PRODUCTION MANAGEMENT

- INTRODUCTION

Joanna Oleśków-Szłapka

Institute of Management Engineering

Poznan University of Technology

October 8th , 2009

 OBJECTIVES among others:..
 Understand basic production management and
its function
 Obtain knowledge of basic methodology in
order to apply these in a working field and find
a way to improve productivity and eliminate
waste
 Understand higher level of production
management
 Gain ability of forecasting demand, planning a
production schedule and fulfilling capacity of
production and reform of an organization
 CONTENTS
1. Production management – background
2. Decision- making process of production
3. Improvement of productivity
4. Forecasting demand of production
5. Design of goods and services
6. Process strategy
7. Material requirements planning and capacity
requirements planning
8. Inventory control
9. Specialization and outsourcing
10. Location and layout strategies
11. Planning and scheduling production –
information systems
12. Basic case studies and exercices
BOOKS

 T. Hill, Production/Operations Management,

Prentice Hall 1991
 Heizer, J. Render, B. Operations Management,
Prentice Hall 2005
 S.N. Chapman, The fundamentals of production
planning and control; Prentice Hall 2006
 K.N. McKay, V.C.S. Wiers, Practical production
control. A survival guide for planners and
schedulers,, APICS, J.Ross Publishing 2004

And others from the field of production/operations

management…
PRODUCTION MANAGEMENT
 30 h
 Lectures,
 Exercices and cases solved by
yourself
 An oral exam – December 10th,
2009
 PRODUCTION MANAGEMENT –
THEORETICAL BACKGROUND

1. DEFINITION
2. OBJECTIVES
3. FUNCTIONS
4. PRODUCT DESIGN, TYPES OF PRODUCTION
SYSTEMS
5. PLANNING AND CONTROL PRODUCTION
MANAGEMENT ETC.
INTRODUCTION TO PRODUCTION
MANAGEMENT

 Planning and control of production

of goods and services are essential for
efficient and effective operations.
 It is definitely not enough (though
necessary) for every worker to “know”
his/her job. There has to be a planned,
coordinated and monitored system
of approach to the operations and
productions of the organization. This
is the reason for production management.
 DEFINITIONS - PRODUCTION
MANAGEMENT
(i) In short production management is the Art of Managing
the Production. It basically concerns itself with the
conversion of inputs into outputs.
(ii) Production management can be also defined as “The job of
coordinating and controlling all the activities required
in making a product”.This concept is not restricted to only
industrial or manufacturing sectors; it is also applicable to
service industries.
(iii) The performance of management activities with regards
to selecting, designing, operating, controlling and updating
production system
 PRODUCTION MANAGEMENT –
OPERATIONS MANAGEMENT

Production management and operations

management are treated as being synonymous.

Operations management is the conversion of

inputs into outputs, using physical resources,
so as to provide the desired utility/utilities of form,
place, possession or state or a combination there –
of to the customer while meeting the other
organizational objectives of effectiveness,
efficiency and adaptability.
 PRODUCTION MANAGEMENT –
OPERATIONS MANAGEMENT

Transformation process

• Method(s) of conversion.
• Support function to provide
INPUTS OUTPUTS
People controls and feedback and to
Energy improve the process Goods
materials services
information
fixed assets

Figure 1. The operations function,

T. Hill, Production/Operations Management. Text and cases, p.57
PRODUCTION MANAGEMENT
FOCUSES on…

 Production management focuses on

two significant functions:
responsibilities and planning
and control.
The production management’s
responsibility sees to the following
areas; men (labor), machines,
methods, materials and money.
 The production management’s
responsibility
 Men: this refers to the labor force. This
responsibility is often referred to as people
management. This is to build a workforce that can
easily adapt to new equipment and schedules in
production.
 Machines and Method: This involves choosing
the machine and technology used in production of
goods and services. The production manager
must also choose the methods in using these
machines to achieve efficiency. He/She must
decide on the technology that best suits the
operation.
 The production management’s
responsibility
 Material: Material here includes both raw
materials for production and the
information needed in production.
production The
production manager must manage the
flow processes; that is, the smoothness of
resource and data movement.
 Money: This deals with the financial
matters involved in the day to day
running of production. The production
manager manages the inventory and
production level and quantity with the
returns on investment, on focus.
 CRITERIA OF PERFORMANCE

3 aims of performance of the Production and

Operations Management Systems:
• Effectiveness – productive utilization of
resources
• Customer satisfaction
• Efficiency
 According to William K. Holstein[1], production planning and
controlling functions can summarily put thus:

PRODUCTION – CONTROL SUMMARY

PROCESSES INVENTORY INSPECTION COSTS

OBSERVATION measuring rate of recording stock inspecting collecting cost

output, recording levels materials and data
idle time or parts
downtime
ANALYSIS comparing progress analyzing demand estimating computing
with the plan for stocks in process costs in
different uses and capabilities relation to
at different times estimates

CORRECTIVE expediting Issuing production Initiating full adjusting

ACTION and procurement inspection; selling price
orders adjusting of products
processes
EVALUATION estimating drawing up reassessing evaluating
production capacities replacement specifications; production
and maintenance policies and improving economics;
inventory systems processes and improving
schedules procedures data
PRODUCTION FUNCTION
PRACTICES IN FIELD OF
PRODUCTION MANAGEMENT

 There have been several practices

developed by many experts in the
field of production management and
aimed at ensuring efficient and
effective production – lean
production, agile production etc. –
 PRODUCT DESIGN
 Product design is a strategic decision
as the image and profit earning capacity
of a small firm depends largely on
product design.
 Once the product to be produced is decided
by the entrepreneur the next step is to
prepare its design.
 The form designing includes decisions
regarding its shape, size, color and
appearance of the product. The
functional design involves the working
conditions of the product
 PRODUCT DESIGN
Various factors are to be considered before designing
product. These factors are listed below: -
(a) Standardization
(b) Reliability
(c) Maintainability
(d) Servicing
(e) Reproducibility
(f) Sustainability
(g) Product simplification
(h) Quality Commensuration with cost
(i) Product value
(j) Consumer quality
(k) Needs and tastes of consumers.
PRODUCT DESIGN

The product design should be

dictated by the market demand.
It is an important decision and
therefore the entrepreneur should
pay due effort, time, energy and
attention in order to get the best
results.
DESIGN OF PRODUCTION SYSTEM

An appropriate designing of
production system ensures the
coordination of various production
operations.
There is no single pattern of
production system which is
universally applicable to all types of
production system varies from one
enterprise to another.
 TYPES OF PRODUCTION SYSTEM
Broadly one can think of three types of production systems
which are mentioned here under:
(a) Continuous production - It is also known as mass flow
production or assembly line production. The system is suitable
in plants involving large volume and small variety of output
e.g. oil refineries reform cement manufacturing etc.
(b) Job or unit production - The system requires comparatively
smaller investment in machines and equipment. It is flexible
and can be adapted to changes in product design and order
size without much inconvenience. This system is most suitable
where heterogeneous products are produced against specific
orders.
(c) Intermittent production - Under this system the goods are
produced partly for inventory and partly for customer's orders.
E.g. components are made for inventory but they are
combined differently for different customers. . Automobile
plants, printing presses, electrical goods plant are examples of
this type of manufacturing.
TYPES OF PRODUCTION SYSTEMS

Three types of production system can be

identified certain features of which
influence the actions of production
managers:
 small batch and unit production

 Large batch and mass production

 Continuous process production

TYPES OF PRODUCTION SYSTEMS
Three main types of production:

A) JOB PRODUCTION
• The job produced only once,
• The job produced at irregular intervals
• The jopb produced periodically at regular intervals.

B) BATCH PRODUCTION
• A batch produced only once
• A batch produced at irregular intervals as per Customer or when
the need arises
• A batch produced periodically at known intervals

C) CONTINUOUS PRODUCTION.
• Mass production
• Flow production
 PRODUCTION AND OPERATIONS
SYSTEM

Examples?
FACTORS AFFECTING THE CHOICE OF
MANUFACTURING PROCESS

Following factors need to be considered

before making a choice of manufacturing
process:

1. Effect of volume/variety
2. Capacity of the plant
3. Lead time
4. Flexibility and efficiency
 PLANNING AND CONTROL IN
PRODUCTION MANAGEMENT
 Production management can also be viewed
from the planning and control perspective.
 The production manager must plan and control
the process of production in a cost effective
way at the same time meeting all quality
specifications.
 Things that are being controlled in production
management are the inventories and labor
cost.
 INVENTORY CONTROL
Inventories include the raw
materials needed in production,
component parts, finished goods,
packing and packaging materials,
and general supplies.
Computer programs and software
have been further developed to
increase efficiency and effectiveness
in inventory controlling.
LABOR COST CONTROL
 This involves measuring the amount
and type of work required to
produce and design an efficient
method for accomplishing the set
production objective.
 The measurement here also
includes time required to produce a
particular production task.
PRODUCTION PLANING AND
CONTROL PROCESS
ROUTING

Routing procedure involves following different

activities.
(1) An analysis of the article to determine what to
make and what to buy.
(2) To determine the quality and type of material
(3) Determining the manufacturing operations and
their sequence.
(4) A determination of lot sizes
(5) Determination of scrap factors
(6) An analysis of cost of the article
(7) Organization of production control forms.
SCHEDULING

The pattern of scheduling differs from

one job to another which is
explained as below:
Production schedule
Master schedule
Manufacturing schedule
Scheduling of job order
manufacturing
LOADING
Loading determines who will do the
work as routing determines where
and scheduling determines when it
shall be done.
Gantt Charts are most commonly
used in small industries in order to
determine the existing load and also
to foresee how fast a job can be
done.
PRODUCTION CONTROL
Production control is the process of:
 planning production in advance of
operations,
 establishing the extract route of each
individual item part or assembly,
 setting, starting and finishing for each
important item, assembly or the finishing
production and
 releasing the necessary orders as well as
initiating the necessary follow-up to have
the smooth function of the enterprise.
DISPATCHING
Dispatching involves issue of production orders for
starting the operations.
Necessary authority and conformation is given for:
1. Movement of materials to different workstations.
2. Movement of tools and fixtures necessary for
each operation.
3. Beginning of work on each operation.
4. Recording of time and cost involved in each
operation.
5. Movement of work from one operation to another
in accordance with the route sheet.
6. Inspecting or supervision of work
FOLLOW UP
 Every production programme involves
determination of the progress of work,
removing bottlenecks in the flow of work
and ensuring that the productive
operations are taking place in accordance
with the plans.
 All problems or deviations are nvestigated
and remedial measurer are undertaken to
ensure the completion of work by the
planned date.
INSPECTION
 This is mainly to ensure the quality
of goods. It can be required as
effective agency of production
control.
CORRECTIVE MEASURES
Corrective action may involve any of those activities
of:
 adjusting the route,
 rescheduling of work changing the workloads,
 repairs and maintenance of machinery or
equipment,
 control over inventories of the cause of deviation
is the poor performance of the employees.
 Certain personnel decisions like training, transfer,
demotion etc. may have to be taken.
 Thank you for your attention

joanna.oleskow-szlapka@put.poznan.pl