Page 22 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 1: Operations Management Basics

In fast paced business settings, since operations managers are amongst those closest to the Notes
customer, they can provide quick feedback to the strategic planning process regarding the
changes in the market. Good operations managers are expected to manage existing business
processes while helping get the firm ready for the future.

Task Take a hospital, say Apollo Hospital, and explain the conversions taking place.
What are the hospital’s overall objectives of the operations systems and how does the
hospital achieve it.

Self Assessment

Fill in the blanks:
10. The primary role of the operations manager is to accomplish the ……………….mission as
best as possible.
11. ……………..decisions refer to the ‘hardware’ of organizations.
12. Infrastructural decisions are the …………….of operations.



Caselet New United Motor Manufacturing (NUMMI)

stablished in 1984 as a joint venture between General Motors Corp. and Toyota,
New United Motor Manufacturing (NUMMI) took over the former General Motors
Eplant. The plant, on 211 acres east of Interstate 880 and south of Fremont Boulevard,
occupies about 5.3 million square feet. This was a 50-50 joint venture that produced Toyota
Corollas and Chevrolet Novas.

Toyota’s secrets aren’t secret. Its production system, which stresses eliminating all wasted
material and labour, has been written about in excruciating detail. NUMMI is proof of
this. The plant, which had operated from 1963 to 1981, had been closed down as it was
plagued by labour disputes. Toyota turned the plant around extra quick. They hired the
best of the former workers and created teams of multi-skilled workers. Absenteeism
dropped to less than 2 per cent compared to 20 per cent under the old management.
Productivity at the plant rose to twice the average level at other GM plants. The Toyota
managers achieved this improvement by focusing on five areas:
1. New products were designed for easy assembly and easy modification.
2. Production layout was organized by product needs.

3. Production flow was managed with little or no inventory.
4. Workers shared responsibility for quality.
5. Employees were encouraged to participate in nearly all decisions.
The system improvements did not come from technology investment; it was transformed
by how the managers were able to integrate the different elements into a coherent
operations strategy. Even without much automation, each worker was producing 63 cars
a year by 1989, more than any other US plant and 40 per cent above the average at that
time.

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