OPERATIONS

MANAGEMENT

MGT 460
 Self Introduction
Dr. Arshad Zaheer
Education: PhD, MS(Engineering Management),
MS (E-Commerce), MBA
Reviewer of International Journals
Ph.D/M.Phil Supervisor/External Reviewer
Publications in International journals
Books//Monographs
Articles in Edited Books

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 Self Introduction
Dr. Arshad Zaheer
National and International Conferences
Workshops
Administrative Experience
Teaching Experience
Areas of Interest
Research Software Expertise (SPSS, AMOS, VPLS)

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 Course Outline
Introduction to Operations Management
Productivity Measurement
Competitiveness and Strategy
Managing Quality
Linear Programming
Transportation Models
Assignment Methods
Forecasting
Project Management
4
 Course Outline
Decision Making Tools
Learning Curves
Inventory Management
Operations Strategy in a Global Environment
Location Strategies
Layout Strategies
Supply Chain Management
Human Resources and Job Design

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 Course Objectives
Learning operational management techniques that could
be applied to real world problems
understand the strategic role of operations management
in creating and enhancing a firms competitive
advantages
understand key concepts and issues of OM in both
manufacturing and service organizations
apply analytical skills and problem-solving tools to the
analysis of the operations problems
letting students apply the relevant operations
management technique to the correct situation
letting students understand operational management
results and draw the correct conclusion from them
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 Reference Material
Operation Management by Jay Heizer, Barry
Render and Jagadeesh Rajashekhar
Operations Research: An Introduction by
Hamdy A. Taha
Operations Management by William J.
Stevenson
Online search

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 Course Plan and
Requirements
Lectures
Assignments
Quizzes
Sessional
Marks Distribution
 Lecture 1

Introduction to Operations Management

Dr. Arshad Zaheer

 Lecture Outline
Management
Operations
Value-Added
Operations Interfaces
Definition of Operations Management
Nomenclature
Goods and Services
Responsibilities of Operations Manager
New Trends in OM
 Management

What is Management?

Management is the scientific

study concerning the different
activities (like POSDCORB) in
order to maximize profit,
minimizing cost and to optimize
productivity
 Operations

What is Operations?
Operations consists of activities related
to the production of goods and services.
Goods Oriented Operations consists of
manufacturing and assembly operations
Service Oriented Operations consists of,
health care, transportation, Education,
retailing etc.
 Operations as core function

Operations function is the core of most

business organizations
Inputs are converted to Valuable outputs
after transformation process
 Value-Added
The difference between the cost of inputs
and the value or price of outputs.

Value added
Inputs
Transformation/ Outputs
Land
Conversion Goods
Labor
process Services
Capital
Feedback

Control
Feedback Feedback
 Food Processor

Inputs Processing Outputs

Raw Vegetables Cleaning Canned
Metal Sheets Making cans vegetables
Water Cutting
Energy Cooking
Labor Packing
Building Labeling
Equipment
 Hospital Process
Inputs Processing Outputs

Doctors, nurses Examination Healthy

Hospital Surgery patients
Medical Supplies Monitoring
Equipment Medication
Laboratories Therapy
 Why Organizations need
Operations Manager
An operations Manager controls the
processes by which value is added
from conversion of inputs to
outputs.
Production and Operations
Management

Production is the creation of

goods and services
Operations management (OM) is
the set of activities that creates
value in the form of goods and
services by transforming inputs
into outputs
 What Is Operations
Management?
The management of systems or processes that
create goods and/or provide services

Organization

Finance Operations Marketing

 Organizing to Produce Goods
and Services
Essential functions:
Finance/accounting allocation of
resources, investment decisions,
tracks how well the organization is
doing, pays bills, collects the
money
Marketing Front line activity,
generates demand
Production/operations creates
the product
 Operations Interfaces
Industrial Maintenance
Engineering
MIS

Distribution Public Relations

Operations

Purchasing Personnel
Accounting
 What Is Operations
Management?
Operations management (OM) is the area
of management which is concerned with
administration of business practices
especially overseeing, designing and
controlling the process of production set
of activities that creates value in the form
of goods and services by transforming
inputs into outputs with maximum level of
efficiency ensuring profitability for the
organization
 Nomenclature
Production Management
Production and Operations Management
(POMA)
Operations Management
Operations Research (Interdisciplinary Subject)
Grey Areas
 Operations Research

Operations research is the development and

collection of techniques based on
mathematics and other scientific approaches
that finds solutions to your problems.
 Difference between Operations
Management and Research
1. OR relies on mathematical
modeling and OM relies on practical
scenarios/industrial cases.
2. OR is domain and tool of Engineers
while OM is considered to be one of
the critical tools of Managers.
 Why Study OM?
OM is one of three major functions
(marketing, finance, and operations)
of any organization
We want (and need) to know how
goods and services are produced
We want to understand what
operations managers do
OM is such a costly part of an
organization
 What Operations
Managers Do
Basic Management Functions
Planning
Organizing
Staffing
Leading
Controlling
 Responsibilities of Operations
Management
Planning Organizing
Capacity Degree of centralization
Location Subcontracting
Products & services Staffing
Make or buy Hiring/laying off
Layout Use of Overtime
Projects Directing
Scheduling Incentive plans
Controlling Issuance of work orders
Inventory Job assignments
Quality
 The Critical Decisions
Design of goods and services
What good or service should we
offer?
How should we design these products
and services?
Managing quality
How do we define quality?
Who is responsible for quality?

Table 1.2 (cont.)

 The Critical Decisions
Process and capacity design
What process and what capacity will
these products require?
What equipment and technology is
necessary for these processes?
Location strategy
Where should we put the facility?
On what criteria should we base the
location decision?
Table 1.2 (cont.)
 The Critical Decisions
Layout strategy
How should we arrange the facility?
How large must the facility be to meet
our plan?
Human resources and job design
How do we provide a reasonable work
environment?
How much can we expect our
employees to produce?
Table 1.2 (cont.)
 The Critical Decisions
Supply chain management
Should we make or buy this component?
Who are our suppliers and who can
integrate into our e-commerce program?
Inventory, material requirements
planning, and JIT
How much inventory of each item should
we have?
When do we re-order?
Table 1.2 (cont.)
 The Critical Decisions
Intermediate and shortterm
scheduling
Are we better off keeping people on
the payroll during slowdowns?
Which jobs do we perform next?
Maintenance
Who is responsible for maintenance?
When do we do maintenance?

Table 1.2 (cont.)

 New Challenges in OM
From To
Local or national focus Global focus
Batch shipments Just-in-time
Low bid purchasing Supply chain
partnering
Lengthy product Rapid product
development development,
alliances
Standard products Mass
customization
Job specialization Empowered
employees, teams
 Characteristics of Goods
Tangible product
Consistent product
definition
Production usually
separate from
consumption
Can be inventoried
Low customer
interaction
 Service Definitions
Services are deeds, processes or
performances.
OR
A service is a time-perishable,
intangible experience performed for a
customer acting in the role of a co-
producer
Characteristics of Service
Intangible product
Produced and
consumed at same time
Often unique
High customer
interaction
Inconsistent product
definition
Often knowledge-based
Frequently dispersed
 Goods-service continuum
Steel production
Automobile fabrication

House building
Low service content Road construction
High goods content
Dressmaking
Farming

Auto Repair
Appliance repair

Maid Service
Increasing Manual car wash
goods content
Increasing Teaching
service content Lawn mowing
High service content
Low goods content
Ethics and Social Responsibility
Challenges facing
operations managers:

Developing and producing safe,

quality products
Maintaining a clean environment
Providing a safe workplace
Honouring community commitments