Pom(f inal) 1
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The document discusses key concepts related to production management including: - Production is defined as the conversion of materials into finished goods or services. - Production management involves planning, organizing, directing, and controlling production activities. - Operations management is concerned with the efficient and effective production of goods and services. It covers topics such as facility layout, quality control, production planning, and inventory management.
Pom(f inal) 1
- 1. •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.” •Edwood Buffa defines production as ‘a process by which goods and services are created’.
- 3. Production management is a process of planning, organizing, directing and controlling the activities of the production function. It combines and transforms various resources used in the production subsystem of the organization into value added product in a controlled manner as per the policies of the organization. “Production management deals with decision making related to production processes so that the resulting goods or services are produced according to specifications, in the amount and by the schedule demanded and out of minimum cost.”
- 4. Operating system converts inputs in order to provide outputs which are required by a customer. It converts physical resources into outputs, the function of which is to satisfy customer wants i.e., to provide some utility for the customer Everett E. Adam & Ronald J. Ebert define operating system as, “An operating system( function) of an organization is the part of an organization that produces the organization’s physical goods and services.”
- 5. An operation is defined in terms of the mission it serves for the organization, technology it employs and the human and managerial processes it involves. Operations in an organization can be categorized into manufacturing operations and service operations. Manufacturing operations is a conversion process that includes manufacturing yields a tangible output: a product, whereas, a conversion process that includes service yields an intangible output: a deed, a performance, an effort.
- 6. Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. It is the management of resources, the distribution of goods and services to customers, and the analysis of queue systems The business function responsible for planning, coordinating, and controlling the resources needed to produce products and services for a company
- 7. While operations management is focused upon administration, planning and execution of operations involved in production of goods and services and trying to minimize the resources at the same time increasing output, production management is more concerned with input/output and churning out products in the shape of desired finished product.
- 9. System Inputs Conversion Output (desired) Hospital Patients MDs, Nurses Medical Supplies Equipment Health Care Healthy Individuals Restaurant Hungry Customers Food, Chef Servers Atmosphere Prepare Food Serve Food Satisfied Customers Automobile Plant Sheet Steel Engine Parts Tools, Equipment Workers Fabrication and Assembly of Cars High Quality Automobiles University High School Grads Teachers, Books Classroom Transferring of Knowledge and Skills Educated Individuals
- 10. Planning ◦ Capacity, utilization ◦ Location ◦ Choosing products or services ◦ Make or buy ◦ Layout ◦ Projects ◦ Scheduling ◦ Market share ◦ Plan for risk reduction, plan B? ◦ Forecasting 10 SUPPLY SIDE DEMAND SIDE Controlling – Inventory – Quality – Costs Organization – Degree of standardization – Subcontracting – Process selection Staffing – Hiring/lay off – Use of overtime – Incentive plans In a nutshell, the challenge is “Matching the Supply with Demand”
- 11. Planning Organizing Staffing Leading Controlling Basic Management Functions
- 12. Ten Decision Areas Chapter(s) 1. Design of goods and services 5 2. Managing quality 6, Supplement 6 3. Process and capacity 7, Supplement 7 design 4. Location strategy 8 5. Layout strategy 9 6. Human resources and 10 job design 7. Supply-chain 11, Supplement 11 management 8. Inventory, MRP, JIT 12, 14, 16 9. Scheduling 13, 15 10. Maintenance 17 Table 1.2
- 13. 1. Design of goods and services ◦ What good or service should we offer? ◦ How should we design these products and services? 2. Managing quality ◦ How do we define quality? ◦ Who is responsible for quality? Table 1.2 (cont.)
- 14. 3. Process and capacity design ◦ What process and what capacity will these products require? ◦ What equipment and technology is necessary for these processes? 4. Location strategy ◦ Where should we put the facility? ◦ On what criteria should we base the location decision? Table 1.2 (cont.)
- 15. 5. Layout strategy ◦ How should we arrange the facility? ◦ How large must the facility be to meet our plan? 6. Human resources and job design ◦ How do we provide a reasonable work environment? ◦ How much can we expect our employees to produce? Table 1.2 (cont.)
- 16. 7. Supply-chain management ◦ Should we make or buy this component? ◦ Who should be our suppliers and how can we integrate them into our strategy? 8. Inventory, material requirements planning, and JIT ◦ How much inventory of each item should we have? ◦ When do we re-order? Table 1.2 (cont.)
- 17. 9. Intermediate and short–term scheduling ◦ Are we better off keeping people on the payroll during slowdowns? ◦ Which jobs do we perform next? 10. Maintenance ◦ How do we build reliability into our processes? ◦ Who is responsible for maintenance? Table 1.2 (cont.)
- 18. Tangible product Consistent product definition Production usually separate from consumption Can be inventoried Low customer interaction
- 19. Intangible product Produced and consumed at same time Often unique High customer interaction Inconsistent product definition Often knowledge-based Frequently dispersed
- 20. Quality Management Statistical Process Control Just in Time Materials Requirement Planning Inventory Control Aggregate Planning Operations Management - Overview Project Management Supply Chain Management Process Analysis and Design Process Control and Improvement Waiting Line Analysis and Simulation Services Manufacturing Operations Strategy Facility Layout Consulting and Reengineering Process Analysis Job Design Capacity Management Planning for Production Supply Chain Strategy
- 21. 21 Operations Examples Goods producing Farming, mining, construction Storage/transportation Warehousing, trucking, mail, taxis, buses, hotels Exchange Trade, retailing, wholesaling, renting, leasing, loans Entertainment Radio, movies, TV, concerts, recording Communication Newspapers, journals, radio, TV, telephones, satellite
- 22. Three basic functions ◦ Operations/Production Goods oriented (manufacturing and assembly) Service oriented (health care, transportation and retailing) Value-added (the essence of the operations functions) ◦ Finance-Accounting Budgets (plan financial requirements) Provision of funds (the necessary funding of the operations) ◦ Marketing Selling, Promoting Assessing customer wants and needs 22 Organization Finance Operations Marketing
- 24. Production of goods ◦ Tangible products Automobiles, Refrigerators, Aircrafts, Coats, Books, Sodas Services ◦ Repairs, Improvements, Transportation, Regulation Regulatory bodies: Government, Judicial system, Entertainment services: Theaters, Sport activities Exchange services: Wholesale/retail Appraisal services: Valuation, House appraisal Security services: Police force, Army Financial services: Banks Education: Universities, 24
- 25. Differences with respect to 1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity 6. Production and delivery 7. Quality assurance 8. Amount of inventory 25
- 26. Characteristic Manufacturing Service Output Tangible Intangible Customer contact Low High Uniformity of output High Low Labor content Low High Uniformity of input High Low Measurement of productivity Easy Difficult Opportunity to correct quality problems Easy Difficult 26 Steel production Automobile fabrication Home remodeling Retail sales Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing High percentage goods Low percentage goods
- 27. Objectives of operations management can be categorised into customer service and resource utilisation. CUSTOMER SERVICE: satisfaction of customer wants
- 29. The customer service objective. To provide agreed/adequate levels of customer service (and hence customer satisfaction) by providing goods or services with the right specification, at the right cost and at the right time. The resource utilisation objective. To achieve adequate levels of resource utilisation (or productivity) e.g., to achieve agreed levels of utilisation of materials, machines and labour.
- 30. Location of facilities Plant layouts and material handling Product design Process design Production and planning control Quality control Materials management Maintenance management
- 31. Strategic: ◦ Product/Service Design ◦ Process Selection ◦ Capacity Planning ◦ Facility Location ◦ Facility Layout ◦ Job Design Tactical: ◦ Quality Control ◦ Demand Forecasting ◦ Supply Chain Management ◦ Production Planning ◦ Inventory Control ◦ Scheduling
- 32. When planning on producing a new product and/or service, the key factor is the product and service design. Principles of product/service design: translate customers' wants and needs, refine existing products and services, develop new products and services, formulate quality goals, formulate cost targets, construct and test prototypes, document specifications, and translate products and service specification into process specifications
- 33. In the product process innovations, research and development play a significant role. Because of the influence a product and service design can have on an organization, the design process is encouraged to be tied in with the organization's strategy and take into account some key considerations. Technological changes, the competitive market, and economic and demographic changes are some market opportunities and threats that all organizations must be aware of when planning a product and service design.
- 34. Computer-aided design (CAD) and Computer-aided manufacturing (CAM) are important tools in the design process because they can anticipate what the design will look like, as well as allow for better manufacturing. Businesses also must take in account environmental and legal concerns when designing a new product. Most importantly, the manufacturing process must ensure the product's safety. Companies choose various ways to design their products and the type of services they provide. Which include: standardization, mass customization, delayed differentiation, modular design, and robust design. Deciding which method to use is very important along with deciding the company's target market. Deciding the right method, establishes good productivity and efficient way for operations.
- 35. Service design is an activity of organizing and planning people, communication and material components in order to improve service quality. It is the interaction between the service provider and customers and the customers' experience. A service is anything that is done to or for a client and is created and delivered simultaneously. The two most important issues in service design are the degree of variation in requirements and the degree of customer contact in which determines how standardized the service can be. The greater the degree of customer contact, the greater the opportunity for selling. In addition, concepts and ideas generated are captured in sketches or in service prototypes. The strong visual element, combined with the opportunity to test and rapidly change services and interfaces, delivers real value in today's competitive markets.
- 36. Product Design combines with product and business knowledge to generate ideas and concepts and convert them into physical and usable objects or services. The discipline covers the entire range of activities from concept, manufacturing, testing to product launch Product Designers conceptualize and evaluate ideas and themes they find profitable. The designers make these ideas tangible through products using a systematic approach.
- 37. 1. Introduction: During the first stage, the product is introduced into the market. Proper research and forecasting should be done to ensure the product/service is adequate for a specific market and for a specific time. It is crucial to have a proper amount of supply that can meet the expected demand for the product/service. 2. Growth: The second stage involves the increase in demand for the product/service. Reputation for the product grows and an accurate forecast of demand is needed to determine the length of time the product/service will remain in the market. Enhancements and improvements are common in this stage. 3. Maturity: This third stage deals with the product reaching a steady demand. Few or no improvements or product changes are needed at this stage. Forecasting should provide an estimate of how long it will be before the market dies down, causing the product to die out. 4. Decline: The last stage involves choosing to discontinue the product/service, replacing the product with a new product, or finding new uses for the product.