TERM REPORT

TRENDS IN OPERATION MANAGEMENT

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 TERM REPORT
TRENDS IN OPERATION MANAGEMENT

Operation:-
A group of recourses performing all or part of one or more processes.
Operation Management:-
The systematic design, direction, and control of processes that transform inputs
into services and products for internal, as well as external, customers.
Operations Strategy:-
Strategic decisions can be classified as those decisions which make major long
term changes to the resource base of the organizations in response to external
factors such as Market, Customers and Competitors. Strategy is seen as
complex in nature due to high degree of uncertainty in future consequences
arriving from decisions, integration is required of all aspects and functional
areas of business and major change may have to be implemented as a
consequence of strategic choices made.

The Role of Operations in Strategy Development:-

The role of operations/manufacturing function plays an important role in the
formulation and delivery of the organizations strategy. Market conditions have
changed from mass production era with an emphasis on high volume, low cost
production to an environment demanding performance on measures such as
quality and speed of delivery as well as cost. In addition the rapid pace of
change in markets means the basis of how the organization will compete may
change quickly over time. The traditional approach to strategy development has
been for senior managers to establish corporate objectives, develop a strategy
for meeting these objectives and then to acquire resources necessary to
implement the chosen strategy.

Traditional Approach V/s Dynamic Approach:-

Traditional approach is intended to ensure that resources are directed efficiently
at the areas as identified as strategically important from the strategic analysis.
The approach is based on the firms ability to forecast future market conditions
and thus identify gaps between future needs and organizational capability.
However in dynamic markets the ability to forecast far enough into the future in
order to build a competitive advantage will be limited. Also this approach has
led to an emphasis on relatively short-term objectives and a lack of emphasis on
behavioral factors such as performance evaluation systems and selection and
development of the work force. The idea is that in dynamic market conditions
the strategic plan should indicate the general direction that the organization
should follow based on the capabilities and values it possesses.

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TRENDS IN OPERATION MANAGEMENT

Operations Competitive Priorities:-

Operation should focus on specific capabilities that give it a competitive edge
which may be termed competitive priorities. Four operations priorities or
measures of these capabilities can be termed as follows.
Cost
Time
Quality
Flexibility

Cost:-
If an organization is competing on price then its essential that its keep its cost
base lower than the competition. Then it will either make more profit than
rivals, if price is equal, or gain market share if price is lower.
The major categories of cost are staff, facilities (including overheads) and
material with the greatest scope for cost reduction lies with reduction of the cost
of materials. A relatively small proportion of costs are usually assigned to direct
labor.
Time:-
The time delay or speed of operation can be measured as the time between
customer request for a product/service and then receiving that product/service.
Speed is an important factor to the customer in making choice about
organization to use. In this case the speed of the internal processes of purchase
and make will directly affect the delivery time experienced by the customer.
Thus the advantage of speed is that it can either be used to reduce the amount of
speculative activity and keep the delivery time constant or for the same amount
of speculative activity it can reduce overall delivery time. Thus in competitive
terms speed can be used to both reduce costs and reduce delivery time for better
customer service.
Quality:-
Quality covers both the quality of products/service itself and the quality of the
process that delivers the product/service. Quality can be measured by the cost
of the quality model were the costs are categorized as either the cost of
achieving good quality or the cost of poor quality products. The advantages of
good quality on competitiveness include dependability, reduce costs and
improved customer services.

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TRENDS IN OPERATION MANAGEMENT

Flexibility:-
There are number of areas in which flexibility can be demonstrated. Flexibility
is needed so the organization can adapt to changing customer needs in terms
product of range and varying demand to cope with capacity shortfalls due to
equipment breakdown and capacity shortage.

Generating Ideas:-
Ideas for new products and services should be sought it out from a variety of
sources including market research, customers viewpoints, the organizations
research and development (R&D) if one exists, competitors or relevant
developments in new technology. Competitors can provide a good source of
ideas and it is important that the organization analyses any new products they
introduce to the market and make an appropriate response. Reverse engineering
is a systematic approach to dismantling and inspecting a competitors product to
look for aspects of design that could be incorporated into the organizations own
product. This is especially prevalent when the product is a complex assembly
such as car, were design choices are myriad. Benchmarking compares a product
against what is considered the best is the market segment and the making
recommendations on how the product can be improved to meet that standard.

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 TERM REPORT
TRENDS IN OPERATION MANAGEMENT

Trends in Operation Management:-

There are several trends which having a great impact on operation management
some of them are as following:-
Productivity Improvement
Global Competition
Ethical, workforce diversity, Environmental Issues
E-Supply Chain Management
Business Process Re-Engineering
Total Quality Management
Time reduction
Worker Involvement
Lean production
Just in Time Production
Computer Aided Manufacturing
Computer Aided Design
Enterprise Resource Planning

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1. Productivity Improvement:-
Measure of performance for process, procedures and economics etc.
Mathematically,
P.I = Value of output / Value of inputs
Types of Productivity Improvement:-
There are 2 types of Productivity Improvement
Single Factor P.I
Multi-Factor P.I
Value of inputs are considered for improving productivity of many processes.
Single Factor P.I:-
If value of input is only one which is significant in the process, then it would be
termed as single factor P.I.
E.g. Labour
Multi-Factor P.I:-
If value of input is more than one in which is significant then it would be
considered as Multi-factor P.I
E.g. Labour-Hrs & Cost etc
ALARP:-
As Low As Reasonably Practicable
This is the term used in industries to optimize the usage of input for P.I

2. Global Competition:-
The following development enhanced global strategies
Improve Transportation & Communication Technology
Loosened Regulations on Financial Institutions
Increased demand for improved Services & Goods
Comparative Cost Benefits
Reduced import quotas and other international trade barriers due to
formation of regional trade blocks like European Union (EU), NAFTA,
SAFTA, SAARC etc.

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3. Ethical, workforce diversity, Environmental Issues:-

Due to increased competition and globalization, many ethical issues are also
arising on the job places. It is prime responsibility of business manager to sort
out such problems.
Issues on the job include bribery, gender discrimination, un-safe work places,
conflict of interest etc.
Due to work force diversity, many other issues can also arise and that must be
identified for better work environment.
Due to industrialization, environmental problems have grown too much like
greenhouse effect gasses, global warming, ozone layer depletion, acid rain etc.
Earlier poor water quality, clean air were considered quality of life issues but
now they are survival issues.
Developed nations having 25% of world total population are consuming 75% of
total resources.
It has now become responsibility worldwide to take care of such persisting
problems.

4. E-Supply Chain Management:-

The synchronization of a firms processes with those of its suppliers &
customers to match the flow of materials, services, and information with
customer demand.
SCM was a traditional concept which is now being replaced by E-SCM. E-
Supply chain management is a series of Internet enabled value-adding activities
to guarantee products created by a manufacturing process can eventually meet
customer requirements and realize returns on investment. Supply chains have
advanced in the last two decades with improved efficiency, agility and accuracy.
The recent advancement of Internet technology has brought more powerful
support to improving supply chain performance. In this context, e-supply chain
management becomes a new term that distinguishes itself by net-centric and
real-time features from traditional supply chain management.

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5. Business Process Re-Engineering:-

It involves drastic measures or break-through improvements to
improve the performance of a firm. It involves the concept of clean-
state approach or starting from a scratch in redesigning in business
processes.

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6. Total Quality Management:-

Total quality management (TQM) describes a management approach to long
term success through customer satisfaction.
In a TQM effort, all members of an organization participate in improving
processes, products, services, and the culture in which they work.

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TRENDS IN OPERATION MANAGEMENT

7. Time Reduction:-
Reduction of manufacturing cycle time and speed to marker for a new product
provide a competitive edge to a firm over other firms. When companies can
provide products at the same price and quality, quicker delivery (short lead
time) provide one firm competitive edge over the other.

8. Worker Involvement:-
The recent trends is to assign responsibility for decision making and problem
solving to the lower levels in the organization. This is known as employee
involvement and empowerment. Examples of employees empowerment are
quality circle and use of work teams or quality improvement teams.

9. Lean production:-
Production system have become lean production systems which have minimal
amount of resources to produce a high volume of high quality goods with some
variety. These systems use flexible manufacturing systems and multi-skilled
workforce to have advantages of both mass production and job production.

10. Just in Time:-

JIT is a pull system of production, so actual orders provide a signal for when a
product should be manufactured. Demand-pull enables a firm to produce only
what is required, in the correct quantity and at the correct time. This means that
stock levels of raw materials, components, work in progress and finished goods
can be kept to a minimum. This requires a carefully planned scheduling and
flow of resources through the production process. For example, a car
manufacturing plant might receive exactly the right number and type of tyres for
one days production, and the supplier would be expected to deliver them to the
correct loading bay on the production line within a very narrow time slot.

11. Computer Aided Manufacturing:-

Computer-aided manufacturing (CAM) is the use of computer-based software
tools that assist engineers and machinists in manufacturing or prototyping
product components. CAM is a programming tool that makes it possible to
manufacture physical models using computer-aided design (CAD) programs.
CAM creates real life versions of components designed within a software
package. CAM was first used in 1971 for car body design and tooling.

12. Computer Aided Design:-

Computer-aided design (CAD) is the use of computer technology to aid in the
design and particularly the drafting (technical drawing and engineering

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TRENDS IN OPERATION MANAGEMENT

drawing) of a part or product, including entire buildings. It is both a visual

(drawing) and symbol-based method of communication whose conventions are
particular to a specific technical field.

13. Enterprise Resource Planning:-

Enterprise resource planning (ERP) is an enterprise-wide information system
designed to coordinate all the resources, information, and activities needed to
complete business processes such as order fulfillment or billing.

REFRENCES:-
Www.Google.Com
Www.Wikipedia.Com
Www.Slideshare.Com
Www.Scribd.Com

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