Tuesday, 8 December 2015

Intorduction - Operation Management

Operations Management is responsible for creating value in the form of goods and services. The objective of operations management is to balance supply with demand. Operations Management works in conjunction with both finance and marketing. An operation is the act of converting inputs into outputs. It is concerned with value-added, which is the difference between the cost of inputs and the value or the price of outputs.

The Scope of Operations Management

Operations management is used in producing goods or services. Systems design deals with the layout of facilities. An example is what equipment is necessary to produce a certain capacity. Purchasing involves buying the materials or equipment, managers need evaluate the quality of materials and equipment. Overlooking poor quality of materials can delay project completion and add costs, due to reworking and overtime pay. Industrial engineering handles variances. The methods used to make the products and the product should be uniform and up to standards. Operations managers need to make sure distribution of goods are sent out to their final locations in a timely manner. Maintenance is responsible for keeping the facility running. This may include disposing of scrap, lubing up machines, or keeping security on premises to reduce theft. Operations management can have any number of responsibilities, ranging from product and service design, to making sure machines are operating correctly. Operations management is also responsible for forecasting, capacity planning, scheduling , managing inventories, assuring quality, motivating employees, deciding where to locate facilities and many more issues to help run the organization efficiently and effectively.

Process Management

Process management is essential to operations management, and is the central role of all management roles. Process management transforms inputs into outputs . In addition, a business process is composed of three categories: Upper-management processes, Operational processes, and Supporting processes. A major business process may consist of any sub-processes, and each one of them have their own goals that contribute to the overall process. Business processes form a sequence of suppliers and customers. Managers establish the amount of capacity of a process needed to meet demand.

Supply Chains

A supply chain is a sequence of activities and organizations having some role in providing a product to a customer. Supply chains typically link many different facilities and activities as raw materials are secured, work-in-process is finished, and final output is distributed. Supply chain management integrates the activities of these differing operations, addressing issues such as forecasting, purchasing and logistics. A simple product supply chain consists of suppliers, direct suppliers, producers, distributors, and final customers. Supply chain management also can include partners outside the firm when goods and services are outsourced. Outsourcing has many risks and benefits that must be explored before a company decides to outsource part of its operations. Valued-added is the difference between the cost of inputs and the value or price of outputs. Therefore, a higher value-added is beneficial for a company.

Current Issues

Managers must contend with ever changing globalization, quality and process improvement, the management of technology, and agility. Three issues that have a major impact are supply chain management, e-commerce, and the Internet.

Key Trends and Issues in Business

The environment constantly changes so organizations need to adapt and change as their environment does. Globalization and new technologies have stimulated changes in organizations. This varies from how they communicate with other organizations to the manner in which they penetrate other country's markets. The Internet is a great tool that many choose to use as an advantage. E-business is the use of the Internet for business transactions, and e-commerce is consumer-to-business transactions. Three technologies that can have major impacts on costs, productivity and competitiveness are: 1) product and service technology, 2) process technology, and 3) information technology. Information Technology is very important because it is the manner in which businesses store, process, and send information.

Basic Functional Areas

Business organizations typically have three basic functional areas: finance, marketing, and operations. Finance is responsible for securing financial resources at favorable prices and allocating those resources throughout the organization; this includes budgeting, analyzing investment proposals, and providing funds for operations. Marketing and operations are the primary or "line" functions. Marketing is responsible for assessing consumer wants and needs, and selling/promoting the organization's goods or services. Operations is responsible for producing the goods or providing the services offered by the organization.

Goods and Services

Goods are referred to as physical (tangible) products, such as computers or bicycles because you can touch them. Services are abstract and they are actions that are provided by people, like healthcare and education. More interaction with customers is required by the service side. There are more variables involved in services than there are in goods. Goods are usually manufactured under specific conditions, and services have a wide range of possibilities. Services, such as, haircuts, gym training, and product troubleshooting are always different depending on the customer, which makes it harder to tend to the customers' needs. Operations run smoother while manufacturing goods, as opposed to services. Because of this, it is harder to measure how productive employees are in the service department. The value of a good is not realized as fast as a service is. There is a time gap between the production aReferencend the sale of a good, where as the value of a service is usually realized soon after. Various companies patent certain goods so that competitors cannot replicate their product. Unfortunately, services cannot be patented, which cause other companies to imitate companies with the best services.

Other Important Trends

Companies have switched from ignoring operations strategy to recognizing the importance of incorporating strategies into their business decisions. Companies have reduced the number of workers and have made their companies operate more efficiently by placing an emphasis on cost control and productivity improvement. Companies use revenue management to manipulate prices and influence demand to maximize revenues. Hotels, theme parks and airliners are key examples of companies using revenue management to their benefit. Six sigma is a process of reducing costs, improving quality, and increasing customer satisfaction. Lean production was first incorporated into businesses in the 1990's in an effort to make production more efficient. It uses a highly skilled workforce and flexible equipment to accomplish an increasing level of quality with less resources compared to mass production which uses space, inventory, and workers to produce a comparable amount of output. These workers have higher expectations than in traditional systems. This also leads to more anxiety and stress among workers in the organization.

Reference : http://ids355.wikispaces.com/

Thursday, 3 December 2015

List of Six Sigma companies

The following companies claim to have successfully implemented Six Sigma in India

1. GE
7. LG

Wednesday, 14 October 2015


Yellow Belt Certification Overview

Six Sigma Yellow Belt certification provides an overall insight into the techniques of Six Sigma, its metrics, and basic improvement methodologies. we will learn how to integrate Six Sigma methodologies for the improvement of production and transactional systems, in order to better meet customer expectations and bottom-line objectives of their organization. we can explore to introduction to process management and the basic tools of Six Sigma, It gives stronger understanding of processes, enabling each individual to provide meaningful assistance in achieving an organization’s overall objectives.

Green Belt Certification Overview

A Six Sigma Green Belt serves as a specially trained team member within his or her function-specific area of an organization. This focus allows a Green Belt to work on small, carefully defined Six Sigma projects, requiring less time than a Black Belt’s full-time commitment to Six Sigma throughout an organization. Six Sigma Online’s Green Belt Training provides participants with enhanced problem-solving skills, including an emphasis on the DMAIC (Define, Measure, Analyze, Improve and Control) model.

The Green Belt has two primary tasks: first, to help successfully deploy Six Sigma techniques, and second, to lead small-scale improvement projects within their respective areas.

Lean/DFSS (Green Belt Level) Certification Overview

Lean & Six Sigma

The Lean approach systematically reduces waste in the value stream. It not only aims to limit effective products, but all types of defective work. It identifies defects, overproduction, excess inventories, unnecessary processing, unnecessary movement of people, unnecessary transport of goods, waiting, and designing goods and services that don't meet customer's needs.

Design for Six Sigma (DFSS)

Companies that implement a Six Sigma program find that a majority of defects are actually created during the design process. As companies' processes begin to exceed Five Sigma, they typically hit a "wall" that requires a redesign of some or all of the processes. This process of redesign is called Design For Six Sigma (DFSS). DFSS is a rigorous approach to designing products and services as well as enabling processes from the very beginning to ensure that they produce Six Sigma-quality products and services, meeting customer expectations

Lean Black Belt Certification / Black Belt Certification Overview

It thorough knowledge of Six Sigma philosophies and principles (including supporting systems and tools). A certified Lean Six Sigma Black Belt exhibits team leadership, understands team dynamics, and assigns their team members with roles and responsibilities. They have a complete understanding of the DMAIC model in accordance with the Six Sigma principles, have a basic knowledge of lean enterprise concepts, and they can quickly identify “non-value-added” activities.

Friday, 2 October 2015

Operations management is an area of management concerned with overseeing, designing, and controlling the process of production and redesigning business operations in the production of goods or services


The history of production and operation systems began around 5000 B.C. when Sumerian priests developed the ancient system of recording inventories, loans, taxes, and business transactions. The next major historical application of operation systems occurred in 4000 B.C. It was during this time that the Egyptians started using planning, organization, and control in large projects such as the construction of the pyramids. By 1100 B.C., labour was being specialized in China; by about 370 B.C., Xenophon described the advantages of dividing the various operations necessary for the production of shoes among different individuals in ancient Greece.

Recent trends in the field revolve around concepts such as:
  • Business Process Re-engineering (launched by Michael Hammer in 1993): a business management strategy focusing on the analysis and design of workflows and business processes within an organization. BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their business processes.
  • Lean Manufacturing: a systemic method for the elimination of waste within a manufacturing process. Lean also takes into account waste created through overburden and waste created through unevenness in work loads.The term lean manufacturing was coined in the book The Machine that Changed the World.
  • Six Sigma (an approach to quality developed at Motorola between 1985-1987): Six Sigma refers to control limits placed at six (6) standard deviations from the mean of a normal distribution, this became very famous after Jack Welch of General Electric launched a company-wide initiative in 1995 to adopt this set of methods. More recently, Six Sigma has included DMAIC (an abbreviation for Define, Measure, Analyze, Improve and Control) for improving processes and DFSS-Design for Six Sigma  (for designing new products and new processes)
  • Reconfigurable Manufacturing Systems: a production system designed at the outset for rapid change in its structure, as well as its hardware and software components, in order to quickly adjust its production capacity and functionality within a part family in response to sudden market changes or intrinsic system change.