INTRODUCTION:

Operations management is an area of business concerned with the production of goods and
services, and involves the responsibility of ensuring that business operations are efficient in
terms of using as little resource as needed, and effective in terms of meeting customer
requirements. It is concerned with managing the process that converts inputs (in the forms of
materials, labor and energy) into outputs (in the form of goods and services).

Operations traditionally refer to the production of goods and services separately, although the
distinction between these two main types of operations is increasingly difficult to make as
manufacturers tend to merge product and service offerings. More generally, Operations
Management aims to increase the content of value-added activities in any given process.
Fundamentally, these value-adding creative activities should be aligned with market opportunity
(see Marketing) for optimal enterprise performance.
As the world of operations has changed, so have interests and priorities within the Unit.
Historically, the Technology in Operation Management Unit focused on manufacturing and
the development of physical products. Over the past several years, we have expanded our
research, course development, and course offerings to encompass new issues in information
technology, supply chains, and service industries.

The field of Technology in Operation Management is concerned with the design,

management, and improvement of operating systems and processes. As we seek to understand
the challenges confronting firms competing in today's demanding environment, the focus of
our work has broadened to include the multiple activities comprising a firm's "operating core":

 The multi-function, multi-firm system that includes basic research, design, engineering,
product and process development and production of goods and services within individual
operating units;

 The networks of information and material flows that tie operating units together and the
systems that support these networks;

 The distribution and delivery of goods and services to customers.

 The impact that technology had and is still having on the functions of operation is truly
substantial. Paper works has been drastically reduced or eradicated from the settlement and
 clearing process. Significant amount of information and instruction are sent electronically and
today the crucial areas of control and risk management are heavily dependant on electronically
generated data. Of course, technology itself has presented many new challenges.

Re-engineering of functions and processes within businesses was a major project. Procedures
needed changing and adapting. Retraining was often business wide and the implementation of
system often created logistical and budget problems. The end products, are however, are
globalised operations functions, direct link with counter parties including clients for
distribution of data and remote clearing and settlement as the need to maintain a physical
presence where the market is located is no longer a necessity.

It is difficult to imagine what the operations area of twenty years looked like- still heavily
paper intensive, with prolonged processes and high levels of manual work. The processes that
were automated relied on batch processing and required lengthy time windows to undertake
the tasks. Naturally the clearing and settlements functions worked under these constraints and
so did the market. The ability to handle the increased activity was primarily about the capacity
to take on additional people so it is not surprising that the costs associated with securities
transactions were high.

The major challenge for the operations team and managers is to embrace technology and
maximize this vital and powerful tool’s (technology) use within the business. A failure to do
so could inevitably have a negative impact on the operations functions and management and
will ultimately result in total destruction to a business.

In the industry today the use of technology reaches just about the every aspects of the
business. Electronic trading, messaging system, and information distribution have created a
global market that is, relatively speaking, instantly accessible and available.

FLEXIBLE MANUFACTURING SYSTEM

Introduction

In the middle of the 1960s, market competition became more intense. During 1960 to 1970 cost
was the primary concern. Later quality became a priority. As the market became more and more
complex, speed of delivery became something customer also needed. A new strategy was
formulated: Customizability. The companies have to adapt to the environment in which they
operate, to be more flexible in their operations and to satisfy different market segments
(customizability). Thus the innovation of FMS became related to the effort of gaining
competitive advantage.

First of all, FMS is a manufacturing technology. Secondly, FMS is a philosophy. "System" is the
key word. Philosophically, FMS incorporates a system view of manufacturing. The buzz word
for today’s manufacturer is "agility". An agile manufacturer is one who is the fastest to the
market, operates with the lowest total cost and has the greatest ability to "delight" its customers.
FMS is simply one way that manufacturers are able to achieve this agility.

Flexibility concept:

Different approaches:

Today flexibility means to produce reasonably priced customized products of high quality that
can be quickly delivered to customers. Different approaches to flexibility and their meanings are
shown Table:

Approach Flexibility meaning:

Manufacturin • The capability of producing different parts without major retooling

g • A measure of how fast the company converts its process from making an old
line of products to produce a new product
• The ability to change a production schedule, to modify a part, or to handle
multiple parts Operational
• The ability to efficiently produce highly customized and unique

Customer The ability to exploit various dimension of speed of delivery

Strategic The ability of a company to offer a wide variety of products to its customers
Capacity The ability to rapidly increase or decrease production levels or to shift
capacity quickly from one product or service to another.
2. Seeking benefits on flexibility

Today’s manufacturing strategy is to seek benefits from flexibility. This is only feasible when a
production system is under complete control of FMS technology. Having in mind the Process-
Product Matrix you may realize that for an industry it is possible to reach for high flexibility by
making innovative technical and organizational efforts. See the Volvo’s process structure that
makes cars on movable pallets, rather than an assembly line. The process gains in flexibility.
Also, the Volvo system has more flexibility because it uses multi-skill operators who are not
paced by a mechanical line. So we may search for benefits from flexibility on moving to the job
shop structures.

Actually, the need is for flexible processes to permit rapid low cost switching from one product
line to another. This is possible with flexible workers whose multiple skills would develop the
ability to switch easily from one kind of task to another. As main resources, flexible processes
and flexible workers would create flexible plants as plants which can adapt to changes in real
time, using movable equipment, knockdown walls and easily accessible and re-routable utilities.

3. Advantages and disadvantages of FMSs implementation

Advantages:

 Faster, lower- cost changes from one part to another which will improve
capital utilization
 Lower direct labor cost, due to the reduction in number of workers
 Reduced inventory, due to the planning and programming precision
 Consistent and better quality, due to the automated control
 Lower cost/unit of output, due to the greater productivity using the same
number of workers
 Savings from the indirect labor, from reduced errors, rework, repairs and
rejects
Disadvantages:

 Limited ability to adapt to changes in product or product mix (ex. machines are of
limited capacity and the tooling necessary for products, even of the same family,
is not always feasible in a given FMS)
 Substantial pre-planning activity
 Expensive, costing millions of dollars
 Technological problems of exact component positioning and precise timing
necessary to process a component
 Sophisticated manufacturing systems

FMSs complexity and cost are reasons for their slow acceptance by industry. In most of the cases
FMCs are favored.

4. The Future of FMS

 FMS systems which deliver directly into warehouse, and do not require labor.
 The use of robots that have vision, and tactile sensing to replace human labor.
 Technology will make 100% inspection feasible. Thus making faster process
adjustment possible.
 Computer diagnosis will improve estimation of machine failure, and guide work
crews repairing failures.
 International coordination and control of manufacturing facilities.
 Customers have completely custom orders made immediately, and to exact
specifications, and at a lower cost.
 Networks will tend to eliminate the barriers caused by international borders.
 Standards will be developed which make installation of a new machine trivial.
 Networking between manufacturers and suppliers will streamline the inventory
problems.
 Marketing will be reduced, as customers desires are met individually and therefore do
not need to be anticipated by research.
 Finished goods inventories will fall as individual consumer needs are met directly.
 Better management software, hardware, and fixturing techniques will push machine
utilization towards 100%.
 The task of Design and Process Planning will become highly automated, therefore
reducing wasted time on repetitious design, and discovering careless mistakes.
 Computing power increases - more sophisticated tools.