Lecture-4

Operations Management
12/02/2022
BITS Pilani
Pilani|Dubai|Goa|Hyderabad
Gaurav Nagpal

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 BITS Pilani
Pilani|Dubai|Goa|Hyderabad

Process Design

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Types of processes

Process Focus

Repetitive Focus
Product Focus

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Process Focus

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Product Focus (Continuous or
discrete production)

Example:
a) Power Plants
b) Oil refineries
c) Paper
d) Cement

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Repetitive Focus

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Four Process Strategies

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Discrete vs Process
Manufacturing

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Process Model

A process model describes the flow of work or activities, usually in a graphic format, that contribute
to accomplishing a specific goal. ... Process models have a clear beginning and end, intended
outcome, order of activities, and different results based on the decisions that you make through
the course of the process.

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Process Analysis

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

System Design Analysis

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Cycle view of supply chain

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Push pull processes

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

VMI (Vendor Management Inventory)--- JIT (Just In Time)

Maintain a transparent production schedule….

Give much of visibility to vendor

Business Partner

Increase the supply chain surplus (profit of the entire supply chain = value
added by the supply chain = The selling price of the product – cost
price of individual inputs (RM,labour, power, etc.)

Equitable distribution of the entire supply chain surplus among the

different entities= Mutually win-win relationships, mutual trust

CPFR (Collaborative Planning, Forecasting, Replenishment)

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

 BITS Pilani
Pilani|Dubai|Goa|Hyderabad

Facility Layout

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Types of plant layout

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Product Layout

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Product Layout relative to
Process Layout
High volume
Low variety

Advantages
Lesser skilled labour
More efficiency
Lesser variable conversion cost per unit

Disadvantages
More Capex
Lesser flexibility
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Process Layout

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Fixed Position Layout

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Cellular Layout (Group
Technology) for part families

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Factory location and layout
decisions
Office

Retail Shop

Production Factory

Warehouse

Hospital

Bank
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Factors affecting facility
location decisions

Availability of raw material

Transportation costs
Ease of transportation
Availability of power and water
Government regulations
Availability of labour
Availability of managerial staff
Dynamics of labour unions

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Weighted Factor Rating
Method
Let us assume that a new medical facility, Health-care, is to be located
in Delhi. The location factors, weights, and scores (1 = poor, 5 =
excellent) for two potential sites are shown in the following table.
What is the weighted score for these sites? Which is the best
location?

Weighted score of loc1 = 24+20+24+3+25 = 96

…………………………. Loc 2= 40 + 15 + 30 + 6 + 15 = 106
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Load Distance Method
A new Health-care facility is targeted to serve seven census tracts in Delhi. The table given below
shows the coordinates for the centre of each census tract, along with the projected populations,
measured in thousands. Customers will travel from the seven census tract centers to the new
facility when they need health-care. Two locations being considered for the new facility are at (5.5,
4.5) and (7, 2), which are the centers of census tracts C and F. Details of seven census tract
centers, co-ordinate distances along with the population for each centre are given below. If we use
the population as the loads and use rectilinear distance, which location is better in terms of its
total load- distance score?
Euclidian distance = [(x1-x2)^2 + (y1-y2)^2] ^ 0.5 when there is a straight line connectivity
Rectilinear distance = |x1-x2| + |y1-y2|

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Centre of Gravity Method
The new Health-care facility is targeted to serve seven census tracts in Delhi. The table given below
shows the coordinates for the centre of each census tract, along with the projected populations,
measured in thousands. Customers will travel from the seven census tract centre s to the new
facility when they need health- care. Two locations being considered for the new facility are at
(5.5, 4.5) and (7, 2), which are the centers of census tracts C and F. Details of seven census tract
centers, coordinate distances along with the population for each centre are given below. Find the
target area’s centre of gravity for the Health-care medical facility.

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956