OPERATIONS MNGT.
L3  Operations people must be involved early in the
Technology and Operations Management: Usage of
technology in operation management has ensured that
organizations are able to reduce the cost, improve the
delivery process.
Integration of Technology with Production System
 Technology Acquisition: technology acquired
should align with overall objectives of the
organization.
 Technology Integration: technology affects all
aspects of production i.e., capital, labor, and
customer.
Technology in Manufacturing and Design
 Computer-Aided Design (CAD): CAD facilitates
linking of two more complex components of
design
 Computer-Aided Manufacturing System
(CAM): Precision is very essential in operating any
machines
 Standard for the Exchange of Product Data: As the
name suggests product design is transmitted
among CAMs
Software Systems in Manufacturing
 There are various software systems available to
integrated operations and manufacturing
functions with other business functions of
organization.
 Automation in Production and Operations:
Automation reduces manual intervention in the
manufacturing process. It increases productivity
and reduces margin of error thereby facilitating
economies of scale.
Challenges: Technology can be facilitating factor in bringing
about change in operations and production management.
Design Goods and Services
 The design of goods and services play an important
role in the degree to which organizations can
achieve its goals.
 It is a major factor in customer satisfaction,
product and service quality and production cost.
Reasons for Product and Service Design
 To be competitive by offering new product or
service.
 To make the business grow and increase profit.
 To develop new products or services as an
alternative to downsizing.
Trends in Product and Service Design
 Increased emphasis on customer satisfaction and
increased pressure to be competitive
 Increased emphasis on reducing the time needed
to introduce a new product
Objectives of the Product and Service Design
 To satisfy the customer while making a reasonable
profit
design process to ensure that the design will be
compatible with the organizations’ capabilities
The Design Process
 Motivation for design
 Ideas for new or improved designs
Regulations and Legal Considerations
 Product Liability
 Uniform Commercial Code
Process Selection, Design and Analysis: Process design is an
important operational decision that affects the cost of
operations, customer service, and sustainability.
Types of Goods and Services
1. Custom, or make-to-order, goods and services are
generally produced and delivered as one-of-a-kind
or in small quantities
2. Option, or assemble-to-order, goods and services
are configurations of standard parts
3. Standard, or make-to-stock, goods and services are
made according to a fixed design
Types of Processes
1. Projects are large-scale, customized initiatives that
consist of many smaller tasks
2. Job shop processes are organized around
particular types of general-purpose equipment
that are flexible
3. Flow shop processes are organized around a fixed
sequence of activities and process steps, such as
an assembly line
Operations Management
Product Design and Process Selection
 Process selection, which is the development of the
process necessary to produce the designed
product.
 Product design and process selection affect
product quality, product cost, and customer
satisfaction. If the product is not well designed or if
the manufacturing process is not true to the
product design, the quality of the product may
suffer.
 Product design brings together marketing analysts,
art directors, sales forecasters, engineers, finance
experts, and other members of a company to think
and plan strategically. It is exciting and creative,
and it can spell success or disaster for a company.
Idea Development
 All product designs begin with an idea. The idea
might come from a product manager who spends
time with customers and has a sense of what
customers want, from an engineer with a flair for
inventions, or from anyone else in the company.
Ideas from Customers, Competitors, and Suppliers
 The first source of ideas is customers, the driving
force in the design of goods and services.
Marketing is a vital link between customers and
product design.
Reverse Engineering
 Another way of using competitors’ ideas is to buy a
competitor’s new product and study its design
features. Using a process called reverse
engineering, a company’s engineers carefully
disassemble the product and analyze its parts and
features.
Product Screening
 After a product idea has been developed, it is
evaluated to determine its likelihood of success.
Product Screening
In the evaluation, executives from each function area may
explore issues such as the following:
1. Operations. What are the production needs of the
proposed new product, and how do they match
our existing resources?
2. Marketing. What is the potential size of the market
for the proposed new product?
3. Finance. The production of a new product is a
financial investment like any other.
Preliminary Design and Testing
 Once a product idea has passed the screening
stage, it is time to begin preliminary design and
testing. At this stage design engineers translate
general performance specifications into technical
specifications.
Final Design
 Following extensive design testing, the product
moves to the final design stage. This is where final
product specifications are drawn up.
Factors Impacting Product Design
Design For Manufacturer (DFM) guidelines focus on two
issues:
1. Design simplification means reducing the number
of parts and features of the product whenever
possible.
2. Design standardization refers to the use of
common and interchangeable parts.
Product Life Cycle: Another factor in product design is the
stage of the life cycle of the product.
1. Products in the introductory stage are not well
defined, and neither is their market.
1. 2.In the growth stage, the product takes hold and
both product and market continue to be refined.
2. The third stage is that of maturity, where demand
levels off and there are usually no design changes
3. 4.Finally, there is a decline in demand because of
new technology, better product design, or market
saturation.
Capacity Management
 Refers to the act of ensuring a business always
maximizes its potential activities and production
output under all conditions. The capacity of a
business measures how much companies can
achieve, produce, or sell within a given time
period.
Role of Capacity Management: Capacity management starts
with the assumption that will have an increase in demand
over time.
Capacity management has a two-fold purpose
1. 1.Get sufficient capacity
2. 2.Avoid overspending
Reasons for Capacity Management: There are seven key
drivers for capacity management in operations
management today.
1. Business critical services
2. Seasonality and peaks in business activity
3. Business growth
4. Regulatory requirements
5. Provisioning lead times
6. Cost optimization
7. Agility
Purpose of Capacity Management: The main purpose is to
make sure that the capacity of the IT services and
infrastructure can meet the agreed-upon requirements of
capacity and performance in a manner that is both timely
and cost-effective.
Objectives of Capacity Management
1. Identify the requirements of IT capacity to meet
the present and future workloads
2. Generate and maintain a capacity plan which is
accurate
3. Provide guidance and advice on all issues related
to capacity and performance.
Scope of Capacity Management: Capacity management is a
process that extends across the entire service lifecycle. It is
a focal point for all the issues related to IT performance and
capacity in an organization. Different technical domains
may carry out most of the day-to-day duties, but capacity
management still has the overall responsibility.
Value of Capacity Management: Capacity management
provides several benefits to the business. Some of them
are:
1. Improvement in performance and availability of IT
services.
2. Distinguishing the activities which are long-term
and strategic from the ones which are day-to-day
operational tasks.
Principles and Basic Concepts of Capacity Management:
Capacity management is mainly about the management of
relationships between the 3 variables – resources,
workload, and service levels, which are interconnected. It is
a balancing act involving:
1. Balancing the costs incurred against the resources
required
2. Balancing the supply against demand
Capacity Management: Capacity management relies on
three sub-processes to deliver results as it is a complex and
demanding process.

Three Sub-processes of Capacity Management
 Business Capacity Management: It translates
business needs and plans into requirements for IT
services and infrastructure.
 Service Capacity Management: Capacity
management should understand the resources,
working patterns, peaks, and lows of the IT
services. By doing so, they can contribute to the
service by meeting its service level agreement
targets.
 Component Capacity Management: It involves
foreseeing, handling, and governing the
performance, utilization, and capacity of individual
IT components.
Capacity Management Process: The primary activities of
the whole process are carried out both proactively and
reactively.
 The proactive activities of capacity management
consist of the following:
o Pre-empting the issues related to the
performance by implementing the corrective
actions before the problems can arise.
o Generating trends about the present level of
utilization and estimating the requirements of
the future.
 The reactive activities of capacity management
consist of the following:
o Keeping tabs on, measuring, reporting,
and reviewing the present performance
of the business.
Roles and Functions
 Capacity Manager
o Owns the entire process.
o Makes sure that the right procedures are
followed.
 Team
o Oversees generating a capacity plan
which is planned to take into account the
changes in IT capacity of the future.
o Does the documentation if there is a need
for upgrading the hardware, software,
resources, or additional equipment based
on the service level requirements,
budgetary constraints, and availability.
 Senior Leadership
o Approve the resources which are required
to meet the capacity.
o Review the present capacity and give
recommendations to improve the
capacity.
 Operations Management
o Provides assistance in describing the
service chains which are associated with
service provisioning.
o Participates in various discussions related
to capacity.
 Lines of Business
o They negotiate the capacity targets and
authorize targets in operational level
agreements and service level agreements.
o Provide whatever information is required
on capacity.
Risks of Capacity Management
 A lack of commitment shown by the business to
the process of capacity management.
 A lack of commitment from the senior
management.