Operation Management Operations Management in Manufacturing and Services. Management

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1 1 Operation

2 Description of Module Subject Name Paper Name Module Title Operation Module Id Module- 02 Pre-requisites Basic understanding of Operation and its inter-linkage with other disciplines Objectives 1. To understand the difference and similarities in Operation management in manufacturing of a product and generating a service. 2. Operational Strategy for Business operations and Production Processes. 3. To understand concept of Capacity Planning and Strategic decision for Service and Manufacturing Operation Keywords Operational, Strategy, System, Mass Production, Lean Production, Kaizen. Learning Objectives: The module provides an introduction to operations management in Manufacturing and services Learning Outcomes: Throughout this module, learner shall understand broad range of Strategies and decisions that operations managers must make in domain of services and manufacturing setups. Suggested Readings: Davis, M. M., & Heineke, J. N. (2005). Operations management: Integrating manufacturing and services. McGraw-Hill Companies. Hayes, R. (2006). Operations, strategy, and technology: pursuing the competitive edge. Strategic Direction, 22(9). Parker, D. (2012). Service operations management: the total experience. Edward Elgar Publishing. Sanders, N. R. (2013). The definitive guide to manufacturing and service operations. Pearson Education QUADRANT III Slack, N., Chambers, S., & Johnston, R. (2009). Operations and process management: principles and practice for strategic impact. Pearson Education. 2 Operation

3 Key Points 1. The operations function is that part of every business organization that produces products and/or delivers services. 2. Operations consist of processes that convert inputs into outputs. Failure to manage those processes 3. Effectively will have a negative impact on the organization. 4. A key goal of business organizations is to achieve an economic matching of supply and demand. The operations function is responsible for providing the supply or service capacity for expected demand. 5. All processes exhibit variation that must be managed. 6. Although there are some basic differences between services and products that must be taken into account from a managerial standpoint, there are also many similarities between the two. 7. Environmental issues will increasingly impact operations decision making. 8. Ethical behaviour is an integral part of good management practice. 9. All business organizations have, and are part of, a supply chain that must be managed. Progress Check Points 1. List five important differences between goods production and service operations; then list five important similarities. 2. The function that is part of every business organization that produces products and/or delivers services is the function. a) Marketing b) Production c) Operations d) Value-Processing e) Supply Chain [Correct Answer: (c)- Operations] 3 Operation

4 3. Which of the following is a key difference between the production of goods and the delivery of services? a) Importance of Quality b) Role of Suppliers c) Importance of Customers d) Feasibility of using Inventory e) Difficulty of balancing Supply with Demand [Correct Answer: (d)- Feasibility of using Inventory 4. A key difference between the production of goods and the performance of services is: a) Services generally can't be stored. b) Manufacturing can be more labor intensive. c) Service is less profitable than manufacturing. d) Service work is more interesting than manufacturing work. e) Service workers require less training than manufacturing workers. [Correct Answer: (a)- Services generally can't be stored. 5. Operations management includes all of these activities except: a) Scheduling work. b) Maintaining quality. c) Assessing consumer wants and needs. d) Managing the supply chain. e) Managing inventories. [Correct Answer: (c)- Assessing consumer wants and needs.. Worksheet 1. Explain the term goods-service continuum. 2. List some ways that manufacturing and systems and service systems differ. 4 Operation

5 3. List some similarities of manufacturing and systems and service systems. Definitions Capacity- The upper limit or ceiling on the load that an operating unit can handle. Design capacity- The maximum designed service capacity or output rate. Efficiency- Efficiency simply means produce the required amount of output with a given level of input. Effective capacity- Design capacity minus allowances such as personal time, equipment maintenance, delays due to scheduling problems, and changing the mix of product. Goods- Physical items produced by business organizations. Quality- Quality simply means the fulfilment of the customers expectations. example, reliable goods and services can fulfil the customers expectations. Responsiveness to Customers- It means actions taken to respond to customer needs. Firm can react quickly and correctly to customer needs as they arise. For Services- Activities that provide some combination of time, location, form, and psychological value. Value Added- The difference between the cost of inputs and the value or price of outputs. 5 Operation