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PRODUCTION AND OPERATIONS MANAGEMENT

INTRODUCTION
This course gives you an introduction to, the functional area of production and operations management as, practiced in manufacturing industries and the services sector. It includes : Nature & Scope of Production & Operation Mgmt, Facility location, Types of Manufacturing Systems & layouts, Layout Planning & Analysis

Material Handling, Production Planning & Control Capacity Planning Aggregate Planning, Work study Method Study Work Measurement Etc

Production and operations management (POM) is the management of an organizations production system. A production system takes inputs and converts them into outputs. The conversion process is the predominant activity of a production system. The primary concern of an operations manager is the activities of the conversion process.

Production management

Production is the basic activity of all the industrial unit. Production activity is nothing but the step by step conversion of one form of material in another, either chemically or mechanically. Production in the other word, is a transformation system where inputs are converted into outputs. The transformation could be physical, location, exchange based, storage based and informational based.

Production Management

Production management is concerned with those processes which convert the input into outputs. The input are various resources like row material, men, machine, method and the output are the goods and the services. H.A.Harding Production management deals with decision making related to production processes so that the resulting goods and services is produced according to specification in the amount and by the schedule demand and at minimum cost. E.S.Buffa

Operational management

Operational management is understood as the process where by resources or inputs are converted into more useful products. The term Operational management is more frequently used for a system where various inputs are transformed into intangible services such as banks, airlines, super bazaar, library. But the term production management is used for the system where the tangible goods are produced.

NATURE OF POM
Production as a System Production as an Organization Function Decision Making in POM

Production as a System
Production System Conversion Subsystem
Control Subsystem

Inputs

Outputs

Inputs of a Production System

External Environment:Political , Economic, Social, Technological Market:Competition, Customer Desires, Product Info. Primary Resources:Materials, Personnel, Capital, Utilities

Conversion Subsystem
Physical (Manufacturing) Location Services (Transportation) Exchange Services (Retailing, Wholesaler) Storage Services (Warehousing) Other Private Services (Insurance) Government services (Banking, Railways)

Outputs of a Production System

Direct Products Services Indirect Waste Pollution

Production as an Organization Function

Companies cannot compete using marketing, finance, accounting, and engineering alone. We focus on POM as we think of global competitiveness, because that is where the vast majority of a firms workers, capital assets, and expenses required. To succeed, a firm must have a strong coordination teaming with the other organization functions.

Decision Making in POM

Strategic Decisions: Decisions

of strategic importance and have

long-term significance for the organization. Examples include deciding: the design for a new products production process where to locate a new factory whether to launch a new-product development plan

Operating Decisions: These decisions are necessary if the ongoing production of goods and services is to satisfy market demands and provide profits. Examples include deciding:
how

much finished-goods inventory to carry the amount of overtime to use next week the details for purchasing raw material next month

Control Decisions: These decisions concern the day-to-day activities of workers, quality of products and services, production and overhead costs, and machine maintenance. Examples include deciding:
labor

cost standards for a new product frequency of preventive maintenance new quality control acceptance criteria

Scope of POM
LONG TERM DECISIONS Product selection and design Process selection and planning Location facility Capacity planning Material Handling facility SHORT TERM DECISIONS Production planning Production control Inventory control Quality control Method study Maintenance and replacement Cost reduction

Objective of the production management

Ultimate objective
Manufacturing cost Product Quality Manufacturing schedule

Intermediate objective
Machinery and equipment Material Manpower Manufacturing services

Function of the production management

Improving the volume of production Reducing rejection rate Maintaining delivery schedule Controlling ideal machine and manpower Updating processes and the procedure Maintain the accuracy and timeliness of the MIS Controlling overtime Decreasing machine setup time Efficient training and the team work TQM

Today's Factors Affecting POM

Global Competition Quality, Customer Service, and Cost Challenges Computers and Advanced Production Technology Growth of Service Sector Scarcity of Production Resources Issues of Social Responsibility Availability of skilled Employee

RECENT TRENDS IN POM

Global market place Production and Operational strategy TQM Flexibility Time Reduction Technology Worker involvement Re Engineering Environmental issues Supply Chain management

THANK YOU !!!

Facility Location

What is facility?

Production unit, where goods and services are produced.

What is location?
Place where a facility is located So the major decision is- WHERE should the facility be located?

Reasons for the Facility Location Decision Arises

Changes in the market

Expansion Contraction Geographic shift

Changes in inputs
Labor skills and/or costs Materials costs and/or availability Utility costs

Reasons for the Facility Location Decision Arises

Changes in the environment

Regulations and laws Attitude of the community

Changes in technology

STEPS INVOLVE IN LOCATION DECISIONS

National Decision Political, social, economic stability;

Regional Decision

Climate; Customer concentrations;

Community Decision

Transportation system availability; Preference of management; . . . . .

Site size/cost; Environmental impact; .....

Site Decision

Regional Location Decision

Attractiveness of region (culture, taxes, climate, etc.) Labor availability, costs, attitudes towards business/union Cost and availability of utilities Environmental regulations of state and town Government incentives Proximity to raw materials & customers Land/construction costs

Community/Locality Decisions

Rural Area or Village Area

Advantages (cheaper rate of land, taxes are negligible, spacious layout, avoidance of danger,) Disadvantages (lack of transportation, skilled labour, power facility, training facility for labour is not available, facility of banking)

Urban Area or City Area Suburban Area nearer to the Urban Area

Site Location Decisions

Site size and cost Air, rail, highway, waterway systems Nearness of services/supplies needed Communication facility Availability of power Possibility of plant expansion

Factors Affecting the Plant Location

Primary /Economic Factor

Supply of Raw Material Nearness of Market Transportation Facility Labour Supply Availability of Power Supply of Capital
Natural and Political Training and employment services Personal or Communitys attitude Education system Recreation and cultural attractions Religious and Historical Factor Government subsidies and facility

Secondary/Non-economic Factor

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Types of Manufacturing/Production Systems

TYPES OF PRODUCTION

INTERMITTENT PRODUCTION MASS AND FLOW PRODUCTION

CONTINOUS PRODUCTION PROCESS PRODUCTION

PROJECT PRODUCTION

JOB PRODUCTION

BATCH PRODUCTION

INTERMITTENT(DISCONTINOUS) PRODUCTION Wide range/Variety of products is produced CONTINOUS PRODUCTION Few/one standard products/ product High quantities High rate of demand

PROJECT PRODUCTION Major characteristics are..

Single assignment (one product) Complex set of activities- Product oriented Short life cycle Involvement of different specialized agencies Fixed position layout (fixed site) High cost overruns Scheduling and controlling- difficult, CPMPERT Examples- Aircraft, Ships, Roads and buildings

JOB PRODUCTION Major characteristics are.

Variety of products Each product with different set of processing steps Discontinuous flow of materials Customized- Made to order Highly skilled labour Customer satisfaction is higher Examples -Tailor Shop (size, design)

BATCH PRODUCTION Major characteristics are. Manufacturing of a no. of identical articles either to meet the specific order or to satisfy the continuous demand. Limited numbers of products Many qualities at regular intervals The customer order size determine the batch size. Examples- Pharmaceuticals, Paints, Ready made garments

Mass and flow production system

Major characteristics are.. Same type of product is produced Separate line for each product Semiskilled or unskilled labour Relatively permanent set up (same size, shape, quality product) Example-(cars, bikes, FMCG product)

Process Production
Major characteristics are.. The product must be standardized. Work must conform to quality standard. Inspection must in line with production. There must be continuity in the demand. High accuracy. Reduced material handling. Example-crude oil, gasoline, diesel, petrol etc.

PLANT/ FACILITY LAYOUT

An arrangement of personnel, departments, stores, equipment etc.. It is determined by

Type of product Type of production process Volume of production

OBJECTIVES OF LAYOUT
1. 2.

3.
4. 5. 6. 7.

8. 9. 10.

Economy in material handling Minimization of delay and bottlenecks Minimum manufacturing cycle time Least resistant to the smooth flow Efficient utilisation of space Safe and proper working conditions Flexibility to change in product design and expansion Easy and simple plant maintenance Improved productivity and quality Effective control

1. 2. 3. 4.

5.
6. 7. 8.

PRINCIPLES OF PLANT LAYOUT Integration of factors Minimum movement of men and material Smooth and continuous flow Effective use of space-vertical /horizontal Safe and improved environment Maximum flexibility Unidirectional flow Maximum visibility and accessibility

Factors Influencing Layout

Material (low price, stored properly, easy move) Product (heavy or light, big or small, liquid or solid) Workers (skilled, unskilled employee) Machinery (types of product, process and volume) Location ( expansion of plant, size of the site, mode of transportation, the storage of the product) Managerial Policies (volume of production, purchasing policies, delivery of goods to customer

TYPES OF LAYOUTS

Process layout

Similar operations at one place Machines arranged according to their functions Operations according to product and in sequence Suitable for continuous production

Product layout

Static product or fixed position layout

Big/heavy or difficult to move product Product position is fixed and operations brought to it
It is the combination of process and the product layout Machine are grouped into cells and cells function somewhat a product layout with in the large process layout.

Combined layout

Cellular Manufacturing layout

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