OPERATIONS

MANAGEMENT
 How goods and services are produced
 What operations managers do
 OM concerned with mgt of an org’s
productive resources such as people,
capital & material are transformed into
products or services.
 Managing the daily production of goods &
services.
 Efficient & effective transformation of
inputs into desired outputs
 3 primary functions-operations, marketing
and finance
 PM deals with decision making related to
production process
 OM is the business function that manages
that part of a business that transforms raw
materials & human inputs into goods &
services of higher value.
 Operations managers are concerned with
the use of resources. The resources include
materials, machines and labour.
 Aims at the maximum resource utilisation at
minimal cost.
 Scope of OM
 Long term Strategic Decisions

1) Product Selection & Design

2) Process Selection
3) Facilities Location
4) Facilities layout & Material Handling
5) Capacity Planning
 Product Selection & Design

 Selecting & designing new products &

distributing them to the market quickly.
 The product development activity
provides the link between the customer
needs & expectations & the activities
required to manufacture the product.
 Process Selection
 Strategic decision of selecting appropriate
production process to conduct production.
 Decision about technology, machines &
equipments
 Different kinds of process like, conversion
process, fabrication process, assembly process,&
testing process
 Facilities Location
 Where should a plant or service facility be
located?
 It is better to set up facilities near to customers
due to time based competition, trade
agreements & transport costs.
 Facilities layout & Material Handling

 To arrange all facilities in order to achieve a

smooth work flow.
 The amount of space required & the distance
that must be travelled between various elements
in the layout should also be decided.
 Different kinds of facility layout are process
layout, product layout, group technology layout
& fixed position layout
 Capacity Planning

 It is the amount of o/p that a system is capable

of achieving over a specific period of time.
 Operations manager should consider both
resource i/p & product o/p while determining
capacity.
 Therefore questions such as how much should a
plant be able to produce, how many customers
should a service facility be able to serve, what
kind of problems arise as the production system
expands should be solved by OM.
 Operational Decisions

1) Production Planning
2) Production Control
3) Inventory Control
4) Quality Control
5) Method Study
6) Maintenance & Replacements
7) Cost Reduction & Control
OBJECTIVES OF OM
 Primary Objectives

1) To reduce cost of production

2) To improve product quality
3) To fix time schedule
 Secondary Objectives
1) Proper utilization of Machinery & Equipment
2) Material Control
3) Manpower utilization
4) Manufacturing services
Overall objectives can be summed up as:

 To create added value for the organisation

 Help to achieve sustainable competitive
advantage by satisfying the demands &
needs of customers for the company’s
products.
 OM’s Future Challenges
 Marketplace Challenges

1) Market Fragmentation
2) Vocal Customers
3) Wired World
4) Human Resource Scarcity
5) The Global Workforce
 Technological Challenges

1) Technological change
2) Bio-genetic
3) Miniaturization
 Societal Challenges

1) The environment
2) Intellectual Property
3) Financial Reporting