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    Trends and Issues in Operations Management - : Prof. M. Ray

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    Abinash Choudhury
    This document discusses key concepts in operations management. It begins by defining operations management and explaining why it is important to study. Current trends in operations like globalization and outsourcing are described. Key operations management concepts are outlined, like efficiency, effectiveness, and value. Different types of production systems and transformations are explained. Some current issues in the field are also summarized.

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    Trends and Issues in Operations Management - : Prof. M. Ray

    Uploaded by

    Abinash Choudhury
    83 views23 pages
    This document discusses key concepts in operations management. It begins by defining operations management and explaining why it is important to study. Current trends in operations like globalization and outsourcing are described. Key operations management concepts are outlined, like efficiency, effectiveness, and value. Different types of production systems and transformations are explained. Some current issues in the field are also summarized.

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    Trends in OM

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    This document discusses key concepts in operations management. It begins by defining operations management and explaining why it is important to study. Current trends in operations like globalization and outsourcing are described. Key operations management concepts are outlined, like efficiency, effectiveness, and value. Different types of production systems and transformations are explained. Some current issues in the field are also summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    83 views23 pages

    Trends and Issues in Operations Management - : Prof. M. Ray

    Uploaded by

    Abinash Choudhury
    This document discusses key concepts in operations management. It begins by defining operations management and explaining why it is important to study. Current trends in operations like globalization and outsourcing are described. Key operations management concepts are outlined, like efficiency, effectiveness, and value. Different types of production systems and transformations are explained. Some current issues in the field are also summarized.

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    Trends and Issues In Operations Management -Prof. M.

    Ray

    Operations Management
    Operations management is defined as
    the design, operation, and

    improvement of the systems that


    create and deliver the firms primary

    products and services.


    2

    Why Study Operations Management?


    Systematic Approach to Org. Processes

    Business Education/ Career Opportunities

    Operations Management

    Increase Competitive Advantage/Survival

    Cross-Functional Applications
    3

    Current Trends
    96 of the top 100 industries in the U.S. have large $

    worth of exports. Exporting industries are characterized by early ongoing investments in advanced product and process technologies.
    Productivity is increasing and has become a basis for

    competition. Success domestically and globally is dependent on the ability to compete on many fronts, including operations (e.g., internet - easy to find potential customers, but hard to deliver)
    Outsourcing of manufacturing and services (e.g., India

    and China) is accelerating.

    Factors Affecting a Firm's Ability to Ward off Imports and/or Export


    Economic/Political
    exchange rates trade barriers capital costs inflation capital availability social costs/legal funds flows savings rate interest rates minimum wage

    Environmental/social
    environmental protection health costs labor unions education system consumer tastes retailing capabilities employee

    External
    transportation costs logistics resources labor supply, capabilities training resources communications public infrastructure

    Corporate

    Technological

    Operations
    costs/productivity quality delivery cycle delivery reliability flexibility for prod change flexibility for vol. change New product introduction inventory mgt. Prod. Planning Control Equip. & process tech #, size, location of facilities logistics customer service information technology

    Suppliers
    abilities coordination location competition cooperation

    strategy R&D risk avoidance engineering role of functions product development Fin-Mktg-Mfg-Eng-R&D process development balance sheet new products financial capacity development process marketing policies export sales competencies Technological sophistication of mgt

    Operations Decision Making


    Marketplace

    Corporate Strategy

    Finance Strategy

    Operations Strategy

    Marketing Strategy

    Operations Management

    People Materials & Customers

    Plants

    Parts

    Processes Products & Services

    Planning and Control

    Input

    Output

    The Transformation Process (value adding)

    Key OM Concepts
    Efficiency - Doing something at the lowest

    possible cost
    Effectiveness - Doing the right things to create

    the most value for the organization


    Value - Quality divided by price

    Transformations
    Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications
    5

    Examples of Production Systems


    System Hospital Inputs Patients MDs, Nurses Medical Supplies Equipment Conversion Health Care Output (desired) Healthy Individuals

    Restaurant

    Hungry Customers Prepare Food Food, Chef Serve Food Servers Atmosphere Sheet Steel Engine Parts Tools, Equipment Workers

    Satisfied Customers

    Automobile Plant

    Fabrication High Quality and Assembly Automobiles of Cars Educated Individuals

    University

    High School Grads Transferring Teachers, Books of Knowledge Classroom and Skills

    What about McDonalds?


    Service or Manufacturing?

    The company certainly manufactures tangible

    products
    Why then would we consider McDonalds a

    service business?

    Core Factory Services


    Core Services are basic things that customers want from products that they purchase.
    Quality Flexibility Speed Price (or production cost)

    10

    Value-Added Services
    Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way.

    Information

    Problem Solving and Field Support


    Sales Support

    11

    Development of OM as a Field The Names and Emphasis Change, but the Elements Remain Basically the Same!
    Scientific Management Moving Assembly Line Hawthorne Studies Operations Research

    Manufacturing Strategy
    JIT/Lean Manufacturing Manufacturing Resources Planning Service Quality and Productivity

    TQM & Six Sigma


    Business Process Reengineering Electronic Enterprise Global Supply Chain Mgt.

    Historical Underpinnings

    OMs Emergence as a Field

    13

    Some Current Issues


    Implementing/sustaining Quality Management initiatives

    Consolidating operations resulting from mergers


    Speeding up the time to get new products to market Developing flexible production systems to enable mass

    customization of products and services


    Developing and integrating new technologies Managing global supplier, production and distribution

    networks
    Outsourcing
    14

    Operations Strategy
    Strategy Process
    Customer Needs

    Example
    More Product

    Corporate Strategy

    Increase Org. Size

    Operations Strategy

    Increase Production Capacity

    Decisions on Processes and Infrastructure

    Build New Factory

    Competitive Dimensions
    Cost

    Quality and Reliability


    Delivery Flexibility Speed Reliability Coping with Changes in Demand New Product Introduction Speed Flexibility

    Dealing with Trade-offs


    For example, if we reduce costs by reducing product quality inspections, we might reduce product quality.
    Example II, if we improve customer service problem solving by cross-training personnel to deal with a wider-range of problems, they may become less efficient at dealing with commonly occurring problems.

    Cost
    Flexibility Delivery

    Quality

    Strategy Begins with Priorities


    Consider the personal computer assembler

    1. How would we segment the market according to product group? 2. How would we identify product requirements, demand patterns, and profit margins for each group? 3. How do we identify order winners and order qualifiers for each group? 4. How do we convert order winners into specific performance requirements?

    Competition (Them)

    Us Differentiation (Core competencies)

    Four Stages of Service Firm Competitiveness


    Stage I. Available for Service

    Stage II. Journeyman


    Stage III. Distinctive Competence Achieved Stage IV. World Class Service Delivery

    U. S. Competitiveness Drivers
    Product Development

    speed development & enhance manufacturability


    WIP, space, tool costs, and human effort borrowed from Japanese Keiretsu strong, independent boards of directors

    Waste Reduction (JIT Philosophy)

    Improved Customer-Supplier Relationships

    Improved Leadership

    Productivity
    Outputs Productivi ty = Inputs
    Partial measures output/(single input) Multi-factor measures output/(multiple inputs) Total measure output/(total inputs)

    Balanced Scorecard
    1. 2. 3. 4. Financial perspective Internal perspective Customer perspective Innovation and learning perspective

    Thanks

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