Modern Tools and Recent Trends in Operations Management

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operation management
operation management

The management of an organization continuously endeavors to find ways and means to bring about further improvements in its manufacturing processes, so that the productivity may be increased. Enhancement in productivity can be ensured either by producing more with the same level of available resources or maintaining the same production level with the lesser resources. The objective is to bring down the level of resource utilization, and reduction in the wastages. A number of tools and techniques are applied to achieve this objective, e.g. Total Quality Management (TQM), Total Preventive Maintenance (TPM), Economic Order Quantity (EOQ), MRP II, supplier integration, team-working, empowerment, behavior, delivery techniques, product innovation, system design, Just-in-Time, etc. The appropriate tools and techniques facilitate overall progress in the area of productivity, service, quality, etc., which ultimately leads to higher customer satisfaction.

operation management

Modern Tools and Recent Trends in Operations Management

In our country, the tendencies in the manufacturing sector may be described in the following points:

1) Global Focus:

Today’s world is termed as a global village due to the lowering of communication and transportation costs which has facilitated the free movement of goods and services across the national boundaries. The evolvement of the global market has simultaneously resulted in resources such as capital, material, talent, labor, etc., and also becoming global. Countries of this new global order aspire for their economic growth coupled with industrial development. All these phenomena pose a major challenge before the operation managers who are expected to meet the challenge through innovative ideas and out-of-the-box thinking which facilitate the processes pertaining to production, marketing, research & development, etc.

2) Lean Manufacturing:

Lean manufacturing techniques remove the difficulties encountered during the management of the supply chain. It is inclusive of manufacturing processes (push scheduling in particular) as well, and use out-dated planning and execution practices resulting in wrong outcomes. It acknowledges the fact that priorities under the manufacturing operations keep on changing frequently, the demands for the product not being in simultaneous with forecasts, delays in deliveries from suppliers, issues pertaining to product specification, capacity disparities, disruptions in material flow, unrealistic practices in relation to the introduction of a new product, long cycle times and the support systems, not in tune with the changing times. However, one of the striking features of the lean philosophy is that it lays emphasis on correcting the manufacturing processes, whether external or internal to the manufacturing process.

3) Just-In-Time (JIT):

It is a management concept, which was originated in Japan and applied in production processes. It involves the following elements: i) Right items. ii) Right quality and quantity. iii) Right place. iv) Right time. From the above, ‘Just In Time’ may be defined as the “philosophy that focuses attention on eliminating waste by purchasing or manufacturing just enough of the right items just in time”. It is also referred to as JIT — hand to mouth approach to production. It ensures that during the assembly process of a product, its quality components arrive at the appropriate quantity at an appropriate time (without any delay or early arrival). The objective of JIT is to focus on small quantity, repetitive process with only one unit of work-in-process (WIP) at a time, and almost no inventories of finished goods.

4) Group Technology or Cellular Manufacturing:

The underlying principle of Group Technology (GT) is that most of the problems faced during the manufacturing exercise have a lot of similarities, and if they are assembled together, a common or single solution which is time and effort saver and is possible to find out. Under this concept, there is a grouping of various parts having similar geometry, manufacturing processes, and functions, with a view to having better assimilation between the designs and manufacturing functions of an organization. A group comprising of similar components is termed as ‘Machine Cell’.

In this connection, it is possible, although not necessary, for every component of a part family to undergo a process by each machine of a corresponding machine cell. The manufacturing, which involves the production of a part family by a machine cell is known as Cellular Manufacturing. Group Technology facilitates the enhancement of manufacturing efficiency, which is due to the fact that the requisite operations take place only in a small cell, and as such transportation of in-process parts is eliminated.

5) World Class Manufacturing:

The essential of the new pattern of production is world-class manufacturing lies in the fact that logistics are framed in a manner so as to make things adaptable. There is a lot of difference from the traditional system of mass-production. In order to fulfill the demand of the versatile and ever-changing market, production is carried out in small batches. Management of inventories is done on the principles of JIT, and the flow of production through the entire plant takes place as a single unit (and not in the form of large batches). The pace of machine changeover is normally very fast, and the machines used are characterized by their simplicity and flexibility.

6) Mass Customization:

The term and concept of mass-customization were first used by the author Alvin Taller in his famous book ‘Future Shock’. It was subsequently described in detail by Davis in his book `Future Perfect’, according to which the concept of mass customization is different from mass-production. However, the implications of mass-customization vary according to the varying products and sectors. The methodology used and procedural aspects pertaining to mass-customization also differ for different products and sectors. While some products may be customized at the level of retail outlet or dealer (post-production customization), others may be customized at the end-users’ level. For example, the r’ system available in some new models of cars, which enable the vehicle to adapt to the driving pattern of the vehicle owners.

Mass customization may further be characterized by the low-cost production of goods and services promptly which is capable of meeting the customers’ expectations in a speedy manner. It is the thing in vogue almost replacing mass-production, which has lost its relevance in the present-day content characterized by volatility, growing product variety, and expanding opportunities for e-commerce. Mass: customization is capable of meeting all the challenges posed by the present-day market may be its product variety, the volatility of the market, or selling various products either over the counter or through the internet.

7) Re-Engineering:

The concept of ‘Division of Labour’ propagated by Adam Smith, which was relevant during those times, is no longer relevant in today’s business world and market. The business processes are undergoing lots of changes in the form of their re-engineering. By the operation managers, we have substantial improvements in various measures of performance, viz. costs, quality, speed, seniors, etc. Re-engineering essentially predicts reorganizing various business processes de-novo in a systematic manner. Once the fragmented processes after reorganization reappear as integrated processes, the role of bureaucracy starts declining. Fragmented processes and bureaucracy go hand in hand and if one is eliminated, the other cannot exist.

8) Supply Chain Initiatives:

Information Technology plays a crucial role in simplifying the various business processes. Today the manufacturers arc in a position to keep a track of orders on a mal-time basis which enables them to match production level with the market demand. Inventory management has become more efficient with better coordination between inventory replenishment with upstream and downstream supply chain partners. Electronic Data Interchange (ED1), Efficient Consumer Response (ECR), and Vendor Managed Inventory (VMI) are some of the common tools used in this regard. EDI: It allows direct transmission of orders, invoices, and payments through computers; ECR: It envisages logistic planning for linking suppliers and distributors, which facilitates product innovation, their promotion, and replenishment by using information pertaining to Point of Sale (PoS); VMI: It enables the suppliers (and also make them responsible) to manage the inventories of customers. There are some sub-categories of VMI, viz. Retail Managed Inventories (RMI), Jointly Managed Inventories (JMI), and consignment selling.

9) Kanban System:

It is a production control system that is related to lean manufacturing and Just-in-Time (JIT) production. It ensures production with smaller inventories. The term Kanban is a Japanese term, which means “virtual record” (Kan means “virtual” and Ban means “card or board”). It is a common word in Japan, meaning “signboard, or billboard”. Kanban, over a period of time, has become a powerful tool to facilitate the operations of the production system in a holistic manner. Further, it has also been used efficiently to promote improvements as problem areas are underlined by the reduction in the number of Kanbans.

10) Toyota System:

This system, also referred to as the Toyota Production System (TPS), was developed by Toyota. It is an integrated socio-technical system consisting of management philosophy and practices of Toyota. This system is used by automobile manufacturers for various purposes pertaining to manufacturing and logistic aspects, especially interaction with suppliers and customers. The TPS is characterized by the following objectives: i) Design out overburden (muri); ii) Design out inconsistency (mum); and iii) Eradication of waste (muda).

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