Operations Management – An Overview 1 - himpub.com

1 Operations Management An Overview12 Production and Operations ManagementProf. K. SHRIDHARA (Mech), PG DIM, DirectorAkshaya Management Consultancy ServicesBangalore - 560 085 Karnataka, IndiaPRODUCTION ANDOPERATIONSMANAGEMENTMUMBAI NEW DELHI NAGPUR BENGALURU HYDERABAD CHENNAI PUNE LUCKNOW AHMEDABAD ERNAKULAM BHUBANESWAR INDORE KOLKATA GUWAHATIO perations Management An Overview3 AuthorNo part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the by:Mrs. Meena Pandey for Himalaya Publishing House Pvt. Ltd., Ramdoot , Dr. Bhalerao Marg, Girgaon, Mumbai - 400 : 022-23860170/23863863, Fax: 022-23877178E-mail: Website: Offices:New Delhi: Pooja Apartments , 4-B, Murari Lal Street, Ansari Road, Darya Ganj,New Delhi - 110 002.

2 Phone: 011-23270392, 23278631; Fax: 011-23256286 Nagpur:Kundanlal Chandak Industrial Estate, Ghat Road, Nagpur - 440 : 0712-2738731, 3296733; Telefax: 0712-2721215 Bengaluru:No. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands, Madhava Nagar,Race Course Road, Bengaluru - 560 001. Phone: 080-32919385;Telefax: 080-22286611 Hyderabad:No. 3-4-184, Lingampally, Besides Raghavendra Swamy Matham,Kachiguda, Hyderabad - 500 027. Phone: 040-27560041, 27550139;Mobile: 09848130433 Chennai:No. 85/50, Bazullah Road, T. Nagar, Chennai - 600 : 044-28144004/28144005 Pune:First Floor, "Laksha" Apartment, No. 527, Mehunpura, Shaniwarpeth(Near Prabhat Theatre), Pune - 411 030. Phone: 020-24496323/24496333 Lucknow:Jai Baba Bhavan, Church Road, Near Manas Complex and Dr. Awasthi Clinic,Aliganj, Lucknow - 226 024. Phone: 0522-2339329, 4068914;Mobile: 09305302158, 09415349385, 09389593752 Ahmedabad:114, SHAIL , 1st Floor, Opp.

3 Madhu Sudan House, Road,Navrang Pura, Ahmedabad - 380 009. Phone: 079-26560126;Mobile: 09327324149, 09314679413 Ernakulam:39/104 A, Lakshmi Apartment, Karikkamuri Cross Rd., Ernakulam,Cochin - 622011, Kerala. Phone: 0484-2378012, 2378016;Mobile: 09344199799 Bhubaneswar:5 Station Square, Bhubaneswar (Odisha) - 751 001. Mobile: 09861046007 Indore:Kesardeep Avenue Extension, 73, Narayan Bagh, Flat No. 302, IIIrd Floor,Near Humpty Dumpty School, Narayan Bagh, Indore - 452 007 ( ).Mobile: 09301386468 Kolkata:108/4, Beliaghata Main Road, Near ID Hospital, Opp. SBI Bank,Kolkata - 700 010, Phone: 033-32449649, Mobile: 09910440956 Guwahati:House No. 15, Behind Pragjyotish College, Near Sharma Printing Press, Bharalumukh, Guwahati - 781009. (Assam).Mobile: 09883055590, 09883055536 DTP by:Page Designers, BengaluruPrinted by:New Edition : 20114 Production and Operations ManagementPrefaceProduction and Operation Management (POM) is a bout the tr ansformation ofproduction and operational inputs into outputs, that when distributed, meet the needs of incorporates many interdependent tasks which can be grouped under five main headingsviz.

4 , Product, Plant, Processes, Programmes and People. Production and Operations Managersensure that quality products are produced and delivered as quickly and cost effectively aspossible. Therefore, a basic knowledge of this subject is essential for students of book comprises 11 chapters covering various important topics such as OperationsStrategy, Production Planning and Control, Design of Production Systems, Design of WorkSystems, Aggregate Production Planning, Project Management , Scheduling of Operations ,Maintenance Management , Quality Management and Facility Location and book is specifically designed to cover the syllabus of MBA programme offered byBiju Patnaik University of Technology. However, it may be found useful to students of MBAprogramme of any other Indian university as well. The book has special features such asillustrations, solved problems, review questions, problems to be solved and case illustrationsand case have great pleasure to express my sincere thanks to Sri Niraj Pandey and Sri Anuj Pandeyof Himalaya Publishing House for their keen interest and effort to publish this book.

5 I am alsothankful to Sri Vijay Pandey for his effort in printing and promoting this book in a very short thank Sri Madhu and Smt. Divya of M/s Page Designers for their excellent I am also thankful to Smt. Nimisha, Sri Rajesh, Sri Yogesh of HPH production unitfor their effort in designing the cover page and printing this also thank my family members, friends and well-wishers for their constant support andencouragement for this endeavour. I also thank one and all who have directly or indirectly helpedor supported me in my work. I invite readers, both students and teachers to offer their valuablesuggestions as a feedback to me so as to improve the book in its future SHRIDHARA , Akshaya , 1 C Main,Kempegowda Layout, 3rd Block,3rd Phase, Banashankari III StageBangalore - 560 : (080) 26694761 Email : Management An Overview5 ContentsCHAPTER 1. Operations Management - AN OVERVIEW1 - 30 Meaning of "Production" Meaning of Operations Nature of Production/ Operations Production Functions Managing a Production/Operating System Distinctionbetween Production Management and Operations Management Objectives ofProduction/ Operations Management Decision Making in Production/OperationsManagement Organising to Produce Goods and Services Functions of Production/ Operations Managers Problems of Production/ Operations Management The HistoricalEvolution of Production/ Operations Management Th e Scope of OperationsManagement recent trends in Production/ Operations Management Systems Designand Systems Operation A Production System Model Production System Diversity Types of Production Systems Differentiating Features of Production Systems FactorsAffecting Production and Operations Management Today Review QuestionsCHAPTER 2.

6 Operations STRATEGY31 - 46 Productivity Competitiveness Production/ Operations Strategy Competitive Priorities Building Production/ Operations Strategy on Competitive Priorities Elements ofProductions/ Operations Strategy Solved Problems Review Questions PoblemsCHAPTER 3 : Operations PLANNING AND CONTROL47 - 70 Classification of Production Planning and Control Functions Production Planning (orOperations Planning) Factors Determining Production Planning Procedures ProductionPlanning System Production Control Production Control System FactorsDetermining Production Control Procedures Production Planning/ Operations Planningand Control Role of Production Planning and Control in Operations Management Scope of Production Planning and Control Principles of Production Planning andControl Phases in Production Planning and Control Function Main Functions ofProduction Planning and Control Department Levels of Production Planning Production Planning Functions Production Control Functions Benefits of ProductionPlanning and Control Function Limitations of PPC Measuring Effectiveness of PPCF unction Production Planning and Control in Different Production Systems Organisation of PPC Department Routing Scheduling and Loading Objectives ofScheduling Elements of Scheduling Types

7 Of Scheduling Dispatching Centralisedand Decentralised Dispatching Progressing (or Expediting or Follow-up) ReviewQuestionsCHAPTER 4. DESIGN OF PRODUCTION/ Operations SYSTEMS71 - 111[A] Product Planning and Development: What is a Product? Need for Product Planningand Development Objectives of Product Planning and Development Characteristicsof Successful Product Development Role of Production Management in ProductDevelopment The Challenges of Product Development New Product6 Production and Operations ManagementDevelopment Strategy New Product Development Process Approaches to Speed upNew-Product Development The Product-life Cycle Concept Factors to be Consideredin Product Development. [B] Product Design: Product Design, Process Design andProduction Design Importance of Product Design What does Product Design Do? Reasons for Product Design or Redesign Objectives of Product Design FactorsInfluencing Product Design The Product Design Process as a part of ProductDevelopment Process Sources of Ideas for Designing New Products or Redesigningthe Products Stages in Product Design Design Documents for Production Effectof Product Design on Product Cost.

8 [C] Process Management : What is a Process? Process Planning Process Management Major Process Decisions Make-or-buyDecisions Make-or-buy Analysis Procedure for Process Planning and Design Process Design Scope of Process Design Basic Factors Affecting Process Design Major Factors Affecting Process Design Decisions Interrelationship Among ProductDesign,Process Design and Inventory Policy Arithmetic Analysis Logarithmic Analysis Selecting a Learning Rate Uses and Limitations of Learning Curves Solved Problems Review Questions ProblemsCHAPTER 5 : DESIGN OF WORK SYSTEMS112 - 156(A) Productivity: Productivity Measurement Productivity Improvement FactorsAffecting Productivity Productivity Improvement Techniques. (B) Job Design: JobDesign Decisions Factors Affecting Job Design Behavioural Considerations in JobDesign Physical Considerations in Job Design Machine-Worker Interaction Ergonomics The Work Environment.

9 (C) Work Study: Objectives of Work Study Scope of Work Study Relationship between Method Study and Work Measurement Basic Work Study Procedure Method Study Method Study Procedure RecordingTechniques Used in Method Study Motion Study Principles of Motion Economy Memomotion Study Work Measurement Objectives of Work Measurement Techniques of Work-measurement Time Study Synthesis Method AnalyticalEstimating Predetermined Motion Time System (PMTS) Work Sampling or ActivitySampling or Ratio-Delay Method Solved Problems Review Questions ProblemsCHAPTER 6 : AGGREGATE PRODUCTION PLANNING157 - 185 Aggregate Planning Objectives of Aggregate Planning Operations Planning andScheduling Systems Aggregate Production (Output) Planning Aggregate Planningor Aggregate Capacity Planning Approaches to Aggregate Planning Aggregate Plansfor Services Capacity Requirement Planning Capacity Requirement Planning (CRP)Process Aggregate Capacity Planning Strategies Level Capacity Plan MatchingCapacity with Aggregate Demand Plan Strategies for Aggregate Capacity Planning Master Production Scheduling Procedure for Developing MPS Guidelines for MasterScheduling Updating of MPS MPS in Produce-to-Stock and Produce-to-Order Firms Length of Planning Horizon of MPS Symptoms of a Poorly Designed MPS SolvedProblems Review Questions ProblemsCHAPTER 7.

10 CAPACITY PLANNING186 - 209 Types of Capacity Measurement of Capacity Capacity Decisions Factors AffectingDetermination of Plant Capacity Capacity Planning Capacity Changes Types ofCapacity Planning Capacity Requirement Planning Strategies Economic BatchOperations Management An Overview7 Quantity for Production Long-Range Capacity Planning Forecasting Long-termFuture Capacity Demand Economies and Diseconomies of Scale Developing CapacityAlternatives Selecting from Among the Alternative Sources of Capacity (or CapacityAlternatives) Solved Problems Review Questions ProblemsCHAPTER 8 : PROJECT MANAGEMENT210-237 Project Management Project Life Cycle Project Organisation The Role of a ProjectManager Problems in Managing a Project Project Planning and Control Techniques Network Fundamentals Commonly Used Network Symbols Terms used in NetworkBased Scheduling Techniques Networking Conventions Project SchedulingTechniques Scheduling Chart (Gantt Chart or Horizontal Bar Chart) ProgrammeEvaluation and Review Technique (PERT) and Critical Path Method (CPM) Critical PathMethod (CPM) Purpose of CPM Procedure for Drawing up a CPM Network CPM- Time Analysis Programme Evaluation and Review Technique (PERT) DeterminingProbability of Meeting Scheduled Date in PERT Analysis Crashing CPM Networks Steps in Network Crashing Solved Problems Review QuestionsCHAPTER 9.