Production and Operations Management Slides.pptx

pom presentation

1. Production and Operation Management Instructor: Dr. Iftikhar Ali

2. Production and Operations Management Production and Operations Management (POM) refers to the process of planning, organizing, directing, and controlling the activities involved in the production of goods and services. POM is primarily concerned with managing resources efficiently to produce outputs that meet customer requirements and add value to the organization

3. Scope of POM The scope of Production and Operations Management is broad and includes various:- Functions Activities D ecision-making areas to ensure efficient production and service delivery. POM is primarily concerned with:- M anaging resources efficiently to produce outputs that meet customer requirements Add value to the organization

4. Scope of POM Key areas within the scope of POM include:- Product and Service Design Process Design and Selection Capacity Planning Supply Chain Management Inventory Management Production Planning and Scheduling Quality Management and Control Project Management Lean Operations and Continuous Improvement Emerging Trends and Sustainability

5. Objectives of POM Production and Operations Management (POM) encompasses several key objectives that are essential for achieving efficiency, quality, and customer satisfaction within manufacturing and service industries :- Optimization of Resource Utilization Minimization of Costs Ensuring Timely Delivery Enhancing Product Quality Continuous Improvement Flexibility and Adaptability Sustainability and Social Responsibility

6. Types of Production Systems Production systems can be broadly categorized into manufacturing and service operations based on their purpose, output, and processes . Manufacturing Service Operations

7. Types of Production Systems Manufacturing Systems Manufacturing systems focus on the production of tangible goods and involve physical transformation processes. They are characterized by a focus on efficiency, quality, and cost control .

8. Types of Production Systems Service Systems Service systems focus on delivering intangible outputs (services) and involve direct interaction with customers. They emphasize customer satisfaction, quality of service, and responsiveness .

9. Types of Production Systems Types of Manufacturing System Job Shop Production Features : Highly customized products, low volume, high variety. Examples : Custom furniture, specialty machinery. Advantages : High flexibility, capable of producing unique products. Challenges : High production costs, longer lead times . Batch Production Features : Production in batches or lots; moderate volume and variety. Examples : Bakery goods, apparel. Advantages : Balances customization and efficiency. Challenges : Downtime between batches, potential for inventory build-up .

10. Types of Production Systems Types of Manufacturing System Mass Production Features : High volume, standardized products, low variety. Examples : Automobiles, electronics. Advantages : Economies of scale, high efficiency. Challenges : Limited flexibility, high setup costs . Continues Production Features : Non-stop production of homogeneous products. Examples : Oil refining, chemical production. Advantages : Very high efficiency, low per-unit cost. Challenges : High initial investment, minimal product variety.

11. Types of Production Systems Key Differences: Manufacturing vs Service Systems Aspect Manufacturing Systems Service Systems Output Tangible goods Intangible services Customer Interaction Minimal High Inventory Can be stored Cannot be stored Customization Limited (varies by type) Often high Focus Efficiency, cost, and quality Customer satisfaction and experience Key Resource Machines and materials Skilled labor and knowledge

12. Role of Operations in Competitive Advantage Business Strategy A long-range plan for a business . Operation Strategy A long-range plan for the operations function that specifies the design and use of resources to support the business strategy .

13. Role of Operations in Competitive Advantage Relationship between the business strategy and the functional strategies

14. Role of Operations in Competitive Advantage

15. Role of Operations in Competitive Advantage Cost Efficiency : Streamlining operations helps reduce costs and improve overall profitability. Customer Satisfaction Efficient and effective operations contribute to delivering high-quality products and services, which lead to increased customer satisfaction. Adaptability : A robust operations strategy allows businesses to adapt to changing market conditions, evolving customer needs, and emerging technologies. Competitive Advantage : A well-executed operations strategy can create a competitive advantage by offering unique products or services and fostering innovation.

16. Role of Operations in Competitive Advantage

17. Role of Operations in Competitive Advantage Business Goals and Objectives : Align your operations strategy with the overall business goals and objectives. Performance Measures : Establish performance measures to track progress towards achieving operational goals. Resource Allocation : Optimize the use of available resources, such as labor, capital, and technology. Process Design : Design efficient processes to minimize waste and maximize productivity. Supply Chain Management: Establish strong relationships with suppliers and optimize the flow of materials and information through the supply chain. Capacity Planning: Plan for future capacity requirements to meet anticipated demand. Continuous Improvement: Implement a culture of continuous improvement to drive ongoing operational enhancements.

18. Developing and Implementing an Operations Strategy The proposed steps for formulation and execution of an operations strategy are as follows:- Assess the Current Situation: Start by evaluating your current operations, identifying strengths, weaknesses, opportunities, and threats (SWOT analysis). Define Objectives: Establish clear, measurable, and achievable operational objectives that align with your business goals. Develop the Strategy: Identify the key initiatives and tactics needed to achieve your operational objectives. Allocate Resources: Assign the necessary resources, including personnel, equipment, and finances, to support your operations strategy. Execute the Plan: Implement the strategy by executing the identified initiatives and tactics. Monitor and Adjust: Regularly review your operation's strategy performance against established objectives and make adjustments as needed .

19. Examples of successful operations strategies Here are a few examples of successful operations strategies in the technology sector :- Amazon's Automated Warehousing: Amazon has been a leader in operations strategy with its use of automation in warehousing and distribution . By using robots to assist with picking and packing orders, Amazon has greatly increased the efficiency and accuracy of its order fulfillment process. This has helped them to minimize costs, improve customer satisfaction with quick delivery times, and scale their operations rapidly . Apple's Supply Chain Management: Apple Inc. is renowned for its effective and efficient supply chain management. The company's operations strategy includes a combination of in-house manufacturing, off-shore production , and strategic partnerships. This hybrid model allows Apple to maintain high-quality standards, control over its products, and the ability to bring new products to market quickly. Furthermore, Apple's strategic component purchasing allows it to secure favorable pricing and ensure the availability of necessary parts.

20. Examples of successful operations strategies Here are a few examples of successful operations strategies in the technology sector :- Netflix's Use of Big Data: Netflix has revolutionized the streaming industry by using big data to drive decisions about what content to produce and promote. By collecting and analyzing data on viewing habits, ratings , and other user behavior, Netflix can predict what types of shows and movies are likely to be popular. This data-driven strategy has led to the production of highly successful original content and a personalized user experience that drives customer loyalty and retention. Google's Scalability: Google's operations strategy has been built around scalability. From its powerful search engine to its multitude of other services like Gmail, Google Maps, and Google Drive, the company has designed its operations to handle enormous amounts of data and traffic. Google's powerful, scalable infrastructure allows it to deliver quick & reliable service to billions of users worldwide.

21. Examples of successful operations strategies Here are a few examples of successful operations strategies in the technology sector :- Microsoft's Transition to Software as a Service ( SaaS ): In recent years, Microsoft has successfully transitioned from a traditional software business model to a Software as a Service ( SaaS ) model with its Office 365 suite and other products. This required significant changes to the company's operations, including the development of new capabilities for delivering software updates over the internet, managing customer subscriptions, and handling customer data securely in the cloud. This transition has allowed Microsoft to generate a stable & recurring revenue, and stay competitive in a changing technology landscape. Tesla's Vertical Integration: Tesla's operations strategy is based on vertical integration, which involves controlling multiple stages of the supply chain . By manufacturing many of its components in-house, Tesla is able to maintain control over the quality, cost, and availability of the parts it uses to build its electric vehicles. This has enabled Tesla to innovate faster than traditional auto manufacturers, though it does come with its own set of challenges.

22. Examples of successful operations strategies Here are a few examples of successful operations strategies in the technology sector :- Microsoft's Transition to Software as a Service ( SaaS ): In recent years, Microsoft has successfully transitioned from a traditional software business model to a Software as a Service ( SaaS ) model with its Office 365 suite and other products. This required significant changes to the company's operations, including the development of new capabilities for delivering software updates over the internet, managing customer subscriptions, and handling customer data securely in the cloud. This transition has allowed Microsoft to generate a stable & recurring revenue, and stay competitive in a changing technology landscape. Tesla's Vertical Integration: Tesla's operations strategy is based on vertical integration, which involves controlling multiple stages of the supply chain . By manufacturing many of its components in-house, Tesla is able to maintain control over the quality, cost, and availability of the parts it uses to build its electric vehicles. This has enabled Tesla to innovate faster than traditional auto manufacturers, though it does come with its own set of challenges.

23. Decision-making in operations management I nvolves selecting the best course of action to optimize an organization's resources and achieve its operational goals . Operations managers use decision-making to address challenges, improve efficiency.

24. Decision-making in operations management Types of Decisions in Operations Management Strategic Decisions Long-term decisions that define the overall direction of operations. Examples: Facility location and capacity planning Product design and process selection Supply chain strategy Tactical Decisions Medium-term decisions that focus on resource allocation and operational efficiency. Examples: Workforce scheduling Inventory management Quality control systems Operational Decisions Short-term, day-to-day decisions aimed at ensuring smooth operations. Examples: Scheduling production runs Addressing equipment breakdowns Managing order fulfillment

25. Decision-making in operations management Key Factors Influencing Decision-Making Data and Information Real-time data from ERP systems, forecasting tools, or market analytics. Accurate data ensures informed decisions and reduces risks. Business Objectives Decisions must align with strategic goals, such as cost reduction, quality improvement, or customer satisfaction. Resource Availability Decisions depend on the availability of financial, human, and technological resources. Market and Environmental Factors Customer demand, competition, and external economic factors can shape decisions. Risk Management Weighing potential risks versus rewards is crucial, especially in volatile environments. Technology and Innovation Leveraging automation, AI, and machine learning can improve decision-making accuracy and efficiency.

26. Decision-making in operations management Steps in the Decision-Making Process Identify the Problem Define the operational issue or opportunity clearly. Gather and Analyze Information Collect relevant data and evaluate the current situation. Generate Alternatives Brainstorm multiple solutions to the problem. Evaluate Alternatives Use criteria like cost, feasibility, and alignment with strategy to assess options. Choose the Best Alternative Select the option that best meets operational and strategic goals. Implement the Decision Develop a plan and execute the chosen solution. Monitor and Review Evaluate the results and make adjustments if necessary.

27. Decision-making in operations management Challenges in Operations Decision-Making Uncertainty and Risk Market volatility, supply chain disruptions, or economic changes can impact decisions. Data Overload Sorting through large volumes of data can delay decision-making. Conflicting Objectives Balancing cost, quality, and speed may involve trade-offs. Resistance to Change Employees or stakeholders may resist decisions that disrupt the status quo.

28. Decision-making in operations management Tools for Enhancing Decision-Making Decision Support Systems (DSS) Interactive software that aids complex decision-making . ERP and Data Analytics Provide insights for making informed decisions . Machine Learning Algorithms Predict trends and automate routine decision-making tasks . Scenario Planning Anticipates possible future conditions and prepares for them.

29. Aligning Operations with Business Strategy to achieve their long-term goals maintain competitive advantage deliver value to stakeholders day-to-day operations contribute directly to the strategic objectives of the company

30. Aligning Operations with Business Strategy Key Steps for Aligning Operations with Business Strategy Understand the Business Strategy : Identify the organization's vision, mission, and strategic goals. Analyze the core values, customer needs, and competitive environment. Ensure operational leaders understand strategic priorities such as cost leadership, differentiation, or focus strategies. Define Operational Goals and Metrics : Translate strategic goals into clear operational objectives. Develop Key Performance Indicators (KPIs) to measure progress (e.g., productivity, quality, speed, and cost metrics). Ensure metrics are specific, measurable, achievable, relevant, and time-bound (SMART).

31. Aligning Operations with Business Strategy Key Steps for Aligning Operations with Business Strategy Streamline Processes : Evaluate existing workflows and eliminate inefficiencies. Implement process improvements using methodologies like Lean, Six Sigma, or Total Quality Management (TQM). Automate repetitive tasks to focus on high-value activities. Ensure Resource Alignment : Allocate resources (capital, labor, technology) in line with strategic priorities. Invest in the right tools, technology, and training to support operational goals. Develop a Collaborative Culture : Encourage communication and collaboration across departments to align operations with strategy. Foster a culture of accountability where employees understand their roles in achieving strategic goals.

32. Aligning Operations with Business Strategy Key Steps for Aligning Operations with Business Strategy Leverage Technology : Use Enterprise Resource Planning (ERP) systems to integrate data and ensure operational decisions align with strategy. Implement analytics to track performance and predict trends. Adapt to Market Changes : Monitor external factors like customer behavior, competition, and regulations. Maintain operational flexibility to adjust processes and priorities as strategies evolve. Evaluate and Improve Continuously : Conduct regular reviews to assess alignment between operations and strategy. Use feedback loops to make iterative improvements. Benchmark against industry standards to identify gaps and opportunities.

33. Aligning Operations with Business Strategy Benefits of Alignment Improved efficiency and cost-effectiveness . Greater ability to meet customer expectations Enhanced agility and responsiveness to market changes Strengthened competitive position in the industry.

34. Aligning Operations with Business Strategy Benefits of Alignment Improved efficiency and cost-effectiveness . Greater ability to meet customer expectations Enhanced agility and responsiveness to market changes Strengthened competitive position in the industry.

35. Aligning Operations with Business Strategy Challenges in Aligning Operations and Strategy Resistance to Change : Employees may resist new processes or priorities Resource Constraints : Limited budgets or skills may hinder alignment efforts Inconsistent Communication : Misalignment occurs if departments don’t share a unified understanding of strategic goals Rapid Market Changes : Shifting external conditions may necessitate frequent adjustments.