Operations Management

Dr. Mashkur Zafar

 TODAY’S TOPIC’S
-Scope of POM
-Volume Variety
-Process Types
-Layout types
Before We Start…..
-How will be go about delivering this entire course.
- Excel and Word must be open, (Please keep your
notebook, pen) calculator available
-All attempts will be made to explain as much the
concepts and technical terms that are associated
with the concept.
- Software’s have been sent to you. They will be
installed within today’s session.
-Case Study’s, Video’s and Assignment
discussion---
- Next three Slides will be read by each one of you, one by
one. After the Slide we will discuss; Why Production and
Operations management is Important for you.
 Large Facilities/Capacities – Dubai

Caparol –Dubai (Paints) Unilever Dubai Industrial Park (Personal Care Prod)

Terraco Dubai (Building Material) SP Jain School of Global Management – Dubai (UAE)
 Large Facilities/Capacities – Dubai

American Hospital –Dubai Lykan HyperSport Assembly In Dubai (W Motors)

RTA (Roads & Transport Authority) Carrefour UAE

Operations Worldwide

https://www.youtube.com/watch?v=D50NX
GKziI4
(How do they do : Manufacturing Airbus
A380 Aircraft for Etihad Airline)
https://www.youtube.com/watch?v=NVItPJAu_
Fk
(Inside the A380's cabin)
https://www.youtube.com/watch?v=qEnbv-
PMCPI&t=3s
(Flying High: Mumbai Air Traffic Control | All
Access Mumbai with Milind Deora)
 Scope of Production and Operations Management

A. General Phase

The Production / Operations Manager should be aware of the general

environment that surrounds the production / operations unit. The immediate
environment comprises of i)Customer ii)Competitors iii)Suppliers
iv)Government regulations v)Technology vi) Economy. The immediate
environment has a deep impact on the operations system.

1. Operations Management

Operations Management is the process of planning, organizing, directing and

controlling a set of those conversion / transformation activities that tends to
make available goods and services that the customer wants.
 Scope of POM

The input to any operation units are as given the below Diagram:-

(Input Conversion / Transformation Output)

Environment :- *Customer * Competitors *Suppliers
*Government regulations * Technology * Economy
Input
Transformed
Resources The Transformation
Material Process
Infor mati on Output
Customer Physical Properties Good or
Informational Properties Services
Possession
Location
Input Transforming Storage/Accommodation
Resources Physiological State Volume
Psychological State Variety
Facilities Variation
Staff Visibility

Monitoring & Control

C1 - 14
 Scope of POM

The input to any operation units are as given the below Diagram:-
 Scope of POM
The primary input for a car manufacturing plant is Materials.
The primary Input to a University is customers (students).
The primary input to bank headquarters is information.
 
The transformation Activities takes place in Facilities along
with staff and machinery on the primary inputs. The
operations manager has to oversee the process of
transformation / conversion.
 
The Output from any operation unit are a mixture of goods
and services. The output of any unit also vary as per the 4
V’s ( Volume, Variety, Variation in demand & Visibility). The
Volume and Variety has a profound implication on the way
the operation are managed.
 Scope of POM

In Class Activity.
Write the Input-Transformation-Output process for
the following operations.
• Hospital
• Car Manufacturer
• Railways/Metro
• Retail Outlet
 Scope of POM

2. Strategic Roles Strategy ( 5 Performance

Objectives)
Strategies is all about knowing “what to do” and “how
to do it”. Every operations unit has to chalk out a
strategy or a coarse of action, and they need to
manage such things as capacity, layout, product,
process, technology, job design, integrated
planning, Quality etc. to operationalize the strategy.
To chalk out the strategy the operations manager must
know that there are 5 performance objectives (Quality,
Dependability, speed, flexibility and cost) the
operation manager must control these variables so
that the organization excels in all the 5 performance
objectives.
 Scope of POM

B. Design Phase
 
Designing is not just about design of a product or service. It is
also related with designing the process and the network that shall
deliver the product or service.
 
3. Design of Product and Service :- The operation Manager
plays a key role in design of product and service along with R&D
department and the Marketing Department. Generally a
structured methodology is followed to design product and
services. Such as Quality Function Deployment (QFD), Value
Analysis / Value Engineering (VA/VE), Taguchi Methods, Design
For Manufacturing and Assembly (DFMA), Poka Yokes. Out of
several product design one of them is finally chosen which will be
manufactured on a large scale.
 Scope of POM

4. Design of operations network :- when a new

product is designed we may need to design the entire
process that will make the product or service.

In case a new course is designed or a new model of

car is launched the operations manger has to decide if
there is sufficient Capacity (Capacity Decision) to cater
to the new product / service. If there is not then may
be an additional facility (Capacity) may be taken up
somewhere. The natural question then is where this
additional facility be (Location Decision). How should
the layout of the additional facility be (Layout
Decision). Apart from this the operation manager
needs to design the entire network of suppliers and
logistics network (Supply Chain Decision).
 Scope of POM

5. Process Technology :- The operations manger

has to choose from the vast array of Processing
Technology available. Hardware such as Machine
Centers, Flexible Manufacturing System(FMS),
Automated Guided Vehicle (AGV), Robotics.
Software system such as CRAFT, Internet
Services, Decision Support System, Expert
System etc.
6. Job Design and Work Organisation :- The
final activity in designing is designing the elements
of the JOB i.e. who will do the job when, where
and how? And the compensation associated with
the job.
 Scope of POM
C. Planning and Control Phase :- In this phase the manager is
associated with carefully running the show that has been designed
previously.
 
7. Capacity planning and control :- here the operation manager
have to manage( with fixed capacity) the medium range and short
term changes in Capacity. He may use some strategies such as
Overtime, shift change, outsourcing / sub-contracting, hire and fire
workers.
8. Inventory planning and Control:- Careful planning of
inventory has to take place because a lot of working capital is tied
up in inventory.
9. Supply chain Planning and Control :- Day to Day Co-
ordination with suppliers and customers.
10. Material Requirement Planning:- is a Push system of
manufacturing where by time schedules are created for
completing the job in a specific period of time and in desired
quantities.
 Scope of POM

11.Quality Planning and Control :- The Operations

Manager has to design a frame work of managing quality
which may include making SQC Charts, Acceptance
Sampling, Determining process capabilities, Applying six
sigma.
12. Project Planning and Control:- are unique Network
based Methodologies to manage large scale projects. We
use techniques such as, Programme Evaluation and
Review Technique (PERT) and CPM (Critical Path Method),
Resource leveling, Resource scheduling and control of
project costs.
13. Just in Time (JIT):- is a pull system of manufacturing.
This philosophy usually envisages as minimum inventory
as is possible in the system. Therefore work is done just in
time.
 Scope of POM

D. IMPROVEMENT PHASE :- Even after calculated

planning and control things are bound to go wrong so an
operations unit must develop a procedure for failure
prevention and recovery.
 
14. Failure prevention and Recovery :- Human error
and machine error all need to be checked. Machines
need to be maintained properly. A strategy of Total
preventive maintenance may be used which includes
authorizing workers to carry out maintenance them self.
15. TQM ( Total Quality Management) :- TQM is a
philosophy which over sees the implementation of
quality programmes in not only the production
department but in the entire organization.
 Scope of POM
E. OPERATIONS CHALLENGES :- In a world that has shrunk into a global
village there are immense challenges for the operations managers. The
effect of globalization and environment protection have to be kept in mind.
There are social responsibilities for an operations managers. Technology is
changing at a very fast rate. When to bring in new technology and how to
use it is a key decision area (Technology Awareness).
Everyday there is a learning by the operations department because they are
directly involved in making the product and service. The knowledge so
gained has to be managed. For e.g. America will never part with its nuclear
enrichment technology however it may be ready to part with its technology
to control Oil Slick.
The operations manager has to deeply understand various government laws
and the industrial safety and security acts which apply to an organization
such as
1)Factories Act(in India and in UAE visit
https://u.ae/en/information-and-services/business/business-regulations),
2) Compensations Act, 3)Labours Act (https://www.uaelaborlaw.com/)
4) Boilers Acts. (In India in UAE it is not applicable. The industry license will
govern this)
Video

Watch the Video

What is Operations Management (from Chase Jacob

Aquilano)

https://www.viddler.com/embed/7042139e/?f=1&player
=arpeggio&secret=69515110&make_responsive=0
Methods to Develop
Operations Strategy
 An operation contributes to business
strategy by achieving five "Performance
Objectives"
Doing things RIGHT Gives a QUALITY advantage

Doing things FAST Gives a SPEED advantage

Doing things ON TIME Gives a DEPENDABILITY advantage

CHANGING what you do Gives a FLEXIBILITY advantage

Doing things CHEAPLY Gives a COST advantage

 The benefits of excelling
Minimum price, highest value

Cost
Quick Dependable
delivery delivery
Minimum cost, Depend-
Speed
maximum value ability
Fast Reliable
throughput operation

Error-free Ability to
processes change

Quality Flexibility

Error-free Frequent new

products and products,
services maximum
choice
 Scope of POM

Discuss what do 5 performance objectives

(Quality, Dependability, speed, flexibility and cost)
mean to a

• Hospital
• Car Manufacturer
• Railways/Metro
• Retail Outlet
The Hill Methodology
Based on the top driven and market driven perspectives Steps

Step 1 – understanding the long-term corporate

objectives
Step 2 – how the marketing strategy has developed
to achieve the corporate objectives
Step 3 – translates marketing strategy into
‘competitive factors’ – order winning and qualifying
Step 4 – Process choice – define a set of structural
characteristics of the operation which are consistent
with each other and appropriate for the way the
company wishes to compete
Step 5 – Infrastructural features of the operation
 Step 1 Step 2 Step 3 Step 4 Step 5

Corporate Marketing How do products Operations strategy

objectives strategy or services win
orders? Process choice Infrastructure

• Growth • Product/service • Price • Process • Functional

markets and technology support
• Profit • Quality
segments
• Operations
• ROI • Delivery speed
• Range • Trade-offs planning and
• Other ‘financial’ • Delivery embodied in control systems
• Mix
measures dependability process
• Work structuring
• Volumes
• Product/service • Role of
• Payment
• Standardisation range inventory
systems
or
• Product/service • Capacity, size,
customisation • Organisational
design timing, location
structure
• Innovation
• Brand image
• Leader or
• Technical
follower
service

The Hill framework of operations strategy

formulation

© Nigel Slack and Michael Lewis 2003

Video on Operations Strategy

https://www.youtube.com/watch?v=ghaaPy3ce-s
Effect of 4 V’s on Operations
 Effect of 4 V’s on Operations

Volume Variety Design Product/ Location Flow Process Staff

(Low) (High) Emphasis in Service Technology Skills
Operations standardi
zation
Example. Product/Ser Low Can be Inter General Task
Architect (or) vice Design centralized m- purpose
Tailor ittent

High Low Process High Usually Conti- Dedicated System

Design Centralized nuous

Example.
Electric Utility
Volume and
Project process Professional services
variety
Decision 1 Jobbing process Service shops
Batch process Mass services
Process type Mass process
Continuous process
Strategic
performance
objectives
Decision 2 Fixed position layout
Process layout
Basic layout type Cell layout
Product layout

Decision 3
The physical position
Detailed design of of all transforming
layout resources

The flow of the

operation’s transformed
resources
• Project process :- Volume very Low, Variety very High. Only one product
is made. There is no repetition in making the product. In case there is
repetition then it is after a very very long time. (Man, Machine Material all
devoted to “one” product)
• Jobbing process :- volume increases slightly and variety reduces
slightly. There is repetition in making the product after long time.
Example 1)visiting card 2) Furniture restorer 3) small job shops in large
manufacturing organizations 4) specialist toolmakers, 5) bespoke tailors
(Man, Machine Material shared across several products all of which may
have unique needs)
• Batch process:- Most processes in the world are batch processes.
Volume increases substantially variety reduces substantially, there is
repetition in making the product after regular time intervals example:-
machine tool manufacturing, the production of some special gourmet
frozen foods, and the manufacture of most of the component parts
which go into mass-produced assemblies such as automobiles, Escorts
TIA machine shop.
• Mass process :- are batch process with a longer production run
example:- coca cola, automobile plant, a television factory, most food
processes and CD/DVD production
• Continuous process:- 24 hours 365 days running example:-Electricity,
Steel, Petroleum, Large Chemical Plants
Professional services:- high contact organizations, customers spends a
considerable time in the service process, high customization. A great deal of staff
time is spent in the front office and contact staff are given considerable discretion
in servicing customers. Tend to be people-based rather than equipment-based, with
emphasis placed on the process (how the service is delivered) rather than the
‘product’ (what is delivered). “The process is the product”. Include management
consultants, lawyers’ practices, architects, doctors’ surgeries, auditors, health and
safety inspectors and some computer field service operations.
Service shops:- Service shops are characterized by levels of customer contact,
customization, volumes of customers and staff discretion. Service is provided via
mixes of front- and back-office activities. Essentially the customer is buying a fairly
standardized product but will be influenced by the process of the sale which is
customized to the customer’s individual needs. Service shops include banks, high-
street shops, holiday tour operators, car rental companies, schools, most
restaurants, hotels and travel agents.
Mass services:- have many customer transactions, involving limited contact time
and little customization. Such services may be equipmentbased and ‘product’-
oriented, with most value added in the back office and relatively little judgement
applied by front-office staff. Staff are likely to have a closely defined division of
labour and to follow set procedures. Mass services include supermarkets, a
national rail network, an airport, telecommunications services and libraries. One of
the most common types of mass service is the call centres used by almost all
companies that deal directly with consumers. Coping with a very high volume of
enquiries requires some kind of structuring of the process of communicating with
customers. This is often achieved by using a carefully designed enquiry process
(sometimes known as a ‘script’).
 Effect of 4 V’s on Operations
Volume Variety
Low High

High Low
 Effect of 4 V’s on Operations
Volume Variety
Low High

High Low
 Advantage and Disadvantage of Layout Type
Fixed Position Layout (Project Layout / Stationary Layout)
Advantage Disadvantage
Very high mix and product flexibility Very high unit cost
Product or customer not moved or disturbed Scheduling of space and activities can be difficult
High variety of task for staff Can mean much movement of plant and staff
Process layout ( Functional Layout / Job Shop Layout)
Advantage Disadvantage
High mix and product flexibility Low facility utilization
Relatively robust if in the case of disruption Can have very high work in progress or customer
queuing
Relatively easy supervision of equipment and Complex flow can be difficulty to control
plant
Cell Layout or Group Technology layout
Advantage Disadvantage
Can give a good compromise between cost and Can be costly to rearrange existing layout
flexibility for relatively high variety operations

Fast throughput Can need more plant and equipment

Group work can result in good motivation Can give lower plant utilization
Product Layout (Line Layout / Assembly Line Layout / Flow Shop Layout)
Advantage Disadvantage
Low unit cost for high volume Can have low mix flexibility
Give opportunity for specialization of equipment Not very robust if there is disruption

Material or customer movement is convenient Work can be very repetitive.

Effect of 4 V’s on Operations
Effect of 4 V’s on Operations
Detailed Layout- Line Layout
 Line Layout

Copy and Paste the below precedence diagram on Excel

 Line Layout
The steps in balancing an assembly line are straightforward:
1. Specify the sequential relationships among tasks using a precedence
diagram. The diagram consists of circles and arrows. Circles represent individual
tasks; arrows indicate the order of task performance. This is similar to the project
network diagram.
2. Determine the required workstation cycle time (C), using the formula

3. Determine the theoretical minimum number of workstations (Nt) required to

satisfy the workstation cycle time constraint using the formula (note that this
must be rounded up to the next highest integer)

4. Select a primary rule by which tasks are to be assigned to workstations and a

secondary rule to break ties. For example, the primary rule might be the longest
task time, and the secondary rule, the task with the longest number of following
tasks. In this case, for the tasks that can be assigned, pick the one with the
longest task time. If there is a tie, pick the one that has the greatest number of
following tasks.
 Line Layout
5. Assign tasks, one at a time, to the first workstation until the sum of the task
times is equal to the workstation cycle time or no other tasks are feasible
because of time or sequence restrictions. Every time a task is assigned, re-
create the list of tasks that are feasible to assign and then pick one based on
the rule defined in 4. Repeat the process for workstation 2, workstation 3, and
so on, until all tasks are assigned.
6. Evaluate the efficiency of the balance derived using the formula

Here we assume there is one worker per workstation. When, for some
reason, the number of workstations does not equal the number of workers,
we would usually substitute the number of workers for number of
workstations since the concern is normally related to the use of labour. Often,
it is the case that the line is run at a cycle time different than the time
calculated in equation 8.1. In this case, the actual cycle time used by the
assembly line should be used in the efficiency calculation.
7. If efficiency is unsatisfactory, re-balance using a different decision rule.
Keep in mind that the efficiency cannot be improved if the current solution
uses the theoretical number of workstations calculated in step 3.
 Process Layout or Functional Layout or Job Shop Layout

High variety - low volume

Equipment and staff grouped based on function
Each output processed differently
Directly Specified Closeness Preferences

A = absolutely necessary
E = especially important
I = important
O = ordinary closeness OK
U = unimportant
X = undesirable

Cost Volume Distance Model

N N
TC =  C
i =1 j=1
ij Vij D ij

Chapter 5: Transformation System 45

Design
Office Layout

Closeness Rating
Dept. Name 1 2 3 4
1 junior assistant --- 15 30  
2 chairperson   --- 30  
3 secretary     ---  
4 restroom Chapter 5: Transformation System
      --- 46
Design
 Use
QM for Windows
and
OMExplorer
to Explain Layout Types
Other Important Layouts

-Retail Service Layout

-Office Layout
THANK YOU
Dr. Mashkur Zafar
mashkurzafar@yahoo.com