E Packets: Preparation for GD-PI Process

Operations Management Concepts

Department of Management
Studies IIT Delhi

Operations ManagementDefinition
The Competent & Adept management of
complex systems in the service, non-profit,
manufacturing and government sectors via the
effective and efficient utilization of time, labor,
money and materials in the generation of goods
and services.

Department of Management Studies IIT Delhi

Operations & Supply Chain

Management
Operations

Supply Chain
Management

Department of Management Studies IIT Delhi

Manufacturing & Services

processes used to transform
resources into product
Single Firm Approach
Processes that move
information & Material to and
from the firm
Multi Firm Approach

Responsibilities of Operations
Manager
Internal Quality Auditors
TPM (Total Productive Maintenance
Strategic Decision Making
Enhance R & D efforts and Automation of processes
Supply Chain Management
Decision regarding outsourcing of business processes
Implement Environment & Pollution norms by Govt.
Timely implementation of Project etc.

Department of Management Studies IIT Delhi

Forecasting

Decoupling Point: Point

at which inventory is
stored, which allows
supply chain to operate
independently

Department of Management Studies IIT Delhi

Forecasting helps
determine the level of
inventory needed at the
decoupling point

Types of forecasting Methods

Quantitative
Methods

Qualitative
Method

Rely on data and

analytical
techniques

Rely on subjective
opinions from
one or more
experts

E.g.: Time Series

Model , Linear
Regression Model

E.g.: Delphi
Method, Market
Research, Panel
Consensus etc.

Department of Management Studies IIT Delhi

Quality
Quality is what customer wants
It is the customers perception about the degree to
which the product or service meets his/her expectation
Quality Control through Statistical tools
Quality Specifications:
Performance
Features
Reliability/ Durability
Serviceability
Aesthetics
.Perceived Quality
Department of Management Studies IIT Delhi

Total Quality Management

Managing the entire organization so that it excels on all
dimensions of products and services that are important to the
customer
Components of TQM
Commitment to Quality
Total Involvement
Continuous
Improvement
Scientific Tools &
Techniques

Department of Management Studies IIT Delhi

Six Sigma Approach

Six Sigma is a process driven approach which emphasize on
continuous improvement and focus on customer needs.
In simple words it gives an approach to achieve less than 3.4
PPM defects throughout supply chain by continuous improvement
Data Driven Decisions
Prevention of defects
Two Types of Six Sigma Approach:
DMAIC : For existing process
DMADV: For new process

Department of Management Studies IIT Delhi

Six Sigma Approach

Defects per million Opportunities (DPMO):
No of non-conforming characteristics in a million of all the desired
characteristics within a product.

[Source: http://www.intechopen.com/books/six-sigma-projects-and-personalexperiences/demystifying-six-sigma-metrics-in-software]
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Various Standards
ISO: Series of standard agreed upon by the International
Organization for Standardization (ISO)
Adopted in 1987
Used in more than 160 countries globally
ISO 9000: International reference for Quality
ISO 14000: Primarily concerned with Environmental Management
First Party, Second Party & Third Party Certification
Benchmarking

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Studies IIT Delhi

11

Inventory Management
Stock of any item or resource used in an organization. It includes:
Raw Material, Finished Products, work in progress etc.
It increases cost of product by inventory for a period of time
It is a necessary evil.
Maintenance Independence
of Operations

Meet Variation in
Product Demand

Purpose of
Inventory
Flexibility in Production
Scheduling

Department of Management Studies IIT Delhi

Safeguard for Variation in

Supply of Raw Material

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Miscellaneous Terms
Lean Manufacturing/Production: Integrated activities designed to achieve high
volume production using minimal level of inventory
Lean Supply Chain: It includes basically lean stakeholders in whole value chain
i.e. Lean Supplier, Lean Procurement, Lean manufacturing, Lean Warehousing,
Lean logistics etc.

Logistics: It is a science of obtaining, producing and distributing material and

product in the proper place and in the proper quantity
Transportation: Movement of goods among organizations and customers

Value Chain: Value chain is a set of activities in which every individual involve in
the process adds some value to the product. It includes procurement, design,
manufacturing, logistics, sales, services etc.

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13

Miscellaneous Terms
Project Management: Planning, Directing and Controlling resources (people,
equipment, material) to meet the technical cost and time constraints of a project

Procurement: Process of purchasing material and products from a

vendor for various application in an enterprise

given

Bullwhip Effect: The variability in demand is magnified as one move from the
customer to the producer in the supply chain
Job Scheduling: Specification of the work activities of an individual or a group
and scheduling their work as per requirement of supply chain

Sustainable Operations: A sustainable approach in operations management to

reduce negative impact of operational activities on environment and future
generation.
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Miscellaneous Terms
Supply Chain-Upstream & Downstream: Upstream in SC indicates supplier side
while downstream in SC indicates goods movement to customer side

Lead Time: The amount of time that elapses between starting of a process and
its completion.
Total Lead Time= Procurement lead time + Production Lead Time + Delivery Lead time

Service Level: Service level is the probability of not being stock out in terms of
inventory (raw material and finished goods)
Queuing Theory/ Waiting Line Model: A process where customer wait in line for
service. Optimized Management of waiting lines comes under Queuing Theory
Operational Strategy: It is the collective concrete actions chosen, mandated, or
stimulated by operations manager to maintain easy flow of throughput.
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Thank You!!

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