Introduction to Operations

Management

Dr. Rinki Rola

PhD (Management)
MBA (Finance) B. E. (Chemical)
 Objective of Course
• The objective of this course is to enable the students
with the concepts, tools and techniques to design,
analyze and improve operational capabilities of an
organization.
 Learning Outcomes

• Upon successful completion of this course, the students will

be able to demonstrate the ability to:
– Identify and explain how operations management
contributes to the achievement of an organization’s
strategic objectives of quality, cost effectiveness,
productivity, sustainability, competitiveness, etc.
– Critically evaluate the operations function and developing
a degree of competence in designing and controlling
operations in services and manufacturing organization in
the prevalent scenario.
 Course Outline
• Introduction to Operations Management
• Product & Service Designing
• Process Designing
• Facility Location Planning
• Designing Facility Layouts
• Demand Forecasting
• Capacity Planning
• Inventory Management
• Quality Management
• Process Capability and Statistical Quality Control
• Supply Chain Management
• JIT and Lean Production
• Service Operations
 Reference Books

• Operations Management - Sustainability and Supply Chain

Management by jay Heizer and Barry Render
• Operations and Supply Chain Management e - Chase R. B., Jacobs, F.
R., Aquilano, N. J. and Agarwal N.K., Latest edition., McGraw Hill
Publication
• Management – Process and Supply Chains by Lee J Krajewski, Larry
P. Ritzman, Manoj K Srivastava and Samir K Srivastava, Eleventh
Edition, Pearson Publication
• Operations and Supply Chain Management by Russell, Roberta S.
and Taylor, Bernard W., Latest edition. John Wiley and Sons (Wiley
India)
• Production and Operations Management by Kanishka Bedi,
Publisher: OXFORD
 Evaluation Procedure / Pattern Details
Written Exam – 50% (100 Marks)

Case Study + Assignments + Projects

Continuous
Evaluation (CE) – 50%
Quiz (MCQ)
(N-1)
N = 6 Components
Class Test

Total – 100%

Contact Details:

Name: Dr. Rinki Rola Email ID: rinki@shantibschool.edu.in Contact: 90990 44167
How do you define and
differentiate –
Goods and Services ??
 Goods & Services
Goods / Product Service

What can How the value is

What customer buys – you What can
provided – Intangible
Physical, tangible aspect make for you do
aspect
me? for me?
 Goods vs. Services
Goods / Products
1) Goods can be resold
2) Goods can be inventoried
3) Some aspects of quality are
measurable
4) Selling is distinct from
production of goods
5) Goods are transportable
6) Often easy to automate
production of goods
7) Are tangible
8) Involve less customer
interaction
Services
1) Reselling services is unusual
2) Services cannot be inventoried
3) Many aspects of quality are
difficult to measure
4) Selling is often a part of
production of service
5) Service provider, not the service,
is transportable
6) Service is often difficult to
automate
7) Are intangible
8) Involve higher customer
interaction
 Manufacturing vs. Service
Manufacturing and Service Organizations differ primarily
because manufacturing is goods-oriented and service is
act-oriented.

Goods Services

Tangible Act-Oriented
 Manufacturing vs. Service !!
Characteristic Manufacturing Service
Output Tangible Intangible
Customer contact Low High
Uniformity of output High Low
Labor content per unit of Low High
goods or service
Uniformity of input High Low
Measurement of Easy Difficult
productivity
Opportunity to correct Easy Difficult
quality problems
Similarities in Manufacturing &
Services!!
• Both use technology.
• Both have quality, productivity, & response issues.
• Both must forecast demand.
• Both will have capacity, layout, and location issues.
• Both have customers, suppliers, scheduling and staffing
issues.
• Manufacturing often provides services.
• Services often provides tangible goods.
Goods - Services Continuum
The Product / Process Continuum

Automobile
Photocopier retailers Banks Consultancies
Automobile manufacturers & service
manufacturers providers Restaurants Airlines Teaching /
Financial Advisor

Product Process
orientation orientation

Organizations on a
Product/Process Continuum
What about McDonald’s - Service
or Manufacturing?
 Hybrid organizations

• Some organizations are a blend of

service / manufacturing are called
Hybrid or semi-manufacturing
organizations.
 Transformation Process

Quality of inputs Quality of outputs

monitored monitored

Random disturbances

INPUTS Transformation OUTPUTS

Process (Goods Or Service)

Feedback Mechanisms
 Transformation Process For a Manufacturing
Organization (A Refrigerator Manufacturer)
Random disturbances
High turnover of workers
and managers
Recession Quality of
Machines & Quality of Government’s taxation outputs
Equipments inputs policy monitored
Building monitored Strikes instigated by trade
Components, unions
parts, sub-
Customers satisfied with:
assemblies, etc.
Transformation Good cooling performance
Workers
Process Less consumption with
Office electricity
infrastructure Good after-sales service
(computers, New advanced features
furniture, etc.)
Packaging
material Feedback Mechanisms
Capital Rising sales volume
Managers Lesser customer complaints
Positive response of customers in
INPUTS the feedback forms OUTPUTS
 Transformation Process
For a Service Organization (An MBA Institute)
Random disturbances
Strikes of students, teachers or Quality of
Quality of staff outputs
inputs Undue interference of the
Raw minds monitored
monitored government in the working of
(students)
institutions
Teachers
Class rooms Enlightened students with:
Transformation Good communication skills
Computer lab Process Pleasant personalities
Library Leadership qualities
Projectors Good analytical ability
(OHP, LCD etc) Team spirit
Decision making abilities
Administrative Computer skills
Feedback Mechanisms
staff
Success at placement interviews
Grades obtained in examinations
INPUTS Rising career graph of alumni in the industry OUTPUTS
Number of applications for admission
in the institute
Ratings of surveys
 Transformation Process For a Hybrid Service &
Manufacturing Organization (A Restaurant)
Random disturbances
High turnover of chefs, Quality of
Customers Quality of waiters, etc. outputs
Building inputs Inflation monitored
Chef monitored Government’s taxation
Vegetables policy
Furniture
Customers satisfied with:
Mutton, Transformation • Good preparation of the
chicken, Process food
pork, etc. • Pleasant behavior and
Cooking oil,
personality of the waiter
Spices, etc.
• Genuine prices charged
Waiters
Manager
Feedback Mechanisms
Rising Revenues
INPUTS OUTPUTS
Repeat Customers
Appreciation of customers
 What is Operations Management?

• Operation Management is the set of activities that relate to the

creation of goods and services through the transformation of inputs
into outputs OR in other words its is the management of all process
and systems that produce goods and services for external and
internal customers .

• Operations Management is the business management function

responsible for planning, coordinating, and controlling the
resources needed to produce products and services for a company.

• It is an core function of every organization whether Service or

Manufacturing, profit or not for profit.
 Role of Operations in an Organization

Integration
between
Different
Functional
Areas of a
Business
Significant Events in OM
 Order Qualifiers & Order Winners
• Terry Hill has divided the criteria required in the marketplace
into two groups: Order qualifiers and Order winners.
• An order qualifier is a characteristic of a product or service
that is required in order for the product/service to even be
considered by a customer.
• An order winner is a characteristic that will win the bid or
customer's purchase.
• Therefore, firms must provide the qualifiers in order to get
into or stay in a market.
• To provide qualifiers, they need only to be as good as their
competitors. Failure to do so may result in lost sales.
• However, to provide order winners, firms must be better than
their competitors.
 Order Winners and Qualifiers
• Winners:
Differentiators — performance not yet duplicated
by competitors
Competitive advantage — performance better
than all or most of the competitors
• Qualifiers
Minimum acceptable level of performance

With time, Order Winners become Order Qualifiers

25
Relationship of Order Winners to
Competitive Priorities
Relationship of Order Qualifiers to
Competitive Priorities