Lecture One-Intrioduction to EOM (2).pptx

Engineering operation management

1. ENGINNERING OPERATIONS MANAGEMANT Description of Module 33 Code: MEU 07404 & MEU 07428 Name: Engineering Operations Management Number of Credits: 6 Sub enabling outcomes: [5.4.5] Develop organisation structure of an Organisation [5.4.6] Analyse a product design steps and production methods during design process. [5.4.7]Optimize production costs to raise profit of the Organisation . [5.4.8] Maintain stock at optimum levels for cost effective. Prerequisite module: MEU 07303 Finance and Human Resources Management.

2. Learning Context The module will be conducted through lectures, tutorials and visit to an industry with pre-determined aims based on what will be observed and reported thereafter. Learning Materials: Chalkboard, Overhead Projectors, flip charts, Audio Visual. Required references: [1] Krajewski L. J. and Ritzman L. P. (2012), Operations Management: Processes and Supply Chains, 10 th Edition, Pearson Pub. [2] Heizer J. and Render B. (2013), Principles of Operations Management, 9 th Edition, Pearson Pub Recommended References: [3] Nembhard H. B. and Aktan M. (2009), Real Options in Engineering Design, Operations, and Management, 1 st Edition, CRC Press. [4] Brown S., Blackmon K., Cousins P. and Maylor H. (2001), Operations Management 1 st Edition, Routledge Publishing. [5] Buffa and Sarin (2007), Modern Production/Operations Management, 8 th edition, Wiley India Private Limited Integrated Methods of Assessment Continuous Assessment components: 40% End of Semester Examination: 60%

3. Lecture One: Introduction to Operation Management Learning Objectives: By the end of this lesson a trainee will be able to: Define operation management and other terms Describe the objectives of operations management List the activities under production and operations management functions. Describe characteristic of modern operations function Discuss recent trends in operation management.

4. Basic Introduction Production Management can be defined as the management of the conversion process, which converts land, labor, capital, and management inputs into desired outputs of goods and services. It is also concerned with the design and the operation of systems for manufacture, transport, supply or service. Examples of goods and services all around you are each book you read, every video you watch, every e mail you send, every telephone conversation you have, and every medical treatment you receive involves the operations function of one or more organizations. Operating System is a configuration of resources combined for the provision of goods or services. Retail organizations, hospitals, bus and taxi services, tailors, hotels and dentists are all examples of operating systems. Any operating system converts inputs, using physical resources, to create outputs, the function of which is to satisfy customer’s wants. The creation of goods or services involves transforming or converting inputs into outputs.

5. Scope of Operation Management Following are the activities, which are listed under production and operations management functions

6. Definitions Production Management: can be defined as the management of the conversion process, which converts land, labor, capital, and management inputs into desired outputs of goods and services. It is also concerned with the design and the operation of systems for manufacture, transport, supply or service. Difference between Operations and Production In the transformation process, the inputs change the form into an output, by adding value to the entity. The output may be a product or service. If it is a product centric that is known as production, If it is a service centric then that is known as operation. Material Management: It is a scientific technique, concerned with Planning, Organizing & Control of flow of materials, from their initial purchase to destination. Material handling: It is the movement and storage of material at the lowest possible cost through the use of proper method and equipment.” Or “Material handling is the art and science of moving, storing, protecting, and controlling material”.

7. Definitions cont…. Product design: It is cross-functional, knowledge intensive work that has become increasingly important in today's fast-paced, globally competitive environment. It is a key strategic activity in many firms because new products contribute significantly to sales revenue. Process Design : It is the activity of determining the workflow, equipment needs, and implementation requirements for a particular process.  Design: refers to the process of originating and developing a plan for a product, service or process. Process: It is any part of an organization which takes a set of input resources which are then used to transform something into outputs of products or services.

8. Definitions cont…. Production planning and control : It is a predetermined process which includes the use of human resource, raw materials, machines etc. PPC is the technique to plan each and every step in a long series of separate operation. It helps to take the right decision at the right time and at the right place to achieve maximum efficiency. Planning: It is the process of determining how the organization can get where it wants to go, and what it will do to accomplish its objectives. Or Planning is the systematic development of action programs aimed at reaching agreed business objectives by the process of analyzing, evaluating, and selecting among the opportunities which are foreseen. Routing : It is about selection of path or route through which raw materials pass in order to make it into a finished product. Scheduling : It is the determination of the time that should be required to perform the entire series as routed, making allowance for all factors concerned.

9. Definitions cont…. Dispatching : It is the routine of setting productive activities in motion through the release of orders and instructions, in accordance with previously planned time and sequence, embodied in route sheet and schedule charts. Expediting/Follow-up : It is a control tool which brings an idea on breaking up, delay, rectifying error etc., during the progress of work. Operational planning: It is the process of planning strategic goals and objectives to tactical goals and objectives.

10. Definitions cont…. Quality control : It is the set of measures and procedures to follow in order to ensure that the quality of a product is maintained and improved against a set of benchmarks and that any errors encountered are either eliminated or reduced. Science: It is the study of the nature and behavior of natural things and the knowledge that we obtain about them. Or Any systematized  knowledge derived from observation, study, and experimentation carried on in order to determine the nature or principles of what is being studied. Engineering: It is the profession in which knowledge of the mathematical and natural sciences gained by study, experience, and practice is applied with judgment to develop ways to utilize economically the materials and forces of nature for the benefit of mankind.

11. Definitions cont…. Technology: It is the collection of techniques, skills, methods and processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation. Or is a body of knowledge devoted to creating tools, processing actions and the extracting of materials.  Production: It is a process of transforming (converting) inputs (raw-materials) into outputs (finished goods). So, production means the creation of goods and services. It is done to satisfy human wants. Thus, production is a process of transformation. Productivity: It is a ratio of production output to the input required to produce. It is a measure of production efficiency. Also, it is defined as a total output per one unit of a total input.

12. Definitions cont…. System : It is a set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty, or solve a problem. Goods:  are items that are tangible, such as pens, salt, shoes, hats and folders while services are activities provided by other people, such as doctors, lawn care workers, dentists, barbers, waiters, or online servers.  A need is something that a person must have in order to thrive. Without it, that person will suffer either physically or mentally. A want is a choice; it is a desire which a person may or may not be able to get. Life will continue if a person doesn’t get what they want. And others more definitions ……….

13. Objectives of Operations Management The objectives of operations management can be categorized into two of them, these are customer service and resource utilization. Customer service : Customer service is therefore a key objective of operations management for the satisfaction of customer wants. Therefore, the operations management must provide something to a specification which can satisfy the customer in terms cost and timing. Thus, primary objective can be satisfied by providing the ‘right thing at the right price at the right time’.

14. Aspects of Customer Service

15. Objectives of Operations Management cont… Resource utilization : Another major objective is to utilize resources for the satisfaction of customer wants effectively, i.e., customer service must be provided with the achievement of effective operations through efficient use of resources. Inefficient use of resources or inadequate customer service leads to commercial failure of an operating system. Operations management is concerned essentially with the utilization of resources, i.e., obtaining maximum effect from resources or minimizing their loss, under utilization or waste.

16. Summary of the objectives of operations management The customer service objective: to provide agreed/adequate levels of customer service (and hence customer satisfaction) by providing goods or services with the right specification, at the right cost and at the right time. The resource utilization objective: to achieve adequate levels of resource utilization (or productivity) e.g., to achieve agreed levels of utilization of materials, machines and labour .

17. Characteristic of Modern Operations Function Today’s production system is characterized by at least four features which are: Manufacturing as Competitive advantage In the past production was like any other function in the organization. When demand was high and production capacities were inadequate, the concern was to somehow muster all inputs and use them to produce goods which would be grabbed by –market. But today’s scenario is contrasting. Plants have excess capacities; competition is mounting, and firms look and gain competitive advantage to survive and succeed.

18. Characteristic of Modern Operations Function cont … Services Orientation As was stated earlier, service sector is gaining greater relevance these days. The production system, therefore, needs to be organized keeping in mind the abnormal requirements of the service component. The entire manufacturing needs to be geared to serve ( i ) intangible and perishable nature of the services, (ii) constant interaction with clients or customers, (iii) small volumes of production to serve local markets, (iv) need to locate facilities to serve local markets. There is increased presence of professionals on the production, instead of technicians and engineers.

19. Characteristic of Modern Operations Function cont.. Disappearance of Smokestacks Protective labour legislation, environmental movement and gradual emergence of knowledge-based organizations have brought total transformation in the production system. Today’s factories are aesthetically designed and built, environment friendly - in fact, they are homes away from homes.

20. Characteristic of Modern Operations Function cont … Small has become beautiful It was E.F. Schumacher who, in his famous book Small is Beautiful, opposed giant organizations and increased specialization. He advocated, instead, intermediate technology based on smaller working units, community ownership, and regional workplaces utilizing local labour and resources. For him, small was beautiful. Businessmen, all over the world, did not believe in Schumacher’s philosophy. Inspired by economies of scale, industrialists went in for huge organizations and mass production systems.

21. Recent Trends in Production/Operation Management Recent trends in production/operations management relate to global competition and the impact it has on manufacturing firms. Some of the recent trends are: Global Market Place Globalization of business has compelled many manufacturing firms to have operations in many countries where they have certain economic advantage. This has resulted in a steep increase in the level of competition among manufacturing firms throughout the world.

22. Recent Trends in Production/Operation Management cont … Production/Operations Strategy More and more firms are recognizing the importance of production/ operations strategy for the overall success of their business and the necessity for relating it to their overall business strategy. Total Quality Management (TQM) TQM approach has been adopted by many firms to achieve customer satisfaction by a never-ending quest for improving the quality of goods and services.

23. Flexibility The ability to adapt quickly to changes in volume of demand, in the product mix demanded, and in product design or in delivery schedules, has become a major competitive strategy and a competitive advantage to the firms Time Reduction Reduction of manufacturing cycle time and speed to market for a new product provide competitive edge to a firm over other firms. When companies can provide products at the same price and quality, quicker delivery (short lead times) provide one firm competitive edge over the other. Recent Trends in Production/Operation Management cont …

24. Recent Trends in Production/Operation Management cont … Technology Advances in technology have led to a vast array of new products, new processes and new materials and components. Automation, computerization, information and communication technologies have revolutionized the way companies operate. Worker Involvement This is known as employee involvement and empowerment. Examples of worker involvement are quality circles and use of work teams or quality improvement teams.

25. Recent Trends in Production/Operation Management cont … Re-engineering This involves drastic measures or break-through improvements to improve the performance of a firm. It involves the concept of clean-slate approach or starting from scratch in redesigning the business processes. Environmental Issues Today’s production managers are concerned more and more with pollution control and waste disposal which are key issues in protection of environment and social responsibility. There is increasing emphasis on reducing waste, recycling waste, using less toxic chemicals and using biodegradable materials for packaging.

26. Recent Trends in Production/Operation Management cont … Corporate Downsizing (or Right Sizing) Downsizing or right sizing has been forced on firms to shed their obesity. This has become necessary due to competition, lowering productivity, need for improved profit and for higher dividend payment to shareholders. Supply-Chain Management Management of supply-chain, from suppliers to final customers reduces the cost of transportation, warehousing and distribution throughout the supply chain. Lean Production Production systems have become lean production systems which use minimal amounts of resources to produce a high volume of high quality goods with some variety. It using flexible manufacturing systems and multi-skilled workforce to have advantages of both mass and job production.

27. The end, Thank you for your concentration