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Operations Management
Suhas Rane
10/17/08 ranesuhas@hotmail.com 1
Agenda
Historical Development of OM
Taylor, Henry Ford, Hawthorne Studies
Operations Research, Computers & Adv. Opn.
Technology.
Production Systems
“Input –Transformation –Output” Relationships
Productivity Measurements
Decisions & Activities in OM
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Historical Development of OM
In olden days, did Production Systems
exist ?
Great Wall of China,
Egyptian Pyramids,
Taj Mahal
Village Activities
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Evolution of OM
Phases in evolution of OM
Craft Production
Mass Production
Lean Management
Mass Customisation
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Historical Evolution of OM
Specialized labour
Interchangeable parts
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Historical Evolution of OM
Hawthorne Studies
Operations Research
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Historical Events in O. M. (cont.)
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Historical Events in O. M. (cont)
Date
Era Events/Concepts Originator
s
Globalizatio WTO, European Union, 1990s Numerous
n and other trade 2000s countries
Internet agreements
Internet, WWW, ERP, 1990s ARPANET, Tim
and companies
Revolution Supply Chain Berners-Lee SAP,
Management i2 Technologies,
ORACLE,
PeopleSoft
E-commerce 2000s Amazon, Yahoo,
eBay, and others
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OM in the Organisation Chart
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O. M. Definition
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What does Operations Manager
Do?
Operations -
a function or system that transforms
inputs into outputs of greater value
Transformation Process -
a series of activities along a value chain
extending from supplier to end-
customer
activities that do not add value are superfluous
and should be eliminated
Physical : as in manufacturing
operations
Locational : as in transportation
operations
Exchange : as in retail operations
Physiological: as in health care
Psychological: as in entertainment
Informational: as in communication
INPUT
•Material
TRANSFORMATION OUTPUT
•Machines
•Goods
•Labor PROCESS
•Services
•Management
•Capital
Feedback
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Operations Management
Is functionally
related to –
Marketing
Finance and
Accounting
Human
Resources
Outside
Suppliers
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INPUT RESOURCES
LAND, PLANT, MATERIAL ENERGY MANPOWER
BLDG M/C
OPERATIONS
MANAGEMENT
Obtains the facts
Plans,
Directs,
Coordinates,
Controls,
Motivates
in order to PRODUCE
OUTPUT
Creation of Providing
Goods Services
Production
Operations Mgmt
Mgmt
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Mfg. v/s Services – What’s the
difference?
Manufacturing Services
1. Step by step conversion of Material Service to satisfy customer
4. More M/c Oriented, Less Labour More Mind Skill / Labour Oriented
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2. Organizing
Centralized or Decentralized
Organized by functions, product or hybrid
Assign responsibility for every activity
Arrange supplier/ subcontractor network
Establish maintenance policies
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3. Controlling
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4. Directing
Personnel policies
Employment contracts
Issue job instructions
Issue routings
Issue despatch lists
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5. Motivating
Encourage thru praise , recognition ,
tangible rewards
Motivate thru enriched jobs & challenging
assignments
6. Co-ordinating
Common forecasts & Master Schedules
Common standardised database
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Production Management
Definition: (by E. S. Buffa)
“Production Management deals with decision
making related to production processes, so
that
resulting goods & services are produced
according to specification, in the amount &
by
the schedule demanded and at minimum
cost.”
Output
Productivity ------------ No. of
pcs./hr.
Input
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Productivity Measures
( Output in terms of Input)
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Myth 2 : Higher productivity mean
working Harder.
Due
10/17/08 to such misconception
ranesuhas@hotmail.com in people’s mind,
39
Productivity of an Organization
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Productivity of a Service Function