CHAPTER : 01
INTRODUCTION TO
OPERATIONS MANAGEMENT
GROUP MEMBERS
• MUNWAR ALI
2K11/PA/71
• ABDUL GHANI
2K11/PA/01
• PARDEEP
2K11/PA/51
• SAYED IHSAN ALI
2K11/PA/67
OUTLINE OF INTRODUCTION TO
OPERATIONS MANAGEMENT
• Introduction of Operations Mgt:
• Define Operations Management
• Historical Evolution of Operations
Management
• Nature & Scope of Operations
Management
• Why Should we study OM?
• Types of Operations
• Manufacturing vs. Service
• Key decision of operations managers
• Responsibilities of Operations Management
• Conclusion of Operations management
OPERATIONS MANAGEMENT – AN OVERVIEW
• Operations Management is the conversion
of inputs into outputs , using physical resources,
so as to provide the desired utility/utilities of
form, place, possession or state or a combination
there-of to the customer while meeting the other
organizational objectives of effectiveness,
efficiency and adaptability.
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Define Operations Management
Operations management is the process of
obtaining and utilizing resources to
produce useful goods and services so as
to meet the goals of the organization.
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HISTORICAL EVOLUTION OF OPERATIONS
MANAGEMENT
BEFORE INDUSTRIAL REVOLUTION:
Before the First industrial revolution work was mainly done
through two systems.
(A) DOMESTIC SYSTEM : In the domestic system merchants took
materials to homes where artisans performed the necessary work.
(B) CRAFT GUILDS: Craft guilds on the other hand were
associations of artisans which passed work from one shop to
another.
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HISTORICAL EVOLUTION OF OPERATIONS
MANAGEMENT
• INDUSTRIAL REVOLUTION (1700’S)
 Flying shuttle
 Spinning jenny
 Water frame
 steam engine
by John Kay in 1733
by James Hargreaves in 1765
by Richard Arkwright in 1769
by James watt in 1765
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HISTORICAL EVOLUTION OF OPERATIONS
MANAGEMENT
• SCIENTIFIC MANAGEMENT (1911)
It analyzed and synthesized workflows. Its main
objective was improving economic efficiency,
especially labor productivity. Scientific management, also
called Taylorism
Mass production
Interchangeable parts
Division of labor
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HISTORICAL EVOLUTION OF OPERATIONS
MANAGEMENT
• HUMAN RELATIONS MOVEMENT (1920-60)
Human relations movement : Refers to the
researchers of organizational development .study
the behavior of people in groups, in particular
workplace groups.
(It originated in the 1930s' Hawthorne studies)
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HISTORICAL EVOLUTION OF OPERATIONS
MANAGEMENT
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Computer age
Total quality management (TQM)
Re-engineering
Flexibility
Time-Based Competition
Supply chain Management
Global Competition
Environmental Issues
Electronic Commerce
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1970s
1980’s
1990s
1990s
1990s
1990’s
1990s
1990s
Late 1990s
NATURE AND SCOPE OF OM
• The scope of operations management is defined to be
ten important decisions in operations management are
as follows:
1. The design of products and services
2. Manage the quality
3. The strategy process
4. Strategic location
5. Layout strategy
6. Human resources
7. Supply chain management
8. Inventory management
9. Scheduling
10. Maintenance
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Why Should we study OM?
• What are the three basic functions of a firm?
Ensure and
allocating financial
resources
Produce goods or
services
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Assess consumer needs,
and sell / promote goods
or services
THE TRANSFORMATION PROCESS
All operations produce products and services by
changing inputs into outputs. They do this by using
the ‘input-transformation-output' process. In other
words, operations are processes that take in a set of
input resources which are used to transform
something, or are transformed themselves, into
outputs of products and services.
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OPERATIONS MANAGEMNET
PROCESS
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Operations example in Manufacturing:
Food Processing
INPUTS
PROCESS
OUTPUTS
Raw vegetables
Cleaning
Metal sheets
Cutting/Rolling/Welding Cans
Energy, Vegetables
Cutting
Energy, Water,
Cooking
Vegetables
Energy, Cans, Boiled Placing
vegetables
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Clean vegetables
Cut vegetables
Boiled
vegetables
Can food
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Types of Operations
Operations
Examples
Goods producing
Farming, mining, construction
Storage/transportation
Warehousing, trucking, mail, taxis,
buses, hotels, location
Exchange
Trade, retailing, wholesaling, renting,
leasing, loans
Entertainment
Radio, movies, TV, concerts, recording
Communication
Newspapers, journals, magazines, radio,
TV, telephones, satellite
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Manufacturing vs. Service !
Services:
Manufacturers:
Intangible product
Tangible product
Product cannot be inventoried
Product can be inventoried
High customer contact
Low customer contact
Short response time
Longer response time
Labor intensive
Capital intensive
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KEY DECISIONS OF OPERATIONS MANAGERS
• What
What resources/what amounts
• When
Needed/scheduled/ordered
• Where
Work to be done
• How
Designed
• Who
To do the work
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RESPONSIBILITY OF OPERATIONS
MANAGEMENT
1) Understanding the strategic objectives.
2) Developing an operations strategy for
organization.
3) Designing the operation’s products, services
and processes.
4) Planning and controlling the operation.
5) Improving the performance of the operation.
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01. Understanding the strategic objectives.
The first responsibility of any operations
management team is to understand what it is trying
to achieve. This involves two sets of decisions
 To develop a clear vision of what role the operation
is to play in the organization.
 To translate the organization’s goals into their
implications for the operations performance
objectives(quality of goods and services and speed of
delivery).
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02. Developing an operations strategy for
organization.
It involves being able to place operations strategy in
the general hierarchy of the organization, which
connect the functional and business strategies
together. It also involves prioritizing the operations
performance objectives in a way which links them to
customer needs and competitors behavior.
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03. Designing the operation’s products,
services and processes.
It is the activity of determining the physical
form, shape and composition of products,
services and processes. In operation
management it is the set of activities which
literally sets the scene for all its other
activities.
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04. Planning and controlling the
operation.
The design activities should have put all the
operation’s in the place, but to work effectively they
need to be planned and controlled.
Planning and controlling is the activity of deciding
what the operation resources should be doing, then
making sure that they really are doing it.
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05.Improving the performance of
the operation.
The responsibility of all operations managers is to
improve the performance of their operations . Failure
to improve at least as fast as competitors ( in for
profit organization) or at the rate of customers’ rising
expectations (in all organization ) is to condemn the
operations function always to fall short of what the
organization should expect from it .
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CONCLUSION
Operations management is a broad area
of business management that involves
labor relations, statistics, manufacturing
control, and policy creation, among other
things. The conclusion for operations
management should be fairly in-depth and
free of fluff, but at the same time goal
oriented.
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