Operations Management Overview

Introduction

  • Operations Management: Managing resources that produce and deliver goods and services.
    • Core Function: Part of every organization, focused on production and delivery.

Manufacturing and Service Operations

  • Manufacturing Organizations: Produce tangible goods, storable as inventory.
  • Service Organizations: Produce intangible goods that cannot be stored.
    • Service Operations Management: Covers activities and decisions in service organizations.
Key Differences Between Manufacturing and Services:
  • Services and production occur simultaneously (e.g., in supermarkets).
  • Lesser tangible goods; quality is harder to measure.

The Systems View of Operations Management

  • System: Interrelated components; behaviors of items in isolation differ.
    • Inputs: Include transformed and transforming resources (e.g., labor, machinery).
    • Outputs: Goods and services produced.
  • Sub-systems: Functional areas like operations, marketing, and finance must coordinate for efficiency.
  • Operations have a direct impact on competitive positioning and are integrated in the organization.

Process View of Organizations

  • Move from discrete functions to sets of processes that deliver customer value, termed value chain.
  • Value Added: Enhancements that create more value for customers.

Operations Strategy

  • What is Strategy?: Long-term decisions shaping resource uses in response to market demands.
  • Roles of Operations: Supports competitive strategy and adapts to changing market needs.
Levels of Strategy:
  1. Corporate Level: Provides general long-range guidance.
  2. Business Strategy: Pertains to how products/services are offered.
  3. Operational Strategy: Supports business strategies through specific functional plans.
Competitive Priorities:
  1. Cost: Essential for price competition.
  2. Time: Speed of operation impacts choice.
  3. Quality: Determines customer dependability, costs, and service.
  4. Flexibility: Adapting to changing customer needs and variations in demand.

Product Design and Process Selection

  • Importance: Competitive edge by meeting customer needs quickly and effectively.
Steps in Product Design:
  1. Generating Ideas: Market research, competitor analysis, reverse engineering, benchmarking.
  2. Product Screening: Market analysis, economic analysis, technical analysis.
  3. Preliminary Design: Define product/service structure, process flow charts.
  4. Final Design: Prototyping for testing.
  5. Improvement Methods: Design for manufacture, concurrent engineering.
  6. Process Selection: Relate to volume and variety of demand.
Types of Processes:
  1. Project: Unique, high variety output.
  2. Jobbing: Low volume, customization.
  3. Batch: Medium variety and volume.
  4. Line: High volume, low variety; focuses on efficiency.
  5. Continuous: Very high volume standard product.

Total Quality Management (TQM)

  • TQM Principles: Quality management at all levels based on customer needs.
    • Emphasizes continuous improvement, employee involvement.
    • Costs classified into prevention, appraisal, internal, and external failures.
Cost of Quality:
  1. Achieving Good Quality: Prevention and appraisal costs.
  2. Poor Quality Costs: Internal and external failures.

Statistical Process Control (SPC)

  • Monitors quality during production through variance detection using control charts.
  • Chance Causes vs Assignable Causes of variation defined.
Control Charts:
  1. Variable Data: X-bar and R charts.
  2. Attribute Data: p-charts and c-charts.

Supply Chain Management

  • Manages inter-organization linkages from supplier to consumer.
  • Fluctuations: Bullwhip effect due to demand variances.
    • Information sharing and small batch ordering mitigate these effects.
Procurement:
  • Ensures material acquisition to meet production needs.

Facility Location and Layout

  • Location Factors: Proximity to customers, suppliers, labor.
  • Layout Types: Process, product, hybrid, and fixed-position layouts.

Work Systems Design

  • Job Enlargement and Job Enrichment: Increase task variety and responsibility.
    • Enhances workplace satisfaction.
Motion Study & Work Measurement:
  1. Methods Analysis: Streamlining tasks for efficiency.
  2. Learning Curves: Measuring productivity improvements over iterations.