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OPERATIONS MANAGEMENT MODULE- II OPERATIONS MANAGEMENT MODULE- II

OPERATIONS MANAGEMENT MODULE- II - PowerPoint Presentation

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OPERATIONS MANAGEMENT MODULE- II - PPT Presentation

PRODUCT AND SERVICE DESIGN Operations and Supply Strategy Framework 2 2 UNDERSTANDING PRODUCTIVITY Productivity is a common measure on how well resources are being used In the broadest sense it can be defined as the following ratio ID: 748750

operations service productivity process service operations process productivity amp customer product design market ikea

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Slide1

OPERATIONS MANAGEMENT

MODULE- II

PRODUCT AND SERVICE DESIGNSlide2

Operations and Supply Strategy Framework

2-

2Slide3

UNDERSTANDING PRODUCTIVITY

Productivity

is a common measure on how well resources are being used. In the broadest sense, it can be defined as the following ratio:

Outputs

Inputs

2-

3Slide4

Total Measure Productivity

Total Measure Productivity =

Outputs

Inputs

or

=

Goods and services produced All resources used

2-

4Slide5

Partial Measures of Productivity

Partial measures of productivity =

Output

or

Output

or

Output

or

Output

Labor Capital Materials Energy

2-5Slide6

Multifactor Measures of Productivity

Multifactor measures of productivity =

Output

Labor + Capital + Energy

or

Output

Labor + Capital + Materials

2-

6Slide7

Exercise on Productivity Measurement

You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms.

Which productivity measure should be used?

Is productivity increasing or decreasing?

2-

7Slide8

Exercise on Productivity Measurement (Solution)

You have just determined that your service employees have used a total of 2400 hours of labor this week to process 560 insurance forms. Last week the same crew used only 2000 hours of labor to process 480 forms.

Which productivity measure should be used?

Answer: Could be classified as a Total Measure or Partial Measure.

Is productivity increasing or decreasing?

Answer: Last week’s productivity = 480/2000 = 0.24, and this week’s productivity is = 560/2400 = 0.23. So, productivity is decreasing slightly.

2-

8Slide9

CASE: IKEA: Design And PricingSlide10

What are IKEA”s competitive priorities?

IKEA’s Corporate Mantra: “ LOW PRICE WITH MEANING”

MAXIMIZE VALUE at LOW COST

Make the Product Offerings LESS EXPENSIVE but NOT CHEAPSlide11

Describe IKEA’s process for

Developing a New Product.

Five Stages:

Pick a price.

Choose a manufacturer.

(3) Design the product.

(4) Ship it. (5) Sell it.Slide12

IKEA’s process for Developing a New Product.

Pick a price. :

Low Price begins at the Drawing Board

Cross Functional Team comprising: Design, Product Development & Purchase

Deptts

.

All components of costing such as, Basic Material, Size, Features, Colour,Packing, Shipping etc. discussed for low cost operation Exp: Green/ Yellow/ White instead of RedSlide13

IKEA’s process for Developing a New Product.

Key Points:

Lighter color: Green/ Yellow/ White instead of Red

Environment friendly, free from Lead & Cadmium

IKEA Code of Conduct banning Child Labor, Health & Safety at work place

Quality Control & Audits by External AgenciesSlide14

IKEA’s process for Developing a New Product.

Key Points:

Internal Competition to select the best design

Competitors given brief about Key functions, materials , manufacturing and the price

Best design is the one which provides maximum functionality at indicated price like the Swiss Army Knives

Size and handles of Mugs redesigned shorter to accommodate 2024 mugs on each pallet

Transportation cost optimised by increasing number to 2024Slide15

IKEA’s process for Developing a New Product.

Key Points:

IKEA practices the concept of FLAT for packing products

Learnt concept in 1956 from a customer carrying table dissembled flat

Bulky

furnitures

packed in rectangular flat cartons with detailed assembly drawings with required bolts/ nuts . Clamps and screws In IKEA, waste is a sin. Employees wage a war against waste at all fronts.Waste of Space in packing is avoided. They don’t want to ship airTransportation & self assembly of furniture by customers contribute to Low cost Operations.Slide16

IKEA’s process for Developing a New Product.

Key Points:

Child Care, Food court, Information Kiosks for guidance on home décor, color coordination etc. and Display of yellow tagged Low Priced products ( BTI: Breath Taking Items) are special features.

Store Layout Guides customers through pre-determined path which augments shopping of related items before the customer arrives Billing counter

IKEA educates customers ‘How to live a modern living without expensive buying’

Collecting big flat pickings from Bins, carrying them on trolleys to the check out point, transporting them home in SUVs, assembling them according to the drawings in their chosen home settings, make millions of customers happy all over the world.Slide17

DESIGNING SEVICE OPERATIONSSlide18

Process Design in Service Operations

Three

types of Service Operations:

Quasi-Manufacturing

Customer-as-Participant

Customer-as-ProductSlide19

Process Design in Service Operations

Quasi-Manufacturing ( similar to manufacturing)

Tangible outcome receives priority over intangible

Operation takes

place

according to pre designed process flow like a manufacturing line operation

Operations could be highly automated, which may not visible to customers

Little or almost

no customer interaction

Little regard for customer relations

Example –

Kitchen of a Hotel or a restaurant

Back end office operations of a call centerPathological Lab testsSlide20

Process Design in Service Operations

Customer-as-Participant

Physical

product

may be a significant part of the

service outcome

Requires high degree of customer involvement in the processService Products may be either standardized or customized to needs of the customerExamples: ATM

,

Self-service petrol pumpsSlide21

Process Design in Service Operations

Customer-as-Product

Service outcome (Product) is the customer himself

Requires customized

service

on the customer

Deserves personal attention to customer needsInvolves high degree of customer contactQuality depends upon customer perception

Examples

:

Hair cutting Salon or a Beauty

Parlour

Doctor’s clinic

Teaching & TrainingSlide22

Copyright 2009 John Wiley & Sons, Inc.

5-

22

Service Design ProcessSlide23

Copyright 2009 John Wiley & Sons, Inc.

5-

23

Service concept

purpose of a service; it defines target

market and the extent of customer experience to be provided

Service packagemix

of

physical products

, experiential

and psychological

satisfaction

Service specificationsperformance specificationsdesign specifications delivery and after sales serviceProcess Design in Service OperationsSlide24

Copyright 2009 John Wiley & Sons, Inc.

5-

24

Service Process MatrixSlide25

Market

Operations

Narrow range of services

Service concept

Focused operations for a narrow marketSlide26

Market

Operations

Narrow range of services

Service concept

Focused operations for a wide marketSlide27

Market

Operations

Wide range of services

Service concept

Unfocused operations for a narrow marketSlide28

Market

Operations

Wide range of services

Service concept

Unfocused operations for a wide marketSlide29

4-29

Characteristics of Well Designed

Service Systems

Consistent with the organization mission

User friendly

Robust

Easy to sustain

Cost effective

Effective

linkages between

back end operations

Single unifying

theme: Deliver value to customerEnsure visibility of Quality and ReliabilitySlide30

4-30

Guidelines for Successful Service Design

Define the service package

Focus on customer’s perspective

Make

sure that managers are involved

Define quality for tangible and intangibles

Make sure that recruitment, training and rewards are consistent with service expectations

Establish procedures to handle exceptions

Establish systems to monitor serviceSlide31

Copyright 2009 John Wiley & Sons, Inc.

6-

31

Mapping

Process Flow

Any

manufacturing or service operation comprises of two broad set of activities, namely:Activities related to main production or service operation

Activities related to support functions, such as: Inspection & quality control

, Storage & movement, Supply & distribution and other Process delaysSlide32

Copyright 2009 John Wiley & Sons, Inc.

6-

32

Process Flowchart Symbols

Operations

Inspection

Transportation

Delay

StorageSlide33

W

F

S

S

S

S

S

B

C

F

K

I

T

MCDONALD SERVICE FLOW CHART

C: Customer- B: Billing- K: Kitchen- W: Waiting- I: Inspection – T:Tray- F: Fries-F: Fill Slide34

Designing for Ease of Production

Ease of Production

(

Manufacturability

)

Specifications - Precise information about the characteristics of the productTolerances - Minimum & maximum limits on a dimension that allows the item to function as designedStandardization - Reduce variety among a group of products or partsSimplification - Reduce or eliminate the complexity of a part or product Slide35

Case:

Narayan

Hridayalaya

Vision and Values

Make Heart Surgery affordable to poor & common man

Grow exponentially from 5000 Bed Hospital to 30000 Beds in 5 years

No poor and children would be denied medical care for lack of money

“ Hands which help are better than the lips that pray”: Mother Teresa

When you do your work without expecting anything in return,

just for the joy of bringing happiness to others, that’s when, you realize it is not your hands, which do the job, it is the hands of God.”: Driving Motivation of Dr Devy Shetty “ Slide36

Case: Narayan

Hridayalaya

Business Model:

Seed money from philanthropist Father-in-law

Adopting Business Model of Wal-Mart :Economy of scale is the main Mantra

Strategic Plans to grow from 5000 Beds to 50000 in 5 years

24 Operation Theatres and other infrastructure support to enable 50 major heart surgeries daily

Large number of pathological tests per day per machine brings down unit cost of the test

Machines for tests hired on long term lease: suppliers are happy with the revenue earned on Reagents sale

Dedicated team of Doctors willing to work on even half the normal salary

Dr

Shetty himself provides consultations to at least 2 patients every five minutesLean Staffing brings down costs as well as corrupt practicesSlide37

Case: Narayan

Hridayalaya

Strategies for making the enterprise Cost Effective:

Collaborations:

ISRO providing Satellite Service Links to smaller HospitalsTelemedicine made available to remote locationsAnesthetics in US provide support in surgery on infants

Biocon

developing new drugs which are considerably cheaper than conventional ones

Karnataka Govt. support through Micro Health Scheme called ‘

Yashaswini

’ on small premium of Rs 10 for farmers

Dedicated team of Doctors working at half the salary to pursue service to humanity (Self actualization needs)