Operations Management

Class - 1

Date - 5th July, 2021

Lecturer - Ravindra Gokhale
Email ID -
Book - Operations Management by Krajewski, Malhotra, Ritzman, Srivastava
Sections - B, C & H

About - NITIE with 7-8 years, joined in 2013. Taught at IIM Indore for 2.5 years. Did his PhD
from IISC Bangalore. Worked in Mahindra & Mahindra for 6 years. Was in SCMHRD before that.

Value chain deals with materials + finance + information

Supply chain deals with materials
OM is within an organization, SCM is across organizations

We will do process analysis first, then capacity analysis, different types of processes, move to
quantitative topics like forecasting and scheduling.
Competition has many parameters - we need to understand where to focus upon - like cost,
strategy, market base etc
Customers can be either internal or external in a process. Different departments have other
departments as their internal customers and consumers as external customers.
For a dept head, ops is the entire department and for a plant head, ops is the entire plant.

Which is larger - process or ops?

Ops is larger. These concepts have developed from manufacturing background.

Upstream to downstream - everything encompasses the supply chain. Raw material supplier is
upstream, wholesaler, retailer, customer is downstream; from the manufacturer’s stand point.
Consumer is the one consuming the product.
Dealer is the customer, the end customer is the consumer.
There are different tiers of dealers.
Sometimes car assembly plants name themselves as OEMs, but they don’t manufacture actual
components. It’s a bit misleading.
Various processes were developed by the military and some jargons have arrived from there.

For SaaS, would ops and SC be the same?

It’s almost service oriented - nothing is material, almost. The answer is no, we need to think if
it’s internal to organization or across organizations.

Difference between Supply Chain and Value Chain?

SC is a part of the value chain. It’s beyond the supply chain. It considers SC + finance +
marketing = value to each and every layer / stakeholder of the supply chain

Difference between OM and IM?

OM is a macro view (planning and all), IM is a more minute view.
Time difference between when we get and deliver the order = Response Time / Lead Time

Intangible, perishable output would come on the right side.

SRM = facilitates info and material flow from suppliers into the chain
Is software a service or a product?
For the software developer / service provider, it’s a product. But from a consumer point of view,
it is a service as it’s not tangible.

Service cannot be inventoried or stored. Shelf life or product is more than services.

Supply Chain is present in every business and industry, but in different forms.
Is the government a stakeholder in the supply chain of the telecom industry?
No, it’s related to value chain, not supply chain

Electricity provision is a service for customers but product based for the supply chain for the
energy industry.
Order winners back then become order qualifiers today. These should be put in the competitive
strategy of a firm
 Class - 2

Date - 6th July, 2021

Ops strategy should align with business strategy

Order winners yesterday have become order qualifiers today
Corporate strategy is the same as business strategy. Market strategy is a part of overall
business strategy.
Video Link - https://www.youtube.com/watch?v=m62whN6CWBM
Batch process - components of a car, they are prepared in a batch process. In between 2
batches, there will be some setup. Variety is high, volume is smaller. That incurs setup time /
changeover time.
In the job process, variety is high and volume is low compared to the batch process. Many
times, job and batch are overlapping.
The car, which is assembled, is mass produced, not a batch.
Raw materials for glass is a continuous process
Upstream processes are continuous one, intermediate is job/batch downstream is mass
production / line process

Line / continuous - high volume, low variety. Products are continuous in nature in a continuous
flow process (metal / oil production). But line, job, batch processes are countable processes
manufacturing discrete materials.

Mass production / continuous -

Special purpose machines are required - more automation - more capital investment
Low skill, as most of the process is automated
High volume of production

For job / shop -

General purpose machines are required - less automation - less capital investment
High skill person is required, as process is not highly automated
Low volume of production
MTO - Push strategy, we are dumping products to next stage - Job / shop is MTO
MTS - Pull strategy - Continuous / mass production is MTS
ATO is in between MTO & MTS. Eg - Paint industry
DTO is a like single project, highly customised production / development

How are services classified with respect to job/shop and continuous/mass production?

Frontend is more of a job/shop - more contacts with customer

Backend is more of a continuous / mass production - no contact with customer

Job/shop by nature doesn’t aim to achieve economies of scale

Semiconductor manufacturing is a job/shop, yet capital intensive and uses highly sophisticated
machinery

Depending on product life cycle, it is more customization initially, and then customization gets
reduced.