Production and Operations Management …

1 Production and Operations Management MGT613 VU Copyright Virtual University of Pakistan 1 Lesson 01 INTRODUCTION TO Production AND Operations Management POMA Previously called Production Management Then Production and Operations Management Often called Operations Management Should not be confused with Operations Research or Production Management which are the domain of Mechanical and Industrial Engineering. THE COURSE CONTENT Tentative Course Content Units of Learning wise Unit I ( Introduction and Productivity, Strategy and Competitiveness) Unit II ( Forecasting) Unit III ( Design of Production Systems) Unit III ( Quality) Unit V ( Operating and Controlling the System) Tentative Course Content Lecture wise Unit I ( 5 Lectures) Unit II (3 Lectures) Unit III ( 12 Lectures) Unit III ( 10 Lectures) Unit V ( 15 Lectures) History of Management Frederick Taylor and Gilbreths (Lillian and Frank Gilbreth) are pioneers of transforming Management to scientific domain.

2 Borrows a lot of information from Engineering and Management to give an overall bigger picture of operating and managing any organization. Difference between Operations Management and Research OR relies on mathematical modeling and OM relies on practical scenarios/industrial cases. OR domain and tool of Engineers while OM is considered to be one of the critical tools of Managers. OR considered more powerful to improve the whole system where as OM can be applied to a part of the system. OR relies on mathematical modeling while OM relies on practical scenarios/industrial cases. Why Study Operations Management Operations Management form core of any organization s senior leadership. What are organizations An organization is a business entity that can work for profit or non profit purposes to generate a value added product or service for its customers.

3 Whether profit or non profit, the role of an Operations MANAGER is to sustain, protect, and project the company s Operations side. Production and Operations Management MGT613 VU Copyright Virtual University of Pakistan 2 Why Operations Manager Every organization must manage processes and Operations by which processes are performed. An Operations Manager controls the processes by which value is added from conversion of inputs to outputs. Why Operations Manager Inputs include materials, inventory, services, land, and energy, human and capital resources. Bridge between Management and Engineering Two Islands named Engineering and Management Operations Management uses foundations of both Engineering and Management . Bridge Basics , Extension of road from both ends till they meet at the centre and fuse to give strength and allow the foundations to give added strength to the bridge Bridge between Management and Engineering.

4 The primary responsibility of an Operations Manager working at any level, for Production or service based organization, is to help and facilitate the building of walls. It s a demanding job but at the time takes the same amount of time required by people who are creating hurdles and end up building walls in stead of bridges. Also, it is important at this point in time to understand that the Strength of the Chain is equal to the strength of the weakest Link, so if your analysis, as an Operations manager consists of both Engineering and Management Links. Any weakness of analysis in Engineering or Management Link would lead to an overall weak analysis. A balanced approach would be to make best use of the strength and overcome the weaknesses. As a rule of thumb, problem solving and decision making through Production and Operations Management would entail that both Engineering and Management aspects should be utilized to aim for the powerful systems ( over all big picture) approach.

5 Production and Operations Management MGT613 VU Copyright Virtual University of Pakistan 3 Lesson 02 INTRODUCTION TO Production AND Operations Management (Contd.) RECAP OF 1ST Lecture Course Content, Midterm and Final Exam Organization Definition Finance, Marketing and Operations Productive systems, Production and Service Systems Operations Management (The Management of systems or processes that create goods and/or provide services) Operation Function ( Consists of all activities directly related to producing goods or providing services) Manufacturing and Service Definitions Manufacturing is the transformation of raw materials into finished goods for sale, or intermediate processes involving the Production or finishing of semi-manufactures. It is a large branch of industry and of secondary Production .

6 Some industries, like semiconductor and steel manufacturer s use the term fabrication. Service is defined as either as Services are deeds, processes, and performances. OR A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer Definition of Service Firms Service enterprises are organizations that facilitate the Production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives. Role of Services in an Economy Production and Services Growth in Pakistan Can be attributed to the following sectors Private Public Public Private Government Key Areas of Responsibility for an Operations Manager Operations Managers job responsibility includes but is not limited to: Forecasting Capacity planning Production and Operations Management MGT613 VU Copyright Virtual University of Pakistan 4 Scheduling Inventory Management Quality Assurance and Control Motivating employees Deciding where to locate facilities Key Decision Areas for Operations Managers 5W2H Approach What : What resources/what amounts Why: The work is needed to be done When: Needed/ scheduled/ordered Where: Work to be done How much: Quantity to be produced or served, How.

7 Designed/capacity planning Who: To do the work Decision Making Operations Manager spends most of their routine hours in making decisions under certainty or uncertainty. The various tools available to an Operations Manager include 1. Models 2. Quantitative approaches 3. Analysis of trade-offs 4. Systems approach Applications of Models in Operations Management Models Are Beneficial and effective to an Operations Manager primarily because of the following reasons Easy to use, less expensive Require users to organize Systematic approach to problem solving Increase understanding of the problem Enable what if questions Specific objectives Consistent tool Power of mathematics Standardized format Historical Development of OM JIT and TQC Manufacturing Strategy Paradigm Service Quality and Productivity Total Quality Management and Quality Certification Historical Development of OM (cont d)

8 Business Process Reengineering Supply Chain Management Electronic Commerce Production and Operations Management MGT613 VU Copyright Virtual University of Pakistan 5 Current Trends in Business Trends in Business in general and Operations Management which have shaped the industry and the technological support to the industry include the following:- 1. The Internet, e-commerce, e-business 2. Management technology 3. Globalization 4. Management of supply chains 5. Agility Production and Operations Management as Nucleus in the Organizations Operations occupy the central figure in any service or manufacturing organization. A small decision as it may seem can serious effect the workings and performance output in other units. Current Issues in OM The recent wave of telecom sector infrastructure consolidation and deregulation has led to a lot of foreign investors aggressively seeking new Pakistani partners.

9 With the aid of operation Management studies we can foresee the following current issues in Pakistan. These issues have already been addressed in Pakistan as well as in other countries. 1. Effectively consolidating the Operations resulting from mergers 2. Developing flexible supply chains to enable mass customization of products and services 3. Managing global supplier, Production and distribution networks 4. Increased commoditization of suppliers 5. Current Issues in OM (cont d) 6. Achieving the Service Factory 7. Enhancing value added services 8. Making efficient use of Internet technology 9. Achieving good service from service firms What is a Production and Productive System? A productive system is defined as a user of resources to transform inputs into some desired outputs (products as well as services) where as Production system refers specifically to only desired output in the form of products or manufactured goods.

10 It is important to understand that productive system reflects both Production as well as services systems. Public RelationsAccounting Industrial Engineering OperationsMaintenancePersonnelPurchasing Distribution MISL egal Production and Operations Management MGT613 VU Copyright Virtual University of Pakistan 6 We also need to understand the important transformations through which a raw material is converted a value added end product or service. Physical--manufacturing Location--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications Our discussion throughout the semester would focus on what is a Service and what is a Good? In our course of discussion, we will collect numerous examples to better understand that Workers working for creation of a product, manufacturing units are simultaneously working to create a service?