Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
MANAGEMENT
Product
A product is anything that can be offered to a market to satisfy a want or
need, including physical goods, services, experiences, events, persons,
places, properties, organizations, information, and ideas.
Concept of Production
Production is defined as the step-by-step conversion of one form of
material into another form through chemical or mechanical process to
create or enhance the utility of the product to the user. Thus production
is a value addition process. At each stage of processing, there will be
value addition.
Edwood Buffa defines production as a process by which goods and
services are created.
Some examples of production are: manufacturing custom-made
products like, boilers with a specific capacity, constructing flats, some
structural fabrication works for selected customers, etc., and
manufacturing standardized products like, car, bus, motor cycle, radio,
television, etc.
Introduction
Production/operations management is the process, which combines and
transforms various resources used in the production/operations subsystem
of the organization into value added product/services in a controlled
manner as per the policies of the organization. Therefore, it is that part of
an organization, which is concerned with the transformation of a range of
inputs into the required (products/services) having the requisite quality
level.
The set of interrelated management activities, which are involved in
manufacturing certain products, is called as production management. If
the same concept is extended to services management, then the
corresponding set of management activities is called as operations
management.
Inputs:
Men
Materials
Machines
Information
Capital
Transformation Process:
Product Design
Product Planning
Production Control
Maintenance
Continuous:
Environment
Inventory
Quality
Cost
Feedback Information
Fig. 1.1 Schematic Production System
Outputs:
Product
Services
Car
Mobile
Pen
Car Rental
Meal at
Restaurant
Tailored Clothing
Auto Repair
Financial
Consulting
Dental Checkup
Haircut
Accounting
Tangible
Services are more intangible than goods
Pure goods are tangible
socks
Variability
Services are more variable than goods
Due to changing needs, abilities, etc. of the service provider and customer
Self-service and equipment can decrease variability
Try to reduce bad variability
Errors in the system
Try to improve good variability
Customization for customers unique needs
Production System
The production system of an organization is that part, which produces
products of an organization. It is that activity whereby resources, flowing
within a defined system, are combined and transformed in a controlled manner
to add value in accordance with the policies communicated by management. A
simplified production system is shown above.
The production system has the following characteristics:
1. Production is an organized activity, so every production system has an
objective.
2. The system transforms the various inputs to useful outputs.
3. It does not operate in isolation from the other organization system.
4. There exists a feedback about the activities, which is essential to
control and improve system performance.
Production systems can be classified as Job Shop, Batch, Mass and Continuous
Production systems.
Continuous
Production
www.newagepublisher.com
Mass Production
Batch
Production
Job-Shop
Production
Continued
Generally no automation is used in this system, but
computer-aided-design (CAD) is used.
It deals with low volume and large variety production. It
can cater to specific customer Order, or job of one kind at
a time.
It is known for rapid value addition.
Large inventory of materials, tools, parts.
Detailed planning is essential for sequencing the
requirements of each product, capacities for each work
centre and order priorities.
Advantages
Following are the advantages of job shop production:
Because of general purpose machines and facilities variety of
products can be produced.
Operators will become more skilled and competent, as each
job gives them learning opportunities.
Full potential of operators can be utilised.
Opportunity exists for creative methods and innovative ideas.
Low risk of loss to the factory adopting this type of
production. Due to flexibility, there is no chance of failure of
factory due to reduction in demand. It can always get one or
the other job orders to keep it going.
Requires less money and is easy to start.
Less or no management problem because of very small work
force.
Disadvantages
Following are the limitations of job shop production:
Higher cost due to frequent set up changes.
Higher level of inventory at all levels and hence higher
inventory cost.
Production planning is complicated.
Larger space requirements.
For handling different types of jobs, only workers with
multiple skills are needed. This increases the labour cost.
Low equipment utilization.
As the raw materials are purchased in less quantity, the
cost of material procurement is more.
Continued..
The batch production system is generally adopted in medium
size enterprises. Batch production is a stage in between mass
production and job-shop production. As in this system, two or
more than two types of products are manufactured in lots or
batches at regular interval, which justifies its name the batch
production system.
Examples of batch production flows include, manufacturing of
drugs and pharmaceuticals, medium and heavy machineries,
etc.
Continued..
A batch production turns into flow production when the rest
period vanishes. In flow production, the processing of
materials is continuous and progressive.
Batch production is bigger in scale than job production, but
smaller than that of mass production.
Material handling may be automated by robots.
A medium size lots (5 to 50) of same items is produced in this
system. Lot may be produced once in a while or on regular
interval generally to meet the continuous customer demands.
Plant capacity generally is higher than demand.
It is used when there is shorter production runs.
Continued..
This System is used when plant and machinery are flexible.
It is used when plant and machinery set up is used for the
production of item in a batch and change of set up is required
for processing the next batch.
This system is used when manufacturing lead time and cost
are lower as compared to job order production.
Advantages
Following are the advantages of batch production:
Better utilisation of plant and machinery.
Promotes functional specialisation.
Cost per unit is lower as compared to job order production.
Lower investment in plant and machinery.
Flexibility to accommodate and process number of products.
Job satisfaction exists for operators.
It is flexible in the sense that it can go from one job to another
with almost zero cost. It needs general purpose machine having
high production rate.
If demand for one product decreases then production rate for
another product may be increased, thus the risk of loss is very
less.
Most suitable for computer-aided-manufacturing (CAM).
Disadvantages
Following are the limitations of batch production:
Material handling is complex because of irregular and longer
flows.
Production planning and control is complex.
Work in process inventory is higher compared to continuous
production.
Higher set up costs due to frequent changes in set up.
As the raw materials to be purchased are in smaller quantity
than in case of mass production, the benefits of discount due
to large lot purchasing is not possible.
It needs specially designed jigs and fixtures.
Features
Process production, in general, has the following features:
It is very highly automated (process automation), and highly capital
intensive. Items move from one stage to another automatically in a
continuous manner.
It has a fixed or hard automation which means there is very less or no
flexibility at all. Layout of the plant is such that it can be used for only
one type of product. Each machine in the system is assigned a definite
nature of work.
To avoid problem of material handling, use of cranes, conveyors etc. are
made.
Work-in-process (WIP) inventory in this system is zero.
Dedicated plant and equipment with zero flexibility.
Material handling is fully automated.
Process follows a predetermined sequence of operations.
Component materials cannot be readily identified with final product.
Planning and scheduling is a routine action.
Advantages
Following are the advantages of process production:
Standardisation of product and process sequence.
Higher rate of production with reduced cycle time.
Higher capacity utilisation due to line balancing.
Manpower is not required for material handling as it is completely
automatic.
Unit cost is lower due to high volume of production.
It gives better quality, large volume but less variety of products.
Wastage is minimum.
As the raw materials are purchased on a large scale, higher
margin of profit can be made on
purchase.
Only a few skilled, and many semi-skilled workers are required.
This reduces the labor cost substantially.
Disadvantages
Following are the limitations of process production:
Flexibility to accommodate and process number of products
does not exist.
Very high investment for setting flow lines.
Product differentiation is limited.
During the period of less demand, heavy losses on invested
capital may take place.
Because all the machines are dedicated and special purpose
type, the system is not changeable to other type of production.
Most of the workers handle only a particular operation
repetitively, which can make them feel monotonous.
As this type of production is on the large scale, it cannot fulfill
individual taste.
Characteristics
Mass production is used under the following circumstances:
1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production
capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and
without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.
Advantages
Following are the advantages of mass production:
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilisation due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.
Limitations
Following are the limitations of mass production:
1. Breakdown of one machine will stop an entire
production line.
2. Line layout needs major change with the changes in the
product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.