The University of Dar Es Salaam

College of Engineering and Technology

Department of Mechanical & Industrial
Engineering
Course: IE 340 – Engineering Operations
Management I (Semester 1 - 3 Units)

Instructor: Ms. Nnko

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 Course Outline
Objectives:
◦ To impart basic knowledge of operations
managements
Prerequisites:
◦ None
Delivery Mode:
◦ 3 Hours lecture + 1 hour tutorial per
week (60 Hrs per Semester)
Assessment Mode: CA 40% + UE
60%
◦ CA will comprise of series of assignments
& Mid-Test 02/22/2025 2
 References
1) Wild, R, (1980); Production and operations
management : principles and techniques
2) Chary, S.N (2004); Production and operations
management
3) Stevenson, W.J (1999) Production-Operations
management. 6th Edition
4) Buffa, .Modern Production/Operation
management by
5) Victor, M., Mwaluko, G., Industrial and
production management for engineers,
Manuscript.
6) Nigel, S., Stuart, C., & Robert, J.,
Operations Management, Sixth Edition,
2010 02/22/2025 3
 Course Contents
1. Introduction to operations
management;
2. Understanding nature of organisations
3. Facility location
4. Facility layout
5. Capacity Management
6. Quality Management, TQM and ISO
9000 series,
7. Inventory Management
8. Just In Time
9. Materials Requirement Planning.
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…cont…Course contents
11. Operations planning and control
12. Production planning and control
13. Operations improvement methods
14. Work study
15. Business Process Reengineering
16. Benchmarking.

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 1. Introduction to Operations Mgt
This chapter will discuss the following key issues;
1) What is Operations Management?

2) Operations Management is Important in All

Types of Organization
3) The Input–Transformation–Output Process

4) The Process Hierarchy

5) Operations Processes have Different

Characteristics
6) The Activities of Operations Management
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 What is Operations Management?
Operations management is the
activity of managing the resources
which are devoted to the production
and delivery of products and services.
It is one of the core functions of any
business, although it may not be
called operations management in
some industries.
Operations management is concerned
with managing processes, and all
processes have internal customers
and suppliers. But all management
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 Introduction to Operations Mgt
 The operations function is the part of the
organization that is responsible for this activity. Every
organization has an operations function because every
organization produces some type of products and/or
services.
 However, not all types of organization will necessarily
call the operations function by this name.
 Operations managers are the people who have
particular responsibility for managing some, or all, of
the resources which compose the operations function.
 In some organizations the operations manager could be
called by some other name. For example, he or she
might be called the ‘fleet manager’ in a distribution
company, the ‘administrative manager’ in a
hospital, or the ‘store manager’ in a supermarket.
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 Operations in the Organization
 The operations function is central to the organization
because it produces the goods and services which are its
reason for existing, but it is not the only function. It is,
however, one of the three core functions of any
organization. These are:
1) The Marketing (Including Sales) Function – which is responsible
for communicating the organization’s products and services to
its markets
2) The Product /Service Development Function – which is
responsible for creating new and modified products and services
3) The Operations Function – This is responsible for fulfilling
customer requests for service through the production and
delivery of products and services.
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Operations in the Organization

Support Functions
 In addition, there are the support functions
which enable the core functions to operate
effectively. These include:
1)The Accounting & Finance Function–
which provides the information to help
economic decision-making and manages
the financial resources of the organization.
2)The Human Resources Function–which
recruits and develops the organization’s
staff as well as looking after their welfare.
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 1.2 OM is Important in all Types of
Organization
In some types of organization it is
relatively easy to visualize the operations
function and what it does, even if we have
never seen it.
For example, most people have seen
images of automobile assembly. But what
about an advertising agency? We know
vaguely what they do – they produce the
advertisements that we see in magazines
and on television – but what is their
operations function?
The clue lies in the word ‘produce’. Any
business that produces something,
whether tangible or02/22/2025
not, must use 11
1.2 OM is Important in all Types of Organization

 Both the automobile plant and the advertising agency

do have one important element in common: to make
a profit from producing their products or services.
 Yet not-for-profit organizations also use their
resources to produce services, not to make a profit,
but to serve society in some way.
 Operations management is for all types of
organizations, because all use resources to produce
products and or services. Look at the following
examples of what operations management does in
five very different organizations and some common
themes emerge.

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 Operations
management
uses
machines to
efficiently
assemble
products that
satisfy
current
customer
demands

Automobile assembly factory

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 Operations
management
uses
knowledge to
effectively
diagnose
conditions in
order to treat
real and
perceived
Physician(general practitioner) patient
concerns

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 Operations
management
uses people to
effectively
create the
services that
will address
current and
potential
client needs

Management consultant

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 Operations
management
uses our staff’s
knowledge and
experience to
creatively
present ideas
that delight
clients and
address their
real needs
Disaster relief charity

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 Operations
management
uses our
staff’s
knowledge
and
experience to
creatively
present ideas
that delight
clients and
address their
real needs
Advertising agency

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Summary

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1.3 The Input–Transformation–Output Process

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 1.3 The Input–Transformation–Output Process
Transformed Resources
 Materials – operations which process materials could
do so to transform their physical properties (shape or
composition, for example most manufacturing
operations). Other operations, process materials to
change their location (parcel delivery companies-
change the possession of the materials, some
operations store materials, such as in warehouses)
 Information – operations which process information
could do so to transform their informational properties
e.g. Accountants, Some change the possession of the
information, for example market research companies
sell information. Some store the information, for
example archives and libraries. Finally, some
operations, such as telecommunication companies,
change the location of the information
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1.3 The Input–Transformation–Output
Process
 Customers – operations which process customers
might change their physical properties or utility
condition in a similar way to materials processors:
for example, hairdressers or cosmetic surgeons.
Some store (or more politely accommodate)
customers: hotels, for example. Airlines, mass
rapid transport systems and bus companies
transform the location of their customers, while
hospitals transform their physiological state.
Some are concerned with transforming their
psychological state, for example most
entertainment services such as music, theatre,
television, radio and theme parks
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 1.3 The Input–Transformation–Output Process
Transforming Resources
 facilities – the buildings, equipment, plant and process technology
of the operation;
Staff – the people who operate, maintain, plan and manage the
operation. (Note that we use the term ‘staff’ to describe all the
people in the operation, at any level.)
Outputs from the Process
 Usually are physical products and services, the distinctive
difference is in their tangibility, storage life . Products are
usually tangible and have longer life. You can physically touch
a television set or a newspaper. Services are usually
intangible and shorter. You cannot touch consultancy advice
or a haircut, the service of ‘accommodation in a hotel room
for tonight’
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 1.4 The Processes Hierarchy
 The idea to analysing businesses at three levels,
the process, the operation and the supply network.
This idea is called the hierarchy of operations
 But one could define many different ‘levels of
analysis’, moving upwards from small to larger
processes, right up to the huge supply network that
describes a whole industry.
 A supply network is the network of operations with
flow between them.
 An operation is the network of processes with flow
between them
 A process is the network of resources with flow
between them
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1.4 The Processes Hierarchy

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 1.4.1 Operations Management is Relevant to All
Parts Of The Business
 It is not just the operations function that manages processes;
all functions manage processes. For example, the marketing
function will have processes that produce demand forecasts,
advertising campaigns and marketing plans.
 These processes in other functions also need management
using similar principles to those within the operations
function. Each function will have its ‘technical’ knowledge.
 In marketing, the expertise is designing and shaping
marketing plans; in finance, it is the technical knowledge of
financial reporting. Yet each will also have a ‘process
management’ role of producing plans, policies, reports and
services. Because all managers have some responsibility for
managing processes, they are, to some extent, operations
Managers
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 1.4.1 Operations Management is Relevant to All Parts Of
The Business
 It also means that we must distinguish between two meanings of
‘operations’:
 ‘Operations’ as a function, meaning the part of the
organization which produces the products and services for the
organization’s external customers; This is for operational
processes and Operation Managers
 ‘Operations’ as an activity, meaning the management of the
processes within any of the organization’s functions. This is for
non-operational process and Others Managers e.g. Marketing
Managers
 Non-operational processes are processes which do not use
resources to produce products or services but rather processing
them. e.g. distribution, transportation of facilities and people.
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 some examples of processes in non-
operations functions
Organizational Some of its Outputs from its Customer(s) for its function
processes process outputs

Marketing and Planning process Marketing plans Senior management

sales Forecasting process Sales forecasts Sales staff, planners,
operations
Order taking process Confirmed orders Operations, finance

Finance and Budgeting process Budgets Everyone

accounting Capital approval Capital request Senior management,
processes evaluations requesters
Invoicing processes Invoices External custom ers

Human resources Payroll processes Salary statements Employees

management Recruitment processes New hires All other processes
Training processes Trained employees All other processes

Information Systems review process System evaluation All other processes

technology Help desk process Advice All other processes
System implementation Implemented working All other processes
project processes systems and aftercare

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 1.5 Operations Processes have
Different Characteristics
 Although all operations processes are similar in
that they all transform inputs, they do differ in a
number of ways, four of which, known as the four
Vs, are particularly important:
 The volume of their output;
 The variety of their output;
 The variation in the demand for their output;
 The degree of visibility which customers have of
the production of their output.

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 1.5.1 The volume dimension
The main issues under volume dimension are
repeatability of the tasks people are doing and the
systematization of the work where standard
procedures are set down specifying how each part of
the job should be carried out
The higher the volume the low the unit cost and vice
versa.
Examples: a small local cafeteria serving a few
‘short-order’ dishes and high-volume hamburger
production is McDonald’s, which serves millions of
burgers around the world every day
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 1.5.2 The Variety dimension

 The variety dimension is defined by flexibility of

the outputs of products/services.
 Flexibility means the range of products or
services which can be offered.
 The higher the flexibility the higher the unit cost
and the vice versa.
 Example: Transportation services by Tax and
Daladala in dar es salaam.
 The daladala have clear define routines (low
flexibility) while the Tax can take you anywhere
you like (high flexibility)
 The cost per kilometre in daladala is likely to be
much lower compared to Tax. (fixed versus
variable rates)
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 1.5.3 The Variation dimension
 The variation dimension is controlled by ‘demand
patterns’ or fluctuations in customer demands on
outputs of the processes.
 Consider the demand pattern for a successful
summer holiday resort hotel. Not surprisingly, more
customers want to stay in summer vacation times than
in the middle of winter. More operations need more
resources and capacity changes dramatically resulting
to high unit cost to cover low-customer season (winter)
 A hotel which has relatively level demand can plan its
activities well in advance. Staff can be scheduled, food
can be bought and rooms can be cleaned in a routine
and predictable manner. This results in a high
utilization of resources resulting to low unit costs
compared to above
 The higher the variation in demand the higher the unit
cost and the vice versa is true.
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 1.5.4 The visibility dimension

 Visibilitymeans process exposure. Visibility is a slightly

more difficult dimension of operations to envisage
 High-visibility operations require staff with good
customer contact skills. Customers could also
request goods which clearly would not be sold in such
a shop, but because the customers are actually in the
operation they can ask what they like! This is called
high received variety.
 This makes it difficult for high-visibility operations to
achieve high productivity of resources, so they tend to
be relatively high-cost operations, hence have high unit
costs
 Example: a retailer could operate as a high-visibility
‘bricks and mortar’, or a lower-visibility web-based
operation. There is a time lag for the later hence easy
to plan resources and when service is ready the
customer may be notified. This results into low unit
coast for web. 02/22/2025 32
 1.5.5 Mixed high- and low-visibility
processes
 Some operations have both high- and low-visibility
processes within the same operation.
 In an airport, for example: some activities are totally
‘visible’ to its customers such as information desks
answering people’s queries. This staffs operate in
what is termed a front-office environment.
 Other parts of the airport have little, if any,
customer ‘visibility’, such as the baggage handlers.
These rarely-seen staffs perform the vital but low-
contact tasks, in the back-office part of the
operation
 What can you say about examination results
processing at UDSM? (key words: Tests,
Assignments and University examinations)
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The Implications of the Four Vs of Operations
Processes
 Allfour dimensions have implications for the
cost of creating the products or services.
 Put simply, high volume, low variety, low
variation and low customer contact all help to
keep processing costs down.
 Conversely, low volume, high variety, high
variation and high customer contact generally
carry some kind of cost penalty for the
operation, hence making processing cost high.
 As Operational manager, how could you
design organization with low and high
cost product or services?
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A typology of operations

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 1.6 The Activities of Operations Mgt.

 Operations managers have some responsibility for all

the activities in the organization which contribute to
the effective production of products and services.
 The nature of the operations function’s responsibilities
will, depend on the way the organization has chosen
to define the boundaries of the function, there are
some general classes of activities that apply to all
types of operations. These are;
◦ Understanding the operation’s strategic performance
objectives
◦ Designing the operation’s products, services and processes
◦ Developing an operations strategy for the organization
◦ Planning and controlling the operation
◦ Improving the performance of the operation
◦ The social responsibilities of operations management

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1.6.1 The Model of Operations Management

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The End of Introduction to
OM

02/22/2025 38
Assignment Number 1
Develop the typology of operations
of any two organisations of your
choices.
The organisations should be from
within Tanzania.
Explain by comparing their core
functions and conclude whether low
processing or high processing cost.
Work on 5 students, max 3pgs,
provide names, program, reg.no.
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