Production & Operations Management

Outline
• Production and Operations
• Systems Approach to P/OM
• Modeling Production Systems
• Course Topics
Production and Operations
Management
Richard S. Barr

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P/OM
• Production management
– Historically associated with manufacturing
• Operations management
– Emphasis on services applications

Production and Operations • P/OM

– The fields have merged
– Common approaches to managing the creation
of products & services
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Objective of P/OM Production Manager’s Job

• The efficient creation of quality goods and • Planning • Organizing
services – Capacity – Degree of centralization
– Location – Subcontracting
– Products and services
• Staffing
• Is accomplished by designing and – Make or buy
– Hiring/laying off
– Layout
optimizing production facilities and – Projects – Use of overtime
processes – Scheduling • Directing
• Controlling – Incentive plans
– Inventory – Issuance of work orders
– Quality – Job assignments

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Production & Operations Management

What is a System?
• A collection of related parts forming an
integrated whole
• Examples:
– Information system
– Transportation system
Systems Approach to P/OM – Educational system
– Marketing system
– Production system
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Elements of a System Example: A Car

• The parts or elements of a system should be
designed to work together to achieve the
overall system goal
– Systems have objectives
– Better systems achieve those objectives
efficiently
– The best systems optimize the elements and
their interactions
• A car is a transportation system with:
– Power-transmission system: for movement
– Braking system: to retard movement
– Steering system: for guidance
• All subsystems work together to achieve the
car’s objectives

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Businesses as Systems Business Subsystems

A business is a system with a set of goals • Component subsystems include:
– Production system — to create goods and
services
– Marketing system — to sell goods and services
Business produced
– Financial system — to manage funding

Production Marketing Finance

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Production & Operations Management

Optimizing Systems Optimizing Systems

• Optimizing the individual components • For the best overall
– Production system: system solution
• Create only one product/service – Make several
products/services Production
• Specialize process for optimal production
– Neither subsystem is
– Marketing system: optimized in isolation
• Sell many products and services – The overall organization
• Satisfy all customer demands to maximize revenues benefits Marketing Finance
generated • Optimize globally, not
locally

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Six Elements of Systems

• Objectives
• Constraints
• Inputs
• Outputs
Elements of Organizational
• Processing
Systems • Control

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1. Objectives 2. Constraints
• Goals of a business? • Limits on possible
actions
• Other tempering
objectives: • Some come from other
entities in the
• For measuring and operating environment,
evaluating a system such as:
• May be undefined or
unstated

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Example Constraints System as Transformer

• Legal • A system can be
viewed as a
Inputs Outputs
• Financial transformer
• Processing “inputs”
• Labor into “outputs”
• Inputs are resources Processing

• Technology used to create the

performance/quality
outputs

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3. Inputs 4. Outputs
• Those resources used • Business examples: • That which is to be • Examples:
produced
to create system
• Usually contribute to
outputs achieving objectives

System System

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5. Processing Food Manufacturing System

• Manipulation of the
inputs to achieve the Inputs Processing Outputs
outputs Raw Vegetables Cleaning Canned vegetables
Metal Sheets Making cans
• How work is
Water Cutting
accomplished
Energy Cooking
• How value is added Processing
Labor Packing
Building Labeling
Equipment

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Hospital Service System Types of Processing

• Three basic processing arrangements:
Inputs Processing Outputs – Project: one-time piece of work
Doctors, nurses Examination Healthy patients • Construction, political convention
Hospital Surgery
Medical Supplies Monitoring
– Flow-shop: highly repetitive, continuous process
Equipment Medication • Auto & paper production, directory assistance
Laboratories Therapy – Job-shop: small batches of large variety
• Machine shop, hospital, restaurant
• Each covered in detail later in course

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6. Monitoring and Control Example System Controls

• Control: the ability to regulate the operation • Information and
of the system computer systems:
• Purposes:
• Air transportation
– Insure accuracy by detecting errors systems:
– Prevent system misuse or destruction
– Direct the system toward its objectives • Production systems:

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Value Added
= the difference between the cost of inputs and
the value or price of outputs.

Value added
Inputs:
Land
Transformation/
Conversion
Outputs:
Goods
Modeling Production &
Labor
Capital
Process Services Operations Systems
Feedback

Control
Feedback Feedback 30

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Models Production/Operations Models

• Simplified representations of reality • Systems Planning • Projects
– Useful model: accurate enough – Forecasting – CPM, Pert
– Decision analysis – Resource constraints
• Many types of system models: – Linear programming • Job Shop
– Physical: wind-tunnel – Network flow – Aggregate scheduling
– Schematic: blueprints, road maps – Facility location – Sequencing and
– Mathematical: spreadsheets, simulation, – Facility layout scheduling
optimization (variables, equations, program)

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Production/Operations Models
• Flow-shop: • Control
– Line balancing – Quality control
– Queuing – Inventory control
– Simulation – MRP
• Process Improvement – Just-in-time
– Total quality
management
– Cycle-time reduction

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