Lecture 02 - Production and Operations Technology PDF

ETAC – 3124 Production and Operations Technology Ms. Thushani Mallikarathne Lecturer (Probationary), Det. Of Mechanical & Manufacturing Technology, Faculty of Technology, Contact: thu...

ETAC – 3124 Production and Operations Technology Ms. Thushani Mallikarathne Lecturer (Probationary), Det. Of Mechanical & Manufacturing Technology, Faculty of Technology, Contact: [email protected] | 0712339770 Wayamba University of Sri Lanka  Course Content  Evolution and Trends  Challenges and Opportunities  Strategic Management Planning  Importance  Process overview  Case studies 2 Evolution of wheel from ancient time to now 3  Evolution Evolution in the context of P/O management refers to the gradual development and advancement of theories, practices, and technologies over time. It encompasses the changes and improvements made from early craft production methods to modern automated digitalized manufacturing systems Key points, Historical Development – traces the progression from manual, craft to mechanized and mass production Technological Advancements – Adaption of new technologies during the Industrial Revolution, assembly lines, and modern automation Management theories- Development of management practices and theories 4  Trends Trends in P/O management refer to the current directions and emerging practices that are shaping the field. These trends are driven by technological advancements, changing consumer demands, and global economic factors. Key points, Digital Transformation- The integration of digital technologies, such as Industry 4.0, the Internet of Things (IoT), and smart factories. Sustainability- Emphasis on eco-friendly and sustainable production practices, such as the circular economy and green operations. Customization and Personalization- Shift towards mass customization, allowing for personalized products while maintaining efficiency. Artificial Intelligence and Automation- Increasing use of AI, machine learning, and robotics to enhance production processes and decision-making. 5  Historical Evolution Early Developments Craft Production – Before the Industrial Revolution, products were made by skilled artisans who crafted items by hand. This method was slow and produced limited quantities. Industrial Revolution The late 18th and early 19th centuries saw the introduction of machinery and mass production techniques, significantly increasing production capacity and efficiency 6  Activity 1 Compare the evolution of Early Developments and Industrial Revelation Aspect Early Developments Industrial Revelation Time Period Production method Labor Scale of Production Technology Efficiency Management Style Quality Control Economic Impact Supply chain Examples 7  Mid – 20 th Century Developments Operations research (OR) World War II – The need for efficient resource allocation and logistics during the war led to the development of OR, using mathematical models to optimize decision-making Total Quality Management (TQM) W. Edwards Deming and Joseph Juran introduced principles focusing on continuous improvement and quality in the production process. TQM emphasizes customer satisfaction, reducing defects, and involving all employees in the quality improvement process. 8  Late – 20th Century Developments Lean manufacturing It focuses on minimizing waste (non-value-adding activities) and improving efficiency. Just-in-time production is a key component, ensuring materials arrive exactly when needed. EX: Toyota Production System Six Sigma A data-driven approach to improve quality by reducing defects and variability. It uses the DMAIC ( Define, Measure, Analyze, Improve, Control) methodology to identify and eliminate causes of defects. Ex: Motorola 9  Activity 2 Compare the concepts of Lean Manufacturing and Six Sigma Aspect Lean Manufacturing Six Sigma Origin Focus Primary Goal Methodology Scope 10  Current Trends Digital Transformation  Industry 4.0 – Integration of digital technologies into manufacturing, creating smart factories with cyber- physical systems  IoT – The Internet of Things allows for real-time data collection and analysis, improving decision-making and efficiency  Smart Factories utilize automation, robotics, and interconnected systems to streamline production and enhance flexibility. Sustainability and Green Operations  Eco-friendly practices – companies are adopting sustainable practices to reduce their carbon footprint, such as using renewable energy and minimizing waste.  Circular Economy – This focuses on recycling and reusing materials to create a closed-loop system, reducing waste and conserving resources 11  Future Trends Artificial Intelligence and Machine Learning Predictive Analysis – Ai can analyze data to predict maintenance needs, optimize supply chains, and improve production processes. Autonomous System – Robotics and AI can automate complex tasks, reducing the need for human intervention and increasing efficiency Customization and Personalization Mass customization – this strategy combines the efficiency of mass production with the flexibility to customize products to individual customer preferences 12 Case study 1 – Toyota Production Systems Lean Principles Toyota's lean manufacturing focuses on reducing waste and improving efficiency. Waste Reduction, Key principles include reducing defects and eliminating non- value-adding activities. Impact Led to significant cost savings and productivity gains. 13 Case study 2 – Motorola & GE and Six Sigma Implementation of Six Sigma GE implemented Six Sigma to improve quality and reduce defects across its operations. DMAIC The structured approach of Define, Measure, Analyze, Improve, and Control was used to identify and eliminate sources of variability and defects. Impact GE realized substantial cost reductions through improved quality and efficiency. The focus on quality improvement led to higher customer satisfaction and loyalty. 14  Case study 3 – Tesla and Automation Use of Robotics and AI Tesla's manufacturing process heavily relies on automation and AI to enhance production efficiency and quality. Tesla is a leader in the production of electric vehicles, utilizing advanced technologies in its manufacturing processes. Impact Automation has allowed Tesla to scale up production and maintain high-quality standards. Tesla's approach has set new standards for innovation and technology integration in the automotive sector. 15  Challenges Managing Technological Change- Rapid advancements in technology require continuous adaptation and investment. Workforce Adaptation- Employees need to be trained and upskilled to work with new technologies and processes. Opportunities Enhanced Productivity- Technology and innovation can lead to significant productivity gains and cost savings. New Business Models- Digital transformation and sustainability trends open up opportunities for new business models and revenue streams. 16  Strategic Management Process Alfred Chandler defined strategy as, “the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” William F. Glueck defined strategy as, “a unified, comprehensive, and integrated plan designed to ensure that the basic objectives of the enterprise are achieved.” 17  Strategic Planning Strategic management is the ongoing planning, monitoring, analysis, and assessment of all necessities an organization needs to meet its goals and objectives. It involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization. Two main types, 1. Usual (Deliberate) Planning and 2. Serendipitous (Emergent) Planning 18  Usual (Deliberate) Planning A structured, systematic approach to strategy formulation and implementation. Characteristics,  Long-term focus through market analysis and forecasting  Detailed plans based on data and trends Customer Market Relationship,  Proactively understand customer needs through market research  Use customer feedback to shape long-term strategic goals Surveys, focus groups, and trend analysis, forecasting customer behavior and market trends 19  Serendipitous (Emergent) Planning A flexible, adaptive approach to strategy that evolves over time. Characteristics,  Short-term focus and high adaptability  Responsive to unexpected market changes Strategies emerge from real- time decisions Customer Market Relationship,  Constantly monitor customer behavior and preferences  Quickly adapt strategies based on immediate customer feedback Social media, customer reviews, and direct interactions, 20  Activity 3 Compare and Contrast the two types of strategy planning methods Aspect Usual Emergent Flexibility Focus Decision making Feedback Source Feedback Frequency Response time 21  Case study 1 – Amazon Amazon exemplifies a balanced approach to strategic management by seamlessly integrating deliberate and emergent planning. 1. Usual Planning- Amazon's long-term vision to be the "Earth's most customer-centric company. 2. Serendipitous Planning- Adapting to market trends, such as launching Amazon Web Services (AWS) in response to emerging tech needs Successful integration of deliberate and emergent strategies leading to diversified growth. 22  Importance of Strategic Management  Provides direction and scope for the organization.  Helps in achieving organizational goals efficiently.  Improves organizational performance.  Enables the organization to be proactive rather than reactive.  Helps in managing change effectively 23 Process Overview of Strategic Management The strategic management process is a continuous cycle of planning, analysis, implementation, and evaluation that helps an organization achieve its goals. Goal Setting Analysis Strategy Formulation Strategy Evolution and control Implementation 24  Goal Setting Establishing clear, specific, and achievable objectives that provide direction and a basis for measuring success. 1. Define the Vision and Mission Vision: A long-term aspiration that outlines what the organization aims to become. Mission: A statement that defines the organization’s purpose, core values, and primary objectives. 2. Set Specific Objectives Establish both long-term and short-term goals. Ensure goals are SMART (Specific, Measurable, Achievable, Relevant, Time-bound). 3. Communicate Goals Ensure that all stakeholders understand and align with the organizational goals. Use clear and consistent messaging to disseminate goals throughout the organization. 4. Example  Increasing market share by 10% within the next year.  Launching a new product line within the next two years. 25  Analysis Conducting a thorough analysis of both internal and external environments to identify strengths, weaknesses, opportunities, and threats. 1. Internal Analysis SWOT Analysis: Assess internal strengths and weaknesses, and external opportunities and threats. Resource Audit: Evaluate tangible and intangible resources, including human resources, financial assets, and technology. Core Competencies: Identify unique capabilities that provide a competitive advantage. 2. External Analysis PESTEL Analysis: Examine external factors (Political, Economic, Social, Technological, Environmental, Legal) that impact the organization. Porter's Five Forces: Analyze the industry environment, focusing on competitive rivalry, threat of new entrants, threat of substitutes, bargaining power of suppliers, and bargaining power of customers. 3. Examples  Identifying a technological advancement that can be leveraged to gain a competitive edge.  Recognizing a potential regulatory change that may affect operations. 26  Activity 4 Please prepare a small SWOT analysis for yourself related to your technology learning stance. This analysis should cover your personal strengths, weaknesses, opportunities, and threats in the context of your technology skills and knowledge. 27  Strategy Formulation Developing strategies that leverage strengths and opportunities while mitigating weaknesses and threats. Levels of Strategy 1. Corporate-Level Strategy: Decisions about the overall scope and direction of the organization. 2. Business-Level Strategy: How to compete successfully in particular areas 3. Functional-Level Strategy: How different functions (e.g., marketing, finance, operations) support the overall strategy. Process  Define strategic options.  Evaluate and select the most appropriate strategies.  Ensure alignment with organizational goals and capabilities. Examples  Expanding into new geographic markets to increase reach and revenue. 28  Strategy Implementation Translating strategic plans into actionable activities and ensuring that these activities are executed effectively. 1. Resource Allocation -Distribute necessary resources (financial, human, technological) to execute the strategy. 2. Develop Organizational Structure- Design an organizational structure that supports strategy implementation. ( Creating new departments, redefining roles and responsibilities) 3. Communicate Strategy- Ensure that the strategy is understood and embraced across the organization. (training sessions, workshops, and regular updates.) 4. Monitor Progress- Track implementation activities and make adjustments as needed. (Project management tools and performance metrics) Examples  Launching a new marketing campaign to support a product differentiation strategy.  Implementing new technology systems to improve operational efficiency. 29  Evolution and Control Monitoring and assessing the performance of implemented strategies to ensure they achieve the desired outcomes. 1. Establish Performance Metrics- Define key performance indicators (KPIs) to measure success (Sales growth, market share, customer satisfaction) 2. Regular Review and Analysis- Conduct periodic reviews to assess progress. (data analysis to identify areas of success and areas needing improvement) 3. Compare Performance Against Objectives- Evaluate whether the strategic goals are being achieved. Identify gaps between actual and expected performance. 4. Adjust Strategies and Plans- Make necessary adjustments to strategies based on evaluation results. Ensure continuous improvement and alignment with changing conditions. Examples  Conducting quarterly performance reviews to track sales growth.  Adjusting marketing strategies based on customer feedback and market trends. 30  Case Studies for Strategic Management Stage Apple Inc. Zara L'Oréal Innovation in technology, Fast-fashion leadership, Beauty innovation, Goal Setting global market leadership sustainability sustainability Expansion in emerging SMART goals for revenue SMART goals for markets, sustainable and market expansion sustainability and growth practices Analysis SWOT, PESTEL analysis SWOT, PESTEL analysis SWOT, PESTEL analysis Internal strengths (brand, Internal strengths (fast Internal strengths (brand innovation), external supply chain), external portfolio), external opportunities opportunities opportunities Diversification, premium Agile supply chain, fast- Sustainability, premium Strategy Formulation pricing fashion leadership and accessible pricing Research-driven, Market differentiation, Responsive to trends, fast personalized beauty product innovation production cycles solutions 31  Case Studies for Strategic Management R&D investment, cross- Sustainability initiatives, R&D for sustainability, Strategy Implementation functional teams cross-functional teams organizational structure Agile manufacturing, Fast production cycles, Sustainability practices, retail expansion online expansion digital engagement KPIs (sales growth, market KPIs (revenue, customer KPIs (sales growth, Evaluation and Control share), sustainability satisfaction) sustainability metrics) metrics Quarterly financial Quarterly financial Quarterly sustainability reviews, customer reviews, consumer reports, consumer feedback insights feedback Adaptation to market Iterative improvements, Product formulation, Adjustments Made trends, operational market responsiveness consumer engagemen adjustments 32 Lessons From History Journey of the P/O system 33 Thank You! 34