What is pom

its an operation research ppt

1. C1 - 1
Chapter 1
Production Systems
And
Operations Management

2. C1 - 2
Why Should you study POM
•A business education is incomplete without an
understanding of modern approaches to managing
operations.
•Operations management provides a systematic
way of looking at organizational processes.
•Operations management presents interesting career
opportunities.
•The concepts and tools of OM are widely used in
managing other functions of a business.

3. C1 - 3
They are all
operations
Retail
operation
Back office
operation in
a bank
Take-out /
restaurant
operation
Kitchen unit
manufacturing
operation

4. C1 - 4

The operations function is fashionable!
The consultancy services market
% of world revenues of 40 largest firms
Marketing/sales
2
Operations and process
management
31
Corporate strategy
17
IT strategy
17
Benefits/Actuarial
16
Organizational
design
11
Financial
6

5. C1 - 5
Introduction
•Plan, design and operate production system / subsystems
that create and deliver the firm’s primary products and
services and to achieve organizational goals
•Note that:
–Operations management deals with process
–Management in a broad, systems sense
–Subsystems are operations too
–Multiple goals: efficiency, productivity, cost minimization

6. C1 - 6
Managers Need Knowledge Of
•Production processes
•Operations management processes
•Decision making tools

7. C1 - 7
Analytical Tools Used In
Operations
•Forecasting methods
•Optimization models
•Queueing analysis
•Decision analysis
•Simulation

8. C1 - 8
Introduction
•Operations management is the management of
an organization’s productive resources or its
production system.
•A production system takes inputs and converts
them into outputs.
•The conversion process is the predominant
activity of a production system.
•The primary concern of an operations manager
is the activities of the conversion process.

9. C1 - 9
Organizational Model
MarketingMarketing
MISMIS
EngineeringEngineering
HRMHRM
QAQA
AccountingAccounting
SalesSales
FinanceFinance
OMOM

10. C1 - 10
Some inter-functional relationships between the
operations function and other core and
support functions
Engineering/
technical
function
Accounting
and finance
function
Human
resources
function
Information
technology
(IT) function
Marketing
function
Product/service
development
function
Financial analysis
for performance
and decisions
Provision
of relevant
data
Analysis of new
technology optionsUnderstanding of
process technology
needs
Understanding of the
capabilities and
constraints of the
operations process
New product and
service ideas
Understanding of the
capabilities and
constraints of the
operations process
Market
requirements
Provision of systems for
design, planning and
control, and improvement
Understanding
of infrastuctural
and system
needs
Recruitment
development
and training
Understanding of human
resource needs
Operations
function

11. C1 - 11
Operations Management as a Operations Management as a
FunctionFunction
Figure 1.3Figure 1.3

12. C1 - 12
Operations Management As a Operations Management As a
FunctionFunction
Skill Areas
•Quantitative
methods
•Organizational
behavior
•General management
•Information systems
•Economics
•International
business
•Business ethics
and law
Figure 1.3Figure 1.3

13. C1 - 13
The position of the operations function
Marketing Operations
Church
Call on
newcomers
Manage
appeals
Retranslate
scriptures
Conduct
weddings
Advertise on
television
Pay
suppliers
Design
hamburgers
Make
hamburgers
Sell to
stores
Pay staff
Design new
furniture
Assemble
furniture
Identify
needs
Raise
capital
Develop
product
Make and
distribute
Accounting
and finance
Product
development
Fast food
chain
Furniture
manufacturer
Process
perspective

14. C1 - 14
(Input Conversion / Transformation Output)
Input Transforming
Resources
Facilities
Staff
Output
Good or
Services
Volume
Variety
Variation
Visibility
Input
Transformed
Resources
Material
Information
Customer
The Transformation
Process
Physical Properties
Informational Properties
Possession
Location
Storage/Accommodation
Physiological State
Psychological State
Environment :- *Customer * Competitors *Suppliers
*Government regulations * Technology * Economy
Monitoring & Control

15. C1 - 15
Continuum of CharacteristicsContinuum of Characteristics
More like a
manufacturing
organization
More like
a service
organization
•Physical, durable product
•Output that can be
inventoried
•Low customer contact
•Long response time
•Regional, national, or
international markets
•Large facilities
•Capital intensive
•Quality easily measured
•Intangible, perishable
product
•Output that cannot be
inventoried
•High customer contact
•Short response time
•Local markets
•Small facilities
•Labor intensive
•Quality not easily measured
Figure 1.4Figure 1.4

16. C1 - 16
Physical / Informational Output
•Physical Outputs
•Seller no longer owns
when sold
•Replication requires
manufacturing
•Output exists in single
location
•Wears Out
•Informational Outputs
•Seller continues to
possess after sale and
can sell again
•Replication at negligible
cost and without limit
•Output can exist in
multiple locations
simultaneously
•Does not wear out

17. C1 - 17
The output from most types of operation is a
mixture of goods and services
Crude oil production
Pure goods
Tangible
Can be stored
Production precedes
consumption
Low customer
contact
Can be transported
Quality is evident
Intangible
Cannot be stored
Production and
consumption are
simultaneous
High customer contact
Cannot be transported
Quality difficult to
judge
Pure services
Aluminium smelting
Specialist machine tool
manufacturer
Restaurant
Computer systems
services
Management consultancy
Psychotherapy clinic

18. C1 - 18
Facilitating Good Concept
•Often confusion in trying to classify
organization as manufacturer or service
•Facilitating good concept avoids this
ambiguity
•All organizations defined as service
•The tangible part of the service is defined as
facilitating good
•Pure Services

19. C1 - 19
The Range From Services to
Products

20. C1 - 20
Classification and Evolution of
Economic Offerings

21. C1 - 21
Comparison of Alternative
Economic Offerings
GuestClientUserMarketBuyer
PersonalizedCustomizedStandardizedNaturalKey
characteristics
MemorableIntangibleTangibleFungibleForm of
output
StagingDeliveringProducingExtractingValue added
by
ExperiencesServicesGoodsCommodities
Economic
Offering

22. C1 - 22
A Typology of
OperationsIMPLICATIONS IMPLICATIONS
High LowVisibility
High LowVariation in demand
High LowVariety
Low HighVolume
Time lag between
production and
consumption
Standardized
Low contact skills
High staff utilization
Centralization
Low unit costs
Short waiting tolerance
Satisfaction governed by
customer perception
Customer contact skills
needed
Received variety is high
High unit cost
Changing capacity
Anticipation
Flexibility
In touch with demand
High unit cost
Flexible
Complex
Match customer needs
High unit cost
Low repetition
Each staff member
performs more of job
Less systemization
High unit costs
Stable
Routine
Predictable
High utilization
Low unit costs
Well defined
Routine
Standardized
Regular
Low unit costs
High repeatability
Specialization
Systemization
Capital intensive
Low unit cost

23. C1 - 23
Scope of POM
•A)GENERAL PHASE
1Operations Management
(Input Conversion / Transformation Output)
2Strategic Role ( Strategy and five performance
objectives)

24. C1 - 24
Scope of POM Cont…
•B) DESIGN PHASE
3Design of Products and Services
4Design of Operations Network
a)Capacity Decision
b)Layout Decision
c)Location Decision
d)Supply Chain Decision
5Process Technology
6Job Design & Work Organization

25. C1 - 25
Scope of POM Cont…
•C)PLANNING & CONTROL
7Capacity Planning and Control
8Inventory Planning and Control
9Supply Chain Planning and Control
10MRP ( Material Requirement Planning )
11Quality Planning and Control
12Project Planning and Control
13JIT ( Just In Time) Planning and Control

26. C1 - 26
Scope of POM Cont…
•D) IMPROVEMENT
14Failure Prevention & Recovery
15TQM ( Total Quality Management)

27. C1 - 27
Scope of POM Cont…
•E) OPERATION CHALLENGES
b)Globalization and Environmental Protection
c)Social Responsibility
d)Technology Awareness
e)Knowledge Management
f)Industrial Safety and Security

28. C1 - 28
Japanese Production System
•Quality comes first
•Continuous improvement of products &
processes
•Eliminate all forms of waste

29. C1 - 29
Operations Management Today
•Service economy
•Environmental awareness

30. C1 - 30
D. Operations Management,
Productivity & Competitiveness
(1990-93) (1982-93)
Productivity Labor cost
growth (%) increase (%)
U.S. 2.5 16.1
Canada 2.4 16.2
Japan 1.8 123.9
Germany 1.2 100.8
Sweden 4.2 26.3
U.K. 4.5 27.0

31. C1 - 31
Operations Management Uses
•apply quality tools to tax work
•project management used on merger
•inventory theory for personal purchases
•job design improves home chores
•flexible spending accounts analyzed as
inventory models