Operation Management - Overview - Strategy - Challenges and Emerging Trends 2019
Operation Management - Overview - Strategy - Challenges and Emerging Trends 2019
Operation Management - Overview - Strategy - Challenges and Emerging Trends 2019
Management of Operations
(Goods ‘n’ Services)
An Introduction
Session Objectives
• Explain what operations management is and why it is important.
• Understand the linkages and implications of Operations on Sales,
Marketing, Finance, HRM, etc.
• Understand the key principles of Operations Management
• Define the planning activities associated with managing operations
across the supply chain.
• Discuss and understand OM Challenges and Emerging Trends
Apple designs cool products.
But its enormous profit margins 2 to 4 times more than
other hardware companies – come it large part from its
priority and focus on Operations Management
It Takes More than Cool Products to
Make Apple Great
Volume
• Capitalizes on
volume across
supply chain
Operations Management at its best:
Apple’s Success Story
PRODUCT
DESIGN/MIX
DEMAND
SUPPLIERS VISIBILITY
Forecasting
PROCESSING
Labour Process & Purchasing & Goods
OUTPUT
Product Inventory
INPUT
Design Control
Material
Feedback
Quality Maintenance Process
Management Management Improvement
Operations Function
Linkages with other functions
Operations Support Layer
Customer Layer
Marketing Maintenance Quality
Ultimate Dealers
Customer Retailers Costing Planning Tooling
Material IT Design IE
Testing Assembly
Layer of
Innovation Fabrication Machining
Innovation Supplier Layer
Strategy Service Delivery system
Sub-contractors Suppliers
Research &
Development
Other service providers
Operations
A key functional area in an Organization
Finance
Operations
Marketing HRM
Why Operations Management?
‘It Matters to People’
Why study OM? – Part I
• Lowering costs
• Improving quality & efficiency
• Enhancing product desirability
• Aligning OM with the
company’s competitive
strategy
• Evolving with the needs of
customers, competition, and
technology
1–29
Emerging Trends
Ford is using 3D printing for car parts
3D-Printed Sneakers Gaining Traction
Virtual Tooling brings ‘flexible manufacturing’ in the body shops of Ford
FMS enabling meeting of variety with efficiency
Uber Eats delivers ice cream by
drones to delighted Singaporeans
Drones to help Amazon, Uber Eats, etc., in fast delivery
Evolving with the needs of customers, competition and technology
Audi is testing two types of drones – one which can carry items such as
steering wheels around, another that can be used to offer camera-
based repair and maintenance work.
Self-Service Kiosks in Airports, Hotels, Healthcare, Banks, etc.,
Evolving with the needs of customers, competition and technology
Operations Management (OM)
is everywhere – Part II
Schools Construction
Restaurants
Hospitality Banks
Military
Agriculture Transportation
Health Sport Teams
Care Municipalities
Government
Manufacturers Services Not-for-Profit Entertainment
Retail
Organizations
Operations Management (OM):
A Basic Definition
Operations
Management (OM): is
the management of
processes used to
design, supply,
produce, and deliver
valuable goods and
services to customers
1–42
Operations Management
Definition
1–45
Important Decisions in OM:
How?
1–46
Important Decisions in OM:
When? Where? Who?
1–47
Foundational Concepts in
Supply Chain Operations Management
Sustainable Operations
Unilever’s SCM – Sustainable SCM
Source: Ravichandran, N and D. Bahuguna (2006), “Rule Bound Government Agency to Customer Centric Service Facility: Can
Indian Passport Offices make the leap?” IIMB Management Review, 18(1), 59 – 66.
From OM to SCM
1–76
From OM to SCM:
Technology and Infrastructure
Advances in communication, computers,
and transportation:
• Faster more extensive connectivity
• Strengthening of partnerships with better
communication
• Faster, more reliable, and more economical
shipping
• Growing transportation infrastructure in
developing and emerging
1–77
From OM to SCM:
Barriers to Trade
Shifting economies,
governmental control and
societal expectations:
•Economic decentralization in
favor of free market systems
•Growing potential for improved
product costs and quality
•Increased complexity and
exposure to risk
1–78
From OM to SCM:
Core Capabilities
Unique sets of skills that confer competitive
advantages to a firm, because rival firms cannot
easily duplicate them:
• Concentration on few skills and areas of knowledge
that make the firm distinct and competitive
• Ability to focus the firm’s efforts in what it does
best, thus producing greater product value through
higher quality and greater efficiencies
• Increased interdependence along the supply chain
1–79
From OM to SCM:
Collaborative Networks
Greater influence of, and reliance upon,
business partners:
• Firms becoming more reliant on their
suppliers
• Product value improvements are achieved
through better coordination and collaboration
1–80
OM Partners Across the Supply Chain
– Intermediate
– Final
OM Partners Across the Supply Chain:
Suppliers
Individuals or organizations that provide inputs
to operational processes. Suppliers can be:
• Upstream product suppliers
• Downstream product suppliers
• Resource and technology suppliers
• Aftermarket suppliers
SC Partners Across the Supply Chain:
Stakeholders
• People other than customers and suppliers who
have an interest in the well-being of a firm.
• Stakeholders include:
– Employees
– Unions
– Local community and social groups
– Government
– Financial investors
1–84
Functional Activities that Connect
Operations Managers
1–87
Functional Activities that Connect
Operations Managers: Customers Mgmt.
1–88
Functional Activities that Connect
Operations Managers: Supply Mgmt.
1–89
Functional Activities that Connect
Operations Managers: Logistics Mgmt.
1–90
Levels of Planning