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371210 CL8A1lCnS

MAnACLMLn1
lAClLl1AC8 18AvLLn kuMA8
8LlL8LnCL
W anner selvam 8 roducLlon and operaLlons
manaaemenL renLlce Pall of lndla
W norman CalLher and Creaorv lralzer
CperaLlons ManaaemenL souLh wesLern
cenaaae learnlna 2002
W 8uslness llne
W !ournals of producLlon manaaemenL
FXPFCTATl0t
Cu8 SluL
ln1L8nAL MA8kS
W ln1L8nAL / MCuLL LxAMS 10 MA8kS
W A11LnuAnCL
/ CLASS A81lClA1lCn 3 MA8kS
W ASSlCnMLn1S 3 MA8kS
uCn'1 8LC lC8 MA8kS
CL8A1lCnS MAnACLMLn1
SCuA8L Cl 1CM
PRODUCTION AND OPERATIONS
MANAGEMENT (POM)
AN INTRODUCTION
CvL8vlLW
W lnLroducLlon
W PlsLorlcal MllesLones ln CM
W lacLors AffecLlna CM 1odav
W ulfferenL Wavs of SLudvlna CM
W Wrapup WhaL WorldClass roducers uo
ln18CuuC1lCn
W ln Lhe arowlna alobal compeLlLlon Lhe
producLlvlLv ls Lhe kev for Lhe survlval of
buslness oraanlzaLlon
W Amona Lhe dlfferenL funcLlons ln a
oraanlzaLlon CM ls a vlLal funcLlon whlch
does Lhe [ob of value addlLlon Lo producLs
/servlces respecLlvelv
W Maxlmlze value auLomaLlcallv resulLs ln
producLlvlLv lmprovemenL
conLd
W 1hls should be done from sLarLlna sLaae of
producL developmenL
W lmplemenLaLlon of proper quallLv conLrol
svsLem malnLenance of equlpmenLs and
concenLraLlna on varlous oLher lnLer medlaLe
Lasks leads Lo lmprovemenL ln producLlvlLv
ln18CuuC1lCn
W roducLlon and operaLlons manaaemenL
(CM) ls Lhe manaaemenL of an oraanlzaLlon's
producLlon svsLem
W A producLlon svsLem Lakes lnpuLs and converLs
Lhem lnLo ouLpuLs
W 1he converslon process ls Lhe predomlnanL
acLlvlLv of a producLlon svsLem
W 1he prlmarv concern of an operaLlons
manaaer ls Lhe acLlvlLles of Lhe converslon
process
PlS1C8lCAL MlLLS1CnLS ln CM
W 1he lndusLrlal 8evoluLlon
W osLClvll War erlod
W SclenLlflc ManaaemenL
W Puman 8elaLlons and 8ehavlorlsm
W CperaLlons 8esearch
W 1he Servlce 8evoluLlon
1PL lnuuS18lAL 8LvCLu1lCn
W 1he lndusLrlal revoluLlon developed ln Lnaland ln
Lhe 1700s
W 1he sLeam enalne lnvenLed bv !ames WaLL ln
1764 laraelv replaced human and waLer power
for facLorles
W Adam SmlLh's 1he WealLh of naLlons ln 1776
LouLed Lhe economlc beneflLs of Lhe
speclallzaLlon of labor
W 1hus Lhe laLe1700s facLorles had noL onlv
machlne power buL also wavs of plannlna and
conLrolllna Lhe Lasks of workers
1PL lnuuS18lAL 8LvCLu1lCn
W 1he lndusLrlal revoluLlon spread from Lng|and to
other Luropean countr|es and Lo Lhe unlLed
SaLes
W ln 1790 an Amerlcan L|| Wh|tney deve|oped the
concept of |nterchangeab|e parts
W 1he flrsL areaL lndusLrv ln Lhe uS was Lhe LexLlle
lndusLrv
W ln Lhe 1800s Lhe developmenL of Lhe gaso||ne
eng|ne and e|ectr|c|ty furLher advanced Lhe
revoluLlon
W 8v Lhe mld1800s Lhe old coLLaae svsLem of
producLlon had been replaced bv Lhe facLorv
svsLem
CS1ClvlL WA8 L8lCu
W uurlna Lhe posLClvll War perlod areaL
expanslon of producLlon capaclLv occurred
W 8v posLClvll War Lhe followlna developmenLs
seL Lhe sLaae for Lhe areaL producLlon
exploslon of Lhe 20Lh cenLurv
|ncreased cap|ta| and product|on capac|ty
the expanded urban workforce
New markets
an effect|ve nat|ona| transportat|on system
SClLn1lllC MAnACLMLn1
W Ireder|ck 1ay|or |s known as the father of
sc|ent|f|c management Pls shop svsLem
emploved Lhese sLeps
Lach worker's sklll sLrenaLh and learnlna ablllLv were
deLermlned
5topwatch stud|es were conducted to prec|se|y set
standard output per worker on each task
MaLerlal speclflcaLlons work meLhods and rouLlna
sequences were used Lo oraanlze Lhe shop
Supervlsors were carefullv selecLed and Lralned
Incent|ve pay systems were |n|t|ated
SClLn1lllC MAnACLMLn1
W ln Lhe 1920s lord MoLor Companv's
operaLlon embodled Lhe kev elemenLs of
sclenLlflc manaaemenL
standard|zed product des|gns
mass product|on
|ow manufactur|ng costs
mechan|zed assemb|y ||nes
spec|a||zat|on of |abor
|nterchangeab|e parts
PuMAn 8LLA1lCnS
Anu 8LPAvlC8ALlSM
W In the 19271932 per|od researchers |n the
nawthorne 5tud|es reallzed LhaL human
facLors were affecLlna producLlon
W 8esearchers and manaaers were recoanlzlna
LhaL psvcholoalcal and socloloalcal facLors
affecLed producLlon
W Irom the work of behav|or ||sts came a
gradua| change ln Lhe wav manaaers LhouahL
abouL and LreaLed workers
CL8A1lCnS 8LSLA8CP
W uurlna World War ll enormous quanLlLles of
resources (personnel supplles equlpmenL )
had Lo be deploved
W MlllLarv operaLlons research (C8) Leams were
formed Lo deal wlLh Lhe complexlLv of Lhe
deplovmenL
W AfLer Lhe war operaLlons researchers found Lhelr
wav back Lo unlverslLles lndusLrv aovernmenL
and consulLlna flrms
W Ck he|ps operat|ons managers make dec|s|ons
when prob|ems are comp|ex and wrong
dec|s|ons are cost|y
1PL SL8vlCL 8LvCLu1lCn
W 1he creaLlon of servlces oraanlzaLlons acceleraLed
sharplv afLer World War ll
W 1odav more Lhan LwoLhlrds of Lhe workforce ls
emploved ln servlces
W bout twoth|rds of wor|d GD |s from serv|ces
W 1here ls a huae Lrade surplus ln servlces
W lnvesLmenL per offlce worker now exceeds Lhe
lnvesLmenL per facLorv worker
W 1hus Lhere ls a arowlna need for servlce
operaLlons manaaemenL
W nexL 3 monLhs vou are aolna Lo see abouL
8CuuC1lCn/CL8A1lCn MAnACLMLn1
1LS Cl 8CuuC1lCn SS1LM
ulllL8Ln1 8CuuC1lvl1 lM8CvLMLn1
S18A1LClLS
nLW 8CuuC1 uLvLLCMLn1
8CCLSS LAnnlnC
CAACl1 LAnnlnC
M8
1CM 1CCLS eLc
ulllL8Ln1 WAS 1C S1uu CM
W roducLlon as a SvsLem
W roducLlon as an CraanlzaLlon luncLlon
W ueclslon Maklna ln CM
C8CAnlZA1lCnAL MCuLL
CM CM
MarkeLlna MarkeLlna
MlS MlS
Lnalneerlna Lnalneerlna
P8M P8M
CA CA
AccounLlna AccounLlna
Sales Sales
llnance llnance
8CuuC1lCn SS1LM
W An oraanlzaLlon conslsLs of malnlv four
funcLlonal subsvsLem
MarkeLlna
roduct|on
llnance
ersonnel
W MA8kL1lnC lunC1lCn
Alms Lo promoLe lLs producLs amona cusLomers
whlch helps lL Lo obLaln subsLanLlal sales order
W 8CuuC1lCn lunC1lCn
1hls funcLlon wlll manaalna Lhe phvslcal resources
for Lhe producLlon of an lLem/ provlslon of
servlces
1he avallable faclllLles need Lo be manaaed
effecLlvelv ln order Lo meeL Lhe currenL markeL
requlremenLs
conL
W 1he resources are raw maLerlal equlpmenL
labor worklna caplLal
W 1he producLlon funcLlon needs Lo oraanlze lLs
resources accordlna Lo Lhe predeLermlned
producLlon plans
W llnAnCL lunC1lCn
1hls funcLlon provldes auLhorlzaLlon and conLrol Lo all
oLher subsvsLems Lo uLlllze Lhe monev ln more
effecLlvelv Lhrouah a well deslaned mechanlsm
W L8SCnnLL lunC1lCn/P8
1hls ls a supporLlna funcLlon whlch plans and provldes
manpower Lo all oLher funcLlon of Lhe oraanlzaLlon
lL lnvolves ln recrulLmenL Lralnlna and developmenL
performance measures of Lhe manpower
W All funcLlons of Lhe oraanlzaLlon are lnLerwoven
bv manv llnkaaes for Lhelr effecLlve funcLlonlna
C8CAnlZA1lCn CPA81MA!C8 LLLMLn1S
Facilities
Production &
nventory ontrol
Quality Assurance
& Control
Procurement
Engineering Design
ndustrial Engineering
Process Engineering
Operations
Disbursements
& Credits
Funds Management
Capital Requirements
Finance/Accounting
Sales Promotion
Advertising
Sales
Market Research
Marketing
Manufacturing Organization
8CuuC1lCn AS An C8CAnlZA1lCn
lunC1lCn
W companles cannoL compeLe uslna markeLlna
flnance accounLlna and enalneerlna alone
W We focus on CM as we th|nk of g|oba|
compet|t|veness because that |s where the
vast ma[or|ty of a f|rm's workers cap|ta|
assets and expenses res|de
W 1o succeed a flrm musL have a sLrona
operaLlons funcLlon Leamlna wlLh Lhe oLher
oraanlzaLlon funcLlons
8CuuC1lCn MAnACLMLn1
roducLlon /operaLlons manaaemenL ls Lhe
process whlch comblnes and Lransforms
varlous resources used ln Lhe
producLlon/operaLlon sub svsLem of Lhe
oraanlzaLlon lnLo value added producLs/
servlces ln a conLrolled manner as per Lhe
pollcles of Lhe oraanlzaLlon
AnC1PL8 vlLW
roducLlon/operaLlon manaaemenL funcLlon ls
Lhe parL of Lhe oraanlzaLlon whlch ls
concerned wlLh Lhe LransformaLlon of a ranae
of lnpuLs lnLo Lhe requlred
ouLpuL(producL/servlce) havlna Lhe requlslLe
quallLv level
ln CLnL8AL
W 1he seL of lnLerrelaLed manaaemenL acLlvlLles
whlch are lnvolved ln manufacLurlna cerLaln
producLs ls called as producLlon manaaemenL
W lf Lhe above concepL ls exLended Lo servlces
manaaemenL Lhen Lhe correspondlna seL of
manaaemenL acLlvlLles ls called as operaLlons
manaaemenL
W So ln aeneral Lhe concepL of manufacLurlna
producLs/provldlna servlces ls called
producLlon/operaLlons manaaemenL
uLClSlCnS A1 ulllL8Ln1 LLvLL Cl
MAnACLMLn1
W ln Lhe process of manaalna varlous subsvsLem
of Lhe oraanlzaLlon execuLlves aL dlfferenL
levels of Lhe oraanlzaLlon need Lo Lake several
manaaemenL
51k1LGIC
LLVLL
1C1ICL
LLVLL
CLk1ICN5 LLVLL
S18A1LClC uLClSlCnS
W 1hese declslons are of sLraLealc lmporLance
and have lonaLerm slanlflcance for Lhe
oraanlzaLlon
W Lxamples lnclude decldlna
Lhe deslan for a new producL's producLlon process
where Lo locaLe a new facLorv
wheLher Lo launch a newproducL developmenL
plan
CL8A1lnC uLClSlCnS
W 1hese declslons are necessarv lf Lhe onaolna
producLlon of aoods and servlces ls Lo saLlsfv
markeL demands and provlde proflLs
W Lxamples lnclude decldlna
how much flnlshedaoods lnvenLorv Lo carrv
Lhe amounL of overLlme Lo use nexL week
Lhe deLalls for purchaslna raw maLerlal nexL
monLh
CCn18CL uLClSlCnS
W 1hese declslons concern Lhe davLodav
acLlvlLles of workers quallLv of producLs and
servlces producLlon and overhead cosLs and
machlne malnLenance
W Lxamples lnclude decldlna
labor cosL sLandards for a new producL
frequencv of prevenLlve malnLenance
new quallLv conLrol accepLance crlLerla
51k1LGIC DLCI5ICN5 1C1ICL DLCI5ICN5 CLk1ICNL DLCI5ICN5
WDef|n|ng the goa|s
WMak|ng po||c|es
WDeterm|nat|on of
organ|zat|ona| ob[ect|ves
Wcqu|s|t|on of resources
W|ant |ocat|on
WNew products
estab||shment
WMon|tor|ng of budgets
WLffect|ve and eff|c|ent use
of fac|||t|es and resources to
carry out act|v|t|es w|th|n
the budget constra|nt
MA8kL1lnC lunC1lCn
W SLraLealc ueclslons
ConslderaLlon of new markeLs and markeLlna
sLraLeales
1he lnformaLlon requlremenLs for sLraLealc plannlna
Inc|ude customer ana|ys|s
Compet|tor ana|ys|s
Consumer survey
Income pro[ect|on
Demograph|c pro[ect|on
1echno|ogy pro[ect|on
conLd
W 1acLlcal ueclslons
Compar|son of overa|| performance aga|nst a
market|ng p|an
Concerns data on customers compet|tors and |ts
products and sa|es force requ|rements
W CperaLlonal declslons
n|r|ng and f|r|ng of sa|es force
Day to day schedu||ng of sa|es and promot|ons
efforts and per|od|c ana|ys|s of sa|es
8CuuC1lCn lunC1lCn
W 5trateg|c Dec|s|on
AlLernaLlve manufacLurlna approaches and
alLernaLlve approaches Lo auLomaLlon
W 1act|ca| Dec|s|on
8eporLs whlch compare overall planned/sLandard
performance
W Cperat|ona| Dec|s|on
8eporLs comparlna acLual performance Lo
producLlon schedule
llnAnCL lunC1lCn
W 5trateg|c Dec|s|on
Lona run sLraLeav Lo ensure adequaLe flnanclna
Lona run Lax accounLlna pollcv Lo mlnlmlze Lhe lmpacL
of Laxes
lannlna of svsLems for budaeLlna
W 1act|ca| Dec|s|on
lnformaLlon on budaeLed versus acLual cosL of
flnanclal resources
CosL of processlna accounLlna daLa
W Cperat|ona| Dec|s|on
uallv error and excepLlon reporLs
8ecords of processlna delavs reporLs of unprocessed
LransacLlon eLc
L8SCnnLL /P8 lunC1lCn
W SLraLealc ueclslon
5trateg|es for recru|tment sa|ary tra|n|ng and
benef|ts
na|ys|s of sh|ft pattern of emp|oyment educat|on
and wage rate etc
W 1acLlcal ueclslon
Var|ance ana|ys|s on h|r|ng and f|r|ng
Cost of recru|tment
Cost of tra|n|ng sa|ary pa|d d|str|but|on of wage
rates
W CperaLlonal declslon
Dec|s|on on h|r|ng tra|n|ng term|nat|on chang|ng
pay rates and |ssu|ng benef|ts
SS1LM CCnCL1 Cl 8CuuC1lCn
W 5ystem
lL ls a collecLlon of lnLerrelaLed enLlLles
CperaLlons manaaemenL ls Lhe manaaemenL
of LransformaLlon svsLems whlch converL lnpuL
lnLo aoods/servlces
W Input
maLerlals labors equlpmenLs caplLal
1he Lvpes of lnpuLs used varv from one lndusLrv Lo
anoLher
8CuuC1lCn AS A SS1LM
lnpuLs lnpuLs lnpuLs lnpuLs CuLpuLs CuLpuLs CuLpuLs CuLpuLs
Converslon Converslon
SubsvsLem SubsvsLem
Converslon Converslon
SubsvsLem SubsvsLem
roducLlon SvsLem roducLlon SvsLem
ConLrol ConLrol
SubsvsLem SubsvsLem
ConLrol ConLrol
SubsvsLem SubsvsLem
INU1
M1LkIL
LCk
LCUIMLN1
CI1L
1kN5ICkM1ICN
(CCNVLk5ICN)
kCCL55
GCCD5/5LkVICL5
CU1U1
l
L
L
u

8
A
C
k

l
n
l
C
8
M
A
1
l
C
n
Lnv|ronment
Interna|/externa|
lnu1S Cl A 8CuuC1lCn SS1LM
W Lxterna|
Leaal Lconomlc Soclal 1echnoloalcal
W Market
CompeLlLlon CusLomer ueslres roducL lnfo
W r|mary kesources
MaLerlals ersonnel CaplLal uLlllLles
CCnvL8SlCn Su8SS1LM
W hvslcal (ManufacLurlna)
W LocaLlonal Servlces (1ransporLaLlon)
W Lxchanae Servlces (8eLalllna)
W SLoraae Servlces (Warehouslna)
W CLher rlvaLe Servlces (lnsurance)
W CovernmenL Servlces (lederal SLaLe Local)
Cu1u1S Cl A 8CuuC1lCn SS1LM
W D|rect
roducLs
Servlces
W Ind|rect
WasLe
olluLlon
1echnoloalcal Advances
kCDUC1 DL5IGN ND NL5I5 / WCkk 51UD
kCDUC1ICN CCN1kCL
GGkLG1L LNNING Mk
M51Lk kCDUC1ICN CCI1 LNNING 5CnLDULING
5CnLDULING
MIN1LNNCL MNGLMLN1
ILLD Ck
CULI1 CCN1kCL
INVLN1Ck CCN1kCL
WPA1 CCn18CLS 1PL CL8A1lCnS
SS1LM?
W Informat|on about the outputs the
convers|ons and the |nputs |s feed back to
management
W 1hls lnformaLlon ls maLched wlLh
manaaemenL's expecLaLlons
W When Lhere ls a dlfference manaaemenL musL
Lake correcLlve acLlon Lo malnLaln conLrol of
Lhe svsLem
1LS Cl 8CuuC1lCn SS1LM
W roducLlon svsLem
1he producLlon svsLem of a companv malnlv uses
faclllLles equlpmenLs and operaLlna meLhods
(producLlon svsLem) Lo produce aoods
1he requlremenL of producLlon svsLem depend on
Lhe Lvpe of producL LhaL companv offers and
sLraLeav LhaL Lhe companv follows
CLASSlllCA1lCn Cl 8CuuC1lCn
SS1LM
5I5 CL55IIIC1ICN LkMLL
1L5 CI CU1U1 kCDUC15
5LkVICL5
CCN5UMLk GCCD5
1kN5Ck11ICN
nLL1nNkINGLDUC1ICN
1L CI ILCW kCILC15
IC 5nC
ILCW5nC
CCN1INUCU5
kCCL55
CCN51kUC1ICN
nC5I1L U1C kLIk
1V IC1CkU1C IC1Ck
C51L 5LkVICL5
1LLLnCNLCCMN CIL
kLIINLk
1L CI 5LCIIIC1ICN
UNDLk 5LkVICL 1L
CU51CMI2LD
51NDkDI2LD
MLDICL CkLLLGL
5LkVICL5
IN5UkNCL WnCLL 5LL
51CkL5
lLCW SPC
W lLCW SPC
lL ls a converslon process ln whlch successlve unlLs
of ouLpuL underao Lhe same sequence of
operaLlons uslna speclallzed equlpmenLs usuallv
poslLloned alona a producLlon llne
Lxample
W uto assemb|y
W assemb|y of e|ectron|c goods
W LxLreme form of flow shop ls someLlmes
LreaLed as a conLlnuous process
ILCW 5nC
CCN1INUCU5 ILCW 5nC
(examp|e cement manufactur|ng)
IN1LkMI11LN1 ILCW 5nC
(1he process |s |nterrupted to set
|t up to hand|e d|fferent
spec|f|cat|on of some bas|c
des|gn)
(examp|e garments
manufactur|ng)
CPA8AC1L8lS1lCS
W SLandardlzaLlon of producL and process
sequence
W Larae volume of producLs
W Lower ln process lnvenLorv
W erfecLlv balanced producLlon llne
W roducLlon plannlna and conLrol ls easv
W MaLerlal handllna can be compleLelv
auLomaLlc
DVN1GL5
W 5tandard|zat|on of
product and process
sequence
W Un|t cost |s |ower due to
h|gh vo|ume of
product|on
W erson w|th ||m|ted sk|||s
can be used on the
product|on ||ne
W n|gher capac|ty
ut|||zat|on
DI5DVN1GL5
Very h|gh |nvestment
roduct d|fferent|ated |s
||m|ted
!C8 SPC
W 1hls ls a converslon process ln whlch unlLs of
dlfferenL Lvpes of producLs follow dlfferenL
sequences Lhrouah dlfferenL shops
W 1hls Lvpe of svsLem ls more flexlblllLv
W 1hls svsLem resulLs lnLo more seL up Llme
more ln process lnvenLorv complex
schedullna varvlna quallLv
Lxample ????????????????
CPA8AC1L8lS1lCS
W Plah varleLv of producLs and low volume
W use of aeneral purpose machlnes and
faclllLles
W Larae lnvenLorv of maLerlals Lools parLs
W ueLalled plannlna ls essenLlal for sequenclna
Lhe requlremenLs of each producL capaclLles
for each work cenLre
DVN1GL5
W Var|ety of products can
be produced
W Cperators w||| become
more sk|||ed and
competent
DI5DVN1GL5
W n|gher cost due to
frequent set up
changes
W roduct|on p|ann|ng |s
comp||cated
W Large space
requ|rements
8A1CP MAnulAC1u8lnC
W A baLch manufacLurlna faclllLv produces some
lnLermedlaLe varleLles of producLs wlLh
lnLermedlaLe volumes
W 1he volume of anv slnale producL mav noL be
sufflclenL Lo [usLlfv Lhe use of dedlcaLed seL of
equlpmenLs for lLs producLlon
CPA8AC1L8lS1lCS
W ShorLer producLlon run
W lanL and machlnerv are flexlble
W ManufacLurlna lead Llme and cosL are lower as
compared Lo [ob order producLlon
DVN1GL5
W etter ut|||zat|on of
p|ant and mach|nery
W romotes funct|ona|
spec|a||zat|on
W Lower |nvestment |n
p|ant and mach|nery
DI5DVN1GL5
W Mater|a| hand||ng |s
comp|ex because of
|rregu|ar and |onger
f|ows
W roduct|on p|ann|ng
and contro| |s comp|ex
W n|gher set up costs due
to frequent changes |n
set up
8C!LC1
W A pro[ecL refers Lo Lhe process of creaLlna a
complex klnd of producL or servlce wlLh seL of
well deflned Lasks ln Lerms of resources
requlred and Llme phaslna
8CuuC1lvl1
W roducLlvlLv ouLpuL/lnpuL alwavs p1
Several sLraLeales for lmprovlna Lhe producLlvlLv
W lncreased ouLpuL for Lhe same lnpuL
W uecreased lnpuL for Lhe same ouLpuL
W roporLlonaLe lncrease ln Lhe ouLpuL ls more Lhan
Lhe proporLlonaLe lncrease ln Lhe lnpuL
W roporLlonaLe decrease ln Lhe lnpuL ls more Lhan
Lhe proporLlonaLe decrease ln Lhe ouLpuL
W lncrease ln Lhe ouLpuL wlLh decrease ln Lhe lnpuL
CL8A1lCn S18A1LC
W 1he process of maklna declslons abouL Lhelr
fuLure ln Lhls complex and chanalna
envlronmenL ls called sLraLealc manaaemenL
W Chanalna envlronmenL LnvlronmenL of
oraanlzaLlon ls becomlna more complex
because of Lhe lncreased raLe of LS1LL
W SLraLealc manaaemenL lnvolves maklna
declslon wlLh reaard Lo oraanlzaLlons mlsslon
and ob[ecLlves lL also deLermlne Lhe
oraanlzaLlons mosL effecLlve uLlllzaLlon of lLs
resources
S18A1LClC MAnACLMLn1 PASLS
W SLraLeav manaaemenL has Lwo phases
5trategy formu|at|on
W ueflnlna Lhe oraanlzaLlon phllosophv and mlsslon
W LsLabllsh lona and shorL ranae ob[ecLlves
W And chooslna Lhe sLraLeav ln order achleve Lhe
ob[ecLlve
5trategy |mp|ementat|on
W lL concerned wlLh allanlna Lhe oraanlzaLlonal sLrucLure
svsLem and processes
PlL8A8CP Cl S18A1LC
W Mlsslon
W Cb[ecLlve
W CorporaLe sLraLeales
W 8uslness unlL sLraLeales
W luncLlonal sLraLeales
CC8C8A1L S18A1LClLS
W SLable arowLh sLraLeav
W CrowLh sLraLeav
ConcenLraLlon on a slnale producL/servlce
ConcenLrlc dlverslflcaLlon
verLlcal dlverslflcaLlon
PorlzonLal dlverslflcaLlon
ConalomeraLe dlverslflcaLlon
W Lnd aame sLraLeav
conLd
W 8eLrenchmenL sLraLeales
1urnaround
ulslnvesLmenL sLraLeav
LlquldaLlon sLraLeav
W ComblnaLlon sLraLeales
SlmulLaneous sLraLeav
SequenLlal sLraLeav
CLnL8lC CCML1l1lvL
(8uSlnLSS) S1A8L1ClLS
W Cver all leadershlp sLraLeav
W ulfferenLlaLlon sLraLeav
W locus sLraLeav
lunC1lCnAL S18A1LClLS
W MarkeLlna sLraLeav
W llnanclal sLraLeav
W ersonnel/P8 sLraLeav
W roducLlon/manufacLurlna sLraLeales
8CuuC1lCn/MAnulAC1u8lnC
S18A1LClLS
W roducLlon /operaLlon funcLlon of an
oraanlzaLlon alms Lo provlde producL/servlce
Lo lLs cusLomer bv uslna a comblnaLlon of
followlna sLraLeales
y t|me|y de||very
I|ex|b|||ty (|n meet|ng customer demands)
Cua||ty
Cost effect|veness
conLd
W 1he selecLed sLraLeales alLernaLlves are LranslaLed
lnLo operaLlons ob[ecLlves Some of Lhe
ob[ecLlves are
ch|ev|ng h|gh eff|c|ency
I|ex|b|||ty |n meet|ng customer demand (|n term of
product features)
I|ex|b|||ty |n product|on vo|ume to meet chang|ng
customers demand
5at|sfy customers demand w|th good qua||ty
Lffect|ve |n |abor re|at|on and manpower cost
contro|
Lff|c|ent mater|a| ut|||zat|on and |ts cost contro|
Lff|c|ent fac|||ty ut|||zat|on and |ts cost
WC8Lu CLASS MAnulAC1u8lnC
W 1he followlna aLLrlbuLes of Lhe world class
manufacLurlna are almed Lo fulflll Lhe
cusLomer demands
roducts w|th h|gh qua||ty
roducts at compet|t|ve pr|ce
roducts w|th severa| enhanced features
roducts |n a w|der var|ety
roducts de||vered on t|me
Ln18LLvLL !C8S ln CM
W urchaslna planner/buver
W roducLlon (or operaLlons) supervlsor
W roducLlon (or operaLlons)
scheduler/conLroller
W roducLlon (or operaLlons) analvsL
W lnvenLorv analvsL
W CuallLv speclallsL
1CuAS lAC1C8S AllLC1lnC CM
W G|oba| Compet|t|on
W Cua||ty Customer 5erv|ce and Cost
Cha||enges
W Computers and dvanced roduct|on
1echno|ogy
W Growth of 5erv|ce 5ector
W 5carc|ty of roduct|on kesources
W Issues of 5oc|a| kespons|b|||ty
SCCL Cl CM
W Addlna value bv lmprovlna CperaLlons
ManaaemenL
W lL can help lmprove lLs compeLlLlveness and lona
Lerm proflLablllLv
W lnLel lC8u PewleLL ackard
W Cost effect|veness?
W undersLandlna Lhe fundamenLal concepLs of
operaLlons manaaemenL and belna able Lo use a
varleLv of common declslonmaklna Lools and
problem solvlna approaches ls kev Lo maklna
beLLer operaLlons declslons
SCCL Cl CM
W roducLlon of aoods ls Lhe fabrlcaLlon of Lhe
phvslcal ob[ecL Lhrouah Lhe [udlclous use of Lhe
resources avallable Lo Lhe manaaer
W 1hese resources lnclude men maLerlals monev
meLhods and machlnes
W Cperat|ons management |s subst|tuted for
roduct|on Management as many |nd|v|dua|s
and organ|zat|ons cont|nue to use the term
roduct|on so|e|y to manufactur|ng act|v|ty
W CperaLlons manaaemenL has wlder scope lL
bealns wlLh Lhe ldea sLaae aoes Lhrouah research
and developmenL manufacLurlna purchaslna
lnspecLlon quallLv conLrol and warehouslna and
ends wlLh cusLomer
W roducLlon ls a subseL of operaLlons
manaaemenL lL's scope ls a parL of operaLlons
manaaemenL lL focuses on
W roduct Des|gn
W Iorecast|ng
W Iac|||ty Locat|on
W Capac|ty |ann|ng
W rocess |ann|ng
W |ant Layout
Scope conL
W kesource Management
W C
W Iob Des|gn
W Ma|ntenance
W Cua||ty Management
W Work Measurement
W urchas|ng
W 5tore keep|ng
W Warehouse
Management
W Inventory contro|
W Mater|a|s Management
W ro[ect Management
luncLlons of CM
W roducLlon ls a process or a seL of procedures Lo
be execuLed ln order Lo converL or Lransform a seL
of lnpuLs lnLo predeLermlned seL of ouLpuLs ln
accordance wlLh Lhe ob[ecLlves asslaned Lo Lhe
producLlon svsLem
W |ann|ng
W Crgan|z|ng
W 5taff|ng
W D|rect|ng
W Contro|||ng
8elaLlonshlp beLween CM and oLher
luncLlons
W MarkeLlna
Customer sat|sfact|on
Deve|op|ng and
ma|nta|n|ng market
ggregate roduct|on
|ann|ng
5a|es forecast
roduct|on 5chedu||ng
5
roduct |mprovement
etc
W llnance
Lconom|c ana|ys|s of
|nvestment proposa|s
roduct|on pr|c|ng
udget|ng and t|m|ng of
funds
Work|ng cap|ta|
ca|cu|at|ons
rov|s|on and re|ease of
funds
Cap|ta| udget|ng
W 8u
Idea generat|on
roduct formu|at|on
1est fac|||t|es
rototype Deve|opment
Iac|||t|es for
deve|opment act|v|t|es
1est market|ng
W roducL ueslan
W MalnLenance
W lndusLrlal Lnalneerlna
W MaLerlals
W ersonnel
W AccounLlna and CosLlna
CLk1ICN5 51k1LGIL5
IN GLCL LCCNCM
CvL8vlLW
W lnLroducLlon
W 1odav's Clobal 8uslness CondlLlons
W CperaLlons SLraLeav
W lormlna CperaLlons SLraLeales
ln18CuuC1lCn
W Cperat|ona| effect|veness ls Lhe ablllLv Lo
perform slmllar operaLlons acLlvlLles beLLer
Lhan compeLlLors
W lL ls verv dlfflculL for a companv Lo compeLe
successfullv ln Lhe lona run based [usL on
operaLlonal effecLlveness
W f|rm must a|so determ|ne how operat|ona|
effect|veness can be used to ach|eve a
susta|nab|e compet|t|ve advantage
W An effecLlve compeLlLlve sLraLeav ls crlLlcal
lAC1C8S AllLC1lnC 1CuA'S
CLC8AL 8uSlnLSS CCnul1lCnS
W ????????????????????????????????????????
8LALl1 Cl CLC8AL CCML1l1lCn
W Chanalna naLure of world buslness
W lnLernaLlonal companles
W SLraLealc alllances and producLlon sharlna
W llucLuaLlon of lnLernaLlonal flnanclal
condlLlons
chanalna naLure of world buslness
W 1he lndlan aross domesLlc producL (Cu) arowlna aL
8 maklna slanlflcanL presence ln Lhe world
W Companles all over Lhe alobe are aaaresslvelv
exporLlna Lhelr producLs/servlces Lo Lhe dlfferenL
counLrles
W Manv lorelan companles are LaraeLlna lndlan
markeLs Lo shore up proflLs
W 1he alobal economv LhaL lnLerconnecLs Lhe
economles of all naLlons has been Lermed Lhe alobal
vlllaae
W Cne of Lhe mosL lmporLanL new markeLs are 88lC
lnLernaLlonal companles
W lnLernaLlonal companles are Lhose whose
scope of operaLlons spans Lhe alobe as Lhev
buv produce and sell
W lnLernaLlonal flrms search ouL opporLunlLles
for proflLs relaLlvelv unencumbered bv
naLlonal boundarles
W CperaLlons manaaers musL coordlnaLe
aeoaraphlcallv dlspersed operaLlons
lnLernaLlonal companles
W World's LaraesL CorporaLlons
1 Ceneral MoLors uS
2 WalMarL SLores uS
3 Lxxon Mobll uS
4 lord MoLor uS
3 ualmlerChrvsler Cermanv
6 MlLsul !apan
7 MlLsublshl !apan
8 1ovoLa !apan
9 Ceneral LlecLrlc uS
10 lLochu !apan
SLraLealc Alllances
W SLraLealc alllances are [olnL venLures amona
lnLernaLlonal companles Lo explolL alobal
buslness opporLunlLles
W Alllances are ofLen moLlvaLed bv
roduct or product|on techno|ogy
Market access
roduct|on capab|||ty
oo||ng of cap|ta|
SLraLealc Alllances
W !apanese companles have lona pracLlced
kelreLsu Lhe llnklna of companles lnLo
lndusLrlal aroups
f|nanc|a| ke|retsu ||nks compan|es together
w|th crossho|d|ng of shares sa|es and purchases
w|th|n the group and consu|tat|on
product|on ke|retsu |s a web of |nter|ock|ng
re|at|onsh|ps between a b|g manufacturer
(1oyota) and |ts supp||ers
roducLlon Sharlna
W roducLlon sharlna means LhaL a producL
mlahL be deslaned and flnanced ln one
counLrv lLs maLerlals produced ln oLher
counLrles assembled ln anoLher counLrv and
sold ln veL oLher counLrles
W 1he counLrv LhaL ls Lhe hlahesLquallLv lowesL
cosL producer for a parLlcular acLlvlLv would
perform LhaL porLlon of Lhe producLlon of Lhe
producL
ros and Cons of CloballzaLlon
W ros (luses)
roducLlvlLv arows more qulcklv (llvlna sLandards
can ao up fasLer)
Clobal compeLlLlon and cheap lmporLs keep a lld
on prlces (lnflaLlon less llkelv Lo derall economlc
arowLh)
Cpen economv spurs lnnovaLlon (wlLh fresh ldeas
from abroad)
LxporL [obs ofLen pav more Lhan oLher [obs
lndla has more access Lo forelan lnvesLmenL
(keeps lnLeresL raLes low)
ros and Cons of CloballzaLlon
W Cons (Mlnuses)
MosL dlsplaced workers flnd new [obs LhaL pav
less
Workers face pavcuLs demands from emplovers
Servlce and whlLecollar [obs are lncreaslnalv
vulnerable
emplovees lose Lhelr comparaLlve advanLaae
when companles bulld advanced facLorles abroad
lnLernaLlonal llnanclal CondlLlons
W lnLernaLlonal flnanclal condlLlons are complex
due Lo
lnflaLlon
flucLuaLlna currencv exchanae raLes
LurbulenL lnLeresL raLes
volaLlllLv of lnLernaLlonal sLock markeLs
huae naLlonal debLs of some counLrles
enormous Lrade lmbalances beLween counLrles
lnLernaLlonal llnanclal CondlLlons
W Companles musL be readv Lo move qulcklv Lo
shlfL sLraLeales as world flnanclal condlLlons
chanae
W CpporLunlLles are usuallv avallable Lo reduce rlsk
8ulldlna smaller more flexlble facLorles
uslna forelan suppllers for maLerlals parLs or
producLs
Carefullv plannlna and forecasLlna so LhaL chanalna
condlLlons can be anLlclpaLed
CuALl1 SL8vlCL Anu CCS1
CPALLLnCLS
W Cua||ty
1he aoal of adequaLe quallLv musL be replaced
wlLh Lhe ob[ecLlve of perfecL producL and servlce
quallLv
1he enLlre corporaLe culLure musL be redlrecLed
and commlLLed Lo Lhe ldeal of perfecL quallLv
All emplovees musL be empowered Lo acL
A commlLmenL Lo conLlnuous lmprovemenL has Lo
be oraanlzaLlonwlde
CuALl1 SL8vlCL Anu CCS1
CPALLLnCLS
W Customer 5erv|ce
Companles musL qulcklv develop lnnovaLlve
producLs and respond qulcklv
CraanlzaLlonal sLrucLures musL be made more
horlzonLal Lo qulcklv accommodaLe chanae
MulLldlsclpllne Leams musL have declslonmaklna
auLhorlLv respondlna beLLer Lo Lhe markeLplace
Larae unwleldv companles are splnnlna off whole
buslness unlLs maklna Lhem auLonomous
buslnesses LhaL can compeLe wlLh small
aaaresslve compeLlLors
CuALl1 SL8vlCL Anu CCS1
CPALLLnCLS
W Cost
1here ls conLlnulna pressure Lo reduce dlrecL
cosLs (of produclna and selllna) and overhead
cosLs
lL cosL Lhe uS auLomakers $1300 more per auLo
for labor ln 1980 Lhan lL cosL Lhe !apanese auLo
makers 8v Lhe 1990s Lhe dlfference was almosL
zero
ClanL reLallers (llke WalMarL) squeezed weaker
compeLlLors ouL of Lhe markeL alvlna Lhe reLallers
Lhe leveraae Lo force Lhelr suppllers Lo sLreamllne
operaLlons and reduce cosLs/prlces
CuALl1 SL8vlCL Anu CCS1
CPALLLnCLS
W Cost
CosLcuLLlna measures belna used lnclude
W Movlna producLlon Lo lowlaborcosL counLrles
W neaoLlaLlna lower labor raLes wlLh unlons and workers
W AuLomaLlna processes Lo reduce Lhe amounL of labor
needed parLlcularlv processes LhaL are labor lnLenslve
AuvAnCLu 1LCPnCLCClLS
W 1he use of auLomaLlon ls one of Lhe mosL far
reachlna developmenLs Lo affecL manufacLurlna
and servlces ln Lhe pasL cenLurv
W 1he lnlLlal cosL of Lhese asseLs ls hlah
W 1he beneflLs ao far bevond a reducLlon ln labor
cosLs
Increased product/serv|ce qua||ty
keduced scrap and mater|a| costs
Iaster responses to customer needs
Iaster |ntroduct|on of new products and serv|ces
CCn1lnuLu C8CW1P Cl SL8vlCL
SLC1C8
W A robusL servlce secLor helps supporL Lhe
manufacLurlna secLor
W 1here ls much opporLunlLv for quallLv lmprovemenL
ln servlce flrms all round Lhe alobe
W Manv operaLlons manaaers are belna emploved ln
servlces
W |ann|ng ana|yz|ng and contro|||ng approaches
from manufactur|ng are be|ng adapted to serv|ce
systems
W 1he servlce secLor llke Lhe manufacLurlna secLor
musL sLreamllne and lmprove operaLlons lf lL ls Lo
survlve
SCA8Cl1 Cl CL8A1lCnS 8LSCu8CLS
W 8aw maLerlals llke LlLanlum nlckel coal naLural
aas waLer and peLroleum producLs are
perlodlcallv unavallable or ln shorL supplv
W A shorLaae of anv necessarv lnpuL Lo a converslon
subsvsLem lncludlna skllled personnel can be a
challenae for an operaLlons manaaer
W An lmporLanL lssue ln Lhe formaLlon of buslness
sLraLeav ls how Lo allocaLe scarce resources
amona buslness opporLunlLles
SCClAL8LSCnSl8lLl1 lSSuLS
W CorporaLe aLLlLudes are evolvlna from dolna whaL
companles have a leaal rlahL Lo do Lo dolna whaL ls
rlahL
W lacLors lnfluenclna Lhls evoluLlon lnclude
Consumer att|tude Consumers are express|ng the|r
||kes/d|s||kes by such means as stockho|der meet|ngs
||ab|||ty su|ts and buy|ng preferences
kegu|at|on 1he L C5n (Cccupat|ona| 5afety and
nea|th dm|n|strat|on ct) C|ean |r ct and Iam||y
Leave ct p|ace constra|nts on bus|nesses
5e|f|nterests Compan|es rea||ze that prof|ts w||| be
greater |f they act respons|b|y
SCClAL8LSCnSl8lLl1 lSSuLS
W Lnv|ronmenta| Impact
W roduct5afety Impact
W Lmp|oyee Impact
Soclal8esponslblllLv lssues
W Lnv|ronmenta| Impact
Concerns about the g|oba| env|ronment |nc|ude
Landf||| waste reduct|on
kecyc||ng
Lnergy conservat|on
Chem|ca| sp|||s
c|d ra|n
kad|oact|ve waste d|sposa|
and more
Soclal8esponslblllLv lssues
W Lnv|ronmenta| Impact
1here |s a need for standard|z|ng government
regu|at|ons of the env|ronment
Ctherw|se compan|es w||| grav|tate to the |ess
regu|ated countr|es
1he Internat|ona| Crgan|zat|on for
5tandard|zat|on has deve|oped a set of
env|ronmenta| gu|de||nes ca||ed I5C 14000
Soclal8esponslblllLv lssues
W roduct5afety Impact
narm to peop|e or an|ma|s that resu|ts from
poor product des|gn can
Damage a company's reputat|on
kequ|re a |arge expense to remedy
Cause governments to |mpose more regu|at|ons
Soclal8esponslblllLv lssues
W Lmp|oyee Impact
Lmp|oyee benef|ts and po||c|es |nc|ude
5afety and hea|th programs
Ia|r h|r|ng and promot|on pract|ces
Daycare
Iam||y |eave
nea|th care
ket|rement benef|ts
Lducat|ona| ass|stance
and more
Soclal8esponslblllLv lssues
W Lmplovee lmpacL
Lmplovee beneflLs and pollcles lmpacL lona
Lerm proflLablllLv due Lo Lhelr effecL on
Lmplovee morale and producLlvlLv
8ecrulLmenL and reLenLlon of emplovees
uemand for a companv's producLs
CosL of defendlna aaalnsL lawsulLs and bovcoLLs
uLvLLClnC CL8A1lCnS S18A1LC
Corporate Mission Corporate Mission Corporate Mission Corporate Mission
Business Strategy Business Strategy Business Strategy Business Strategy
Product/Service Plans Product/Service Plans Product/Service Plans Product/Service Plans
Competitive Priorities Competitive Priorities Competitive Priorities Competitive Priorities
Operations Strategy Operations Strategy Operations Strategy Operations Strategy
Assessment Assessment
oI Global oI Global
Business Business
Conditions Conditions
Assessment Assessment
oI Global oI Global
Business Business
Conditions Conditions
Distinctive Distinctive
Competencies Competencies
or or
Weaknesses Weaknesses
Distinctive Distinctive
Competencies Competencies
or or
Weaknesses Weaknesses
CorporaLe Mlsslon CorporaLe Mlsslon
W corporate m|ss|on ls a seL of lonaranae
aoals and lncludlna sLaLemenLs abouL
Lhe klnd of buslness Lhe companv wanLs Lo be ln
who lLs cusLomers are
lLs baslc bellefs abouL buslness
lLs aoals of survlval arowLh and proflLablllLv
8uslness SLraLeav
W us|ness strategy ls a lonaranae aame plan of
an oraanlzaLlon and provldes a road map of
how Lo achleve Lhe corporaLe mlsslon
W lnpuLs Lo Lhe buslness sLraLeav are
AssessmenL of alobal buslness condlLlons soclal
economlc pollLlcal Lechnoloalcal compeLlLlve
ulsLlncLlve compeLencles or weaknesses workers
sales force 8u Lechnoloav manaaemenL
CompeLlLlve rlorlLles
W Low roducLlon CosLs
ueflnlLlon
unlL cosL (labor maLerlal and overhead) of each
producL/servlce
Some Wavs of CreaLlna
W 8edeslan of producL/servlce
W new Lechnoloav
W lncrease ln producLlon raLes
W 8educLlon of scrap/wasLe
W 8educLlon of lnvenLorv
CompeLlLlve rlorlLles
W De||very erformance
Def|n|t|on
a) lasL dellverv b) CnLlme dellverv
5ome Ways of Creat|ng
a) |arger f|n|shedgoods |nventory
a) faster product|on rates
a) qu|cker sh|pp|ng methods
b) morerea||st|c prom|ses
b) better contro| of product|on of orders
b) better |nformat|on systems
CompeLlLlve rlorlLles
W n|ghCua||ty roducts/5erv|ces
Def|n|t|on
Customers' percept|on of degree of exce||ence
exh|b|ted by products/serv|ces
5ome Ways of Creat|ng
Improve product/serv|ce's
W ppearance
W erformance and funct|on
W Wear endurance ab|||ty
W ftersa|es serv|ce
CompeLlLlve rlorlLles
W Customer 5erv|ce and I|ex|b|||ty
Def|n|t|on
b|||ty to qu|ck|y change product|on to other
products/serv|ces Customer respons|veness
5ome Ways of Creat|ng
W Change |n type of processes used
W Use of advanced techno|og|es
W keduct|on |n WI through |ean manufactur|ng
W Increase |n capac|ty
CL8A1lCnS S18A1LC
W CperaLlons sLraLeav ls a lonaranae aame plan
for Lhe producLlon of a companv's
producLs/servlces and provldes a road map
for Lhe producLlon funcLlon ln helplna Lo
achleve Lhe buslness sLraLeav
LLLMLn1S Cl CL8A1lCnS S18A1LC
W oslLlonlna Lhe producLlon svsLem
W roducL/servlce plans
W CuLsourclna plans
W rocess and Lechnoloav plans
W SLraLealc allocaLlon of resources
W laclllLv plans capaclLv locaLlon and lavouL
CSl1lCnlnC 1PL 8CuuC1lCn
SS1LM
W SelecL Lhe Lvpe of producL deslan
SLandard
CusLom
W SelecL Lhe Lvpe of producLlon processlna svsLem
roducL focused
rocess focused
W SelecL Lhe Lvpe of flnlshedaoods lnvenLorv pollcv
roduceLosLock
roduceLoorder
roducL/Servlce lans
As a product is designed, all the detailed As a product is designed, all the detailed
characteristics oI the product are established. characteristics oI the product are established.
Each product characteristic directly Each product characteristic directly
aIIects how the product can be made. aIIects how the product can be made.
How the product is made determines How the product is made determines
the design oI the production system. the design oI the production system.
SLaaes ln a roducL's Llfe Cvcle
W lnLroducLlon Sales bealn producLlon and
markeLlna are developlna proflLs are neaaLlve
W CrowLh sales arow dramaLlcallv markeLlna
efforLs lnLenslfv capaclLv ls expanded proflLs
bealn
W MaLurlLv producLlon focuses on hlahvolume
efflclencv low cosLs markeLlna focuses on
compeLlLlve sales promoLlon proflLs are aL peak
W uecllne decllnlna sales and proflL producL mlahL
be dropped or replaced
CuLsourclna lans
W CuLsourclna refers Lo hlrlna ouL or subconLracLlna
some of Lhe work LhaL a companv needs Lo do
W 1hls sLraLeav ls belna used more and more as
companles sLrlve Lo operaLe more efflclenLlv
W Cutsourc|ng has many advantages and d|sadvantages
W Companles Lrv Lo deLermlne Lhe besL level of ouL
sourclna Lo achleve Lhelr operaLlons buslness aoals
W More ouLsourclna requlres a companv Lo have less
equlpmenL fewer emplovees and a smaller faclllLv
CuLsourclna lans
W A companv mlahL ouLsource anv of Lhe
followlna manufacLurlna relaLed funcLlons
Des|gn|ng the product
urchas|ng the bas|c raw mater|a|s
rocess|ng the subcomponents subassemb||es
ma[or assemb||es and f|n|shed product
D|str|but|ng the product
CuLsourclna lans
W Manv companles even ouLsource some servlce
funcLlons such as
ayro||
||||ng
Crder process|ng
Deve|op|ng/ma|nta|n|ng a webs|te
Lmp|oyee recru|tment
Iac|||ty ma|ntenance
rocess and 1echnoloav lans
W An essenLlal parL of operaLlons sLraLeav ls Lhe
deLermlnaLlon of how producLs/servlces wlll
be produced
W 1he ranae of Lechnoloales avallable Lo
produce producLs/servlces ls areaL and ls
conLlnuallv chanalna
SLraLealc AllocaLlon of 8esources
W lor mosL companles Lhe vasL ma[orlLv of Lhe
flrm's resources are used ln
producLlon/operaLlons
W Some or all of Lhese resources are llmlLed
W 1he resources musL be allocaLed Lo producLs
servlces pro[ecLs or proflL opporLunlLles ln
wavs LhaL maxlmlze Lhe achlevemenL of Lhe
operaLlons ob[ecLlves
laclllLv lans
W Pow Lo provlde Lhe lonaranae capaclLv Lo
produce Lhe flrm's producLs/servlces ls a crlLlcal
sLraLealc declslon
W 1he locaLlon of a new faclllLv mav need Lo be
declded
W 1he lnLernal arranaemenL (lavouL) of workers
equlpmenL and funcLlonal areas wlLhln a faclllLv
affecLs Lhe ablllLv Lo provlde Lhe deslred volume
quallLv and cosL of producLs/servlces
CompeLlLlve rlorlLles for Servlces
W 1he compeLlLlve prlorlLles llsLed earller for
manufacLurers applv Lo servlce flrms as well
Low product|on costs
Iast and ont|me de||very
n|ghqua||ty products/serv|ces
Customer serv|ce and f|ex|b|||ty
W rovldlna all Lhe prlorlLles slmulLaneouslv Lo
cusLomers ls seldom posslble
oslLlonlna SLraLeales for Servlces
W 1vpe of Servlce ueslan
SLandard or cusLom producLs
AmounL of cusLomer conLacL
Mlx of phvslcal aoods and lnLanalble servlces
W 1vpe of roducLlon rocess
Cuasl manufacLurlna
CusLomerasparLlclpanL
CusLomerasproducL
oslLlonlna SLraLeales for Servlces
W LxAMLL MCuCnALu'S
Plahlv sLandardlzed servlce deslan
Low amounL of cusLomer conLacL
hvslcal aoods domlnaLlna lnLanalble servlces
CuaslmanufacLurlna approach Lo backroom
producLlon process
lormlna CperaLlons SLraLeales lormlna CperaLlons SLraLeales
W SupporL Lhe producL plans and compeLlLlve
prlorlLles deflned ln Lhe buslness sLraLeav
W Ad[usL Lo Lhe evolvlna poslLlonlna sLraLeales
W Llnk Lo Lhe markeLlna sLraLeales
W Look aL alLernaLlve operaLlons sLraLeales
LvoluLlon of oslLlonlna SLraLeales
W 1he characLerlsLlcs of producLlon svsLems Lend Lo
evolve as producLs move Lhrouah Lhelr producL
llfe cvcles
W CperaLlons sLraLeales musL lnclude plan for
modlfvlna producLlon svsLems Lo a chanalna seL
of compeLlLlve prlorlLles as producLs maLure
W 1he caplLal and producLlon Lechnoloav requlred
Lo supporL Lhese chanaes musL be provlded
LvoluLlon of oslLlonlna SLraLeales
'olume 'olume
'ery 'ery
Low Low
Low Low High High
'ery 'ery
High High
Focus Focus Process Process Process Process Product Product Product Product
Fin.Gds. Fin.Gds. To To- -Order Order To To- -Order Order To To- -Stock Stock To To- -Stock Stock
Batch Batch
Size Size
'ery 'ery
Small Small
Small Small Large Large
'ery 'ery
Large Large
Product Product Custom Custom
Slightly Slightly
Standard Standard
Standard Standard
Highly Highly
Standard Standard
LiIe LiIe
Stage Stage
Intro. Intro.
Early Early
Growth Growth
Late Late
Growth Growth
Maturity Maturity
Llnklna CperaLlons and MarkeLlna
SLraLeales
W CperaLlons SLraLeav
roducLfocused
MakeLosLock
SLandardlzed producLs
Plah volume
W MarkeLlna SLraLeav
Low producLlon cosL
lasL dellverv of producLs
CuallLv
W Lxample 1v seLs
Llnklna CperaLlons and MarkeLlna
SLraLeales
W CperaLlons SLraLeav
roducLfocused
MakeLoorder
SLandardlzed producLs
Low volume
W MarkeLlna SLraLeav
Low producLlon cosL
keeplna dellverv promlses
CuallLv
W Lxample School buses
Llnklna CperaLlons and MarkeLlna
SLraLeales
W CperaLlons SLraLeav
rocessfocused
MakeLosLock
CusLom producLs
Plah volume
W MarkeLlna SLraLeav
llexlblllLv
CuallLv
lasL dellverv of producLs
W Lxample Medlcal lnsLrumenLs
Llnklna CperaLlons and MarkeLlna
SLraLeales
W CperaLlons SLraLeav
rocessfocused
MakeLoorder
CusLom producLs
Low volume
W MarkeLlna SLraLeav
keeplna dellverv promlses
CuallLv
llexlblllLv
W Lxample Larae supercompuLers
no Slnale 8esL SLraLeav
W SLarLup and Small ManufacLurers
usuallv prefer poslLlonlna sLraLeales wlLh
CusLom producLs
rocessfocused producLlon
roduceLoorder pollcles
1hese svsLems are more flexlble and requlre less
caplLal
no Slnale 8esL SLraLeav
W SLarLup and Small Servlces
Successfullv compeLe wlLh larae corporaLlons bv
Carvlna ouL a speclalLv nlche
Lmphaslzlna close personal cusLomer servlce
ueveloplna a loval cusLomer base
no Slnale 8esL SLraLeav
W 1echnoloavlnLenslve 8uslness
roducLlon svsLems musL be capable of produclna
new producLs and servlces ln hlah volume soon
afLer lnLroducLlon
Such companles musL have Lwo kev sLrenaLhs
W Plahlv capable Lechnlcal people
W SufflclenL caplLal
Wrapup WorldClass racLlce
W uL cusLomers flrsL
W CeL new producLs/servlces Lo markeL fasLer
W Are hlah quallLv producers
W Pave hlah labor producLlvlLv low producLlon
cosLs
W Carrv llLLle excess lnvenLorv
W more
WorldClass racLlce
W 1hlnk more aloballv ln purchaslna and selllna
W Culcklv adopL and develop new Lechnoloales
W 1rlm oraanlzaLlons Lo be lean and flexlble
W Are less reslsLanL Lo sLraLealc alllances/[olnL
venLures
W Conslder relevanL soclal lssues when seLLlna
sLraLeales