GROUP MEMBERS Ron Christous.P.

K Vishnu Prasad Gawin Sam Vijay Krishnan Nobby Jerry

MODULE 1
Introduction of Operations Management; Introduction of Operations Function

Input/output transformation;
Operations as Competitive Advantage

INTRODUCTION
What is operations?

A function or system that transforms inputs into outputs of greater value. What is a transformation process? A series of activities along a value chain extending from supplier to customer. What is a value chain? A value chain is a chain of activities for a firm operating in a specific industry.

What is operations management?

Operations management is an area of management

concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs into outputs.

How Operations are linked

Marketing Finance and accounting Human resources Outside suppliers

OPERATIONAL MANAGEMENT FUNCTIONS AND ACTIVITIES

The operations management functions, like in other

management disciplines, include planning, directing, organizing, staffing, motivating and controlling to achieve the set organizational goals.

operation managers perform many other activities also

The facility location activity involves the decision of

the location for the facility, manufacturing unit or service outfit, geographically. The layout design determines how the internal facilities (departments, equipments, service stations, workstations etc ) will be arranged.

CONT..
The job design activity involves the structuring of work

tasks assigned to an employee and the study of the tasks that make up the job. The work measurement activity involves the timing of the tasks that comprise a job.The job design and work measurement activities are carried out to optimize output.

CONT..
Demand forecasting-Organizations need to forecast

the demand for their products and services so that all relevant plans can be developed for the future. Operation managers need to estimate future demand as accurately as possible as this will influence not only the requirement of manpower resources but also the utilization of working capital.

CONT..
Planning is the most important function performed by

an operations manager. Planning may be long range(strategic),short range(operational) or medium range(tactical). An operational management plan follows as a sequel to the overall corporate planning and includes marketing, financial, personnel/MIS, other plans at the functional level and departmental plans for the purchasing, inventory, assembly, finishing etc. Aggregate plans define how the resources can be best employed to meet market demand for the given products

CONT..
The materials management activity involves the

grouping of management functions supporting materials flow. Materials management includes activities starting from purchase and internal control of production materials, the planning and control of unfinished products in process at various stages of production and the warehousing, shipping and distribution of the finished product

CONT..
The inventory management activity is concerned with

the planning and control of inventories of raw materials, consumables, work in progress materials, other economic resources and finished goods.

CONT..
Purchase

management-This function is a subsystem of the materials management and is of special importance in a typical manufacturing firm where 50-60%of the total costs is made up of purchases. Purchase management functions include vendor development, selection of suppliers, contract negotiation, value analysis, make or buy decisions and maintaining the high ethics

CONT..
Total Quality Management-This is a management

concept that focuses the collective efforts of all managers and employees on satisfying customer expectations by continually improving operation management processes and products.

CONT..
Supply chain management-Supply chain can be

described as the network covering the various stages in the provision of products or services to the customers. Supply chain management integrates procurement, operations and logistics to provide value added products or services. Effective management of the supply chain enables organisations to meet customer requirements in time with improved facility utilisation, optimimal inventory etc.

CONT..
Project Management-A thorough knowledge of project

management procedures, tools and techniques is essential for the operations manager as almost all organizations embark upon projects of one kind or another almost all the time.Also some project oriented organizations take years to deliver their products. Project management uses basic tools like PERT/CPM and their advanced versions for planning ,scheduling and expediting.

CONT..
Maintenance

management-The objective of maintenance management is to ensure that the systems are working at their optimum efficiency and is essential to the organization for productivity, increase operational life of equipments and keep safe working conditions. Maintenance management uses modern preventive and predictive maintenance tools and monitoring techniques

Transformation Process

EXAMPLE
In an oil refinery the inputs are crude oil, labour and

processing plants and the output is petroleum products like gasoline, diesel etc. The transformation process consists of heating, mixing and distillation; feedback is production rates, expenses; and the control elements are plant managers, accountants, supervisors etc.

Competitive Advantage
A distinctive competency that clearly set an organization

apart from competitors and gives it an advantage over them in a competitive marketplace.

Operations as Competitive Advantage

Product Design Customer appeal Robust - production proof Design for Manufacturing Design for Disassembly Technology Utilization Lean Production Flexible Manufacturing Agile Manufacturing Mass Customization.

 Organization Design

Blending the best of technology with the full potential of people. Cross-functional task forces Job enrichment Self-managing teams Autonomous work groups It is about Organizational Flexibility, Adaptability, and Worker Empowerment.

How is operations relevant to my major?

Accounting Information
As an auditor you must

Technology
Management

understand the fundamentals of operations management. IT is a tool, and theres no better place to apply it than in operations. Things you learn in an operations classscheduling, lean production, theory of constraints, and tons of quality tools.

How is operations relevant to my major?

Marketing

How can you do a good job

Finance

marketing a product if youre unsure of its quality or delivery status? Most of the capital budgeting requests are from operations, and most of the cost savings, too.