OPERATIONS MANAGEMENT: DEFINITION:Operations management is a systematic approach to addressing issues in the transformation process that converts inputs into

useful Revenue generating outputs.Applicability of Operations management: The principles of operations management is applicable to both Manufacturing organisations(which produce physical&durable products,such as pen,automobile,fertilizer etc) as well as Service organisations(which produce Intangible & Perishable products,such as travel, restaurant service,hospital service etc.) Four important aspects of this definition: 1.OM is a systematic approach. 2.OM involves addressing various issues that an(y) organization faces. 3.Transformation processes are central to Operations systems. 4.The goal of Operations management is to ensure that the organization is able to keep COSTS TO A MINIMUM and OBTAIN REVENUE IN EXCESS OF COSTS through CAREFUL PLANNING AND CONTROL OF OPERATIONS.

A COMPARISION OF MANUFACTURING & SERVICE ORGANISATIONS: Manufacturing organization Service organisation 1.0 Differences: (i)Physical ,durable product................Intangible ,perishable product (ii)Output can be inventoried..Output can not be inventoried (iii)Low customer contact..High customer contact (iv)Long response timeShort response time (v)Reginal/National/International marketsLocal markets (vi)Large facilitiesSmall facilities (vii)Capital intensive.Labour intensive (viii)Quality easily measurableQuality not easily measurable 2.0 Similarities: (i)Both are concerned about quality, productivity and timely response to customers. (ii)Both must make choices about capacity ,location ,layout. (iii)Both have suppliers to deal with. (iii)Both have to plan operations , schedules and resources. (iv)Both must balance capacity with demand by careful choice of resources. (v) Both must make an estimate of demand.

MANUFACTURING TRENDS IN INDIA: A CII McKinsey study PROJECTED THAT by 2015, the export of auto components from India will grow to US$ 25 billion. Table: Salient aspects of the corporate sector of the Indian economy (Sources:Based on data from economic survey 2007-08(New Delhi:Oxford University press,2008; and Centre for Monitoring Indian Economy,CMIEs Economic Intelligence Services(EIS) data on the corporate sector. Note:All numbers in table represent growth percentages over the previous year. Item Index of industrial production ..manufacturing ..capital goods ..consumer goods intermediate goods Corporate-sector performance Sales/income:Manufacturing Sales/income:Services(other than Financial services) Sales/income: Financial services Wages and salaries:Manufacturing Wages and salaries: Services(other than Financial services) Wages and salaries: Financial services PAT:Manufacturing PAT: Services(other than Financial services) PAT: Financial services Total Assets:Manufacturing Total Assets: Services(other than Financial services) Total Assets: Financial services Gross savings:Manufacturing Gross savings: Services(other than Financial services) 200304 04-05 0506 06-07 Average

13.60 7.20 6.40

9.20 13.90 11.70 6.10

9.10 15.80 12.00 2.50

12.50 18.20 10.10 12.00

10.27 15.38 10.25 6.75

13.30 27.00

20.50 21.40

18.30 23.10 15.70 22.60

18.80 21.68

-9.10 6.70 16.00

-66.10 3.00 35.10

32.60 13.90 8.90 18.20 17.90 26.50

-14.13 9.20 23.88

12.80

8.60

11.20 10.90

10.88 70.45 85.65 30.55 14.75 16.03

147.80 58.30 17.30 58.40 165.60 109.90 39.50 27.60 62.30 7.00 11.10 -2.70 12.50 13.30 27.70 34.90 18.80 20.70 18.10 21.60

14.70 58.60 34.30

14.60 31.50 40.20

18.60 23.80 14.00 45.10 11.90 31.60

17.93 37.30 29.50

Gross savings:Financial 30.80 8.50 17.30 24.30 20.23 services Note:All numbers in table represent growth percentages over the previous year. EXPORT POTENTIAL OF SELECT MANUFACTURING SECTORS IN INDIA (Source:Article on Made in India:The next big manufacuringmexport story(Mumbai:CII and McKinsy &co,2004) Sector of Industry Electricals & Electronics Apparel manufacturing Current Exports US$ 1.25 billion US$ 6.10 billion Potential Exports US$ 15 billion to US$ 18 billion US$ 25 billion to US$ 30 billion Requirements to meet this target Designing&manufacturing capabilities

Auto components

US$ 1.10 billion

Speciality chemicals

US$ 1.60 billion

Operational excellence, Labour productivity, Design&Innovation Skills US$ 20 billion Sales&marketing to US$ 25 Capability,Manufacturing billion Capability TO MEET WORLD CLASS COMPETITIVENESS US$ 12 billion Low-cost manpower and to US$ PROCESS 1Desig5 INNOVATION SKILLS billion

OBSERVATIONS ON INDIAN TEXTILE SECTOR: A Study on the TEXTILE SECTOR indicated that,on average, Indian plants are 1/10 th the size of their Chinese counterparts.The productivity level of Indian textile exporters is only 35% of the productivity of their counterparts in US and 55% of the productivity of textile exporters of China.

OBSERVATIONS ON INDIAN AUTOMOBILE SECTOR: The Automobile sector is poised to become a global manufacturing base on account of better management practices followed in the sector.

SERVICES SECTOR AS PART OF OPERATIONS MANAGEMENT: The service sector encompasses a wide spectrum of activities in every country. The growth of service sector in India has been very significant.

GDP SHARE OF SOME SERVICE SECTORS IN INDIA: (Source: Economic survey,2007-08(New Delhi,Oxford University Press,2008) Service Sectors Trade,Hotels,Transport, Communications Financial services,Insurance, Real estate and business Services Public administration and Defence and other sectors 200102 9.2 7.3 200203 9.4 8.0 200304 12.0 5.6 200405 10.7 8.7 200506 11.5 11.4 200607 11.8 13.9

4.1

3.9

5.4

6.9

7.2

6.9

Note: All numbers in the table represent growth percentage over the previous year. OPERATIONS MANAGEMENT SPECTRUM: From the operations management perspective, a PURE PRODUCT and aPURE SERVICE are just TWO ENDS of the SPECTRUM. THE SERVICE-PRODUCT SPECTRUM: Pure Product.Pure Service ------------------------------------------ ------------Ayurvedic healing------------------------------------------------- ------Legal/Tax consulting-------------------------------------------------Cy ber Caf-Telephone booths-------------------------------------Emergency Maintenance Services----------------------------------------Facilities m aintenance----------------------------------------------------High quality rest aurant Food---------------------------------------------Fastfood in eat-out Joint-----------------------------------------------Customised durable goods--------------------------------------------------Fast moving commodit ies-----------------------------------------------General Purpose Machine Tools

OPERATIONS MANAGEMENT AT MTR FOODS,BANGALORE .1(1)

Operations management is the key to achieving competitive advantage for organizations , whether they are in THE MANUFACTURING INDUSTRY OR THE SERVICE INDUSTRY.Operations management processes address the questions that an organization faces in its choice of products and manufacturing technology, utilization of capacity ,maintenance of quality, costing and sourcing of materials and customerhandling policies.MTR Foods,like many other organizations,deals with several aspects of operations management. According to co.sources, MTR Foods is the fastest growing vegetarian processed-food co.,in India,and it had turnover of US$20 million for the year ending March 2008.To add to that , MTR Foods is growing annually at a rate of 35%.With a commitment to quality,recipe expertise in indian vegetarian food,and technological capability,MTR provides complete authentic meal solutions to todays discerning customer. MTR brands in most categories are market leaders in indiaand abroad.The co., began exporting its products 10 years ago,and today,its product range is exported toUS,Malayasia,Singapore,the United Arabic Emirates,the sultanate of Oman,Australia,Newzealand etc. MTRs portfolio of products covers a wide range of processed foods,including ready-to-eat ,ready-to-cook,and frozen food;instant desert and snack mixes,spices and spice blends,vermicelli;pickles;papads;and ice cream.The products reflect the authentic flavor of the region they are from,and contain no preservatives. MTRs manufacturing facility is located in the outskirts of Bangalore.There are presently about 800 people working in the factory,which operates on 3 shifts.The factory has 8 divisions.Each division has separate buildings with modern manufacturing facilities that enable to carry out all stages-from raw-material handling to packaging- in hygienic conditions.MTR makes judicious use of technology and systems to meet consistency and quality standards.Some of the technical know-how at MTRs ready-to-eat manufacturing division has been derived from the Defence Food Reserch Laboratory(DFRL) at Mysore. MTR requires a large variety of packing material for its varied range of products and package sizes.Furthermore,information on ingredients,shelf life,cooking instructions,and other statutory details may vary for each product.The packaging division of MTR is responsible for printing and preparing the packaging material.The printing is done on the raw material for packing,which is then laminated.These packages are the sent to the centralized store in the same division.The packaging materials are drawn out from the central store when required,and other details such as the MRP,the best before date ,the lot number,and the manufacturing date are printed on the packages before they are sent to the respective divisions. MTR Foods is an ISO 22000:2005 certified company.The company has also successfully met the Hazard Analysis and Critical Control Point(HACCP) requirements.Its facilities are equipped with modern systems to ensure adherence to strict quality norms.A well-appointed lab consisting of analytical,chemical,and microbiology sections performs a variety of tasks for quality controland assurance.In the chemical

section,several important parameters such as the pH,moisture,and the acidity of the food are checked. Organisations face several challenges in operations management, and MTR Foods is no exception in this regard.One of its biggest challenges is to forecast the demand for its numerous products.As MTR is in the business of manufacturing food items,that have a limited shelf life,the accuracy of such forecasts is critical for the company.Its forecast is based on experience,seasonal variations,and the companys growth rate.While forecasting demand,the rise in the demand during the festive season is also kept in mind. New product development is also a challenge for MTR.It requires innovation,an understanding of customer preferences and tastes,and the capacity to translate these into the final product through the right choice of raw materials,blend,and production.Therefore,it is not surprising that MTR has a long new product development process.New recipes are developed,tested in the product development lab,cooked,tasted,and refined before they can be launched for regular production. Choosing the right manufacturing processes is crucial as it has implications for the cost of operation,quality, and productivity.For example,in MTRs spices division,manufacturing process choices closely follow the traditional method and sequence of using the best possible ingredients and hours of pounding.First the raw materials are roasted.Roasting serves 2 purposes:it increases shelf life and kills microorganisms.The ingredients are then pounded and mixed together. MTR also faces several planning challenges.Planning for raw material procurement,the release of production plans into the shop floor,and dispatch are just a few examples.Raw materials procurement poses unique challenges as MTRs raw materials are mostly agrarian and seasonal in supply.Good supply management practices are essential to maintain a continuous supply of high-quality raw materials at a reasonable price. Like MTR,every organization in the manufacturing as well as in service sectors of our economy faces a similar set of issues.These issues can be addressed by applying several tools and techniques,COLLEECTIVELY KNOWN AS OPERATIONS MANAGEMENT. (Source:Vasudeva Reddy,MTR Foods Limited,unpublished summer study report submitted at IIM Bangalore,2008)

OPERATIONS MANAGEMENT IN SERVICE SYSTEMS2(1) Intangibility, heterogeneity, perishability and simultaneous production and consumption are the factors that differentiate service systems from manufacturing systems. Despite these differences ,many of the operations management tools that were initially developed for manufacturing organizations are applicable to services as well. A study on the Ahmedabad Regional Passport Office(ARPO) illustrates this fact.

In March,2001,the Regional Passport Officer of the ARPO was concerned about the long lead time taken for processing pass port applications and issuing pass ports. The estimated lead time was 145 days at that time, so there was always a long queue of applicants waiting at ARPO, either to know the status of the application or to submit the application form. To improve the response time,the existing process needed to be studied and redesigned. The situation called for the application of operations management to a service setting. A detailed study of the process was undertaken to investigate the reasons for the long lead time .Excessive delays and long lead times often point out to operations managemet issues pertaining to capacity, process, procedures and use of technology and people. Process mapping, estimating the time for each step in the process and assessment of capacity inbalances are important steps in studying issues related to long lead times in any operations system.In the case of ARPO,this data was collected.Although the ARPO had a sanctioned staff of 103,the staff strength was 57 in January 2002.It augmented the capacity by employing 40 casual workers.It received about 235,000 applications in a year.Detailed studies were initiated to understand the various processes involved in issuing pass ports.The following figure may be referred to for a detailed illustration of the process followed for pass port application and approval.

Obtain form &Fill Submit Form to RPO counter Reg d Age nts Speed Post Centres By Re gd Pos t

Receiv e &initia l scrutin y Scrutin y& Accept

3 Mi ns

5 mi ns

fees Dispatc 3 h Mi Of PPF ns Outgoin g PPF Detailed Entry Police Verifica tion Indexing 4 Mi ns 2 mi ns Regn Form Scanning 2 mi ns

Verified PPF

Incoming verified PPFs to Diary Cection Linking At branches Granting 3 Mi ns 2 Mi ns 6 mi ns 5 mi ns

Writing

Pasting, Laminating,signing& dispatch Despatch

Process- flow diagram(chart) for application processing Detailed discussions with the officers revealed several opportunities for improving the existing situation .The activities at the ARPO were labourintensive and the organization rules and procedures were highly centralized. Further, the discussions revealed that there was scope for automation of some of the activities. In the present scenario, it took a lot of time to access information on the application status and web based services could reduce this time. The uneven load on police stations and the need to modify ad simplify certain rules were some other issues that merited attention. Independent of the study, some administrative and procedural changes were

already underway at the ARPO. Attention to all the issues that were highlighted during the study through better capacity management could help reduce the lead time in processing passports. The data collected during the study was subjected to detailed analysis and alternative methods were identified for the design and operational control of the operation at ARPO. These include the use of waiting line models to explore alternative ways of redesigning the service delivery system, the implementation of process redesigning to eliminate waste, improvements in productivity and the discovery of hidden capacity in the system, the identification of a new system for tracking operational performance, bench marking and improvement; and the use of work load analysis and capacity planning methodologies. All these aspects are discussed in OM. (Source: Adapted from N.Ravichandran and D,Bahuguna, Rule bound government agency to customer centric service facility-can Indian passport offices make the leap?IIMB Management review 18, no. 1(2006):59-66.