Operations Management

Operations Management
Definition
An operations system is defined as one in which
several activities are performed to transform a set of inputs into useful output using a transformation process
Operations Management is
a systematic approach to address all the issues pertaining to the transformation process that converts some inputs into output that are useful, and could fetch revenue to the operations system
Mahadevan (2010), Operations Management: Theory & Practice, 2 nd Edition Pearson Education
Operations Management (OM)

Salient Aspects
OM is a systematic approach
using scientific tools & techniques and solution methodologies to analyze problems
OM is about addressing several issues

varying in terms of time horizon, nature of decisions
Transformation processes are central to Operations Focusing on keeping costs to the minimum Developing a set of measures to assess performance of the system
Operations Management- focus
To address the design, planning and operational control of the transformation process
Service Manufacturing
Continuum
Pure Product Pure Service
Ayurvedic Healing Treatment Legal/Tax Consulting Cyber Caf Telephone Booths Emergency Maintenance Services Facilities Maintenance High quality restaurant meal Fast food in a eat out joint Customized durable goods Fast moving commodities Vending Machines
Adopted from Hill, T. (2005), Operations Management (Palgrave Macmillan), 2nd Edition, pp 14.
Service Operations
Salient Features
Tangibility: Services are performances and actions rather than objects, therefore having poor tangibility Heterogeneity: High variability in the operation system performance Simultaneous Production & Consumption: Degree of customer contact is very high Perishability: Services cannot be inventoried as in the case of manufactured products.
Manufacturing & Service

Similarities & Differences
Manufacturing Organizations Differences Physical durable product Output can be inventoried Low customer contact Long response time
Regional, national, Intl. markets
Service Organizations Intangible, perishable product Output cant be inventoried High customer contact Short response time
Local markets
Small facilities Labour intensive Quality not easily measured Similarities
Large facilities Capital intensive Quality easily measured
Is concerned about quality, productivity & timely response to its customers

Must make choices about capacity, location, layout Has suppliers to deal with Has to plan its operations, schedules and resources Balance capacity with demand by a careful choice of resources Has to make an estimate of demand
Operations
A key functional area in an Organisation

Finance
Operations
Marketing
HRM
Operations Function
Customer Layer
Ultimate Customer Dealers Retailers
Linkages with other functions

Operations Support Layer
Marketing Maintenance Quality
Costing
Planning
Tooling
Core Operations Layer

Testing Fabrication Assembly Machining
Material
IT
Design
IE
Layer of Innovation
Innovation Strategy Research & Development
Supplier Layer
Service Delivery system

Sub-contractors Suppliers
Other service providers

Source: B Mahadevan, The New Manufacturing Architecture, Tata McGraw Hill, New Delhi, 1999.
A systems Perspective
Forecasting
PROCESSING
Labour
Process & Product Design Operations Planning & Control Purchasing & Inventory Control Goods
OUTPUT
INPUT
Material
Capital
Material & Capacity Planning
Services
Quality Management
Maintenance Management
Process Improvement
Feedback
Functions
Design of Operations Operational Control of Operations
Product Design & Development Process Design Quality Management Location and Layout of facilities Capacity Planning
Forecasting Production Planning and Control Supply Chain Management Maintenance Management Continuous improvement of operations
Design issues in Operations Management lay down overall constraints under which the operations system functions Operational Control issues focuses on optimizing the use of available resources in the short-term while delivering goods and services as per plan under the given design constraints

Operations Management

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Operations Management

Operations Management (OM)

OM is about addressing several issues

Operations Management- focus

Manufacturing & Service

Large facilities Capital intensive Quality easily measured

Is concerned about quality, productivity & timely response to its customers

A key functional area in an Organisation

Linkages with other functions

Core Operations Layer

Service Delivery system

Other service providers

Material & Capacity Planning

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