Vous êtes sur la page 1sur 11

OM0010 Operations Management

Name: Registration No: Center: Course:

Sreenath.MR 511037136 2717


Master of Business Administration Semester 3

Assignment Set- 1

OM0010 Operations Management

OM0010 Operations Management

Assignment Set- 1

OM0010 Operations Management


1. What are the emerging opportunities and challenges that confront Operations Management in India? List the important differences between Service and manufacturing. Ever since 1992, when the Chelliah committee put up its proposal in respect of import traffic, the need for changing Operation management practices in the country has been felt. The committee recommended: 1. Reduction in traffic levels. 2. Removal of differences between rate and materials. 3. Intermediates and finished goods. 4. Efficient administration. Advantages and Disadvantages of Indian Manufacturing Orgs . Indian industry enjoyed undue advantages due to high import traffics. Another advantage enjoyed by the Indian industry was Licenses determined the availability of products and services their quality, price, etc. in the market. Once of the serious drawbacks of Indian manufacturing Orgs operating in a controlled economy was the predominant domestic focus in their approach to business. In contrast, manufacturing organizations in small countries such as Japan and Korea develop good international focus, which help them target and high standards for operations system performance. The main challenges that confront Operations Management. 1. Quality Management Issues 2. Lead Time Issues. 3. Labor productivity Issue. Emerging Opportunities in Business Several developments that affect Operation Management practices have taken place in the market due to economic policies at national and international levels like advent of new sectors of industry and new technologies such as the internet. Business organization must be aware of these trends and take them into account in their strategic planning. Advancement in IT and global competition has influenced the major trends different organizations have different priorities, 1. Dismantling of Trade barriers. 2. Outsourcing as a major wave 3. The internet, e-commerce and e-business. 4. Management of technology 5. Globalization 6. Management of supply chain 7. Agility There are also other important Issues that have become vital to organization and must be addressed. 1. Ethical behavior 2. Working with fewer resources. 3. Cost control and productivity 4. Quality and process improvement 5. Increased regulation and product liability issues 6. Lean production.

OM0010 Operations Management


The differences and similarities between the service and manufacturing organizations. Service Organizations. 1. Intangible, perishable product 2. Output cannot be inventoried. 3. High customer contact 4. Short response time 5. Cover local markets. 6. Small facilities. 7. Labor intensive 8. Quality not easily measured. Manufacturing Organizations. 1. Physical, durable product. 2. Output can be inventoried. 3. Low customer contact 4. Long response time 5. Cover regional, national international markets. 6. Large facilities. 7. Capital intensive 8. Quality easily measured. Similarities : 1. Is concerned about quality, productivity, and timely response to its customers. 2. Must make choice about capacity. Location and layout 3. Have to plan operations, schedules and resources. 4. Has to plan operations, schedule and resources. 2. Explain Order Winner, Order Qualifier and Kano Model. List out the Universal Principles. For a specific product, some of the dimensions of competitiveness are more important than other in a specific market during a specific market during a specific time. Hence, it is useful to differentiate between so called order winners and order qualifiers. An order qualifier is your ticket to go into race. An example of an order qualifier is the quality standard ISO9000, currently stipulated by many international companies, an order winning is the operating system of Apple computers. An optional way of looking at the competitive dimensions is through the Kano Model Kano model is a Japanese quality specialist who believed product characteristics can be classified into must be more is better delighters. The Kano model: 1. Helps to explain requirements. If requirements are satisfied, they contribute to customer classification, neutrally, or satisfaction. 2. Identifies the Must be needs, Which the client expects, If they are unfulfilled, the customer is dissatisfied. However even if they are entirely satisfied the customer is not particularly satisfied. An example of a Must be need is airline safety .

OM0010 Operations Management 3. Indentify the, Must is better needs, which have a linear effect on
customer satisfaction: the more these needs are met, the more satisfied customer are, an example is low-price airline tickets. 4. Indentifies delighter needs, which are those that do not cause dissatisfaction when not present but satisfy the customer when they are. Example is serving hot chocolate chip cookies during an airline flight. 5. Helps in the prioritization of needs example. Must be needs are usually taken for grant unless they are absent. These needs are to be taken care first. Universal principles We have seen the variation in processes, automation and scheduling in the volume variety and product matrix. You could ask if there are principles of operations management that apply across the entire product process matrix. Schonberger and Knod (1994) present one of the most useful lists of principles, applicable both to serve and manufacturing operations. They challenged that these principles can make a massive difference to any operations based organization. They compiled a list of principles. According to them, organization involved in the service and manufacturing sector should: 1. Get to understand and team up with the next and last customer. 2. Become committed to replaced, quick improvement in quality, cost, lead time, flexibility, inconsistency and service. 3. Accomplish unfilled purpose via shared information and team participation in forecasting and implementation of charge 4. Get to understand the competition and world class leaders 5. Cut the number of products or service components or operations and number of suppliers to a few good ones. 6. Arrange resources into multiple chains of customers, each focused on a product, service or customer family; create cells, flow lines and plants-in-a-plant. 7. Constantly invest in human resources through cross training, education, job and career path rotation, and improved health, safety and security, 8. Preserve and improve present equipment and human work before thinking about new equipment; mechanize incrementally when process inconsistency cannot otherwise be reduced 9. Look for simple, flexible movable, low cost equipment that can be acquired in multiple copies, each assignable to focused cells, flow lines and plants in a plan. 3. What are Opportunity Costs and Ownership Costs and how are they relevant to investment decisions? We have seen in the previous section that one of the major decisions in business which especially concerns operation is pertaining to investments in plant and equipment. While making such decisions, the costs of such investments have to be calculated precisely, so that decisions are made on sound and rational basic.

OM0010 Operations Management

The cost of an investment is not merely the cost of acquiring the assets, which could be equated to the landed price of the assets plus the installation and running in costs. The cost of an investment forms one of the elements of the overall ownership cost. The concepts of ownership cost adequately address the need to look at the costs more comprehensively. Opportunity Cost: Opportunity cost can be defined as the profits foregone by investing funds or efforts in one project instead of in another project. Let us understand this concept through a more individual based example of a person owning a car whose value in market is Rs 2 lakhs. This becomes the economic value of the car. The person can either sell the car for its value or retain the car. In case he sells the car. The Rs 2 lakhs can earn interest over a period of a year. By retaining the car, the person forgets the interest, which is the opportunity cost of ownership. Besides, by retaining the car for a year, the sale value of the car gets diminished. This loss is resale value is the second opportunity cost. So the total opportunity cost is the loss of interest earnings plus the loss in sale value. Ownership Cost: Ownership Cost is the total cost of owning and maintaining an asset over a period of the time including the opportunity cost. In above example, in order to keeps the car running for a year some capital /maintenance expenses would need to be incurred on the car. So that cost of continued ownership is the opportunity cost, plus the capital addition or renewals to keeps the car running. 4. What is Economies of Scale? Illustrate with an example. How is it different from Economies of Scope? The concept of economies of scale can be explained by considering a situation where a manufacturing facility has been just set up, and the necessary raw materials, power connections, work force etc have all been organized, and the company is all set to commence manufacture. It should be appreciated that even before the first unit is produced, company is incurring certain costs such as rent for the premises, the fixed conditioning and running of equipments such as compressors, filters, etc. These generate the fixed costs of operations. Let us say that such an expenditure of fixed nature is Rs. F per day. Now consider the situation when the plan reaches a stage producing 10 units per day. If the variable cost (cost of material + cost of direct labour + cost of power + others)per unit of production is v then total cost of production 10 units (on any particular day) works out to be. Total cost = (F+10 x V)/10 = F/10 +v If after some time, the plant manufacture 40 units of product in a day. Then Total cost = F/40 + v Thus we see as that the production level increases during a particular time period, the unit cost of producing a product reduces. In other words, if the

OM0010 Operations Management


scale of operations increases, then the unit cost of manufacture comes down. This aspect is referred to as the Economics of scale. Economic Scope: Many businesses due to the competitive market, are forced to board into manufacture of different types of products, and achieve higher volumes only through that variety of products. Efficient and flexible operations systems can be develop this process. This approach is called the Economies of scope Developing very efficient machine settings, and re- arranging the availability and issue of materials, and the workmens ability to adjust to change of product and multi -skill can make the operations more flexible. 5. Explain the importance of location decisions and the decision-making process for making location decisions. Profit based organizations make most of their decisions on the resultant profit potential, while non-profit organization generally tend to seek a balance between their ability to serve their customers and the cost they incure. However it can be so many acceptable locations for a company some time options may be many as to make it very difficult to make a choice. Four possible options exist in case of decisions on location. They are: 1. To expand an existing facility: This pre-supposes that there is scope for expansion in the existing facility. Such an option is considered if there are sufficient advantages in the existing location that are not available in other options. This option generally entails less cost than other options. 2. Add more locations to existing ones: Generally this happens in retail operations. The basic concept would be to weigh the resultant impact of the total system- in other words, the company should examine whether addition of locations would result in a net improvement in business. 3. Move from existing location to new one: In this position also, a cost benefit analysis of moving to a new location should be assessed carefully before taking a decision. Shift in the market, running out of raw material supplies or required manpower, etc are some of the typical reasons for considering this alternative. 4. Status Quo: This option may be forced on company if the latter is unable to identify any better potential location. 6. Explain the terms: Operations Mission, Distinctive Competence, Operation Objectives and Operation Policies. Operation Mission: Every business operations should have an articulated Mission along with other functional strategies that is connected to the business strategy as well. For eg. If the business strategy is product leadership, the operations mission should focus on new product introduction and develop the needed flexibility to adopt product to the changing needs of the market or Price Company chooses to follow other strategies such as market or price.

OM0010 Operations Management

Distinctive competence: Distinctive competence refers to the companys ability to carry out a process better than the competitors the competence could be derived either from unique resource (capital or human) of from unique capabilities . The distinctive competence of the company should be commensurate with the mission of operations. Development the distinctive competence refers to developing a business process in an area (for example, in quality assurance ) which is different from the mission of the operations (say excelling in new product innovation ). Similarly the distinctive competence must be value by other functional areas such as marketing, finance, ect.. Operation Objectives: The third element of operations strategy is operations objectives. There are four common objectives, they are: 1. Cost 2. Quality 3. Delivery 4. Flexibility The companys Mission is logically converted into objectives in the above mentioned areas. To be strategic in nature, these objective should be long- term (5-10 years) Operations policies: This relates is the forth element of the operations strategy. Policies are normally board guidelines that the company develops in keeping with their strategies and value systems. These policies assist decision makers in arriving at decisions. Operation policies should generally be developed for each decision categories and should be integrated with other functional decisions and policies.

OM0010 Operations Management

Name: Registration No: Center: Course:

Sreenath.MR 511037136 2717


Master of Business Administration Semester 3

Assignment Set- 1

OM0010 Operations Management

OM0010 Operations Management

Assignment Set- 2

10

OM0010 Operations Management

11