Introduction to production and operation management.

1. PRODUCTION AND
OPERATIONS
MANAGEMENT -1
Introduction
- Pritesh Kholkar

2. WHAT IS OPERATIONS ???
A function or system that transforms inputs into outputs of greater
value.
WHAT IS OPERATION MANAGEMENT(OM) ???
Systematic design, operation and improvement of the systems
that create and deliver the firm’s primary products and services.

3. ORGANIZATIONAL MODEL

4. TODAY’S FACTORS AFFECTING OM
• Global Competition
• Quality, customer services and cost challenges
• Rapid expansion of advanced technologies
• Continues growth of the service sectors
• Scarcity of operations Resources
• Social Responsibility Issues

5. WHY STUDY OM ???
Operations
Managemen
t
Business
Education
Systematic
approach to
Organisation
processes
Career
Opportunitie
s
Concepts
and Tools

6. OPERATION AS A SYSTEM

7. INPUTS OF AN OPERATION SYSTEM
 External
• Legal, Economic, Social, Technological
 Market
• Competition, Customer Desire, Product Info.
Primary Resources
• Material, Personnel, capital, Utilities

8. TRANSFORMATION PROCESSES/
CONVERSION SUBSYSTEM
Uses resources to convert inputs into desired output.
Categories
 Physical: as in manufacturing operations
Locational: as in transportation
 Exchange: as in retail operations
 Storage : as in warehousing
 Physiological: as in health care
 Informational: as in communication

9. OUTPUTS OF OPERATION SYSTEM
 Direct
• Products
• Services
 Indirect
• Waste
• Pollution
• Technological Advances

10. OBJECTIVES OF OM
• Quicker work
• Higher Efficiency
• No Errors
• Cost Reduction
• Good quality product
• Customer satisfaction
• Employees and workers morale

11. KEY CONCEPTS IN OM
Efficiency : Doing things at lowest possible cost
Effectiveness: Doing the right things to create the
most value for the company
Value: Quality divided by price

12. MANAGEMENT DECISIONS
• Strategic (Long Term) decisions.
• Tactical (Intermediate Term) decisions.
• Operational Planning and control (Short Term)
decisions.

13. STRATEGIC DECISIONS
 These decisions are of strategic importance and have
long term significance for the organization
 Examples include deciding:
• the design for a new product’s production process
• where to locate a new factory
• whether to launch a new product development plan

14. TACTICAL DECISION
 It addresses how to efficiently schedule material and
labour within the constraints of previously made
strategic decisions.
 Examples include deciding:
• how much finished goods inventory to carry
• amount of overtime to be planned next week
• details of raw material to be purchased next month.

15. OPERATIONAL PLANNING &
CONTROL DECISIONS
 These decisions concern the day to day activities of
workers, quality of products and services, production
and overhead cost and machine maintenance.
 Examples include deciding
• labour cost standards for a new project.
•Which jobs are on priority
•Whom to assign jobs
• frequency of preventive maintenance

16. SERVICES & GOODS
Service
•Intangible process
•Location of service
facility and direct
consumer
involvement in
creating output is
Goods
•Physical output of
process
•Location is not
essential

17. OPERATIONS AS SERVICE
Core Services
 Quality
 Flexibility
 Speed
 Price
Value-added Service
 Information
 Problem Solving
 Sales Support
 Field Support

18. HISTORICAL SUMMARY OF OM
 JIT and TQC
• Just In Time (JIT) and Total Quality Control (TQC) were the major
breakthrough in year 1980 which marked revolution in management
plilosophies and technologies.
 Manufacturing Strategy Paradigm
• Late 1970 and Early 1980 saw the development of manufacturing
strategy paradigm by researchers at Harvard Business School. It
emphasized how manufacturing executives could use their factories
capabilities as strategic competitive weapons.

19. HISTORICAL SUMMARY OF OM
 Service Quality and productivity
• great diversity of service industries.
 Total Quality Management and Quality Cerification
• In late 1980 and 1990 major development was focus on Total
Quality Management
• ISO 9000 certification created by International Organization for
Standardization, which plays major role in setting quality
standards for global manufacturers.

20. HISTORICAL SUMMARY OF OM
 Business process Reengineering
• The need to become lean to remain competitive in global
recession of 1990 pushed companies to seek innovation in their
processes.
• Business process Reengineering was introduced the approach
was to make revolutionary approach and not evolutionary
approach.
 Supply chain Management
• The central Idea of supply chain management is to apply a
total system approach to managing the flow of information,
material and services from raw material suppliers through

21. HISTORICAL SUMMARY OF OM
 Electronic Commerce
• Use of Internet and World Wide Web in late 1990 was remarkable
• e-commerce refers to use of internet as an essential element for
business activity.

22. CURRENT ISSUES IN OM
Coordinating the relationships between mutually supportive but
separate organizations
Optimizing global supplier, production and distribution networks
Increased co-production of goods and services
Managing customer touch points
Raising senior management awareness of operations as a significant
competitive weapon

23. THANK YOU