BKC3813 - OPERATION and PROJECT MANAGEMENT (E)

Hj. M Noor Nawi, FKKSA, UMP. (X 2813)

Chapter 1: OPERATION
MANAGEMENT & STRATEGY
The Outline: Definition Concept Classification of System Manufacturing vs Services System Framework The Objective The Scope The Operation Strategy

WHAT IS OPERATION

MANAGEMENT?
What is Production Management? The management interrelated activities in manufacturing designed product/s What is Operation Management? The business function responsible for planning, coordinating, and controlling the resources needed to produce a companys products and services

OPERATION MANAGEMENT

The Concept
INPUT TRANSFORMATION PROCESS OUTPUT

Input-Transformation-Output Processes

CLASSIFICATION OF PRODUCTION SYSTEM

1) 2) 3) 4) Job-Shop Production Batch Production Mass Production Continuous Production System

CLASSIFICATION OF PRODUCTION SYSTEM

Job-Shop Production 1. Characteristics 2. Advantages 3. Limitations

CLASSIFICATION OF PRODUCTION SYSTEM

Batch Production 1. Characteristics 2. Advantages 3. Limitations

CLASSIFICATION OF PRODUCTION SYSTEM

Mass Production 1. Characteristics 2. Advantages 3. Limitations

CLASSIFICATION OF

PRODUCTION SYSTEM
Continuous Production System 1. Characteristics 2. Advantages 3. Limitations

Differences between Manufacturing

and Service Operation

SERVICE Intangible Immediate Consumption of Output. More Labour Less Equipment Usage Direct Customer Contact Frequent Customer Participation Easy method to Performance Measure. MANUFACTURING Tangible Output Consumption over time. Nature of work Less Labour More Equipment Little Degree of Customer Contact No Customer Participations Sophisticated Performance Measurement

Quiz 01
Q. What are the FOUR objectives of Production Management?

Operation Management System

Framework

Planning
- activities that establishes a course of action & guide future Decision -Making

Organizing
- activities that establishes a structure of tasks and authority

Controlling
- Activities that assure the Actual performance in accordance with planned performance

Operation Management System

Framework Behaviour
- relationship all above parameters with human behaviour

Models
- e.g aggregate planning, break even analysis, linear programming & Simulation, decision tree analysis & simple median models.

Objectives of Operation Management Customer Service

- provide goods and services with Right Specifications, Right Cost & Right Time!!!

Resource Utilization
- Man, Materials & Machines

Quiz 02
Q. What are the scopes (areas) of Operation/ Production Management?

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Scope of Operation Management

Location of Facilities Plant Layout and Materials Handling Product Design Process Design Production and Planning Control Quality Control Materials Management Maintenance Management

Location of Facilities
Long-term Capacity & Commitment Base of Operation Large Investment of Plant & Machineries Expansion Plan & Policy Diversification Plan for Products/ Market Sources of Raw Materials Manpower Supplies (skilled or non-skilled) Optimal Location greatest advantages to organizations

Plant Layout and Materials Handling

Plant Layout: 1. Physical arrangement of facilities, comprise of departments, work centres and equipment. 2. Meeting most economic output quality and quantity.

Materials Handling: 1. About moving materials from store to machine and so on..in manufacturing process. 2. Cost reduction by proper section, operation and maintenance of MH devices and help to increase output, improve quality & speed up deliveries.

Product Design
Conversion of Ideas into Reality Product Development translates customers needs via marketing into technical specs and design various features into the product specifications. P.D. and Development provide link bet marketing, customer needs & expectations and activities required to manufacture the product.

Process Design
Decision Making in Overall Process Route for Converting Raw Mat into Finished Goods. Selection of a process Choice of Technology Process Flow Analysis Layout of the facilities Analyse workflow Select workstation in the workflow

Production and Planning Control

Advance process Setting, fixing, orders and follow up progress. Planning what, how, when & who? Routing selection of route to be follow Scheduling Dispatching Follow-up

Quality Control
Improve Income Reduce cost Achieve Interchangeability Produce optimal quality Prompt inspection Variation check Customers satisfaction, goodwill, confidence and reputation.

Materials Management
Minimise material cost Efficient in purchasing, receiving, transporting and warehousing. Cut cost via simplification, standardisation, value analysis and import subtitution. New source of supply? Reduce investment tie in inventory & develop high inventory turnover ratios.

Maintenance Management
Minimum breakdown low cost No interruption, optimal capacity Availability of machines, buildings and services functional at optimal return on investment.

Historical Development of Operation

Management
Industrial revolution Scientific management Human relations movement Management science Computer age Environmental Issues Late 1700s Early 1900s 1930s to 1960s Mid-1900s 1970s 1970s

Historical Development of Operation

Management
Just-in-Time Systems (JIT) 1980s Total quality management (TQM) 1980s Reengineering 1990s Global competition 1980s Flexibility 1990s Time-Based Competition Supply chain Management

1990s
1990s

Electronic Commerce 2000s Outsourcing and flattening of the world 2000s

Operation Management Strategy

Operations Management Strategy is concerning the planning to achieve vision and mission of organisation via total patterns of decisions and actions which set the role, objectives and activities of the operation so that they contribute to, and support, the organisations business strategy!!!

Operation Strategy
Operational decisions occur on a daily/ weekly/ monthly/ yearly basis and are made considering the risk to the business. These decisions are administrative in nature and can be implemented quickly and tend to carry minor risk.

Tactical Strategy
Tactical Strategic decisions are medium term decisions. Misguided strategy could take a business in entirely the wrong direction and lead to failure, a misguided tactic would have a more limited impact. Tactical strategy tend to be more changeable. (2 5years)

Strategic Planning
Long-term Strategy ( > 5 years ) Strategic decisions are those which affect the long term performance of the business and which relate directly to its aims and objectives. They are usually taken at the highest levels of management and carry higher levels of risk. Effective strategic decisions bring high levels of reward.

Productivity Measurement
Productivity is a measure of how efficiently inputs are converted to outputs Productivity = output/input Total Productivity Measure Total Productivity = $sales/inputs $ Partial Productivity Measure Partial Productivity = cars/employee

Multifactor Productivity Measure Multi-factor Productivity = sales/total $costs

Quiz 03
1) What are the elements/ factors that contribute to the success of O.M.? and 2) How and Why these factors can affect the success of O.M.?

Cont.
ANS: Right Quality Right Quantity Right Time Right Manufacturing Cost