Operations Management (Processes and Supply Chain) 10th Edition. (Krajes!i" #it$man" % Malhotra) &ecturer' M. ais
Outline o* Chapters •
Part 1 (Competing ith Operations) +sing Operations to Compete – ,ecision Ma!ing Models – Managing E-ectie Projects –
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Part (,esigning and Managing Processes) ,eeloping a Process Strategy – naly$ing Process – Managing /uality – Planning Capacity – aiting &ine Models – Managing Process Constraints – ,esigning &ean Systems –
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Part (,esigning and Managing Supply Chains) Managing 2nentories – Special 2nentory Models – ,esigning E-ectie Supply Chain – &ocating 3acilities – 2ntegrating the Supply Chain – Managing Sustaina4le Supply Chain – 3orecasting ,emand – Planning and Scheduling Operations – Planning Su5cient #esources –
Chapter 1 +sing Operations to Compete 1. Operations Management (OM) and Supply Chain Management (SCM) cross the Organi$ation. . 6istorical Eolution o* SCM and OM. . Process 7ie. 8. 9he Supply Chain 7ie. :. Competitie Priorities and Capa4ilities. ;. Operations Strategy as a Pattern o* ,ecisions. <. ddressing the Challenges in OM. 8
1. Operations Management (OM) and Supply Chain Management (SCM) cross the Organi$ation. •
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Operations Management is the systematic design" direction" and control o* processes that trans*orm inputs into serices and products *or internal" as ell as e=ternal" customers. Process is any actiity or group o* actiities that ta!es one or more inputs" trans*orms them" and proides one or more outputs *or its customers. n Operation is a group o* resources per*orming all or part o* one or more processes. Supply Chain is an interrelated series o* processes ithin and across >rms that produces a serice or product to the satis*action o* customers. Supply Chain Management* is the synchroni$ation o* a >rm?s processes ith those o* its suppliers and customers to match the @o o* materials" serices" and in*ormation ith customer demand. *The terms supply chain and value chain are sometimes used interchangeably.
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1. Operations Management (OM) and Supply Chain Management (SCM) cross the Organi$ation. •
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OM and SCM spreads across all the department o* any organi$ation and to 4e a success*ul manager understanding and proper e=ecution o* such processes is desira4le. Chie* Operating O5cer (COO) or 7ice President o* Manu*acturing are the titles used in the industry *or operations manager superising the hole organi$ations? process.
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1. Operations Management (OM) and Supply Chain Management (SCM) cross the Organi$ation.
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1. Operations Management (OM) and Supply Chain Management (SCM) cross the Organi$ation. •
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2n >gure 1.1 4asic *unctions li!e Operations" Mar!eting" and 3inance are shon. 3inance generate resources and then decide here and ho to inest them and conert them into assets and material inputs. Operations trans*orms these inputs into outputs and then mar!eting is responsi4le *or producing sales reenue o* the outputs. 3unctions such as accounting" in*ormation systems" human resources" and engineering ma!e the >rm complete 4y proiding essential in*ormation" serices" and other managerial support. ll these *unctions proide a strategic directions o* the organi$ation and almost all o* these are essential *or any organi$ation. A
B 6istorical Eolution o* SCM and OM Modern operations and SCM has 4een around *or nearly 00 years. • ames att inented the steam engine in 1
c management o* operations and supply chain management that as *urther improed upon 4y 3rederic! 9aylor in 111. •
B 6istorical Eolution o* SCM and OM 9hree other landmar! eents *rom the tentieth century de>ne the history o* operations and supply chain management. • First is the inention o* the assem4ly line *or the Model 9 car 4y 6enry 3ord in 10. 9he era o* mass production as 4orn" here comple= products li!e automo4iles could 4e manu*actured in large num4ers at a-orda4le prices through repetitie manu*acturing. • Second" l*red Sloan in the 10s introduced the idea o* strategic planning *or achieing product proli*eration and ariety" ith the nely *ounded Heneral Motors Corporation o-ering Ia car *or eery purse and purpose.J • Finally" ith the pu4lication o* the 9oyota Production System in 1
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B 6istorical Eolution o* SCM and OM 9he recent history o* operations and supply chains oer the past three decades has 4een steeped in technological adances. • 9he 1A0s ere characteri$ed 4y ide aaila4ility o* computer aided design (C,)" computer aided manu*acturing (CM)" and automation. • 2n*ormation technology applications started playing an increasingly important role in 10s" and started connecting the >rm ith its e=tended enterprise through Enterprise #esource Planning Systems and outsourced technology hosting *or supply chain solutions. • Serice organi$ations li!e 3ederal E=F press" +nited Parcel Serice (+PS)" and almart also 4ecame sophisticated users o* in*ormation technology in operations" logistics" and management o* supply chains. • 9he ne millennium has seen an acceleration o* this trend" along ith an increased *ocus on sustaina4ility and the natural enironment. 11 •
B Process 7ie •
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Process can 4e considered at the heart o* an organi$ation. process can hae its on o4jecties" inputs" and outputs. 3igure 1. (next slide) shos ho processes or! in an organi$ation. ny process has inputs and outputs. 2nputs can include a com4ination o* human resources (or!ers and managers)" capital (eDuipment and *acilities)" purchased materials and serices" land" and energy. 1
B Process 7ie
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B Process 7ie •
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3igure 1. can represent a hole >rm" a department" a small group" or een a single indiidual. 2nputs can 4e *rom internal (daily sales report" coo!ing material *or coo! in a restaurant) or external (li!e *uel *or ,eaoo) customers. lso" outputs can 4e *or internal (preparing car parts *or >nal assem4ly) or external customers (any >nal products or serices). 18
B Process 7ie •
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lmost all o* these processes ould 4e presents in some *orm or the other in all organi$ations. Each one has inputs and uses processes at arious operations to proide outputs. 9he dashed lines represent to special types o* input' Participation 4y customers (students? participation during class discussion) and – 2n*ormation on per*ormance *rom 4oth internal and e=ternal sources (customer serices" inentory leels). –
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Managers need all types o* in*ormation to administer e-ectiely.
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B Process 7ie •
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Nested Processes is a concept o* a process ithin a process. process can 4e diided into su4F processes as one person or one department may 4e una4le to per*orm all parts o* the process" or di-erent parts o* the process may reDuire di-erent s!ills. Some parts o* the process may 4e designed *or routine or! hile other parts may 4e geared *or customi$ed or!. 1;
B Process 7ie •
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Services and Manufacturing Processes are the to major types o* processes. Serice processes perade the 4usiness orld and hae a prominent place in our discussion o* operations management. Manu*acturing processes are also important ithout them the products e enjoy as part o* our daily lies ould not e=ist. 2n addition" manu*acturing gies rise to serice opportunities. 1<
B Process 7ie
Continuum o* Characteristics o* Manu*acturing and Serice 1A
B Process 7ie 9he to main di-erences are (i) nature o* the output and (ii) degree o* contact ith the customers. • 2n general" manu*acturing processes also hae longer response times" are more capital intensie" and their Duality can 4e measured more easily than those o* serice processes. • Manu*acturing processes conert materials into goods that hae a physical *orm e call products. •
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B Process 7ie 1. Physical properties 2. Shape 3. Size (e.g., length, breadth, and height of a rectangular block of wood !. Surface "nish #. $oining parts and %aterials •. 9he outputs *rom manu*acturing processes can 4e produced" stored" and transported in anticipation o* *uture demand. •. 2* a process does not change the fve properties o* materials on at least one o* these >e dimensions" it is considered a serice (or nonFmanu*acturing) process. •. Serice processes tend to produce intangi4le" perisha4le outputs.
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B Process 7ie 9here can 4e similarities or presence o* product and serice under same roo* as in restaurants or hospitals. • 9here can 4e a de4ate a4out as ho to classi*y an organi$ation either manu*acturing or serice 4ased organi$ation. • 3or this" e hae to loo! at the processes and !no the !ind and impact and impact o* that process on the organi$ation. •
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