Welcome to

OPERATIONS MANAGEMENT -1

Credit:02

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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.

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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
production/delivery system

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

entire

Prof. Kedar P. Joshi

Operations and Supply Chain Processes

Operations

Manufacturing and service

processes used to
transform resources into
products

Internal
Customer
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Supply Chain

Processes that move

information and material
to and from the firm

External
Customer

Introduction to Operations Management I

Prof. Kedar P. Joshi

Process Steps for Mens Nylon Supplex Parkas

the nylon Supplex producer

the Polartec producer

OPM 1 Term 2, B2015-17, Oct-Dec 2015

the parka manufacturer

Introduction to Operations Management I

the catalog sales retailer

Prof. Kedar P. Joshi

Operations and Supply Chain Processes

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

Process Activities
Planning

processes
needed to
operate an
existing supply
chain

Sourcing

selection of
suppliers that
will deliver the
goods and
services
needed to
create the
firms product

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Making

producing the
major product
or service

Delivering

Returning

logistics
processes such
as selecting
carriers,
coordinating
the movement
of goods and
information,
and collecting
payments from
customers

receiving wornout, excess,

and/or
defective
products back
from customers

Introduction to Operations Management I

Prof. Kedar P. Joshi

Where are the OM Jobs?

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

Historical Development of Operations and

Supply Chain Management

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

Current Issues in OSCM

Coordinating
relationships
between
members of SC

Optimizing
global network
of suppliers,
producers, and
distributors

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Managing
customer touch
points

Raising
awareness of
OSCM as a
competitive
weapon

Introduction to Operations Management I

Sustainability
and triple
bottom line

Prof. Kedar P. Joshi

GOODS OR SERVICES?
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

12

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

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

Goods versus Services

Goods

Pure Goods

Services

Core Goods

Tangible
Less interaction with customers
Often homogeneous
Not perishable can be inventoried

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Core Services

Pure Services

Intangible
Interaction with customer required
Inherently heterogeneous
Perishable/time dependent
Defined and evaluated as a package of features

Introduction to Operations Management I

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
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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
OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

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

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

Efficiency and Wall Street

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi

Efficiency and Wall Street

OPM 1 Term 2, B2015-17, Oct-Dec 2015

Introduction to Operations Management I

Prof. Kedar P. Joshi