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Operation Management TQM - Module 1_PPT

This document provides an overview of Operations Management and Total Quality Management (TQM), outlining its definition, history, importance, and key functions. It emphasizes the evolution of production management from the 18th century to contemporary practices, highlighting significant contributions from figures like Adam Smith and Henry Ford. Additionally, it discusses the strategic aspects of operations management, including international considerations and the importance of aligning operational strategies with organizational goals.

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23 views18 pages

Operation Management TQM - Module 1_PPT

This document provides an overview of Operations Management and Total Quality Management (TQM), outlining its definition, history, importance, and key functions. It emphasizes the evolution of production management from the 18th century to contemporary practices, highlighting significant contributions from figures like Adam Smith and Henry Ford. Additionally, it discusses the strategic aspects of operations management, including international considerations and the importance of aligning operational strategies with organizational goals.

Uploaded by

flooperdooper23
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Operations Management

and
Total Quality Management (TQM)
Module 1

Introduction to Operations Management


Topic Outline:

Definition of Operations Management


The History of Operations Management
The Importance of Operations Management
Functions and Roles in Operations Management
Production Management and Operations
Management
Operations: Policy and Strategy
International Production and Operations
Management (IPOM)
Learning Objectives

By the end of the lesson, the participants should be able to:


Appreciate the origin of production management.
Understand the importance of production and Operation
Management.
Explain the difference between production management
and operation management.
Explain what operations management is and why it is
important.
Identify the functions and roles in Operations Management
Words Ponder
Definition of Operations Management

Operations management is the management of


processes that transform inputs into goods and services
that add value for the customer.
(https://courses.lumenlearning.com/boundless-business/chapter/introduction-to-operations-management/)

Operations management is the administration of business


practices to create the highest level of efficiency possible
within an organization. It is concerned with converting
materials and labor into goods and services as efficiently as
possible to maximize the profit of an organization.
Operations management teams attempt to balance costs
with revenue to achieve the highest net operating profit
possible. (https://www.investopedia.com/terms/o/operations-management.asp)
The History of Operations Management

18th Century
The earliest account of operations and production
management is given by Adam Smith in his book,
"An Inquiry into the Nature and Causes of the
Wealth of Nations," published in 1776. In this work,
Smith explains how the division of labor allows for
more efficient production. According to Smith,
people are more efficient producers if each
person works on a single component, rather than
building the product from start to finish.
The History of Operations Management

19th Century
In the 19th century, technological advancements gave
rise to the use of interchangeable parts. These are
components to a product that are standardized
according to precise specifications. Previously, each
component had to be custom fit to the specific
product. Industrialists such as Eli Whitney and Marc
Isambard Brunel used interchangeable parts to develop
highly efficient production systems in which workers
could simply build components that would be
assembled at the end of the process.
The History of Operations Management

Early 20th Century


In the early 20th century, Henry Ford took the division
of labor and the use of interchangeable parts one
step further, creating the assembly line method of
manufacturing. This method revolutionized operation
and production management, allowing Ford to
produce a high volume of cars at affordable prices.
This method of production has been adopted by
many other producers, allowing for the mass
production of cheap consumer goods.
The History of Operations Management

Contemporary Period
In the latter half of the 20th century, several operation
and production management systems have been
developed. The focus of most of these systems is on
creating even greater efficiency in the production
process. Some of the more popular systems have
included Six Sigma, which was developed by
Motorola; lean manufacturing, which was developed
by Toyota; and ISO 9000, which was developed by the
International Organization for Standardization.
(Reference: https://bizfluent.com/info-8043238-history-operation-production-management.html)
The Importance of Operations Management

Key Benefits of Effective Operations Management


 Product Quality
OM sees to quality of products or goods which would suit customers
on and after delivery. When a product is of quality, it gives you an
edge compared to your competitors.
 Productivity
OM ensures appropriate staffing of employees to resources so as to
get maximum result.
 Customer Satisfaction
OM rightly ensures this coupled with quality product
 Reduced Operating Cost
Through productivity, quality products and customer satisfaction, cost
incurred on products servicing is maximally reduced.
Functions and Roles in Operations Management
The field of operations management includes a diverse set of
functions and roles, which can differ among industries and different-
sized companies:
 Planning and implementing manufacturing  Managing transportation and distribution
plants
 Managing and maintaining facilities
 Managing projects
 Conducting enterprise resource planning
 Planning information systems (ERP)
 Helping to design and develop products  Forecasting for planning
and services
 Planning for capacity
 Managing inventory through the supply
 Navigating industrial labor relations
chain
 Analyzing the value chain
 Managing delivery to customers in a timely
manner  Optimizing resource usage
 Optimizing quality control  Eliminating waste and bottlenecks
 Conducting procurement/purchasing  Continuously improving processes
 Managing logistics  Executing a company’s strategic plan
Production Management & Operations Management

 The primary objective of


production & operations
management is to
effectively manage and
utilize those resources of
the firm that are essential
for the production of
goods and services.

Reference:
https://keydifferences.com/differenc
e-between-production-and-
operations-management.html
Operations: Policy and Strategy

Operational strategy is essential to achieve operational


goals set by organization in alignment with overall objective
of the company. Operational strategy is design to achieve
business effectiveness or competitive advantage.
Operational strategy is planning process which aligns the
following:
Organizational Goal
Business Goal
Product/Service Goal
SWOT Analysis
Operation Strategy
International Production and Operations Management (IPOM)

 International production and operations management deals with


production of goods and services in international locations and
markets. It involves management process which has to take into
consideration local production market (labor and capital) and
international customer requirements.
 As IPOM is dynamic in nature, organization has to design it strategic
objectives which cover following points:
 Meeting international quality standards
 Forecasting demand and production design
 Profitability
 Minimum production cost
 Adaptation to modern available technology
Nature of IPOM

As IPOM is dynamic in nature, organization has to


design it strategic objectives which cover following
points:
Meeting international quality standards
Forecasting demand and production design
Profitability
Minimum production cost
Adaptation to modern available technology
End of Presentation
Activity

Think of the last time you visited a Shopping Mall (like SM or Ayala
malls). How many different goods and services did you consume as
part of your overall experience? How many of these products were
“pure” goods and “pure” services? Which of these products were
prepared before you ordered them (inventoried), versus being
prepared at the very time that you ordered them?
Name some products that were formerly delivered in tangible forms,
yet through digitization or other means are now delivered intangibly.
Media-based products such as music (CD’s, now files), news
(newspapers, now on-line pages), and event tickets (paper stubs,
now barcodes delivered to your phone) probably come to mind. Can
you think of other physical goods that have been dematerialized into
services?
References
 Swink, M., Melnyk, S.A., and Hartley, L.H. (2020). Managing Operation Across
the Supply Chain. New York: Mc Graw Hill
 Sharma, S. (2018). Total Quality Management Concepts, strategy and
Implementation for Operational Excellence. New Delhi: Sage Publication Inc.
 Oakland, J.S. (2014). Total Quality Management and Operational Excellence
Text with cases 4th Ed.: New York: Routledge
 https://courses.lumenlearning.com/boundless-
business/chapter/introduction-to-operations-management/
 https://bizfluent.com/info-8043238-history-operation-production-
management.html
 https://keydifferences.com/difference-between-production-and-operations-
management.html
 https://www.smartsheet.com/operations-management
 https://www.managementstudyguide.com/production-and-operations-
management.htm

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