PRODUCTION

Industrial Project Management

Dr. Sri Bramantoro Abdinagoro

Metallurgy & Materials Department

Faculty of Engineering – University of Indonesia
2019
Production is…

… processes that changing input to

output through many kind of
transformation system with value
added
Position of Production in Organization
Production Management
Conversion process management, that transformation
input (raw materials, employees, customers) to output
(products or services)

Inputs Outputs
(materials, (Products
Transformation Process
employees and
and/or services)
customers)
Operation/Production as a system

Demanding environment
Technology

Boundary management

Boundary management
Energy
Transformation
Materials Goods &
(Conversion) Services
Labour Process
Capital
Information

Feedback (information) - control over

process inputs & technology
Kind of Operation/Production
Operation Examples
Production Farming, mining, construction ,
manufacturing, power generation
Transportation Warehousing, trucking, mail
service, moving, taxis, buses,
hotels, airlines
Exchange Retailing, wholesaling, banking,
renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and television
newscasts, telephone, satellites
Relationships for Typical Systems
Differences of Feature in Production
System
◦ Degree of product standardization (standardized vs.
customized)
◦ Kind of process (quantity of output)
◦ Production of products or services
Product / Process Matrix
High Variety Low Variety

Volume
Mass Continuous
Customization Production

Mass
Production

Batch
Production/
Job Shop

Project/
Unit
Production

Degree of Standardization
 PLC -
Product
Life Cycle
Diagram

◦ This diagram can

help us to
understanding
change  refer to
revenue making
and related to
product selling
stage, from birth to
dead.
 Introduction Growth Maturity Decline

Introduction
• Seller have to stimulate demand
• Promotion/campaign for public awareness
• Explain how to use the product,
• Features : Advantage : Benefit
• More expense, but there are prospect for making profit in the future
• Low selling, low profit, cause of expense bigger than revenue
• Profit is “negative”
• Need more money for promotion
 Introduction Growth Maturity Decline

Growth
• Many sold – Selling more as he can
• Competitor’s watching, and decide to joint with same product
• “Imitate success”
• Growth still going until too many competitor on market – market be
saturated
• At the end of growth phase, profit start declining. It means that you have
to expense more for promoting, to keep selling.
• Promotion cost will cut the profit.
 Introduction Growth Maturity Decline

Maturity
• Many competitor joined – market saturated
• Only one way to sell, lower cost – and profit declined
• Difficult to tell consumer about differences among products. Its more
similar Features, Advantages & Benefits
• Wild competition, and intensive advertisement
• “Persuasive Promotion” more important during this stage
• It means, your advertisement will be pleading to consumer for buying the
product
 Introduction Growth Maturity Decline

Decline
• New product is more attractive,
• Although the price is more cheap but still not make consumen buy
• Profit margin decline – and can only make profit with selling in bulk
• For increasing the number of product:
1. Increase the customer – get the new customer
2. Increase the number of product that customer use
Examples Product Lifecycle
Essential of Production management

◦We need operation can be managed for

more productive.
◦Mean of efficiency, productivity,
effectivity….
Production
form raw materials to
product
Flow Process (example)
Purchasing of folding bike
materials

Storage of ‘sepeda lipat’

materials

Cutting, forming, welding, painting of raw

materials to size

Quality inspection

Transport the materials that have been

assembly at assembly line

Checking
Assembling Packaging Storage before shipping out
Plant

Praying
Toilet

Area
Lay-out
Store
Cutting Machine for
Raw
Materials

Welding Area

Forming Machine
Office

Display of
Inspection
Finished Goods

Painting and
Spraying
Business Information Flow
Entry-Level Jobs in Production Management

◦ Purchasing planner/buyer
◦ Production (or operations) supervisor
◦ Production (or operations) scheduler/controller
◦ Production (or operations) analyst
◦ Inventory analyst
◦ Quality specialist
-Questions?-