gains of portfolio investments of nonresidents through stock exchanges
- Remittance in repayment of principal and payment of interest of such loans

Manpower and Labour Policy

Bangladesh offers a substantial manpower reserve skilled, unskilled, educated and
otherwise. There is a good supply of easily trainable low cost labour in the country.
Many of them have a working knowledge of English language and possess the basic
skills required by industries. Of late, there is an increasing supply of professionals,
technologists and other middle and low level skilled workers. They receive technical
training from universities, colleges, technical training centers, polytechnic institutions
etc. The expenditure incurred by an employer to train his employees is exempted from
income tax.
(1) Employment conditions:
The minimum age for workers in Bangladesh is 18 years in factories and
establishments. In the private sector, the dignity of labour is ensured in accordance
with the principles enunciated in the ILO convention and recommendations.
(2) Labor Laws: In Bangladesh 44 labor laws are now in operation. These relate to (a)
wages and employment, (b) trade union & industrial disputes, (c) working environment
and (d) labor administration and related matters. The main labor laws are :
(i) Workmens Compensation Act, 1923
(ii) Payment of Wages Act, 1936
(iii) Maternity Benefit Act, 1936
(iv) Employment of Labor (Standing Orders) Act, 1965
(v) Shops & Establishments Act, 1965
(vi) Factories Act, 1965
(vii) Industrial Relations Ordinance, 1969
(3) Wages and fringe benefits :

In the public sector, wages and fringe benefits of the workers are determined by the
government on the recommendation of the National Wages Commission established
from time to time. Such Commissions were appointed in 1973, 1977, 1984, 1989 &
1992. Wages & fringe benefits declared by the government in 1997 have 20 grades of
wages.
The public sector employees are, however, covered by the pay Commission declared by
the government from time to time.
In the private sector, the wages & fringe benefits of the workers and employees are
determined through collective bargaining process. Sometimes private industries follow
the public sector wages & salary structure for their workers and employees
respectively.
(4) Working hours :
Workers in the public or private sector remain at their job for eight and a half hours
daily (including half an hour for meal or rest), with Friday as weekly holiday making 48
working hours a week . Work in excess of these, is paid as overtime. The rate of
overtime is 2 hours pay for 1 hour job.
(5) Registration under factories act:
Any manufacturing company employing ten or more workers (with or without use of
power) is required to be registered under the Factories Act, 1965 (Act IV of 1965)
with the office of the Chief Inspector of Factories and Establishment.
The Act is primarily to regulate working conditions and to ensure safety measure in
the factory.

8. Economic Development:
The term "economic development," on the other hand, implies much more. It typically
refers to improvements in a variety of indicators such as literacy rates, life
expectancy, and poverty rates. GDP is a specific measure of economic welfare that
does not take into account important aspects such as leisure time, environmental
quality, freedom, or social justice. Economic growth of any specific measure is not a
sufficient definition of economic development.

In this sense, economic development focuses on the recruitment of business

operations to a region, assisting in the expansion or retention of business operations
within a region or assisting in the start-up of new businesses within a region.
In addition to economic models, the needs of constituency groups guide economic
developers actions. For example, a local economic developer working out of a mayor's
office may act towards decreasing unemployment by attracting businesses with large
labor needs. The economic developer working for the chamber of commerce dominated
by banks, real estate agents and utilities will recruit manufacturers with large capital
investments (steel and chemical plants). The economic developer working for the state
manufacturers association will lobby for more workforce training money. In its
broadest sense, economic development encompasses three major areas:
1) Policies that governments undertake to meet broad economic objectives such as
price stability, high employment, expanded tax base, and sustainable growth. Such
efforts include monetary and fiscal policies, regulation of financial institutions, trade,
and tax policies.
2) Policies and programs to provide infrastructure and services such as highways,
parks, affordable housing, crime prevention, and K-12 education.
3) Policies and programs explicitly directed at job creation and retention through
specific efforts in business finance, marketing, neighbourhood development, small
business development, business retention and expansion, technology transfer, and real
estate development. This third category is a primary focus of economic development
professionals.
To do the economic development of on organization against world market competition
the following functions are very important:
Controlling: It is creating and maintaining a positive flow of work by utilizing what
resources and facilities are available.

Leading: It is the Process which developing and cascading the organizations strategy
mission statement to all staffs.
Organizing: Resources such as facilities and employees so as to ensure effective
production of goods and services.
Planning: It prioritizes customer, employee and organizational requirements
Maintaining: It monitors the staffs, levels, knowledge, skill-attitude, expectation and
motivation to full organizational requirements
There

are

significant

differences

between

economic

growth

and

economic

development. The term "economic growth" refers to the increase of a specific

measure such as real national income, gross domestic product, or per capita income.
National income or product is commonly expressed in terms of a measure of the
aggregate value-added output of the domestic economy called gross domestic product
(GDP). When the GDP of a nation rises economists refer to it as economic growth.
For Production Systems, Information Technology influences to every unit of
production. The products might be tangible goods or services. Advanced Information
Technology leads to highly capacities of production systems and highly productivity.
New technology tools always create to increase capacity of production, such as
Hardware Systems and Software Systems etc. In Operation Management, Hardware
Systems is very important issues that the company should consider carefully because
hardware systems affect to the capacity of production and highly productivity.
Information Technology for consideration hardware systems is primarily to operate
equipment associated with the system as well. The highly technology is the important
factor to get the best hardware systems and highly products and services. The
effective and qualified hardware systems leads to reduce the costs of operating and
maintenance, produce the highly quality of products and services, shorter cycle times,
and speed up operating, delivery flexibility, new product introduction speed etc.
Secondly, Software Systems are also affected to Production. Software using for
Operation Management consists of programs for the computer. Software Systems in
Operation Management are such as Computer-aided design, Automated manufacturing

planning and control systems, and Computer-aid manufacturing, Computerized

Maintenance Management Software, Continuous Improvement program, Overall
Equipment Effectiveness,
Technical Data Management, Production Data Management, and Statistical Quality
Control Charting and Analysis, etc. Software Systems support the production
activities and businesses processing. For example, some software helps designing and
development of products and services. Some software are provided methods for
planning and scheduling the inputs and outputs of a manufacturing and control system,
purchasing, material requirements planning, adjusting plans and schedules based on
performance,

supporting

JIT

strategy,

safety

provision,

find

solutions

and

alternatives, and creating opportunities of new products and services, etc.

This report introduces some general operations management sites and then focuses on
some specialized web sites including computer aided design and manufacturing,
flexible manufacturing systems, and manufacturing planning software. Further
sections return to more general areas of operations management, including demand
forecasting, shop floor control, TQM, GSCM, project management and queuing theory.
Information Technology affects to business because it changes the industry to
become more favorable to the company and consumer demands. It provides solutions,
alternatives, and business production opportunities. The company could gain more
power over suppliers and customers. Highly Information Technology in both hardware
systems and software systems lead the company to achieve high quality products and
services and keep it up in the face of restrictions. It also supports developing flexible
production systems to enable mass customization of products and services. Moreover,
it could affect the developing and integrating new productive technologies into
existing production systems and improve existing product lines and services. The
highly of Information Technology increase capacity of the production and drive down
the cost of operating, reduce time and effort to complete manual tasks, improve
organizational effectiveness, develop, and support the fundamental business strategy
of enterprise.

9. Practical aspects of Bangladesh:

Operations management is concerned with the effective and efficient transformation
of inputs into saleable tangible products and intangible services. The long term
survival of most companies is inextricably linked to the ability of management to shape
operations resources to achieve this task and to realize that difficult and
fundamentally important trade-off decisions must be made. Operations, by the very
nature of its underlying resources, cannot be all things to all potential customers. It
can do some things very well and others less so. Knowing the existing capabilities
allows for current exploitation of resources and also provides the basis for deciding
the nature of future resources.
Though, operation management is a vital part for the development of economic
activities in Bangladesh. But it can assume some interruptions such as- political issues,
unavailable resource, unskilled labor, proper environment etc. We should remove all
obstacles regarding operational tools so that our national economy can develop day by
day.
In either the private or public sectors can operations make strategic decisions? It
should, however, make a contribution to strategic thinking and to do that operations
managers have to understand how the different components of the operations package
can be put together to achieve what the strategists are aiming for. Operations
managers need to be able to translate strategic objectives into clear operational
objectives and to design, implement and improve both the "products" themselves and
the processes by which they are delivered. They have to understand how changes to
external factors impact on the operation and how changes in one part of the operating
system impact on every other part. They need to understand how changes in
technologies impact on the organizations delivery capability, for example, and to feed
this back into the strategic process. At the heart of operations thinking, therefore,
lays the ability to think systematically and dynamically across space and time.

Garments Industries of Bangladesh

At present Garment is the main industry of Bangladesh now. This sector have
developed here rapidly because of it is a labor intensive industry, ordinary technology,
cheap labor and small capital. Before liberation in 1970, in Bangladesh there was only
one garment factory. In 1977, the number rose to 8. In 1984, the number was 587. In
1998, the number stood at 2650 and now the number of garments in Bangladesh is
3300.
In Bangladesh garment factories are situated in Dhaka, Chattagong, Narayangong,
Savar and Tongi-Gazipur. The Number of Garment workers in Bangladesh is 1.6 million.
Number of woman workers is 1.320.000 and men 280.000.
Seventy Six percent of total export of Bangladesh is garment oriented. Mainly
Bangladeshi garments products are exported to the USA, Canada, European Union and
Caribbean countries. Recently Bangladesh started export to Japan, Australia and some
other countries in small scale. Bangladesh exports 63 items of garments products.
Main raw materials of garments - mainly fabrics come from other countries.
The Operations Management Graduate Certificate focuses on operations process
development combined with core management courses that are integral for industry
success. These courses are developed by our highly acclaimed university faculty along
with industry experts with extensive real world experience. After successful
completion of this program, students receive a graduate certificate in Operations
Leadership. All of the credits in the program can be transferred into a Master of
Science in Operations Design and Leadership. Our mission is to combine the best,
most relevant elements of our campus-based programs to provide educational solutions
tailored to the needs of specific organizations. The result is a comprehensive array
of programs and subject matter designed to help companies make the most of their
human capital.

10. Conclusion:
From the above statement we can conclude that the operation management a greater
contribution to the economical development of Bangladesh for the meeting of world
market competition. It has a great influence in case of those factors such as- social
activities; cultural activities as well as industrial activities are universally accepted.
Although large portion of organization usually benefited from the operation
management as they have other options to support them, change of attitude is
gradually taking place in different organization. But garment industry of Bangladesh is
more and more becoming interested in operation management keeping in head the
troubles although they are facing in another management process.
This study examines the planning, design, execution, and coordination of all activities
that create goods or provide services. It addresses how upper level management can
improve decision-making in both the manufacturing and service sectors. The course
introduces productivity, competitiveness and strategy; decision-making; quality
management; product and service design; process selection and capacity planning;
linear programming; facility layout; location planning and analysis; the transportation
model; project management; design of work systems; and learning curves. Study how
industry and service organizations perform various management practices to remain
competitive and productive in current environments.
Operation management is bringing more and more effecting ideas in line focusing
social development and the number of organization of different sizes are in rise
regarding the useful application of operation management. As more and more employee
has exposure to civilized life, number of well trained operation management has
significantly increased, the time constraint of our organizational activities, in the
context of socio-economic changes that influenced our life style-all have contributed
to make a large research area of operation management.
In concepts of Operations Management, we illustrate how these concepts can be used
to improve profitability. Develop your conceptual and, to a lesser extent, your

quantitative skills for dealing with the key issues in the management of hospitality
operations.
This study provides us a broad conceptual framework for evaluating operations
management practices and understanding the major decisions made in operations and
the connections of operations decisions to other functions. Concepts, techniques and
management tools related to the four major decision responsibilities of operations
management, namely process, quality, capacity, and inventory, are studied and
discussed.