Operations Management

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Chapter

01
OPERATIONS MANAGEMENT: as a competitive weapon
mks
mks@mdi.ac.in http://mks507.vistapanel.net

Prof. (Dr.) Manoj K Srivastava
Operations Management Area

1.

The Systems Approach

C O N T E N T S

2.
3.

OM Definition
Ten Critical Decisions

4.
5.

The Cases
4V Typology of Operations

6.
7.

Productivity
Competitiveness

8.
9.

Manufacturing Vs. Service?
The History

10.

The Future

1

Systems Approach

Systems Approach

Reduce waste…or enhance output…

2

OM Definition

What is Operations Management?
What is Operations?
a function or system that transforms inputs into outputs of greater value

Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs TYPES OF TRANSFORMATIONS
• • Physical: Locational: as in manufacturing operations as in transportation operations

What is a Transformation Process?
a series of activities along a value chain extending from supplier to customer. activities that do not add value are superfluous and should be eliminated




Exchange:
Physiological:

as in retail operations
as in health care

What is Operations Management?
design, operation, and improvement of productive systems

• •

Psychological: Informational:

as in entertainment as in communication

Value Engineering / Value Analysis
 Use  Esteem  Time  Place

3

What Operations Managers do?

 Service, product design……………..
 Quality management…………………  Process, capacity design…………..  Location …………….…………………

Ten Critical Decisions

 Layout design ………………………..  Human resources, job design……..  Supply-chain management…………  Inventory management …………….  Scheduling ……………………………

 Maintenance ………………………….

4

The Cases

Britannica Story
Invite your enemy onto the roof, then remove the ladder Sun tzu The Art of War 36 Stratagems 1988 1988-93 Britannica (Leader, 230 years experience, 1768), $1000 Microsoft encyclopedia from funk & Wagnall’s encyclopedia Searchability, Multimedia, Graphics, Timeline (20 feet), cross-links, updating

1993 1995

Price $300 (cost of CD:$1) (in-fact you can purchase encarta encyclopedia + a PC in Britannica price) Britannica has to jump in a business which was not its strength, Price still $1000

1997

Reduced to $125, later on free online, crashed twice

Innovation in Operations
McDonald’s Corp Olympic Flame

   

Facing Increased Competition Smarter and More Demanding Customers Less Brand Loyal Switched to hamburger bun that does not require toasting.  Customers prefer taste of new bun  Saves time and money, QSVC Model

   

10,000 runners 15,000 miles through 42 states in 84 days Two years of planning Must plan for no-show runners and rush hour traffic  Cost of this operation in the neighbourhood of $20 million

Innovation in Operations
Ginger Hotel BillDesk

No-frills, June 2004 No room service, travel desk, swimming pool Wi-fi, Two type of room: Rs. 999 and Rs. 1199, Prabhat Pani, CEO, Roots Corporation

BillDesk, a property of IndiaIdeas.com Ltd., 2000

Three Arthur Anderson Executives Third-party bill collection 25 Banks, 100 companies

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Reserve one of our cars - for a couple hours or the entire Day. Do it online or use a phone. We're easy.

Walk to the car, then just hold your Zipcard to the windshield. The doors will unlock, and it's all yours!

Drive away... and return to the same reserved parking spot at the end of your reservation. It's that simple. And remember, gas and insurance are included too.

5

Operations typology: 4V Approach

Differences within sectors are often greater than the differences between sectors Financial services An account management centre at a large retail bank
Financial analyst advising a client at an...
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