Operation &

Production
Management
INPUT

Design

Operation

Output

Nature & Scope

Four Functional areas in a business

organization. Marketing, Production,
Finance And Personnel.
All activities revolve around Production.
The end product is for the satisfaction
of human wants.
Basic inputs are Men, Machine, Plant,
Services, and Methods.
The Raw Materials are from Mine, Sea,
Farm and Forest.

Definitions

Production
Step by step conversion of one form of
material to other through chemical or
mechanical process.

Production Management
Planning, organizing, directing and
controlling the activities of the production
function.

Operation Management
Service oriented industry is broadly known as
operations management.

Scope in Detail

Aim - Customer satisfaction at

optimum cost.
1.
2.
3.
4.

5.

Product Selection Design

Process Selection and Planning
Facilities Location
Facilities Layout and Materials
Handling
Capacity Planning

Scope in Detail

Operational decisions
1.
2.

Production Planning
Production Control (PPC)

3.
4.
5.
6.
7.

Planning
Routing
Dispatching
Follow Up

Inventory Control
Quality Control
Method Study
Maintenance & Replacement
Cost Reduction And Control

Historical
Development

Adam Smith is the first person

who introduced Production
Management in 1776.
Emphasized the division of labour
This effected in turn for improving
the quality & quantity of goods.

Historical
Development

Charles Babbage in 1883

introduced the principle of
limiting skills as a basis for pay
fixation.
Also agreeing on Adam Smiths
theory.

Historical
Development

Management techniques by F M Taylor.

The workers should not be allowed to
evolve their own operations.
Proper selection, training and development
programmers given to workers to get the
best result.
Close cooperation and understanding
between workers and management.
Importance of specialization & expertise to
carry different operations.

Historical
Development

Short Comings on Taylor

technique
Production Management was very
slow.
Study materials were unavailable.
Output depended on man, job and
job conditions.

Historical
Development

In 1914 F W Harris introduced the

economic lot size method to control
the inventory of an Enterprise.
In 1931 Walter Schewart introduced
statistical quality control. Applied in
second World War.
In 1934 L H C Tippet developed
Sampling Theory. Applied in
Production Analysis in 1950.

Where Do We Stand
Today?

Advent of computer introduced the field

of Automation.
Efficient use of Labour, Material &
Equipment Economies in Production.
Continuous improvement in design &
layout.
Sophisticated production control
techniques to produce goods & service
at desired time & minimal cost.

References

Production and Operations Management

R. Paneerselvam Prentice Hall India

Production and Operations Management

Chunawala & Patel Himalaya Publishing
house

Production and Operations Management

Kanishka Bedi - Oxford

Production Operations Management

Dr. B. S. Goel - Pragati

What Next?

Operations Strategy
Layout
Layout Planning