OPERATIONS OPERATIONS MANAGEMENTMANAGEMENT

MGT 460MGT 460

Self IntroductionSelf Introduction

Dr. Arshad ZaheerDr. Arshad Zaheer

•Education: Education: PhD, MS(Engineering Management), MS (E-Commerce), MBA

•Reviewer of International Journals

•Ph.D/M.Phil Supervisor/External Reviewer

•Publications in International journals

•Books//Monographs

•Articles in Edited Books

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Self IntroductionSelf Introduction

Dr. Arshad ZaheerDr. Arshad Zaheer

•National and International Conferences

•Workshops

•Administrative Experience

•Teaching Experience

•Areas of Interest

•Research Software Expertise (SPSS, AMOS, VPLS)

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Course OutlineCourse Outline• Introduction to Operations Management Introduction to Operations Management

• Productivity MeasurementProductivity Measurement

• Competitiveness and StrategyCompetitiveness and Strategy

• Managing QualityManaging Quality

• Linear ProgrammingLinear Programming

• Transportation Models Transportation Models

• Assignment MethodsAssignment Methods

• ForecastingForecasting

• Project Management Project Management 4

Course OutlineCourse Outline

• Decision Making ToolsDecision Making Tools

• Learning CurvesLearning Curves

• Inventory ManagementInventory Management

• Operations Strategy in a Global Environment Operations Strategy in a Global Environment

• Location StrategiesLocation Strategies

• Layout StrategiesLayout Strategies

• Supply Chain ManagementSupply Chain Management

• Human Resources and Job DesignHuman Resources and Job Design

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Course ObjectivesCourse Objectives

• Learning operational management techniques that could be applied to real world problems

• understand the strategic role of operations management in creating and enhancing a firm’s competitive advantages

• understand key concepts and issues of OM in both manufacturing and service organizations

• apply analytical skills and problem-solving tools to the analysis of the operations problems

• letting students apply the relevant operations management technique to the correct situation

• letting students understand operational management results and draw the correct conclusion from them

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Reference MaterialReference Material

• Operation Management by Jay Heizer, Barry Operation Management by Jay Heizer, Barry Render and Jagadeesh RajashekharRender and Jagadeesh Rajashekhar

• Operations Research: An Introduction by Operations Research: An Introduction by Hamdy A. TahaHamdy A. Taha

• Operations Management by William J. Operations Management by William J. StevensonStevenson

• Online searchOnline search

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Course Plan and Course Plan and RequirementsRequirements

• LecturesLectures

• AssignmentsAssignments

• QuizzesQuizzes

• Sessional Sessional

• Marks DistributionMarks Distribution

Introduction to Operations ManagementIntroduction to Operations Management

Dr. Arshad ZaheerDr. Arshad Zaheer

Lecture 1Lecture 1

Lecture OutlineLecture Outline

• ManagementManagement

• OperationsOperations

• Value-AddedValue-Added

• Operations InterfacesOperations Interfaces

• Definition of Operations ManagementDefinition of Operations Management

• NomenclatureNomenclature

• Goods and ServicesGoods and Services

• Responsibilities of Operations ManagerResponsibilities of Operations Manager

• New Trends in OMNew Trends in OM

ManagementManagement

Management Management is the scientific is the scientific study concerning the different study concerning the different activities (like POSDCORB) in activities (like POSDCORB) in

order to maximize profit, order to maximize profit, minimizing cost and to optimize minimizing cost and to optimize

productivityproductivity

What is Management?What is Management?

OperationsOperations

‘‘Operations’ Operations’ consists of activities related consists of activities related to the production of goods and services. to the production of goods and services.

‘‘Goods Oriented Operations’ Goods Oriented Operations’ consists of consists of manufacturing and assembly operations manufacturing and assembly operations

‘‘Service Oriented Operations’ Service Oriented Operations’ consists of, consists of, health care, transportation, Education, health care, transportation, Education, retailing etc.retailing etc.

What is ‘Operations’?What is ‘Operations’?

Operations as core functionOperations as core function

‘‘Operations’ Operations’ function is the core of most function is the core of most business organizationsbusiness organizations

Inputs are converted to Valuable outputs Inputs are converted to Valuable outputs after transformation processafter transformation process

Value-AddedValue-AddedThe difference between the cost of inputs

and the value or price of outputs.

Inputs Land Labor Capital

Transformation/Conversion

process

Outputs Goods Services

Control

Feedback

FeedbackFeedback

Value added

Food ProcessorFood Processor

Inputs Processing Outputs

Raw Vegetables Cleaning Canned vegetablesMetal Sheets Making cans

Water CuttingEnergy CookingLabor PackingBuilding LabelingEquipment

Hospital ProcessHospital Process

Inputs Processing Outputs

Doctors, nurses Examination Healthy patientsHospital Surgery

Medical Supplies MonitoringEquipment MedicationLaboratories Therapy

Why Organizations need Why Organizations need Operations ManagerOperations Manager

• An operations Manager controls the An operations Manager controls the processes by which value is added processes by which value is added from conversion of inputs to from conversion of inputs to outputs.outputs.

Production and Operations Production and Operations ManagementManagement

ProductionProduction is the creation of is the creation of goods and servicesgoods and services

Operations management (OM)Operations management (OM) is the set of activities that is the set of activities that

creates value in the form of creates value in the form of goods and services by goods and services by

transforming inputs into transforming inputs into outputsoutputs

What Is Operations What Is Operations Management?Management?

Organization

Finance Operations Marketing

The management of systems or processes that create goods and/or provide services

Organizing to Produce Goods Organizing to Produce Goods and Servicesand Services

Essential functions:Essential functions: Finance/accounting – allocation of Finance/accounting – allocation of

resources, investment decisions, resources, investment decisions, tracks how well the organization is tracks how well the organization is doing, pays bills, collects the doing, pays bills, collects the moneymoney

Marketing – Front line activity, Marketing – Front line activity, generates demandgenerates demand

Production/operations – creates Production/operations – creates the productthe product

Operations InterfacesOperations Interfaces

Public Relations

Accounting

IndustrialEngineering

Operations

Maintenance

PersonnelPurchasing

Distribution

MIS

What Is Operations What Is Operations Management?Management?

Operations management (OM)Operations management (OM) is the area is the area of management which is concerned with of management which is concerned with

administration of business practices administration of business practices especially overseeing, designing and especially overseeing, designing and

controlling the process of production set controlling the process of production set of activities that creates value in the form of activities that creates value in the form

of goods and services by transforming of goods and services by transforming inputs into outputs with maximum level of inputs into outputs with maximum level of

efficiency ensuring profitability for the efficiency ensuring profitability for the organizationorganization

NomenclatureNomenclature

• Production ManagementProduction Management

• Production and Operations Management Production and Operations Management (POMA)(POMA)

• Operations ManagementOperations Management

• Operations Research Operations Research (Interdisciplinary Subject)(Interdisciplinary Subject)

• Grey AreasGrey Areas

Operations ResearchOperations Research

Operations research is the development and Operations research is the development and collection of techniquescollection of techniques based on based on

mathematicsmathematics and other and other scientific approachesscientific approaches that finds solutions to your problems.that finds solutions to your problems.

Difference between Operations Difference between Operations Management and ResearchManagement and Research

1.1. OR relies on mathematical OR relies on mathematical modeling and OM relies on practical modeling and OM relies on practical scenarios/industrial cases.scenarios/industrial cases.

2.2. OR is domain and tool of Engineers OR is domain and tool of Engineers while OM is considered to be one of while OM is considered to be one of the critical tools of Managers.the critical tools of Managers.

Why Study OM?Why Study OM?

OM is one of three major functions OM is one of three major functions (marketing, finance, and operations) (marketing, finance, and operations) of any organizationof any organization

We want (We want (and needand need) to know how ) to know how goods and services are producedgoods and services are produced

We want to understand what We want to understand what operations managers dooperations managers do

OM is such a costly part of an OM is such a costly part of an organizationorganization

What Operations What Operations Managers DoManagers Do

PlanningPlanning

OrganizingOrganizing

StaffingStaffing

LeadingLeading

ControllingControlling

Basic Management FunctionsBasic Management Functions

Responsibilities of Operations Responsibilities of Operations ManagementManagement

Products & services

Planning– Capacity– Location–– Make or buy– Layout– Projects– Scheduling

Controlling– Inventory– Quality

Organizing– Degree of centralization– Subcontracting

Staffing– Hiring/laying off– Use of Overtime

Directing– Incentive plans– Issuance of work orders– Job assignments

The Critical DecisionsThe Critical Decisions

Design of goods and servicesDesign of goods and services What good or service should we What good or service should we

offer?offer? How should we design these products How should we design these products

and services? and services?

Managing qualityManaging quality How do we define quality?How do we define quality? Who is responsible for quality?Who is responsible for quality?

Table 1.2 (cont.)Table 1.2 (cont.)

The Critical DecisionsThe Critical Decisions

Process and capacity designProcess and capacity design What process and what capacity will What process and what capacity will

these products require?these products require?

What equipment and technology is What equipment and technology is necessary for these processes?necessary for these processes?

Location strategyLocation strategy Where should we put the facility?Where should we put the facility?

On what criteria should we base the On what criteria should we base the location decision?location decision?

Table 1.2 (cont.)Table 1.2 (cont.)

The Critical DecisionsThe Critical Decisions Layout strategyLayout strategy

How should we arrange the facility?How should we arrange the facility?

How large must the facility be to meet How large must the facility be to meet our plan?our plan?

Human resources and job designHuman resources and job design How do we provide a reasonable work How do we provide a reasonable work

environment?environment?

How much can we expect our How much can we expect our employees to produce?employees to produce?

Table 1.2 (cont.)Table 1.2 (cont.)

The Critical DecisionsThe Critical Decisions

Supply chain managementSupply chain management Should we make or buy this component?Should we make or buy this component?

Who are our suppliers and who can Who are our suppliers and who can integrate into our e-commerce program?integrate into our e-commerce program?

Inventory, material requirements Inventory, material requirements planning, and JITplanning, and JIT How much inventory of each item should How much inventory of each item should

we have?we have?

When do we re-order?When do we re-order?Table 1.2 (cont.)Table 1.2 (cont.)

The Critical DecisionsThe Critical Decisions

Intermediate and shortIntermediate and short––term term schedulingscheduling Are we better off keeping people on Are we better off keeping people on

the payroll during slowdowns?the payroll during slowdowns?

Which jobs do we perform next?Which jobs do we perform next?

MaintenanceMaintenance Who is responsible for maintenance?Who is responsible for maintenance?

When do we do maintenance?When do we do maintenance?

Table 1.2 (cont.)Table 1.2 (cont.)

New Challenges in OMNew Challenges in OM

Global focusGlobal focus

Just-in-timeJust-in-time

Supply chain Supply chain partneringpartnering

Rapid product Rapid product development, development, alliancesalliances

Mass Mass customizationcustomization

Empowered Empowered employees, teamsemployees, teams

ToToFromFrom Local or national focusLocal or national focus

Batch shipmentsBatch shipments

Low bid purchasingLow bid purchasing

Lengthy product Lengthy product developmentdevelopment

Standard productsStandard products

Job specializationJob specialization

Characteristics of GoodsCharacteristics of Goods

Tangible productTangible product

Consistent product Consistent product definitiondefinition

Production usually Production usually separate from separate from consumptionconsumption

Can be inventoriedCan be inventoried

Low customer Low customer interactioninteraction

Service DefinitionsService Definitions

• Services are deeds, processes or Services are deeds, processes or performances.performances.

OROR

• A service is a time-perishable, A service is a time-perishable, intangible experience performed for a intangible experience performed for a customer acting in the role of a co-customer acting in the role of a co-producerproducer

Characteristics of ServiceCharacteristics of Service Intangible productIntangible product

Produced and Produced and consumed at same timeconsumed at same time

Often uniqueOften unique

High customer High customer interactioninteraction

Inconsistent product Inconsistent product definitiondefinition

Often knowledge-basedOften knowledge-based

Frequently dispersedFrequently dispersed

Steel productionAutomobile fabrication

House buildingRoad construction

DressmakingFarming

Auto RepairAppliance repair

Maid ServiceManual car wash

TeachingLawn mowing

Low service contentHigh goods content

High service contentLow goods content

Increasinggoods content

Increasingservice content

Goods-service continuum

Ethics and Social ResponsibilityEthics and Social Responsibility

Challenges facing Challenges facing operations managers:operations managers:

Developing and producing safe, Developing and producing safe, quality productsquality products

Maintaining a clean environmentMaintaining a clean environment

Providing a safe workplaceProviding a safe workplace

Honouring community commitmentsHonouring community commitments