MANAGEMENT 516 OPERATIONS MANAGEMENT

1
MANAGEMENT 516OPERATIONS MANAGEMENT

• What is Operations Management (OM) ?
• Activities that relate to creation of goods and
  services through transformation of inputs Pg.5
• Relationship to other functional areas such as
  Marketing and Accounting Finance
• Key areas in OM 13
• Product/service design/Process design/Capacity
  planning/facilities location and design
  (Layout)/Quality management/HR and job
  design/Supply chain management/Inventory and
  materials management/Operations planning and
  scheduling/Maintenance
• We will learn principles/methods to handle issues
  in these areas

2
MANAGEMENT 516OPERATIONS MANAGEMENT

• What are the levels of the organization ?
• Corporate Business Functional.
• What are the levels of managers/management ?
• Top management, middle management,
  entry-level/first-level/supervisory
• What is management what do managers do ?
• Achieving Objectives/Goals
• Functions of Management (Process)
• Efficient Use of Resources

3
How good is our operations management ?

• Effectiveness Achieving objectives, goals
• Efficiency Managing resources
• OUTPUT INPUT

4
Function of Management
Process of Management

• Planning
• Organizing
• Directing/ Leading
• Control

5
Operations Management

• First of all Strategy or Competitive Priorities
• Then, planning and organizing activities
• Product/service design, process selection,
  technology, planning workforce, quality,
  capacity, facilities, supplier network
• Next, directing/leading operations, (doing)
• Production planning, managing workforce,
  improving quality/processes/products-services,
  material requirements, inventories, scheduling
  operations
• And, controlling/monitoring operations
• Quality control, production control, inventory
  control, cost control, customer satisfaction
  measurement, monitoring workforce, monitoring
  suppliers

6
Views of the Organization. 16

• Functional View
• Traditional functional organization
• Finance, marketing, HR, operations, IT
• Value chain view
• In bound logistics, operations, marketing/sales,
  outbound logistics, service
• Process View
• Customer processes, supplier processes, internal
  processes

7
Role of Services

• Growth of the service sector in the US economy
• Employment in services about 40 in 1950 65 in
  1990 80 in 2010
• Reasons Stages of economic activity, Changing
  demographics, Information Technology growth,
  Innovative business strategies,
• Even manufacturing needs many services
• Communications, banking, utilities,
  transportation, legal, accounting, insurance
• Distribution retailing, wholesaling
• After sale services complaint resolution,
  repairs, customer service
• Product promotion advertising, market research,
  websites
• Public services
• Personal services health care, restaurants,
  hotels
• Professional services consulting, auditing, tax,
  medical
• B2B services

8
The new Experience Economy 14

• Adding value by engaging and connecting with
  customer in a personal and memorable way
• Revealed/sustained over time
• Consumer as guest
• Personal touch
• Design elements Theme, Positive impressions and
  cues, Memorabilia, Environmental relationships ,
  Customer participation

9
FORMULATING STRATEGY 37

• Resource based view
• What are we good at core competencies
• Internal environment (see later slide)
• Is there a strategy management process ?
• Yes
• Strategy formulation, implementation, control
• Levels of strategy formulation
• Corporate level
• Business level
• Functional level

10
Strategic Management Process

• Objective Competitive advantage
• Strategic Management process
• Strategic Intent/Vision/Mission
• Environmental Analysis
• Revised Vision/Mission and LT objectives
• Detailed situation analysis
• Formulate strategies
• Develop action for implementation Programs,
  Policies, Budgets
• Plan monitoring

11
ENVIRONMENTAL SCANNING EXTERNAL ENVIRONMENT

• ECONOMY
• POLITICAL-LEGAL
• SOCIO-CULTURAL
• TECHNOLOGY
• GLOBAL/INTERNATIONAL
• COMPETITION
• CUSTOMERS
• SUPPLIERS

12
INTERNAL ENVIRONMENT

• FUNCTIONAL AREA RESOURCES
• Finance, Marketing, Operations, HR, MIS, RD
• ORGANIZATION STRUCTURE
• Dividing work, Authority Responsibility,
  Information flow, decision making
• CORPORATE CULTURE
• Social responsibility and ethics, integration and
  intensity of competitive priorities

13
STRATEGIC MANAGEMENTFORMULATING STRATEGY
EXT. ENVT.
MISSION OBJECTIVES
SITUATION ANALYSIS
INT. ENVT.
STRATEGY
14
SITUATION ANALYSIS

• SWOT ANALYSIS.
• PRODUCT LIFE CYCLE ANALYSIS
• INDUSTRY/ COMPETITION ANALYSIS

15
STRATEGY
CORPORATE LEVEL(GRAND)
GROWTH
STABILITY
RETIREMENT
BUSINESS LEVEL 59-66
COST LEADERSHIP
DIFFERENTIATION
FOCUS
Competitive Priorities Cost/Price Quality
Availability
Dependability
FUNCTIONAL LEVEL
OPERATIONAL STRATEGY
16
Functional level strategyE.g. Operations Strategy

• PRODUCTS/SERVICES
• PROCESS
• TECHNOLOGY
• CAPACITY
• QUALITY
• WORK FORCE
• FACILITIES
• SUPPLIERS/VERTICAL INTEGRATION

17
Implementing and Monitoring Strategy

• Implementation organizing and directing
• Done by
• Developing/revising policies
• Procedures
• Programs medium/short term plans
• Budgets
• Control Monitoring
• Balanced approach 47

18
Controlling Operations

• What ?
• quality control, process control, employee
  evaluations, customer satisfaction surveys,
  supplier evaluations
• How ? Steps
• Setting standards
• Measuring actual performance
• Comparison/ analysis
• Corrective action/ no action
• Where ?
• Preliminary control
• Concurrent control
• Post/Feedback control