Operations and Supply Chain Management Lecture Notes

Instructors

• Rahul Marathe
• Another instructor (unnamed)

Course Overview

• Operations Management: Planning and control in manufacturing and services.
• Supply Chain Management: Addresses planning and control issues across multiple organizations or facilities.

Key Topics Covered

1. Challenges in manufacturing and alternatives to meet these challenges.
2. Forecasting: Need for forecasting and quantitative models.
3. Location Decisions: Quantitative models on location, layout, and cellular manufacturing.
4. Production Decisions: Aggregate production, planning and control, and scheduling.
5. Inventory Models: Deterministic and probabilistic models.
6. Introduction to Supply Chain Management: Importance and value of information, outsourcing, transportation, and information decisions.

Detailed Breakdown

Forecasting

• Importance of forecasting.
• Quantitative forecasting models.

Location Decisions

• Quantitative models for location decisions.
• Layout models and cellular manufacturing.

Production Decisions

• Aggregate production planning and control.
• Scheduling methodologies and their importance.

Inventory Decisions

• Deterministic inventory models.
• Probabilistic inventory models.

Supply Chain Management

• Introduction to SCM and its importance.
• Value of information and outsourcing.
• Transportation decisions.
• Information-based decision-making in SCM.

Challenges in Manufacturing

• Changing Market Conditions: Rapid change from a seller’s market to a buyer’s market.
• Increased Customer Demands: Customers are less patient and more demanding.
• Global Competition: Need to face local and foreign competition.
• Proactive Decisions: Importance of being proactive rather than reactive.
• Increased Customer Focus: Requirement to meet customer expectations to maintain loyalty and business.

Evolution of Customer Requirements

1. Early 1920s: Customers were satisfied with limited options (e.g., only black cars).
2. Availability: Need for high-volume production to meet demands.
3. Price Sensitivity: Focus on reducing costs to provide affordable products.
4. Quality: Emphasis on good quality and after-sale service.
5. Variety: Shift from volume to mid-volume, mid-variety production.
6. Frequent Purchases: Customers buy products more frequently, requiring new product introductions.
7. Lead Times: Need to minimize lead times to meet impatient customer demands.
8. Value for Money: Focus on quality, warranties, and after-sale services.

Requirements of Manufacturing (Skinner, 1985)

1. Variety: Increase in the variety of products.
2. Shorter Lead Times: Frequent purchases with smaller runs and flawless quality.
3. Rate of Return: Improve return on investment through automation and new technologies.
4. Mechanization & Flexibility: Balance between automation and flexibility in scheduling.
5. Employee Satisfaction: Content workforce leads to better products.

Historical Context and Impact

• World War II: Highlighted the importance of resource optimization.
• Operations Research: Emerged to minimize cost and time in processes.
• Computers and Communication: Enhanced cost control and information flow.
• Electronic Commerce: Shift towards online purchasing and home offices.

Manufacturing Evolution

Key Contributors

• Conversion from up and down motion to rotary motion (steam engine).
• Early focus on volume and scale, especially in the steel industry.
• Principles of scientific management and efficiency.
• Development of Gantt charts and time-motion studies.

Methodologies in Manufacturing

Traditional Approaches

• Emphasis on volume and variety.
• Classification into continuous production, mass production, batch production, job shop, and project-based approaches.
• Layouts: Product layout (high volume) and process layout (mid volume, mid variety).

Process Improvement

1. Group Technology/Cellular Manufacturing: Transition from functional to cellular layouts.
2. Just In Time (JIT): Focus on waste elimination and inventory reduction.
3. Flexible Manufacturing Systems (FMS): Emphasis on automation and capacity to handle high volumes and variety.

Human Resources and Processes

• Total Quality Management (TQM): Emphasis on quality and employee empowerment.
• Business Process Reengineering (BPR): Radical changes to improve efficiency.
• Quality Certifications: ISO 9000 and other certifications for quality, environment, and safety.

Information Systems and Decisions

• Materials Requirement Planning (MRP): Inventory reduction and lot sizing.
• Enterprise Resources Planning (ERP): Integration of various organizational processes.
• Supply Chain Management (SCM): Integration of production and distribution processes.

Business Perspectives

• Constraint Management: Identification and management of bottlenecks.
• Agile Manufacturing: Emphasis on flexibility, waste elimination, and customer empowerment.

Goals and Delays in Manufacturing

Delays in Production

• Raw Materials: Delays due to ordering, lead times, transportation, inspection, and issues.
• Work in Process: Delays due to machine availability, changeover times, and in-process inspections.
• Finished Goods: Delays due to assembly, excess inventory, and transportation.

Reducing Delays

• Implementing better purchasing management, production planning, scheduling, quality control, maintenance, and distribution.

Course Outline

• Forecasting: Estimation of demand.
• Production Planning and Disaggregation: Allocation of time and resources.
• Scheduling and Production Control: Managing shifts and production times.
• Quality and Inventory Management: Ensuring high quality and optimal inventory levels.
• Materials Requirement Planning (MRP): Inventory management and lot sizing.
• Maintenance: Ensuring reliability and uptime of machines.

Conclusion

• Next lecture will begin with demand forecasting.