Class notes for PGDM Second Semester Students

1. Concept of Operations Management
Operations Management
Concept of Operations
Management
• The Classical Image
Presented By:
Anupam Kumar
Reader
SMS Varanasi
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Operations Management Operations Management
It is: It is…
• A management function …the business function responsible for
• An organization’s core function planning, coordinating, and controlling the
• In every organization whether resources needed to produce products and/or
– Service or Manufacturing, services for a company.
– Profit or Not for profit
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What Does Operations Management Do? Why The Transformation and How?
• Transforms inputs to – Inputs are resources such • To add value
as
outputs – Increase product value at each stage
• People,
• Material, – Value added is the net increase between output product
• Machines, value and input material value
– Outputs can be • Energy,
• goods and / or • Information,
• To Provide an Efficient Transformation
• services • Technology, and – Efficiency – means performing activities well at least
• Money possible cost
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2. Concept of Operations Management
Types of Operations Types of Operations
• An operation may be broadly divided into two • Manufacturing Operations
categories. – If a company has an ability to manufacture tangible
products, we call it a manufacturing company.
– Manufacturing Operations
– Manufacturing operations deal with goods/tangible
– Service Operations. products.
– Example industries:
• Agriculture,
• Forestry and fishing,
• Mining, Construction, etc.
– Inputs (raw materials, etc.) and outputs (products) are
tangible and visible objects.
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Types of Operations Types of Operations
• Non Manufacturing Operations • Service Operations
– Even in service operations, there are inputs and outputs.
– Manufacturing transformation processes are some – The output is a satisfied customer.
kind of chemical or physical processes – Processes in service operations include
• giving advice (consultant firms),
– (ex: welding, assembling). • transporting,
• packaging,
• The other companies who are not manufacturers • storing,
are referred to as service companies. • serving (food), etc.
• Examples of service organizations include
• Example industries: – Educational institutions,
– Transportation, Finance, real estate, insurance, hotels, – repair shops,
– Barbers, etc.
etc.
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Types of Service Operations Types of Service Operations
• Product Based Service Operations • Proximity to Customer
– Some service operations deal with tangible outputs even – In most service operations, customer needs to be present
though they do not manufacture a product. e.g. as an active participant. e.g.
• Health care,
• Distributors,
• Hair cut,
• Mail service,
• Travel, etc.
• Library, etc.
• Remote Operations
• Pure Service Operations – In some service operations, customer is not present as a
– Other service operations deal with intangible products. participant. E.g.
– These are pure service operations. E.g. • Architectural design,
• Financial advice, • Repairing automobiles,
• Counseling, etc. • Insurance, etc.
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3. Concept of Operations Management
Operational Transformations Operations as a Function
Operation
Inputs Transformation Outputs • Operations function is
System one of 3 primary
functions within a
Car Factory Raw Materials
Fabrication &
Cars business:
Assembly of Cars
– Finance,
– Marketing, and Organization
Chemical & Other Gas, Petrol,
Oil Refinery Crude Oil
Processing Kerosene, Diesel, Etc – Operations.
• Operations function
Airplane, pilots, must also be well
Airlines flight attendants, Air Transportation Change of place
customers integrated with other
Operations
parts of business.
Hospital Patients Health Cured patients
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Operations Operations Function
• Work of 3 primary
functions – Finance,
• In many companies,
Marketing and
operations function retains
Operations, overlaps
the greatest percentage of
each other and employees.
• All three must work
• And, it is responsible for the
together to reach the
largest part of the budget.
full potential of the
system.
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Operations Function
To Production V/s Operations
Management…
Therefore, operations function plays a
significant role in success of businesses.
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