PRODUCTION AND OPERATIONS MANAGEMENT

PRODUCTION AND OPERATIONS MANAGEMENT. LECTURE ONE.

INTRODUCTION. Production and operations management concerns itself with 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 thereof—to the customer while meeting the other organizational objectives of effectiveness, efficiency and adaptability..

INTRODUCTION CONT.. The essential features of a production and operation function is to bring together people, machines & materials to provide goods and services for satisfying customer needs. These needs of the target audience is what drives most of the manufacturing companies to produce quality products and services..

INTRODUCTION CONT.. The set of interrelated management activities, which are involved in manufacturing certain products, is called production management. If the same concept is extended to services management, then the corresponding set of management activities is called as operations management..

The Transformation Process. Student Slides. Inputs Land Labor Capital Information Outputs Goods Services Transformation Cutting, drilling, farming, Mining. Control Measurement and Feedback Measurement and Feedback Measurement and Feedback Value-Added.

BACKGROUND OF OPERATIONS AND PRODUCTIONS MANAGEMENT.

BACKGROUNDA CONT.. The functions of OM first came into being during the period of 1890-1920 with the works of Frederick W. Taylor, Frank and Lillian Gilbrethand Henry L. Gantt. This era was later defined as ‘‘scientific management’’. However, notwithstanding the great depression in 1930s, in many ways the period from 1920 to 1960 can be considered as the golden age for the development of industry. During this era, the main focus of OM was on the labor productivity improvements where time and motion studies, layout, production control, queuing theory were among the popular techniques to improve labor productivity..

BACKGROUND CONT.. The period of the 1980s was recognized as an era where OM has been widely accepted as one of the functional fields of an organization. Increasing competition spurred by the success of Japanese products in the global markets led OM to focus heavily on improving manufacturing strategies service operations new product development and developing better performance metrics to produce for less..

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 Productivity is the ratio between the amount produced and the amount of resources used in the course of production. The resources may be any combination of materials, machines, men and space..

PRODUCTION CHARACTERISTICS. Production is an organized activity, so every production system has an objective. The system transforms the various inputs to useful outputs. It does not operate in isolation from the other organization system. There exists a feedback about the activities, which is essential to control and improve system performance. Machinery is laid as per the sequence of production. Procedures, tools and materials handling need proper attention..

IMPORTANCE OF PRODUCTIVITY. It helps to cut down cost per unit and thereby improve the profits. Gains from productivity can be transferred to the consumers in form of lower priced Products or better quality products. These gains can also be shared with workers or employees by paying them at higher rate. A more productive entrepreneur can have better chances to exploit expert opportunities. It would generate more employment opportunity. Improved competitiveness.

Operations Management. The management of systems or processes that create goods and/or provide services.

Core functional of the organizations. Operations function (product and service design, materials handling, Procurement, Inventory) Marketing function (Marketing plan, Marketing Research, Product branding, Sales, Advertising) Finance function (Budget, Funds, Cash disbursement, Financial statement, Receivables and Payables).

similarities and differences. The set of interrelated management activities, which are involved in manufacturing certain products, is called production management. If the same concept is extended to services management, then the corresponding set of management activities is called as operations management..

WE HAVE FOUR MAIN PRODUCTION SYSTEMS. Job Shop Production Batch Production Mass Production Continuous Production.

JOB SHOP PRODUCTION. SHOE FACTORY.

JOB SHOP PRODUCTION. Job shop production are characterized by manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. A job shop comprises of general purpose machines arranged into different sections. Each job demands unique technological requirements, demands processing on machines in a certain sequence..

CHARACTERISTICS OF JOB SHOP. High variety of products and low volume. Use of general purpose machines and facilities. Highly skilled operators who can take up each job as a challenge because of uniqueness. Large inventory of materials, tools, parts. Detailed planning is essential for the requirements of each product, capacities for each work center and order priorities..

ADVANTAGES OF JOB SHOP. As a result 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 utilized. Opportunity exists for creative methods and innovative ideas. Easily adaptable to change Very flexible.

DISADVANTAGES OF JOB SHOP. 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 Material handling costs.

Batch Production. CANNED FOOD.

BATCH PRODUCTION. “As a form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing.” This basically means that the raw materials move through the production line in batches, so that there is a pause between each step as a batch moves through..

CHARACTERISTICS. Batch production system is used under the following circumstances: When there is shorter production runs. When plant and machinery are flexible. 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. When manufacturing lead time and cost are lower as compared to job order production..

ADVANTAGES OF BATCH PRODUCTION. Following are the advantages of batch production: Better utilization of plant and machinery. Promotes functional specialization. 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..

DISADVANTAGES OF BATCH PRODUCTION. 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..

MASS PRODUCTION. 611%. COCACOLA DRINK.

MASS PRODUCTION. Manufacture of discrete parts or assemblies using a continuous process are called mass production. This production system is justified by very large volume of production. The machines are arranged in a line or product layout. Product and process standardization exists and all outputs follow the same path..

CHARACTERISTICS. Mass production is used under the following circumstances: 1. Standardization of product and process sequence. 2. Large volume of products. 3. Shorter cycle time of production. 4. Lower in process inventory. 5. Perfectly balanced production lines..

ADVANTAGES MASS PRODUCTION. Following are the advantages of mass production: 1. Higher rate of production with reduced cycle time. 2. Higher capacity utilization due to line balancing. 3. Less skilled operators are required. 4. Low process inventory. 5. Manufacturing cost per unit is low..

DISADVANTAGES MASS PRODUCTION. Following are the limitations of mass production: Breakdown of one machine will stop an entire production line. Line layout needs major change with the changes in the product design. High investment in production facilities. The cycle time is determined by the slowest operation..

CONTINUOUS PRODUCTION. Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. The items are made to flow through the sequence of operations through material handling devices such as conveyors, transfer devices, etc..

CHARACTERISTICS. Continuous production is used under the following circumstances: 1. Dedicated plant and equipment with zero flexibility. 2. Material handling is fully automated. 3. Process follows a predetermined sequence of operations. 4. Component materials cannot be readily identified with final product. 5. Planning and scheduling is a routine action..

ADVANTAGES OF CONTINUOUS PRODUCTION. Following are the advantages of continuous production: 1. Standardization of product and process sequence. 2. Higher rate of production with reduced cycle time. 3. Manpower is not required for material handling as it is completely automatic. 4. Person with limited skills can be used on the production line..

DISADVANTAGES OF CONTINUOUS PRODUCTION. Following are the limitations of continuous production: Flexibility to accommodate and process number of products does not exist. Very high investment for setting flow lines. 3. Product differentiation is limited..

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