wishing you all a “total quality” new...
TRANSCRIPT
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Session 1
Vinay Kumar Kalakbandi
Assistant Professor
Operations & Systems Area
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Operations Management - II Post Graduate Program 2015-17
Wishing you all a
“Total Quality” New Year!
Hope you achieve Six sigma heights
Hope you are able to produce excess inventory of high quality happiness
Hope all your bottlenecks are removed
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Agenda
• Introductions
• Course Overview
• The Systemic perspective of OM
• Performance metrics in OM
• Key Challenges in OM
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INTRODUCTIONS
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Course overview
• Course website where details of all readings,
PPTs could be accessed anytime.
– http://vkteaching.weebly.com/
• Availability
– On prior appointment only
• Textbook and Course pack
– Has been provided by the PGP office
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About the course
• Assessment pattern
• Case analysis
• Class participation
• Team Project
• Quizzes
– Engrade???
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Teams
• Form teams
• Name your teams after a well known company
• Always be seated by teams!
– You never know when a team activity would happen!
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Team Names – Section B
1. BMW
2. Toyota
3. Fedex
4. Tesla
5. Lufthansa
6. Honda
7. IKEA
8. Boeing
9. Starbucks
10. Royal Enfield
11. Virgin
12. Apple
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Team names (Section A)
1. 7 Sigma
2. Bottlenecks
3. Bullwhippers
4. Kaizens
5. Mavericks
6. Dabbawalas
7. 4PGP2LKG
8. Taskar
9. House of SWAGs
10. The Undecideds
11. Nagshakti
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To begin with
• A Sweet example
• Authority
• Responsibility
• Transformation process
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What is Operations?
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What is the transformational process in
the following examples
• Toyota
• Indigo/Ola
• Big Bazaar/Walmart/Flipkart
• Narayana Hrudalaya
• PVR cinemas/Netflix
• Airtel/Vodafone/Skype
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Transformation Process
• Physical: as in manufacturing operations
• Locational: as in transportation operations
• Exchange: as in retail operations
• Physiological: as in health care
• Psychological: as in entertainment
• Informational: as in communication
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A Systems Perspective
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INP
UT
OU
TP
UT
Labour
Capital
Material
Goods
Services
Forecasting
Operations
Planning &
Control
Process &
Product
Design
Material &
Capacity
Planning
Fee
db
ack
Purchasing &
Inventory
Control
Maintenance
Management
Process
Improvement
Quality
Management
PROCESSING
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OM Functions
• Design issues in Operations Management lay down overall constraints under which the operations system functions
• Operational Control issues focuses on optimizing the use of available resources in the short-term while delivering goods and services as per plan under the given design constraints
Design Issues Operational Control Issues
Product & Service Design Forecasting the Demand
Process Design Operations Planning & Control
Quality Management Supply Chain Management
Location & Layout of Facilities Maintenance Management
Capacity Planning Continuous Improvement of
Operations
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Further on systems perspective
• Transformational process is integral to all verticals of the organization
• What is the transformational process in
– Finance
– Marketing
– HR
• Organizational sub-process could be viewed as systems in themselves and OM logic applied
• Systems are a point of analysis in OM
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„Operations‟ as a source of
competitive advantage
Vinay Kumar Kalakbandi
Assistant Professor
Operations & Systems Area
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Operations Management – s2e02 Post Graduate Program 2015-17
Disclaimer!
This course is not a spa, this is a Gym
Warm-up, Lift weights, do cardio
Read, Analyse, Participate
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Recap
• Introduction
• Systems perspective
– Transformation process
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What do firms compete on?
• Firms compete on attributes of the output
• Price (Cost)
• Quality
– Customer service
– Product quality
• Lead Time
– Rapid, reliable delivery
• Variety
– Degree of customization
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Operations Management From What to How?
What do firms compete on?
• Price (Cost)
• Quality
– Customer service
– Product quality
• Lead Time
– Rapid, reliable delivery
• Variety
– Degree of customization
How do firms achieve desired output attributes?
• Capability
– Flexibility
– Vertical integration
• Connectivity
– Location /Accessibility
– Distribution
– Inventory
• Capacity
– Speed
– Scale
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Strategic questions?
Trading off performance metrics
Priorities
• cost/quality
• cost/variety
• cost/lead time
• lead time/quality
• lead time/variety
Qualifier or Differentiator
• Qualifier: Necessary for basic
survival
• Differentiator: distinguishes
you from your competitors
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Fit between Strategy and Processes
• Processes must fit the operations strategy of the firm
• Competing on
– Cost (Southwest Airlines, Tiger Airways, Aravind Eye Care, Shouldice)
– Quality (Toyota, Shouldice)
– Variety (Donner, American Connector)
– Time (McDonalds, Manzana)
all require different process design and different performance measures to focus on.
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In summary
• Operations Management is a systematic approach to address all issues pertaining to the transformation process that converts some inputs into useful output
– Firms strategically determine the desirable output attributes they intend to compete on
– These desired output attributes drive the operational choices made by the firm
– Operational choices and output attributes should be aligned to each other to achieve Operational Excellence
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Role of Performance Measures
• What are the performance metrics for
Operations Management?
• What do we infer from such metrics?
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Operations performance measures
• Provide critical linkage between order winning and order qualifying attributes and choices made in operations
• Help organisations evaluate how well the operations system is responding to the requirements at the marketplace
• Serve a useful purpose in comparing performances amongst competitors and for benchmarking
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Operational Excellence Quality Cost
First Pass Yield Average days of inventory (No. of inventory turns)
Quality Costs Manufacturing cost as percent of sales
Defects per Million Opportunities Procurement costs, total cost of ownership
Number of suggestions per employee Value of import substitution, cost reduction
Process Capability Indices Target cost reduction efforts
Delivery Flexibility
Lead time for order fulfillment Number of models introduced
Procurement and Manufacturing Lead time New product development time
On time delivery for supplies Breadth and depth of the product and service offerings
Schedule adherence Process flexibility
Indirect Measures
Indirect-labour to Direct-labour ratio Number of suggestions per employee
Ratio of Lead time to work content Non-value added content in processes
Process rate to sales rate ratio No. of certified deliveries
Average training time per employee Delivery quote for customised products and services
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Which airline is better?
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Measures for operational excellence
Performance Criterion for Comparison (1987) Japan@ U.S.*
Production of vehicles (Million) 4 8
Number of employees 37,000 850,000
Parts on which detailed Engg. is done (%) 30 81
No. of employees in purchasing 337 6,000
Number of suppliers for upholstery 1# 25**
Design to customer delivery time (million Hrs.) 1.7 3
Design to customer delivery time (months) 46 60
@ - Data pertaining to Toyota; * - Data pertaining to GM # - Single supplier; ** - 25 Suppliers were supplying components to seat building department.
Source: J. P. Womack, D. T. Jones, and D. Roos, The Machine That Changed the World (New York: Rawson Associates , 1990)
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Key challenges in Operations
Management
• Managing Trade-offs appropriately
• Dealing with uncertainty in demand and supply
• Appropriation and product/service proliferation
• Volatility of technology, market place, economy
• Focus on social and environmental sustainability
apart from financial sustainability
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Southwest Airlines
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Slides provided by Prof. Pierrie Dussage, HEC Paris 1/7/2016 Vinay Kalakbandi 32
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Slides provided by Prof. Pierrie Dussage, HEC Paris 1/7/2016 Vinay Kalakbandi 33
Slides provided by Prof. Pierrie Dussage, HEC Paris 1/7/2016 Vinay Kalakbandi 34
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Slides provided by Prof. Pierrie Dussage, HEC Paris 1/7/2016 Vinay Kalakbandi 35
Slides provided by Prof. Pierrie Dussage, HEC Paris 1/7/2016 Vinay Kalakbandi 36
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Slides provided by Prof. Pierrie Dussage, HEC Paris 1/7/2016 Vinay Kalakbandi 37
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Source: “Putting the Service-Profit Chain to Work”, Heskett et al 1994
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Source: “Putting the Service-Profit Chain to Work”, Heskett et al 1994
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Southwest Airlines in Baltimore
• SWA Operating strategy
• Turnaround process
• BWI performance
• Plans for the future
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THANK YOU
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