Presentation On OPERATION MANAGEMENT SUBMITTED TO : Mr. AJAY SUBMITTED BY: KARAMVEER SINGH

2 Historical Development of OM Industrial revolutionLate 1700s Scientific managementEarly 1900s Hawthorne Effect 1930s Human relations movement1930s- Management science1940s- Computer age1960s- Environmental Issues1970s- JIT & TQM*1980s- *JIT= Just in Time, TQM= Total Quality Management

3 Historical Development con’t Reengineering1990- Global competition1980- Flexibility1990- Time-Based Competition1990- Supply chain Management1990- Electronic Commerce2000- Outsourcing & flattening of world2000- For long-run success, companies must place much importance on their operations

The Basics Of Operations Management Operations Management The process of managing the resources that are needed to produce an organization’s goods and services. Operations managers focus on managing the “five Ps” of the firm’s operations: People, plants, parts, processes, and planning and control systems. 4

The Production System Input A resource required for the manufacture of a product or service. Conversion System A production system that converts inputs (material and human resources) into outputs (products or services); also the production process or technology. Output A direct outcome (actual product or service) or indirect outcome (taxes, wages, salaries) of a production system. 5

The Basic Production System

The Scope of Operations Management

Types of production systems Classification on the basis of output Three bases considered- 1. Variety 2. Uniformity 3. Volume per output type o Two types - a)continuous b)intermittent

CONTINUOUS INTERMITTENT FLOW PRODUCTION MASS PRODUCTION BATCH PRODUC- TION JOB ORDER PROJECTS LOW HIGH VARIETY HIGH LOW UNIFORMITY HIGH LOW VPOT

DIFFERENCE BETWEEN CONTINUOUS AND INTERMITTENT SYSTEMS ON THE BASIS OF MACHINERY CONTINUOUSINTERMITTENT 1.SPECIFIC MACHINERY1.GENERALISED MACHINERY 2.PERMANENT MACHINE SETUP 2.FREQUENT CHANGES IN MACHINE SETUP 3.DUPLICATION OF MACHINES 3.LESS MACHINES REQUIRED

ON THE BASIS OF MATERIAL HANDLING AND LABOUR USE CONTINUOUSINTERMITTENT 1.UNSKILLED AS WELL AS SMALL TEAM OF SPECIALISED LABOUR FORCE 1.HIGHLY SKILLED LABOUR FORCE 2.MECHANIZED MATERIAL HANDLING 2.NOT FEASIBLE TO EMPLOY MECHANIZED HANDLING 3.MATERIAL HANDLING COST IS LESS 3.MATERIAL HANDLING COST IS HIGHER 4.INVESTMENT IN INVENTORY IS HIGHER 4.NEED FOR INVENTORY IS MINIMISED

ON THE BASIS OF OUTPUT PRODUCED- CONTINUOUSINTERMITTENT 1.FEW STANDARD PRODUCTS IN LARGE QUANTITIES 1.WIDE RANGE OF PRODUCTS IN SMALL QUANTITIES 2.OUTPUT ON THE BASIS OF ANTICIPATION OF DEMAND 2.OUTPUT ACCORDING TO ORDER RECEIVED

DIFFERENCES ON THE BASIS OF MAINTENANCE AND CONTROL EMPLOYED CONTINUOUS INTERMITTENT 1.ABSENCE OF MAINTENNCE MAY INTERRUPT WHOLE PROCESS 1.NO DANGER OF STOPPAGE OF WHOLE LINE 2.CONTROLLING IS SIMPLER2.CONTROLLING IS COMPLEX

TYPES OF CONTINUOUS PRODUCTION SYSTEM 1.FLOW TYPE  Output cannot be segregated into different units  High degree of uniformity  Output cannot be measured directly  Example-power plant

2.MASS PRODUCTION  Straight line flow of materials  Output of one stage normally becomes input for another  Output visible in form of identical units  Standardised output produced in large quantities  PROBLEMS 1. Balancing of production lines 2. Machine maintenance 3. Raw materials supply  Example – sugar production

Types of intermittent production systems 1.BATCH PRODUCTION SYSTEM-  Variety of products are made in small quantities  Various products compete for share of machines  Outputs are aggregated in form of batches  Batches may comprise of similar or dissimilar outputs  PROBLEMS 1. Machine-job allocation problem 2. Determination of economic batch quantity 3. Scheduling and sequencing of operations  Example – electrical goods

2.JOB-ORDER PRODUCTION SYSTEM  Does not has its own standard product but accepts whatever customer orders come in  Output identifiable in terms of specific job order  Material flow is very complex  PROBLEMS 1. Determination of the sequence of processing  Example – tailor shop

3.PROJECT PRODUCTION SYSTEM  Project is a temporary endeavour having a defined beginning and end ;undertaken to meet unique goals and objectives  Project is non repetitive  This type of production system uses resources on different projects  Product remains fixed and manpower and facilities put work on it  PERT/CPM can be used for planning and control in this case  Example- Ship production

22 OM Decisions All organizations make decisions and follow a similar path First decisions very broad – Strategic decisions Strategic Decisions – set the direction for the entire company; they are broad in scope and long-term in nature

23 OM Decisions Following decisions focus on specifics - Tactical decision Tactical decisions: focus on specific day-to-day issues like resource needs, schedules, & quantities to produce are frequent Strategic decisions less frequent Tactical and Strategic decisions must align

24 OM Decisions

25 Today’s OM Environment Customers demand better quality, greater speed, and lower costs Companies implementing lean system concepts – a total systems approach to efficient operations Recognized need to better manage information using ERP and CRM systems Increased cross-functional decision making

26 OM in Practice OM has the most diverse organizational function Manages the transformation process OM has many faces and names such as; V. P. operations, Director of supply chains, Manufacturing manager Plant manger, Quality specialists, etc. All business functions need information from OM in order to perform their tasks

27 OM Across the Organization Marketing is not fully able to meet customer needs if they do not understand what operations can produce Finance cannot judge the need for capital investments if they do not understand operations concepts and needs Information systems enables the information flow throughout the organization Human resources must understand job requirements and worker skills Accounting needs to consider inventory management, capacity information, and labor standards

Thank you….