MAM5C/ OPERATIONS MANAGEMENT UNIT I -V

Transcription

1 MAM5C/ OPERATIONS MANAGEMENT UNIT I -V

2 Unit 1 - syllabus Introduction Nature and Scope of Operations Management Production Design Process Planning Plant Location 2 MAM5C/ Operations Management 2

3 INTRODUCTION Operations management refers to the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization. Operations management teams attempt to balance costs with revenue to achieve the highest net operating profit possible. MAM5C/ Operations Management 3

4 NATURE OF OPERATIONS MANAGEMENT Production/operation as a system Production/operation as a transformation Process Production/operation as Organizational Function Production/operation as a means of creating utility MAM5C/ Operations Management 4

5 SCOPE OF OPERATIONS MANAGEMENT The application of operations management concepts in service operations. The growing importance of quality. The introduction of operation management concepts to other areas such as marketing and human resources The realization that the operations Management function can add value to the end product. MAM5C/ Operations Management 5

6 PRODUCTION PROCESS IN OPERATIONS MANAGEMENT Location of facility Quality Control Product Design Maintenance management Production and Planning control Plants Layout Process design Materials Management MAM5C/ Operations Management 6

7 PRODUCT DESIGN Product design as a verb is to create a new product to be sold by a business to its customers. A very broad concept, it is essentially the efficient and effective generation and development of ideas through a process that leads to new products. Product design process, the set of strategic and tactical activities, from idea generation to commercialization, used to create a product design. MAM5C/ Operations Management 7

8 PRODUCT PROCESS PLANNING ANALYSIS CONCEPT SYNTHESIS The designers decide on committing to the project and finding a solution to the problem. They pool their resources into figuring out how to solve the task most efficiently. This is where the key issue of the matter is defined. The conditions of the problem become objectives, and restraints on the situation become the parameters within which the new design must be constructed He designers here brainstorm different ideas solutions for their research problems MAM5C/ Operations Management 8

9 STRATEGIC PLANNING CYCLE GOALS RESULTS DESIRED OUTCOME STRATEGY MEASURES AND TARGETS MAM5C/ Operations Management 9

10 PLANT LOCATION Location of an industry is an important management decision. It is a two-step decision: first, choice of general area or region and second, the choice of site within the area selected. Location decision is based on the organizations long-term strategies such as technological, mar-keting, resource availability and financial strategies. MAM5C/ Operations Management 10

11 IMPORTANCE OF PLANT LOCATION. Location influences plant layout facilities MAM5C/ Operations Management 11

12 IMPORTANCE OF PLANT LOCATION Entrepreneurs locate their enterprises where the cost of production comes, the lowest at the time of establishing industries. Location influences capital investment and operating costs. This is known as location of industries. MAM5C/ Operations Management 12

13 Unit II SYLLABUS Layout of manufacturing facilities Principles of a Good Layout Layout Factors Basic Types of Layout Service Facilities. MAM5C/ Operations Management 13

14 LAYOUT Plant layout is the most effective physical arrangement, either existing or in plans of industrial facilities i.e. arrangement of machines, processing equipment and service departments to achieve greatest co-ordination and efficiency of 4 M s (Men, Materials, Machines and Methods) in a plant. MAM5C/ Operations Management 14

15 NEED OF PLANT LAYOUT MAM5C/ Operations Management 15

16 OBJECTIVES OF A PLANT LAYOUT Having better control over the production cycle by having greater flexibility for changes in the design of the product. Providing comfort to the workers and catering to worker s taste and liking. Minimizing delays in production and making efficient use of the space that is available. Giving good and improved working conditions. MAM5C/ Operations Management 16

17 TYPES OF PLANT LAYOUT Process layout : These layouts are also called the functional layouts and are very suitable in the conditions, when the products being prepared are non standard. Project layout - :such layouts are also referred to as the fixed position layouts. Product layout These layouts are also known as the line layouts or the layout by sequence. In such layouts, the manufacturing cycle is small with minimum material handling. MAM5C/ Operations Management 17

18 PRINCIPLES OF A GOOD PLANT LAYOUT A good plant layout is the one which is able to integrate its workmen, materials, machines in the best possible way. A good plant layout is the one which sees very little or minimum possible movement of the materials during the operations. A good layout is the one that is able to make effective and proper use of the space that is available for use. A good layout is the one which involves unidirectional flow of the materials during operations without involving any back tracking. A good plant layout is the one which ensures proper security with maximum flexibility. MAM5C/ Operations Management 18

19 FACILITY LAYOUT For an organization to have an effective and efficient manufacturing unit, it is important that special attention is given to facility layout Facility layout looks at physical allocation of space for economic activity in the plant. Therefore, main objective of the facility layout planning is to design effective workflow as to make equipment and workers more productive. MAM5C/ Operations Management 19

20 TYPES FACILITY LAYOUT Line Layout Functional Layout Fixed Position Layout Cellular Technology Layout Combined Layout Computerized Relative MAM5C/ Operations Management 20

21 FACILITY LAYOUT OBJECTIVE To promote order in production towards a single objective To reduce movement of workers, raw material and equipment To promote safety of plant as well as its workers To increase production capacity of the organization MAM5C/ Operations Management 21

22 FACTORS AFFECTING FACILITY LAYOUT Facility layout designing and implementation is influenced by various factors. These factors vary from industry to industry but influence facility layout. The design of the facility layout should consider overall objectives set by the organization. Optimum space needs to be allocated for process and technology. A proper safety measure as to avoid mishaps. Overall management policies and future direction of the organization MAM5C/ Operations Management 22

23 DESIGN LAYOUT TECHNIQUES Two or Three Dimensional This technique utilizes development of a scaled-down model based on approved drawings. Sequence Analysis: This technique utilizes computer technology in designing the facility layout by sequencing out all activities and then arranging them in circular or in a straight line. Line Balancing: This kind of technique is used for assembly line. MAM5C/ Operations Management 23

24 UNIT III - SYLLABUS Basic types of production Basic Inventory Models Economic Order Quantity, Reorder point Safety stock Classification and Codification of stock Procedure for Stock Control, Materials Requirement Planning MAM5C/ Operations Management 24

25 PRODUCTION INVENTORY Production inventory refers to your level of materials and supplies on hand for use in manufacturing production. Production inventory refers to your level of materials and supplies on hand for use in manufacturing production. MAM5C/ Operations Management 25

26 TYPES OF PRODUCTION CONTROL Job Production Production Control Batch Production Mass or Flow Production MAM5C/ Operations Management 26

27 PRODUCTION INVENTORY MANAGEMENT Managing production inventory requires careful and thoughtful strategy. Companies may also ramp up production when material costs are relatively low to take advantage of lower-cost production. =hfqghh5nixi MAM5C/ Operations Management 27

28 INVENTORY MODEL Fixed Reorder Period System Fixed Reorder Period System is an Inventory Model of managing inventories, where an alarm is raised after every fixed period of time Fixed Reorder Quantity System Fixed Reorder Quantity System is an Inventory Model, where an alarm is raised immediately when the inventory level drops below a fixed quantity MAM5C/ Operations Management 28

29 ECONOMIC ORDER QUANTITY MODEL Economic Order control is one of the oldest and most known inventory control technique Research on its dates back to 1915 publications by Ford W. Harris. The function of the EOQ model is to determine the optimal order size that minimizes total inventory costs. MAM5C/ Operations Management 29

30 GRAPHICAL REPRESENTATION The function of the EOQ model is to determine the optimal order size that minimizes total inventory costs. MAM5C/ Operations Management 30

31 THE BASIC EOQ MODEL The basic EOQ model is a formula for determining the optimal order size that minimizes the sum of carrying costs and ordering costs. The model formula is derived under a set of simplifying orders MAM5C/ Operations Management 31

32 SAFETY STOCK Safety stock is an additional quantity of an item held in the inventory in order to reduce the risk that the item will be out of stock, safety stock act as a buffer stock in case the sales are greater than planned and or the supplier is unable to deliver the additional units at the expected time. MAM5C/ Operations Management 32

33 METHODS FOR CALCULATING SAFETY STOCKS Lead time the delay between the time the reorder point (inventory level which initiates an order is reached and renewed availability. Demand the number of items consumed by customers, usually a succession of independent random variables. Service level is the desired probability of meeting demand during the lead time without a stockout. If the service level is increased, the required safety stock increases as well. Forecast error an estimate of how far actual demand may be from forecast demand MAM5C/ Operations Management 33

34 REORDER POINT The reorder point (ROP) is the level of inventory which triggers an action to replenish that particular inventory stock. It is a minimum amount of an item which a firm holds in stock, such that, when stock falls to this amount, the item must be reordered Reorder Point = Normal consumption during lead-time + Safety Stock. MAM5C/ Operations Management 34

35 CLASSIFICATION AND CODIFICATION OF MATERIALS Classification and codification of materials are steps in maintaining stores in a systematic way. Good store-keeping requires proper classification and codification of various items of stores on stock. Materials are classified in such way that storing, issuing and identifying of materials become easy. The former method of classification or classification by the nature of materials is most commonly used. MAM5C/ Operations Management 35

36 GOOD STORE KEEPING It requires proper classification and codification of various items of stores on stock. Stores are generally classified either by their nature or by their usage. The former method of classification or classification by the nature of materials is most commonly used. MAM5C/ Operations Management 36

37 STOCK MOVEMENTS Stock movements are a constant activity in retailing. Stock must be moved in the most efficient way possible by following the store s policy and always considering the costs involved. MAM5C/ Operations Management 37

38 COST RELATED TO STOCK : transportation or freight charges lost sales if your store is missing stock storage costs disruption to the general activities of staff in store. MAM5C/ Operations Management 38

39 PROCEDURE TO CONTROL STOCK Assess the performance of Products Monitor and Limit Shrinkage Stocks to be maintained in good condition Maintain Customer Prefernces MAM5C/ Operations Management 39

40 MATERIAL REQUIREMENT PLANNING Material requirements planning (MRP) is a production planning and scheduling. Inventor control system used to manufacture processes. Most MRP systems are softwarebased, but it is possible to conduct MRP by hand as well. MAM5C/ Operations Management 40

41 OBJECTIVES OF MRP Ensure materials are available for production and products are available for delivery to customers. Maintain the lowest possible material and product levels in store Plan manufacturing activities, delivery schedules and purchasing activities.. MAM5C/ Operations Management 41

42 UNIT IV SYLLABUS Methods Analysis and Work Measurement: Time Study Performance Rating Allowance Factors Standard Time Work Sampling Technique. Quality Control: Purposes of Inspection and Quality Control Acceptance Sampling by Variables and Attributes Control Charts MAM5C/ Operations Management 42

43 METHOD ANALYSIS Methods analysis is used by companies when developing new products or services and for improving the efficiency of methods currently in use. Methods analysis documents this accepted procedure, including specific notations that identify customer preferences. MAM5C/ Operations Management 43

44 STEPS IN METHOD ANALYSIS Identify the operation to be analyzed Gather all relevant information about the operation, including tools, materials, and procedures. Talk with employees who use the operation or have used similar operations. Chart the operation, whether you are analyzing an existing operation or a new operation. Evaluate each step in the existing operation or proposed new operation. MAM5C/ Operations Management 44

45 WORK MEASUREMENT Work measurement. Work measurement is the application of techniques designed to establish the time for an average worker to carry out a specified manufacturing task at a defined level of performance. It is concerned with the duration of time it takes to complete a work task assigned to a specific job MAM5C/ Operations Management 45

46 TIME STUDY A time and motion study (or timemotion study) is a business efficiency technique combining the Time Study work of Frederick Winslow Taylor with the Motion Study work of Frank and Lillian Gilbreth (the same couple as is best known through the biographical 1950 film and book Cheaper by the Dozen) MAM5C/ Operations Management 46

47 TIME STUDY PROCEDURE Select the job to be timed Select the worker to be studied Find out the time taken to do every single element Fix the standard time for doing the job. Record the necessary details of the job and conditions of work MAM5C/ Operations Management 47

48 STOP WATCH Stop watch is one of the important timing devices used for measuring the time taken by a worker to complete a job. Stop watch is an accurate time measuring equipment which can normally run continuously for half an hour or one hour and record the time by its small hand. MAM5C/ Operations Management 48

49 STANDARD TIME The standard time is the time required by an average skilled operator, working at a normal pace, to perform a specified task using a prescribed method. It includes appropriate allowances to allow the person to recover from fatigue and, where necessary, an additional allowance to cover contingent elements which may occur but have not been observed MAM5C/ Operations Management 49

50 CALCULATING STANDARD TIME Standard time =normal time +allowance Where; normal time =average time *rating factor MAM5C/ Operations Management 50

51 ALLOWANCE Allowances in time study can be defined as the extra time figures which are to be added to the basic time of an operation to account for personnel desires, delays, fatigue of operators. MAM5C/ Operations Management 51

52 PERFORMANCE RATING Performance rating is the step in the work measurement in which the analyst observes the worker's performance and records a value representing that performance relative to the analyst's concept of standard performance. MAM5C/ Operations Management 52

53 USELFULNESS OF PERFORMANC RATING. Performance rating helps people do their jobs better, identifies training and education needs, assigns people to work they can excel in, and maintains fairness in salaries, benefits, promotion, hiring, and firing. Most workers want to know how they are doing on the job. MAM5C/ Operations Management 53

54 ATTRIBUTIONS TO WORK PERFORMANCE Performance rating has become a continuous process by which an employer and employees attempt to understand company goals and how his or her progress toward contributing to them are measured. MAM5C/ Operations Management 54

55 WORK SAMPLING Work sampling is the statistical technique for determining the proportion of time spent by workers in various defined categories of activity MAM5C/ Operations Management 55

56 IMPORTANCE OF WORK SAMPLING It is as important as all other statistical techniques because it permits quick analysis, recognition, and enhancement of job responsibilities, tasks, performance competencies, and organizational work flows. Other names used for it are 'activity sampling', 'occurrence sampling', and 'ratio delay study MAM5C/ Operations Management 56

57 CHARACTERISTICS OF WORK SAMPLING A work sampling study usually requires a substantial period of time to complete. There must be enough time available (several weeks or more) to conduct the study. Long cycle time. The job covered in the study has relatively a long cycle time. Another characteristic is multiple workers. Work sampling is commonly used to study the activities of multiple workers rather than one worker. The jobs consist of various tasks rather than a single repetitive task. However, it must be possible to classify the work activities into a distinct number of categories MAM5C/ Operations Management 57

58 QUALITY CONTROL Quality control, or QC for short, is a process by which entities review the quality of all factors involved in production. ISO 9000 defines quality control as "A part of quality management focused on fulfilling quality requirements MAM5C/ Operations Management 58

59 INSPECTION IN QUALITY CONTROL The term inspection generally refers to the activity of checking products, whereas audit applies to analyzing manufacturing processes and organizations. Inspected products can be the components used for production, semi-finished goods, or (most often) finished goods before shipment to a customer. MAM5C/ Operations Management 59

60 UNIT V SYLLABUS Service Operations Management Types of Service Service Encounter Service Facility Location Service Processes and Service Delivery. MAM5C/ Operations Management 60

61 SERVICE OPERATIONS MANAGEMENT Operations management for services has the functional responsibility for producing the services of an organization and providing them directly to its customers. The services sector treats services as intangible products, service as a customer experience and service as a package of facilitating goods and services. MAM5C/ Operations Management 61

62 SERVICE CONCEPT Organizing Idea. The vision and essence of the service. Service Received. The customer experience and outcomes expected SERVICE CONCEPT Service Provided. The process and results designed by the provider. Satisfaction of the Customers MAM5C/ Operations Management 62

63 SERVICE DESIGN Service design begins with a business strategy and service strategy. The business strategy defines what business the firm is in, for example, the Walt Disney Company defines its business strategy "as making people happy MAM5C/ Operations Management 63

64 CHARACTERISTICS OF SERVICE Service Facility Flexible Approach Strategic Decision Explicit service Information MAM5C/ Operations Management 64

65 TYPES OF SERVICE Relationship Builder Find out the time taken to do every single elemen Masters of Complexity Late Bloomers Captains of Scale MAM5C/ Operations Management 65

66 SELF SERVICE Self-service is in wide use. For example, in the 1960's gas station attendants came out and pumped your gas, cleaned your windshield and even checked your oil. ATM's have replaced many traditional tellers and online banking provides even more self-service. 66 BPK1D/Business MAM5C/ Operations Management Economics 1/6066

67 SELF SERVICE Routed services is less efficient than Co-routed or Provider-Routed processes that have less customization and less customer involvement. Process that should be used for each combination of customization and customer involvement. 67 BPK1D/Business MAM5C/ Operations Management Economics 1/6067

68 SERVICE ENCOUNTER 68 BPK1D/Business MAM5C/ Operations Management Economics 1/6068

69 SERVICE BLUE PRINT The service blueprint is a way to describe the flow of a customer through a service operation from the start to the finish, along with the actions provided by the service providers both in interaction with the customer and in the "back room" out of sight of the customer. MAM5C/ Operations Management 69

70 EXAMPLE SERVICE BLUE PRINT For example, if a customer wishes to purchase a suit, the service blueprint starts with entry to the store, next the customer is greeted by a sales representative, the customer then provides information on his/her needs. The sales representative searches for appropriate suits, one or more suits are selected and tried-on for a fitting, a suit is selected and then alterations are done (which take place away from the customer), the customer pays for the suit and returns later to pick it up. MAM5C/ Operations Management 70

71 TM SERVICE MANAGEMENT SERVICE CULTURE SERVICE QUALITY. EMPLOYEE ENGAGEMENT CUSTOMER EXPERIENCE MAM5C/ Operations Management 11/7571

72 FACILITY LOCATION Facility Location is the right location for the manufacturing facility, it will have sufficient access to the customers, workers, transportation, etc. Overall objective of an organization is to satisfy and delight customers with its product and services. Therefore, for an organization it becomes important to have strategy formulated around its manufacturing unit MAM5C/ Operations Management 72

73 FACILITY LOCATION A manufacturing unit is the place where all inputs such as raw material, equipment, skilled labors, etc. come together and manufacture products for customers.. MAM5C/ Operations Management 73

74 DELIVERING EXCELLENT SERVICE Running a successful service company should be synonymous with delivering excelling service MAM5C/ Operations Management 74

75 DELIVERING EXCELLENT SERVICE Companies which perform services effectively compete on providing the service, then the key differentiator lies in the service management model and the ability to execute it. MAM5C/ Operations Management 75