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INTRODUCTION TO OPERATIONS MANAGEMENT

Prof. Kaushik Paul


Associate Professor
Operations Area
E-Mail: kaushik.paul@igsm.in
Phone: 43559308
OBJECTIVES

 To recognise that Operations Management exists

 To understand the concepts of core and value added services

 To understand how Operations management is used in


practice

 To understand how the transformation process works.

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Back office Kitchen unit
operation in manufacturing
a bank operation

They are all


operations

Take-out /
Retail restaurant
operation operation
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A GENERAL MODEL OF OPERATIONS MANAGEMENT
Operation’s
ENVIRONMENT strategic
objectives

Operations
The operation’s
strategy
competitive role
and position
Input
transformed
resources
Materials Design Improvement
Information
Customers Output
Input
products and Customers
resources
services
Facilities
Staff
Planning and
Input control
transforming
resources

ENVIRONMENT

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CORE SERVICES DEFINED

Core services are basic things that customers


want from products they purchase

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CORE SERVICES PERFORMANCE OBJECTIVES

Quality

Operations
Flexibility Speed
Management

Price (or cost


Reduction)

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VALUE-ADDED SERVICES DEFINED

Value-added services differentiate the organization from


competitors and build relationships that bind customers
to the firm in a positive way

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VALUE-ADDED SERVICE CATEGORIES

Problem Solving

Operations Sales Support


Information
Management

Field Support

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WHERE DOES THE BUSINESS GET ITS COMPETITIVE ADVANTAGE?

The
“technological”
specification of Product/
its Service
product/service Technolog
? y
The way it
produces its
goods and
Marketing Operation services?
s
The way it
positions
itself in its
market?
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THE THREE FUNCTIONS WORKING TOGETHER .... e.g. SWATCH

Further
innovations
Innovative
plastic design
which
with few parts
gives which
Product/ funds which
allows service funds etc.
design

Standardize,
Mass fashion Marketing Operations easy to make
product at high
orientation
volume so low
Extended cost
range but Increased variety
also does not increase
costs
but because
volume is high

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CORE AND SUPPORT FUNCTIONS
Core functions Engineering/
technical
Support functions
function
Accounting
and finance Product/services
function development
function

Others
Operations Marketing
function function

Human
resources
function
Information/
technical (IT) A broad definition of
function operations
management
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THE POSITION OF THE OPERATIONS FUNCTION

Accounting Product
Marketing Operations
and finance development

Call on Manage Retranslate Conduct


Church newcomers appeals scriptures weddings

Fast food Advertise on Pay Design Make


chain television suppliers hamburgers hamburgers

Furniture Sell to Design new Assemble


Pay staff
manufacturer stores furniture furniture

Process Identify Raise Develop Make and


perspective needs capital product distribute

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The best way to start understanding the nature of “Operations” is
to look around you

Everything you can see around you (except the flesh and blood) has
been processed by an operation

Every service you consumed today (radio station, bus service,


lecture, etc.) has also been produced by an operation

Operations Managers create everything you buy, sit on, wear, eat,
throw at people, and throw away

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SOME OPERATIONS MANAGEMENT ACTIVITIES AT IKEA

Design a store layout


which gives smooth Ensure that the jobs of
Design elegant and effective flow all staff encourage their
products which can be
flat-packed efficiently contribution to
business success
Site selection for
stores of an IKEA STORE
appropriate size in Continually examine
the most effective and improve
locations operations practice

Maintain
Monitor and enhance
cleanliness and
quality of service to
safety of storage
customers
area Arrange for fast
replenishment of
products

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ALL OPERATIONS ARE TRANSFORMATION PROCESSES

TRANSFORMED ENVIRONMENT
RESOURCES

MATERIALS
INFORMATION
CUSTOMERS

TRANSFORMATION GOODS
INPUT OUTPUT AND
PROCESS
SERVICES
FACILITIES
STAFF

TRANSFORMING
RESOURCES
ENVIRONMENT

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OPERATIONS MANAGEMENT – BASIC PRINCIPLES

Materials Operations
management is
concerned with
Information Products and
producing and services
delivering products
Customers and services

All types of enterprise have an operations function, even if


it isn’t called ‘operations.
Most operations produce both products and services.

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THE OUTPUT FROM MOST TYPES OF OPERATION IS A
MIXTURE OF GOODS AND SERVICES

Pure goods
Crude oil production

Tangible
Can be stored
Aluminium smelting

Specialist machine tool Production precedes


consumption
Low customer
manufacturer

contact
Can be transported
Quality is evident
Restaurant

Computer systems
services

Intangible
Management

Psychotherapy clinic
consultancy
Cannot be stored
Production and
consumption are
simultaneous
High customer contact
Cannot be transported
Quality difficult to
judge
Pure services
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THE ACTIVITIES OF OPERATIONS MANAGEMENT

OPERATIONS
STRATEGIC
ENVIRONMENT
OBJECTIVES
THE
INPUT OPERATIONS
TRANSFORMED OPERATIONS Operations COMPETITIVE
RESOURCES STRATEGY strategy ROLE AND
MATERIALS POSITION
INFORMATION Operations
CUSTOMERS management IMPROVEMENT
DESIGN
GOODS
INPUT OUTPUT AND
SERVICES
PLANNING AND
FACILITIES CONTROL
STAFF
INPUT
TRANSFORMED
RESOURCES ENVIRONMENT

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Operations Activities as Feedback Loops
Design activities set the basic configuration
Planning & control activities guide short/medium term changes
Improvement activities guide longer term changes

Design

Planning & Control

Improvement
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HISTORICAL DEVELOPMENT OF OM

 JIT and TQC


 Manufacturing Strategy Paradigm
 Service Quality and Productivity
 Total Quality Management and Quality Certification
 Business Process Reengineering
 Supply Chain Management
 Electronic Commerce

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OBJECTIVES

 To recognise that Operations Management exists

 To understand the concepts of core and value added services

 To understand how Operations management is used in


practice

 To understand how the transformation process works.

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References:
1) ‘Operations Management’ By Nigel Slack et al.
2e

2) ‘Operations Management for Competitive


Advantage’
By Chase, Jacobs & Aquilano, 10e

HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE


THANK YOU