Welcome to

OPERATIONS MANAGEMENT -1

Credit:02

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Learning Objectives

Identify the elements of operations and supply chain

management.
Know the potential career opportunities in operations and
supply chain management.
Recognize the major concepts that define the operations and
supply chain management field.
Evaluate the efficiency of a firm.

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Strategy, Processes, and Analytics
Operations and supply chain management involves
Product design
Purchasing
Manufacturing
Service operations
Logistics
Distribution
Success depends upon
Strategy
Processes to deliver products and services
Analytics to support the decisions needed to manage the firm

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
What Is Operations and Supply Chain Management?

The design, operation, and improvement of the systems that

create and delivery the firms primary products and services

Operations and supply chain management (OSCM) is

A functional field of business
Concerned with the management of the entire
production/delivery system

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Operations and Supply Chain Processes

Operations Supply Chain

Manufacturing and service

Processes that move
processes used to
information and material
transform resources into
to and from the firm
products

Internal External
Customer Customer
Introduction to Operations Management I
OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
 Process Steps for Mens Nylon Supplex Parkas
the nylon Supplex producer the Polartec producer the parka manufacturer the catalog sales retailer

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Operations and Supply Chain Processes

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Process Activities

Planning Sourcing Making Delivering Returning

processes selection of producing the logistics receiving worn-

needed to suppliers that major product processes such out, excess,
operate an will deliver the or service as selecting and/or
existing supply goods and carriers, defective
chain services coordinating products back
needed to the movement from customers
create the of goods and
firms product information,
and collecting
payments from
customers

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Where are the OM Jobs?

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Historical Development of Operations and
Supply Chain Management

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Current Issues in OSCM

Optimizing Raising
Coordinating
global network Managing awareness of Sustainability
relationships
of suppliers, customer touch OSCM as a and triple
between
producers, and points competitive bottom line
members of SC
distributors weapon

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
 GOODS OR SERVICES?

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi 12
Characteristics of Goods

Tangible product
Consistent product
definition
Production usually separate
from consumption
Can be inventoried
Low customer interaction

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Characteristics of Services
Intangible product
Produced and consumed at
same time
Often unique
High customer interaction
Inconsistent product
definition
Often knowledge-based
Frequently dispersed
Introduction to Operations Management I
OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Goods versus Services
Goods Services

Pure Goods Core Goods Core Services Pure Services

Intangible
Tangible
Interaction with customer required
Less interaction with customers
Inherently heterogeneous
Often homogeneous
Perishable/time dependent
Not perishable can be inventoried
Defined and evaluated as a package of features

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
 China Global Leader is Manufacturing

11th 5 yr plan

Heavy manufacturing
& high technology

Light industry

The end of cheap China: What do soaring Chinese wages mean for global manufacturing? Mar 10th 2012 | HONG KONG AND SHENZHEN
Source: http://www.economist.com/node/21549956
Introduction to Operations Management I
OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Manufacturing: China vs. India

Made In India*: As China begins to lose its competitive advantage, manufacturing starts moving to India by Goutam Das
Source: http://businesstoday.intoday.in/story/india-benefits-china-begins-to-lose-manufacturing-edge/1/203040.html

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Make in India

Havells Bosch Micromax

Made In India*: As China begins to lose its competitive advantage, manufacturing starts moving to India by Goutam Das
Source: http://businesstoday.intoday.in/story/india-benefits-china-begins-to-lose-manufacturing-edge/1/203040.html

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Efficiency, Effectiveness, and Value

Efficiency

Doing something at the lowest possible cost

Effectiveness

Doing the right things to create the most value for your customer

Value

The attractiveness of a product relative to its cost

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Efficiency, Effectiveness, and Value
Getting passengers on a plane quickly can
greatly affect an airlines costs.
Southwest says that if its boarding times
increased by 10 minutes per flight, it would
need 40 more planes at a cost of $40 million
each to run the same number of flights it does
currently.
Reverse pyramid

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Efficiency and Wall Street
Comparison of firms is important to investors
From an operations and supply chain perspective, the relative cost of
providing a good or service is closely related to earnings growth
Management efficiency ratios
Labor productivity
Net income per employee
Revenue (or sales) per employee
Asset productivity

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Efficiency and Wall Street

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi
Efficiency and Wall Street

Introduction to Operations Management I

OPM 1 Term 2, B2015-17, Oct-Dec 2015 Prof. Kedar P. Joshi