1.introduction of production and operations management
INTRODUCTION Four functional areas of business organisation(i) Marketing(ii) Production(iii) Finance(iv) personnel
PRODUCTION It is a transformation system where inputs are converted into outputs. Production involves the step by step conversion of one form of materials into another through chemical or mechanical processing to create or enhance the utility of the products or services. According to economists, production is an activity through which utility is either created or enhanced
OPERATIONS It is a process of changing inputs into outputs with the creation or adding value to some entity. The process of alteration or transportation or storage or inspection or any combination there of to add value to an entity is rightly called operations.
FEATURES Non-inventoriable output of service, since generally no stock is produced Variable demand Labour intensive operations mostly Location of service is dictated by the location of the user.
PRODUCTION MANAGEMENT Production management is the process of planning, organizing, directing and controlling the activities of the production function. Production function is the conversion of raw material into finished products. Acc to H.A. Harding,” production management is concerned with those processes which convert the inputs into outputs.
OBJECTIVES OF PRODUCTIONMANAGEMENT (i) Ultimate objectives (ii) Intermediate objectives
Ultimate Objective The primary responsibility of the manufacturing activity to produce a product or products at(1) Pre-established cost(2) According to specified quality(3) Within the stipulated time period
The ultimate objectives can be classified as under:(i) Manufacturing costs(ii) Product quality(iii) Manufacturing time schedule
Manufacturing costs: Efforts should be made for following(i) Reduction in variable costs.(ii) Reduction in fixed costs(iii) Increase in the volume of production, so that the fixed costs may be spread over more production resulting in the reduction in the per unit absorption(iv) The allocation of the fixed overhead should be made on scientific basis.
Product quality The product quality standards are often established by the consumer. The manufacturing organizations should try to translate such quality prescriptions into some measurable objectives. The maintenance of the quality should not result in increase in manufacturing costs or delay in production
Manufacturing schedule The time system should not be set for the shipment alone, it should be broken into all sub systems like operating cycle time, inventory turnover rate, machine and labour idle time, set up, repair and maintenance time etc.
Intermediate objectives Machinery and equipment Materials Manpower Manufacturing services
Machinery and equipment Acquisition of machinery and equipment: The adequacy of existing machinery should be considered and proper additions and replacements should be made according to requirements. Utilization of machinery and equipment: Efforts should be made to increase the utilization rate of machinery through repair, maintenance and maximum occupancy of the machines.
Materials The material objective must be prescribed in terms of rupee value, units and space requirements. The per unit material cost should be specified and efforts should be made to increase the inventory turnover all types of inventories – raw matrial, work in progress and finished goods.
Manpower Manpower must be closely allied with the objective of selection, placement, training, rewarding and utilization of manpower. Usually these objectives are considered in terms of employees turnover rates, safety measures, industrial relations, absenteeism etc.
Manufacturing services The objective of manufacturing service is to manufacture a quality product, on schedule, at the lowest possible cost, with maximum asset turnover, to achieve consumer satisfaction.
Characteristic of modernproduction and operations function(i) Manufacturing as competitive advantage(ii) Service orientation(iii) Disappearance of smokestacks(iv) Small has become beautiful
Conclusion To summarise the product has to(i) Make sure that it develops a product which can function as expected, i.e. product with the correct quality(ii) Produce the product in correct quantity(iii) Deliver the product in Time to right place(iv) And to perform these functions at the right price.