Production and operational management Unit - 1 .pdf

PRODUCTION AND PRODUCTION SYSTEM
UNIT- 1
Introduction
Concept of Production
Any process which involves conversion of raw material into finished product for satisfaction
of human wants is called as production. Production function refers to creation of goods and
services in order to satisfy human needs by converting resources into outputs. Production
function is that part of an organisation, which is concerned with the transformation of a range of
inputs into the required outputs having the requisite quality level.
Definition 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. At each stage of processing, there will be
value addition.
Edwood Buffa defines production as ‘a process by which goods and services are created’.
The aim of any business is to provide best quality goods and services to its customers. It is
possible only when the transformation of input into output is simple, efficient and creates value
for the customer.
The group of activities, processes, and systems that control production of goods called
production management. The group of interrelated activities starting from product design and
development; converting raw material into finished goods or creating services and ending with
proper distribution of these product or services to end customer is called operations management.
Therefore, the organization must re- examine the production processes, systems, and operations
by which the goods are created and services are provided.

Meaning of production
Production is the process of transformation of raw materials into finished goods with the help of
various resources viz..men, money and machinery.
The production aims at generating or increasing the value of other materials/ products which are
being transformed. In relation to the service organization production refers to the execution of
the activity/ function which os useful to the customer or creates value to the customer. For
example- service garage performs function of repair and maintenance of automobiles, beauty
parlour, hair salons providing expertise services, hotel, banks , etc. To sum up, production is
conversion of inputs into value added outputs.
Production is a method employed for making or providing essential goods and services for
consumers. It is a process that puts intangible inputs like ideas, creativity, research, knowledge,
wisdom, etc. in use or action. It is a way that transforms (convert) tangible inputs like raw-
materials, semi-finished goods and unassembled goods into finished goods or commodities.
Production is the process of combining units of inputs (natural, man-made and human resources)
to create output (goods and services) capable of satisfying human needs and wants.
Meaning and Definition of production management
The term production management consists of two terms- production and management.
Production ( as discussed earlier), refers to the conversion of inputs into value added outputs.
Management is the process of planning, organizing, directing and controlling the activities of
the organization to achieve the pre determined goals.
Therefore, the production management is that part of the management which is concerned
with the production activities of the organization.
In other words, production management is concerned with the planning, organizing, directing
and controlling the process of conversion of inputs into outputs.

Production management aims at proper integration and utilisation of 6M’s: Men, Machine,
Money, Methods, Materials and Market to satisfy the customer needs in a better way. Its main
E. S. Buffa defines Production Management as, “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.”
Objectives of Production Management
The objective of the production management is ‘to produce goods services of right quality
and quantity at the right time and right manufacturing cost’.
RIGHT QUALITY
The quality of product is established based upon the customers needs. The right quality is
not necessarily best quality. It is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.
RIGHT QUANTITY
The manufacturing organization should produce the products in right number. If they are
produced in excess of demand the capital will block up in the form of inventory and if the
quantity is produced in short of demand, leads to shortage of products.
RIGHT TIME
Timeliness of delivery is one of the important parameter to judge the effectiveness of
production department. So, the production department has to make the optimal utilization
of input resources to achieve its objective.
RIGHT MANUFACTURING COST
Manufacturing costs are established before the product is actually manufactured. Hence,
all attempts should be made to produce the products at pre-established cost, so as to
reduce the variation between actual and the standard (pre-established) cost.

NATURE OF PRODUCTION MANAGEMENT
 Results in Value Addition: Production management is a key tool available with an
organization which assist in value addition. It is a process which enables in producing
high-quality products by purchasing raw materials from the right source, in right
form, at right price and in right quantity. These quality goods provide better
satisfaction to customers thereby improving goodwill of an organization.
 Inter-Disciplinary Approach: It is an inter-disciplinary approach which is derived
from several disciplines and subjects. Different subjects like statistics, mathematics,
economics, engineering, sociology and human psychology have contributed toward
the development of production management approach.
 Part of General Management: Production management is an essential component of
General management. It is a tool which assist managers in planning, organizing,
coordinating and controlling all activities related to the production of products and
services.
 Transformation Process: It is a process of transformation in which raw materials are
converted into finished products that are ready for consumption by consumers.
Production management focuses on economical production of products avoiding any
wastage of raw materials used.
 Operative Function: Production management monitors day to day operations of
business for ensuring long-term continuity. It supervises all production activities on
daily basis for checking out whether all resources are efficiently utilized.
 Both Art and Science: It can be treated both as an art as well as science. Production
management is termed as art as it is the one which assign, coordinates and monitors
all work activities of an organization. Whereas, it is a science as it manages all
machines and technical aspects helping in production activities.
 Management of Service Sector: Production management not only manages the
activities related to production of tangible products. It is a process which monitors the
service sector also where intangible products are provided to customers as per their
needs.
For example, the production process in a Garment manufacturing company consists of
inputs of materials, transformation processes, and final output i.e. garment.
Raw material, labor, machines, technology, are considered as the primary requirement
which is an input in the production process of cloth or garment. Different raw materials

are required in the manufacturing of garments such as yarn, fabric, sewing threads, and
accessories i.e. buttons, labels, trims, hangtags, etc.
Further, the transformation process is there which consists of a series of processes in an
organized way like cutting, marking, stitching, laying, checking, pressing, finishing, and
packaging. This transformation process converts raw materials into final goods.
The finished goods result in the final cloth or garment.
OPERATIONS MANAGEMENT
Introduction
In the earlier times when the scale of operations was small and competition was less, the process
and knowledge that deals with production was called production management. Slowly with the
passage of time as the business progresses, the competition and complexities in which it is being
run increased manifold.
The business has to survive by cutting costs and realigning all of its operations. Product designs
and development undergoes a change. The modernization has introduced fully automated
machine in the manufacturing and distribution of goods and services of the organization.
Operation Management has been variously known as Industrial Management,
Management science, Operation Research, Production management and
Production and Operation Management

Meaning
Operations are useful actions or activities which are done methodically as part of plan of work
by a process that is designed to achieve the pre decided objectives.The aspect of business
organization that is responsible for producing goods or services .A function or system that
transforms inputs into outputs of greater value.
Operations Management is a branch of management that deals with planning, organizing,
coordinating and controlling related with operations of an organization. All the business
organization deal either in products or services. The whole process starting from product design
and development; converting raw material into finished goods or creating services and ending
with proper distribution of goods or services to end customer is called operations management.
Hence operations management has a wide scope that includes various strategic, tactical and
operational issues such as
Strategic issues comprise deciding the size of the market on the basis of demand forecasting,
selection of location, deciding required facilities and logistics.
Tactical issues contain product design and development, finalization of layout, machinery,
equipments, establishing a production schedule, setting work standards and method and ensuring
quality control and inspection.
Operational Issues
Finally operational issues involve purchase management, inventory control and ensuring
efficient functioning of supply chain.
Operations in an organization can be categorisedinto manufacturing operations and service
operations.
Manufacturing operations is a conversionprocess that includes manufacturing yields a tangible
output: a product, whereas, a conversion processthat includes service yields an intangible output:
a deed, a performance, an effort.
Distinction between Manufacturing Operations and Service Operations
Following characteristics can be considered for distinguishing manufacturing operations with
service operations:

1. Tangible/Intangible nature of output
2. Consumption of output
3. Nature of work (job)
4. Degree of customer contact
5. Customer participation in conversion
6. Measurement of performance.
Manufacturing is characterised by tangible outputs (products), outputs that customers consume
overtime, jobs that use less labour and more equipment, little customer contact, no customer
participation in the conversion process (in production), and sophisticated methods for measuring
production activities and resource consumption as product are made.
Service is characterised by intangible outputs, outputs that customers consumes immediately,
jobs that use more labour and less equipment, direct consumer contact, frequent customer
participation in the conversion process, and elementary methods for measuring conversion
activities and resource consumption. Some services are equipment based namely rail-road
services, telephone services and some are people based namely tax consultant services, hair
styling.
Definitions According to Norman Gaither
Operations Management is some configuration of resources combined for the purpose of
production, transport, supply, service ,storage.
According to Reid R, Dan and Nada R. Sanders
Operations Management is the business function that plans, organize, coordinates and controls
the resources needed to produce a company' s good and services.
According to Plenert (2002), "Operations Management (OM) can be defined as the management
of activities that enable an organisation to transfer a range of basic inputs (raw materials,
energy, customer requirements, information, skills, finance, etc.) into outputs that deliver the
organisation’s primary products and services to the end customer."

The business function responsible for planning, coordinating, and controlling the resources
needed to produce products and services for a company.
The science and the Art of ensuring, goods and services are created and delivered successfully
to customers.
Production/Operations Management is the management of the processes that transform inputs
into goods and services that add value for the customer.
Production and Operation Management is aset of general principles for production economies,
facility design, job design, schedule design, quality control, inventory control work study and
cost band budgeting control. This definition explains the main areas of an enterprise where the
principles of production and operation management can be applied. This definition clearly
points out that the production and operation management is not a set of techniques,
Production/operations management is the process, which combines and transforms various
resources used in the production/operations subsystem of the organization into value added
product/services in a controlled manner as per the policies of the organization.
The set of interrelated management activities involved in manufacturing of certain goods is
called as Production Management. Similarly, the set of management activities involved in
providing certain services is called as Operations Management.
Importance of Operations Management
Operations management is the heart of any organization. Below are pointers that would explain
the importance of operations management.
 Operations management oversees the complete operating system of an organization.
 Operations management is essential for organizations to manage their daily activities
seamlessly.
 Operations management controls all the processes and handles issues including design,
operation, maintenance, and improvement of the systems. It also maintains smooth,
effective, timely production of products and services even when unexpected situations
arise.
 Operations management helps improve the reputation of an organization and thus has a
positive influence on its capability to achieve growth and stability goals.

 Operations management ensures that products meet the quality standards and customers’
expectations. Thus, satisfied customers also mean customers buy from you again and
referrals, which further improves brand value, giving a competitive edge in the market.
 Operations management includes recognizing and optimizing the processes included in
the production of services or goods, which can help cut costs. Thus, operations
management facilitates selling more products/services and reducing costs, which means
increased revenues and enhanced growth of an organization.
 Operation management motivates the employees toward their roles and improves
employee productivity.
Relationship of production and operations management / Differences
Production management is a branch of management that deals with conversion of raw materials
into finished goods.
Technically, it is a subsystem or small part of operation management that concentrates on
production systems and its efficient functioning.
Operations management, on the others hand, is a group of all activities that begin with product
and service planning, production and ends with distribution of these product and services to end
customer.
BASIS Production management Operations Management
Definition Production management
connotes the administration of
the range of activities
belonging to the creation of
produc
Operations management refers
to the part of management
concerned with the production
and delivery of goods and
services.
Objective The objective of production
management is to produce the
Objective of operations
management is to utilise

best goods or services that are
of the right quality, quantity at
the right time
resources to the extent
possible so as to satisfy
customer wants.
Concept Old term that was used when
business scale and operations
was small and complexities
and competition was less. The
focus was on production as
production was driven.
Modern term as it is includes
organizations that deal in
supply of services and also
watch overall operations of
the organizations. It is more in
sync with the concept of
customer is king.
Decision making Related to aspects of
production only.
Related to the regular business
activities in an organization
Found in enterprises where production
is undertaken
It is found in places like
Banks, Hospital, Companies
etc which are providing
service
Customer contact Less More
Scope Narrow concept confined to
only conversion of raw
materials into finished goods
Broad concept that includes
planning, design
development, conversion and
distribution.
OBJECTIVES OF POM
1. Effective utilization of resources
2. Production planning
3. To ensure timely delivery of products
4. Maximum customer satisfaction through quality, reliability, cost and delivery time.
5. Reduced cost of production
6. Reduced price of goods and services
7. Increased wages to workers
8. Lower overhead costs
9. Higher profits of business

10. Higher per capita income
11. Overall prosperity and growth
12. Helps in development of new products
13. Ability to face competition
14. Minimum possible inventory levels.
15. Concern of protection of environment.
16. Minimum production cycle time
DUTIES AND RESPONSIBILITIES OF PRODUCTION MANAGERS IN
MANUFACTURING ORGANIZATIONS
1. Planning the geographical location of the factory.
2. Purchasing production equipments
3. Layout of equipments within the factory
4. Designing production process and equipments
5. Product design
6. Designing production work and establishing work standards
7. Capacity planning
8. Production planning and scheduling
9. Production Control
10. Inventory management
11. Supply chain management
12. Quality control
13. Production equipment maintenance and repair
14. Measurement and monitoring of productivity
15. Industrial relations
16. Health and safety
17. Staff selection and liaisoning
18. Budgeting and capacity planning
HISTORICAL EVOLUTION OF PRODUCTION AND OPERATIONS
MANAGEMENT
For over two centuries operations and production management has been recognised as an
important factor in a country’s economic growth.

The traditional view of manufacturing management began in eighteenth century when Adam
Smith recognised the economic benefits of specialisation of labour. He recommended
breaking of jobs down into subtasks and recognises workers to specialised tasks in which they
would become highly skilled and efficient. In the early twentieth century, F.W. Taylor
implemented Smith’s theories and developed scientific management. From then till 1930, many
techniques were developed prevailing the traditional view. Brief information about the
contributions to manufacturing management is shown in the Table 1.
Production management becomes the acceptable term from 1930s to 1950s. As F.W. Taylor’s
works become more widely known, managers developed techniques that focussed on economic
efficiency in manufacturing. Workers were studied in great detail to eliminate wasteful efforts
and achieve greater efficiency. At the same time, psychologists, socialists and other social
scientists began to study people and human behaviour in the working environment.
In addition, economists, mathematicians, and computer socialists contributed newer, more
sophisticated analytical approaches.With the 1970s emerges two distinct changes in our views.
The most obvious of these,reflected in the new name operations management was a shift in the
service and manufacturing sectors of the economy. As service sector became more prominent,
the change from ‘production’ to ‘operations’ emphasized the broadening of our field to service
organizations. The second, more suitable change was the beginning of an emphasis on synthesis,
rather than just analysis, in management practices

SCOPE OF PRODUCTION AND OPERATION MANAGEMENT
Production and operations management concern with the conversion of inputs into outputs, using
physical resources, so as to provide the desired utilities to the customer while meeting the other
organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from
other functions such as personnel, marketing, finance, etc., by its primary concern for
‘conversion by using physical resources.’ Following are the activities which are listed under
production and operations management functions:
1. Location of facilities
2. Plant layout and material handling
3. Product design
4. Process design
5. Production planning and controlling
6. Quality control
7. Material management
8. Maintenance management
1. Location of facilities: for operations is a long-term capacity decision which involves
a long term commitment about the geographically static factors that affect a business
organization. It is an important strategic level decision-making for an organization.
It deals with the questions such as ‘where our main operations should be based?’
The selection of location is a key-decision as large investment is made in building
plant and machinery. An improper location of plant may lead to waste of all the
investments made in plant and machinery equipments. Hence, location of plant
should be based on the company’s expansion plan and policy, diversification plan for
the products, changing sources of raw materials and many other factors. The purpose
of the location study is to find the optimal location that will results in the greatest
advantage to the organization.
2. PLANT LAYOUT AND MATERIAL HANDLING
Plant layout refers to the physical arrangement of facilities. It is the configuration of
departments, work centers and equipment in the conversion process. The overall
objective of the plant layout is to design a physical arrangement that meets the required
output quality and quantity most economically.

According to James Moore, “Plant layout is a plan of an optimum arrangement of
facilities including personnel, operating equipment, storage space, material handling
equipments and all other supporting services along with the design of best structure to
contain all these facilities”.
‘Material Handling’ refers to the ‘moving of materials from the store room to the
machine and from one machine to the next during the process of manufacture’. It is also
defined as the ‘art and science of moving, packing and storing of products in any form’. It
is a specialized activity for a modern manufacturing concern, with 50 to 75% of the cost
of production. This cost can be reduced by proper section, operation and maintenance of
material handling devices. Material handling devices increases the output, improves
quality, speeds up the deliveries and decreases the cost of production. Hence, material
handling is a prime consideration in the designing new plant and several existing plants.
3. PRODUCT DESIGN
Product design deals with conversion of ideas into reality. Every business organization
has to design, develop and introduce new products as a survival and growth strategy.
Developing the new products and launching them in the market is the biggest challenge
faced by the organizations.
The entire process of need identification to physical manufactures of product involves
three functions: marketing, product development, and manufacturing. Product
development translates the needs of customers given by marketing into technical
specifications and designing the various features into the product to these specifications.
Manufacturing has the responsibility of selecting the processes by which the product
can be manufactured. Product design and development provides link between
marketing, customer needs and expectations and the activities required to manufacture
the product.
4. PROCESS DESIGN
Process design is a macroscopic decision-making of an overall process route for
converting the raw material into finished goods. These decisions encompass the selection

of a process, choice of technology, process flow analysis and layout of the facilities.
Hence, the important decisions in process design are to analyze the workflow for
converting raw material into finished product and to select the workstation for each
included in the workflow.
5. PRODUCTION PLANNING AND CONTROL
Production planning and control can be defined as the process of planning the
production in advance, setting the exact route of each item, fixing the starting and
finishing dates for each item, to give production orders to shops and to follow up the
progress of products according to orders.
The principle of production planning and control lies in the statement ‘First Plan
Your Work and then Work on Your Plan’. Main functions of production planning
and control includes planning, routing, scheduling, dispatching and follow-up.
Planning is deciding in advance what to do, how to do it, when to do it and who is to do
it.
Planning bridges the gap from where we are, to where we want to go. It makes it
possible for things to occur which would not otherwise happen.
Routing may be defined as the selection of path which each part of the product will
follow, which being transformed from raw material to finished products. Routing
determines the most advantageous path to be followed from department to department
and machine to machine till raw material gets its final shape.
Scheduling determines the program for the operations. Scheduling may be defined as ‘the
fixation of time and date for each operation’ as well as it determines the sequence of
operations to be followed.

Dispatchingis concerned with the starting the processes. It gives necessary authority so
as to start a particular work, which has already been planned under ‘Routing’ and
‘Scheduling’. Therefore, dispatching is ‘release of orders and instruction for the starting
of production for any item in acceptance with the route sheet and schedule charts’.
The function of follow-up is to report daily the progress of work in each shop in a
prescribed proforma and to investigate the causes of deviations from the planned
performance.
6. QUALITY CONTROL
Quality Control (QC) may be defined as ‘a system that is used to maintain a desired
level of quality in a product or service’. It is a systematic control of various factors that
affect the quality of the product. Quality control aims at prevention of defects at the
source, relies on effective feed back system and corrective action procedure.
Quality control can also be defined as ‘that industrial management technique by means
of which product of uniform acceptable quality is manufactured’. It is the entire
collection of activities which ensures that the operation will produce the optimum quality
products at minimum cost.
The main objectives of quality control are:
 To improve the companies income by making the production more acceptable to the
customers i.e., by providing long life, greater usefulness, maintainability, etc.
 To reduce companies cost through reduction of losses due to defects.
 To achieve interchangeability of manufacture in large scale production.
 To produce optimal quality at reduced price.
 To ensure satisfaction of customers with productions or services or high quality level,
to build customer goodwill, confidence and reputation of manufacturer.
 To make inspection prompt to ensure quality control.
 To check the variation during manufacturing.

7. MATERIALS MANAGEMENT
Materials management is that aspect of management function which is primarily
conLABOUR with the acquisition, control and use of materials needed and flow of goods
and services connected with the production process having some predetermined
objectives in view.
The main objectives of materials management are:
 To minimize material cost.
 To purchase, receive, transport and store materials efficiently and to reduce the
related cost.
 To cut down costs through simplification, standardization, value analysis, import
substitution, etc.
 To trace new sources of supply and to develop cordial relations with them in order to
ensure continuous supply at reasonable rates.
 To reduce investment tied in the inventories for use in other productive purposes and
to develop high inventory turnover ratios.
8. MAINTENANCE MANAGEMENT
In modern industry, equipment and machinery are a very important part of the total
productive effort. Therefore, their idleness or downtime becomes are very expensive.
Hence, it is very important that the plant machinery should be properly maintained.
The main objectives of maintenance management are:
 To achieve minimum breakdown and to keep the plant in good working condition at
the lowest possible cost.
 To keep the machines and other facilities in such a condition that permits them to be
used at their optimal capacity without interruption.
 To ensure the availability of the machines, buildings and services required by other
sections of the factory for the performance of their functions at optimal ssurn on
investment.

PRODUCTION SYSTEM
Production system is a combination of two words:
Production
Production function is that part of an organization, which is concerned with the transformation of
a range of inputs into the required outputs (products) having the requisite quality level.
Meaning of system
System consists of elements or components. The elements or components are interlinked
together to achieve the objectives for which the system exists. For example - a human body is
made up of group of organs, called organ system, that work together to keep the body in balance,
or a business organisation is maRoboticsof many administrative and management functions,
products, services, groups and individuals.
Huge systems are often a collection (assembly) of smaller sub-systems.
What is a Production System?
Production System refers to that set-up of the organization, which is engaged in producing
products. It is an activity in which resources are put together and converted into a product. This
process enables adding value to that product. Further, the process takes place as per the policies
of the management.
Production system of an organization is that part, which produces products of an organization.
It is that activity whereby, resources flowing within a defined system are combined and
transformed in a controlled manner to add value in accordance with the policies communicated
by management.

The production system has the following characteristics:
1. Production system is an organized activity, so every production system has an
objective.
2. The system transforms the various inputs into useful outputs.
3. It does not operate in isolation from the organization system.
4. There exists a feedback about the activities, which is essential to control and improve
system performance.
A simplified production system is shown below:
Production system components:
Production system consists of three main components viz., Inputs, Conversion Process and
Output.
1. Inputs include raw-materials, machines, man-hours, components or parts, drawing, instructions
and other paper works.

2. Conversion process includes operations (actual production process). Operations may be either
manual or mechanical or chemical. Operations convert inputs into output. Conversion process
also includes supporting activities, which help the process of conversion. The supporting
activities include; production planning and control, purchase of raw-materials, receipt, storage
and issue of materials, inspection of parts and work-in-progress, testing of products, quality
control, warehousing of finished products, etc.
3. Output includes finished products, finished goods (parts), and services.
The three components of a production system are depicted in this diagram.
In spite of these above three major steps the manufacturer has to keep a continuous
check on whether continuous inventory is been supplied, The focus on the quality aspect cost
factor also has to be given top priority. In accordance with the environment and continuous
feedback.
Examples
The examples of a production system are as follows:
1. Tangible goods: Consider an example of a manufacturing industry like a Sugar Industry. Here,
sugarcane is first used as an input, then the juice of sugarcane is processed through a
conversion process, finally to get an output known as a refined sugar (used for mass
consumption).
2. Intangible goods: Consider an example from a service industry that of a software-development
firm or company. Here, initially, written program codes are used as an inputs. These codes are
then integrated in some database and are provided with a user-friendly interface through a
conversion process. Finally, an output is made available in form of an executable application
program.
Conclusion
Production system is a result of arranging inputs, their conversion process and output based on
some logic and functions. Production system fails if any such arrangement made don't give a
desired level of outcome.
Classification of Production System

One should note that the classification of any production system relies on many factors. These
factors include type and volume of production. Generally, the production systems divided into
two categories:
1. Intermittent production
 Job Production
 Batch Production
 project production
2. Continuous Production
 Mass Production
 Process production
Now let's discuss in detail each of the above-mentioned categories.
( A) INTERMITTENT PRODUCTION
Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed)
intervals (time gaps).
As the name signifies, the production process takes place at irregular intervals to produce a
number of different products with the help of one production line.
Manufacturers use this system to produce low-volume, high-variety products. Therefore, this
system is very flexible.
The types of intermittent production systems are discussed below:
Following are examples on the intermittent production system.
The work of a goldsmith is purely based on the frequency of his customer's orders. The
goldsmith makes goods (ornaments) on a small-scale basis as per his customer's requirements.
Here, ornaments are not done on a continuous basis.

Similarly, the work of a tailor is also based on the number of orders he gets from his customers.
The clothes are stitched for every customer independently by the tailor as per one's measurement
and size. Goods (stitched clothes) are made on a limited scale and is proportional to the number
of orders received from customers. Here, stitching is not done on a continuous basis
Job Shop Production
It involves the manufacturing of one or a few products within a predetermined time and cost.
This is because the production takes place as per the specifications of the customer. Therefore,
the products in job shop production are high in variety and low in volume. Also, they aim to
meet the requirement of the specific order.
The machines are general purpose. These are set up in different departments. Further, each
job has a unique technological requirement. Also, it requires processing on machines in a definite
order. Its sub-classification relies on the production of job
1. Only once
2. At irregular intervals
3. At regular intervals
Examples: Boutique, Automobile service center, typing shops, etc.
Characteristics of Job Shop Production
The job production system is followed when there is:
1. High variety of products and low volume.
2. Use of General purpose machines and facilities.
3. Highly skilled operators whi can take up each job as a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detail planning is essential for sequencing the requirement of each product, capacities for
each work centre and order priorities.
Advantages

1. Because of General purpose machines and facilities varieties of products can be
produced.
2. Operators will become more skilled and competent as each job gives them learning
opportunities .
3. Full potential of operators can be utilized.
4. Opportunities exists for creative methods and innovative ideas.
LIMITATIONS
1. High cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence inventory cost.
3.
4. Production planning is complicated.
5. Large space requirements.
Batch Production
It is that type of production system in which the job passes through functional departments, in
lots. These lots are nothing but batches and each lot has a different routing. It involves
manufacturing a confined number of products. They are similar and produced in large volumes
these products are produced at periodic intervals and stocked awaiting sales of the batches. Its
sub-classification relies on the production of batches:
1. Only once
2. At irregular intervals
3. At regular intervals
Example: Production of tyres and tubes, ready-made garments, pharmaceuticals, and cosmetics.
Examples of batch production flows include, manufacturing of drugs and pharmaceuticals,
medium and heavy machineries, etc

the service sector, the system for processing claims in a large insurance company. Batch
production systems are often referred to as job shops.
For example, a consumer durable company, Samsung manufactures different types of
electronic products. Also, there are different variants of the same product that are being
produced. Like, there are different types of Samsung washing machines alone in the product
range of the company. So, it produces these variants of a single product in different batches i.e.
through batch production. One type of washing machine will be manufactured first and after that,
the next type of washing machine will be produced as per the demand.
Characteristics of Batch Production
 When there is shorter production runs.
 When plant and machinery are flexible.
 When plant and machinery set up are used to the product in the lot. After that, the setup
undergoes a change so as to process the next batch.
 When manufacturing lead time and cost are lower as compared to job order production.
Advantages
1. Better Utilization of plant and machinery.
2. Promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Flexibility to accommodate and process number of products.
5. Job satisfaction exists for operators.
Limitations
1. Material handling in complex because of irregular and longer flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to continous production.
4. Higher set up costs due to frequent changes in set up.
Project production
It is one-of-a-kind production in which only one type of item is manufactured at a time.
This type of production is often used for very large projects or for individual customers. Because
the customer’s needs and preferences play such a decisive role in the final output, it’s essential

for the operations manager to maintain open and frequent communication with that customer.
The workers involved in this type of production are highly skilled or specialists in their field.
The third type of production system is the project, or “one-shot” system. For a single, one-of-a-
kind product, for example, a building, a ship, or the prototype of a product such as an airplane
or a large computer, resources are brought together only once. Because of the singular nature
of project systems, special methods of management have been developed to contain the costs of
production within reasonable levels.
The following are examples of project or job-based production:
 custom home construction
 yachts
Consider the home in which you live. When the house was built, the contractor used a job
process, and highly skilled workers were brought in to install the plumbing, heating, and
electrical systems.
Some types of service businesses also deliver customized services. Doctors, for instance, must
consider the illnesses and circumstances of each individual patient before developing a
customized treatment plan. Real estate agents may develop a customized service plan for each
customer based on the type of house the person is selling or wants to buy.
CHARACTERISTICS OF PROJECT PRODUCTION
 The requirement of resources is not same (it varies). Generally, the resource requirement
at the beginning is low. Then in mid of production, the requirement increases. Finally, it
slows down when the project is near its completion phase.
 Many agencies are involved in the project. Each agency performs specialized jobs. Here,
coordination between agencies is important because all jobs are interrelated.
 Delays take place in completion of projects due to its complexity and massiveness.
 As routing and scheduling changes with fresh orders, proper inspection is required at
each stage of production.
CONTINOUS PRODUCTION
Continuous means something that operates constantly without any irregularities or frequent
halts.

In the continuous production system, goods are produced constantly as per demand forecast.
Goods are produced on a large scale for stocking and selling. They are not produced on
customer's orders. Here, the inputs and outputs are standardized along with the production
process and sequence.
Following chart highlights the concept of a continuous production system.
Following are examples on the continuous production system. Please refer above chart while
reading examples given below.
The production system of a food industry is purely based on the demand forecast. Here, a
large-scale production of food takes place. It is also a continuous production.
Similarly, the production and processing system of a fuel industry is also purely based on,
demand forecast. Crude oil and other raw sources are processed continuously on a large scale to
yield usable form of fuel and compensate global energy demand.
Characteristics
The characteristics of a continuous production system are listed as follows:
 The flow of production is continuous. It is not intermittent.
 The products are standardized.
 The products are produced on predetermined quality standards.
 The products are produced in anticipation of demand.
Standardized routing sheets and schedules are prepared
Advantages
1. Standardization of product and process sequence.
2. oHigher rate of production with reduced cycle time.
3. Higher capacity building due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.

Similarly, the production and processing system of a fuel industry is also purely based on,
demand forecast. Crude oil and other raw sources are processed continuously on a large scale to
yield usable form of fuel and compensate global energy demand.
The types of continuous production system include:
 Mass production flows, and
 Process production flows.
Mass Production
When manufacturing of discrete parts and assemblies takes place by way of a continuous
process, it is mass production. As the name signifies, the production involves a large volume so
as to meet demand.
In this, the arrangement of the machine is in a line. There is the standardization of products and
processes. Further, the outputs go through the same path. Also, the materials are purchased n
bulk. It requires well-researched production planning.
One of the best examples of mass production is the manufacturing process adopted by Ford.
Mass production is also known as flow production or assembly line production.
An Assembly line or mass production plant typically focus on specialization. There are
multiple workstations installed and the assembly line goes through all the workstations turn by
turn. The work is done in a specialized manner and each workstation is responsible for one single
type of work. As a result, these workstations are very efficient and production due to which the
whole assembly line becomes productive and efficient.
Products which are manufactured using mass production are very standardized products. High
sophistication is used in the manufacturing of these products. If 1000 products are manufactured
using mass production, each one of them should be exactly the same. There should be no
deviation in the product manufactured.

Examples: Production of auto parts and industrial products.
The goods are produced either with the help of a single operation or uses a series of
operations.
E. g. of mass production is the production of toothpastes, soaps, pens, etc.
Another example can be Coca-Cola, which is a bottling company that works on mass
production under a continuous production system. The products are highly automated and
standardized and production is in high volumes. Coca-Cola’s production process includes
transferring sub-parts or sub-assemblies from production’s one stage to another stage through a
continuous flow or process. Products are added at each stage of mass production. This mass
production method being used by Coca-Cola is due to the wide variation of products of the
company that are being distributed in bulk orders. The company has a different range of products
in its distribution range such as Diet Coke, Coke, Flavored soft drinks, Bottled water, etc. So, the
production of such a huge range of products can be best achieved through mass production and a
continuous production system
Characteristics of Mass Production
 Standardization of sequence of product and process
 Special purpose machines dedicated to higher production capacities and output rates
 Product volume is large
 Cycle time of production is shorter
 Lower in process inventory
 Balanced production lines
 The continuous flow of material components and parts. Also, it does not have any
backtracking.
 Easy production planning and control
 Automatic material handling
Process Production
Process production is characterized by the manufacture of a single product produced.
Production is carried on continuously through a uniform and standardized sequence of
operations. Highly sophisticated and automatic machines are used.

Process production is employed in the bulk processing of certain materials.
The typical processing Industries are fertilizers plants, petrochemical plants, and milk
dairies which have highly automated systems and sophisticated controls.
Here, a single product is produced and stocked in warehouses until it is demanded in the
market. The flexibility of these plants is almost zero because only one product can be produced.
Examples of these plants include, steel, cement, paper, sugar, etc.
The flexibility of such plants is almost zero as only one type of product can be produced in
theplant
Examples are refineries, petrol, kerosene, and diesel oil.
Characteristics of Process Production
 highly mechanized system for handling materials. Conveyors and automatic transfer
machines are used to move the materials from one stage to another.
 Low-skilled labour and skilled technicians are required.
 There is very less work-in-progress because material flow is continuous.
 The production planning and scheduling can be decided well in advance.
 The full production system is designed to produce only one specific type of item.
For example, different industries that are based on process production include Milk diaries,
Fertilizer plants, and Petrochemical plants as these industries work on highly automated systems.
Types of Process Production

There are two types of Processs Production
1. Analytical Process: Here raw material is broken down into its component parts. Ex:
Crude oil inrefinery is broken down into individual fractions like Kerosene. Petrol,
Naptha etc.
2. Synthetic Process: Mixing of two or more parts of materials to form a finishesd product
like soap.
Conclusion
Above all, the production System of an enterprise uses facilities, equipment, manpower,
material, and operating method to produce goods. These goods satisfy the demand of customers.

1. Production Management System of Oil Refineries
Crude oil is converted into various common products of petroleum i.e. diesel, gasoline, etc.
Liquids being used in plastics and chemicals are also produced by a refinery. Multiple units are
used in complex and large oil refineries to disintegrate crude oil. Further, the process starts for
reconfiguration of the disintegrated crude oil into new products using different chemical-based
processes. Large tanks are arranged to store finished products before making them available for
transport at different places.

PRODUCTIVITY
Productivity refers to the physical relationship between the quantity produced (output)
and the quantity of resources used in the course of production (input).
“It is the ratio between the output of goods and services and the input of resources
consumed in the process of production.”
Productivity is the ratio between output of wealth and input of resources used in production
processes.
Output means the quantity of products produced and the inputs are the various resources used
in the production. The resources used may be land, building, equipment, machinery,
materials, labour etc.
PRODUCTIVITY
Productivity means the balance between all the factors of production that will give the greatest
ooutput for the smallest budget.
Productivity refers to the physical relationship between the quantity produced (output) and the
quantity of resources used in the course of production (input). “It is the ratio between the
output of goods and services and the input of resources consumed in the process of
production.”

Output implies total production while input means land, labour, capital, management, etc.
Productivity measures the efficiency of the production system. The efficiency with which
resources are utilized is called productive efficiency. Higher productivity means producing
more from a given amount of inputs or producing a given amount with lesser inputs.
At the level of a plant or an industry productivity is an output-input ratio. But at the
macro level, productivity is a measure of performance of an economy or country. From a
nation’s viewpoint productivity is the ratio of available goods and services to the
potential resources of the country.
DEFINITIONS
The management guru, Peter Drucker has defined Productivity as a balance between
different elements of production, and through this; the maximum output will be obtained with
the minimum effort.
According to the International Labor Organization (I.L.O), Productivity is a ratio between
an output’s volume that is measured by the production index and the subsequent volume of
labor input that is measured by the employment index.
In this, the output indicates total production in terms of revenue or units produced. Wherein,
input includes land, capital, labor, equipment, etc. The efficiency of the whole production
management system is determined through productivity.
Higher and Lower Productivity
In the operational efficiency of a manufacturing unit, productivity is viewed as a good
indicator. The productivity of an organization is defined as higher productivity if its
production is more than the given inputs. In other words, higher productivity is obtained if
the available resources of an organization are utilized properly.
On the other hand, lower productivity replicates the excessive use or wastage of both time and
available resources.

Productivity = Output/Input
For the long term growth of the firm and the economy as a whole, it is impertinent that a high
level of productivity is maintained. A high productivity means that the resources are utilised
to the optimum, while minimizing wastage. This leads to reduction in cost of production,
and subsequently availability of quality products to customers at lower price.
Profitability of the firm is also related to its productivity. More profits mean that more
retained earnings which would ultimately increase shareholders’ wealth.
Productivity – Concept (With Formula)
The concept of productivity can be applicable to any economy, small, medium and large
business, government and individuals. Productivity aims at the maximum utilization of
resources for yielding as many goods and services as possible, desired by consumers at lowest
possible cost. Productivity is the ratio of output in a period of time to the input in the same
period time.
Productivity can measured with the help of following formula:

Productivity is an aggregate measure of the efficiency of production; it is the ratio of output to
inputs i.e. capital, labor, land, energy and materials”.
“Productivity refers to the efficiency of the production system and an indicator to; how well
the factors of production (land, capital, labor and energy) are utilized”.
Productivity refers to the efficiency of the production system. It is the concept that guides the
management of production system. It is an indicator to how well the factors of production
(land, capital, labor and energy) are utilized.
Productivity can be increased by the following ways:
1. Increasing the output using the same input.
2. Reducing the input by maintaining the output as constant.
3. Increasing the output to a maximum extent with a smaller increase in input.
A major problem with productivity is that it means many things to many people.
Economists determine it from Gross National Product (GNP), managers view it as cost cutting

and speed up, engineers think of it in terms of more output per hour. But generally accepted
meaning is that it is the relationship between goods and services produced and the resources
employed in their production.
Productivity – Measurement (With Formula)
Productivity is a measure of the efficiency of production. The measure of productivity is
defined as a total output per one unit of a total input.
Productivity measurements must show a linkage with profitability; after all, it is the bottom
line that is the ultimate barometer of a company’s success. Inputs in any production process
comprises capital, labor, material and energy.
Productivity of each resource can be measured separately. Such measurement gives single
factor productivity.
The method of calculating productivity considering more than one resource is called multi-
factor productivity approach to measuring productivity.
Total productivity (total productivity index) refers to the productivity of all resources put
together. So productivity of all resources put together gives total productivity.
There are broadly three types of productivity measurements and these are explained
below:
1. Single-Factor Productivity Measurement.
2. Multi-Factor Productivity Measurement.
3. Total (Composite) Factor Productivity Measures.
4. Total Productivity Model.
1. Single-Factor Productivity Measurement
Single-Factor Productivity is a measure of output against specific input. Partial productivity
is concerned with efficiency of one class of input. Its significance lies in its focus on
utilization of one resource. Labor productivity is a single factor productivity measure. It is the

ratio of output to labor input (units of output per labor hour). Material productivity is the ratio
of output to materials input.
Machine productivity is the ratio of machine units of output per machine hour, output per
unit machine. Capital productivity is the ratio of output to capital input and it is measured in
Rupees. Energy Productivity is units of output per kilowatt-hour (Rupee value of output per
kilowatt-hour).
Advantages of Single-Factor Productivity:
i. Ease in obtaining relevant data and easy to comprehend.
ii. Acts as a good diagnostic measure to identify areas of improvement by evaluating inputs
separately across the output.
iii. Ease in comparing with other businesses in the industry.
Disadvantages of Single-Factor Productivity:
i. Does not reflect the overall performance of the business.
ii. Misinterpreted as technical change or efficiency/effectiveness of labor.
iii. Management may identify wrong areas of improvements if the focus areas of a business
are not examined accurately.
2. Multi-Factor Productivity Measurement:
The concept of multi-factor productivity was developed by Scott D. Sink, multi-factor
productivity measurement model considered labour, material and energy as major inputs.
Capital was deliberately left out as it is most difficult to estimate how much capital is being
consumed per unit/ time.
The concept of depreciation used by accountants make it further difficult to estimate actual
capital being consumed. Multi-factor productivity is ratio of output to a group of inputs such
as; labor, energy and material. Multi-factor productivity is an index of output obtained from

more than one of the resources (inputs) used in production. It is the ratio of net output to the
sum of associated labor and other factor inputs.
Advantages of Multi-Factor Productivity:
i. Considers intermediate inputs of a business.
ii. Measures technical change in an industry. Disadvantages of Multi-Factor Productivity
iii. Difficulty in obtaining all the inputs.
iv. Difficulty in communicating inter-industry linkages and aggregation.
3. Total (Composite) Factor Productivity Measures:
The Total Factor Productivity model developed by John W. Kendrick in 1951, he has taken
only labour and capital as only two input factors. In an effort to improve productivity of
labour, company may install more machinery and then productivity of labour will go up
bringing down the capital productivity.
Therefore, labour and capital are considered to be the most significant in contribution in the
process of production.
Advantages of Total Factor Productivity:
i. Ease in obtaining data and to understand.
ii. Ease in understanding.

iii. Ease of aggregation across industries.
Disadvantages of Total Factor Productivity:
i. Not a good measure for technological change.
ii. Other inputs are ignored.
iii. Net output does not reflect the efficiency of production system in a proper way.
4. Total Productivity Model:
Total Productivity Model was developed by David J. Sumanth in 1979 considered five items
as inputs. These are human, material, capital, energy and other expenses. This model can be
applied in any manufacturing or service organization.
Total Tangible Output = Value of finished units produced + Partial units produced +
Dividends from securities + Interests from bonds + other incomes.
Total Tangible Inputs = Value of human inputs + Capital inputs + Materials purchased +
Energy inputs + other expenses (taxes, transport & office expenses etc.).
Advantages of Total Productivity:
i. All quantifiable inputs are considered.
ii. Sensitivity analysis can be done.
iii. Provides both firm level and operational unit level productivity.
Disadvantages of Total Productivity:
i. Data is difficult to compute.
ii. Does not consider intangible factors of input and output.

FACTORS AFFECTING PRODUCTIVITY
Productivity is the outcome of several factors. These factors are so interrelated that it is
difficult to identify the effect of any one factor on productivity.
The factors influencing productivity can be classified broadly into two categories:
 (A) Controllable Factors.
 (B) Uncontrollable Factor.
(A) Controllable Factors:
 Controllable Factors are considered as internal factors. These are the factors which are
in control of industrial organization.
Controllable factors are:
1. Material and Power:
 Improved quality of raw materials and increased use of power have a favorable effect
on productivity. An effort to reduce materials and energy consumption brings about
considerable improvement in productivity.
 It consist:
 Selection of quality material and right material.
 Control of wastage and scrap.
 Effective stock control.
 Development of sources of supply.
 Optimum energy utilization and energy savings.
2. Machinery and Plant Layout:

The size of the plant and the capacity utilization has direct bearing on productivity.
Production below or above the optimum level will be uneconomical and will tend
towards lower level of productivity. The arrangement of machines and position in the
plant and the setup of the wore-bench of an individual worked will determine how
economically and efficiently production will be ferried out.
3. Human Factors:
 Human nature and human behavior are the most significant determinants of
productivity. Human factors include both their ability as well as their willingness.
i. Ability to Work:
Ability to work is governed by education, training, experience and aptitude of the
employees. Productivity of an organization depends upon the competence and caliber
of its people (both workers and managers).
ii. Willingness to Work:
Motivation and morale of people are very important factors that determine
productivity. These are affected by wage incentive schemes, labour participation in
management, communication systems, informal group relations, promotion policy,
union Management relations, quality of leadership, working hours, sanitation,
ventilation, subsidized canteen and company transport etc.
4. Organization and Managerial Factors:
Organization factor include various steps taken by the organization towards
maintaining better industrial relations such as delegation and decentralization of
authority. These factors also influence motivation likewise the existence of group, with
higher productivity as their goal is likely to contribute to the organization objectives.
The competence and attitudes of managers have an important bearing on productivity.
Competent and dedicated managers can obtain extraordinary results from ordinary
people. Job performance of employees depends on their ability and willingness to
work.
5. Technological Factors:
Technological factors exert significant influence on the level of productivity.

These include the following:
i. Size and capacity of plant
ii. Product design and standardization
iii. Production planning and control
iv. Plant layout and location
v. Materials handling system
vi. Inspection and quality control
vii. Machinery and equipment used
viii. Research and development
(B) Uncontrollable Factors:
Uncontrollable factors are known as external factors and these factors are beyond the
control of the individual industrial organization.
Uncontrollable factors are:
1. Economic Political and Social Changes:
There are economic, social and political factor that affects the productivity.
i. Economic Factors : There are certain factors that also have an impact on
productivity such as: Market sizeBanking and credit facilitiesTransport and
communication systemWays to Improve Productivity
ii. Political Factors like Law and order, stability of government, harmony between
states etc. are essential for high productivity in industries Taxation policies of the
government influence willingness to work, capital formation, modernization and
expansion of plants etc. Industrial policy affects the size, and capacity of plants.
Elimination of sick and inefficient units also helps to improve productivity.

iii. Social Factors We live in a society and we have to follow its culture, traditions,
customs, rules, and norms. Also social customs, traditions and institutions influence
attitudes towards work and job. For instance, bias on the basis of caste, religion, etc.,
inhibited the growth of modern industry in some countries. The joint family system
affected incentive to work hard in India. Close ties with land and native place
hampered stability and discipline among industrial labour.
2. Natural Resources:
Natural factors such as physical, geographical and climate conditions exert
considerable influence on productivity, particularly in extreme climates (too cold or
too hot) tends to be comparatively low. Natural resources like water, fuel and minerals
influence productivity.
3. Government Factor:
Government policies and programs are significant to productivity practices of
government agencies, transport and communication power, and fiscal policies (interest
rates, taxes) influence productivity to the greater extent.
Productivity – Importance
 Productivity has become almost synonymous for progress. The resources of a
country are generally limited. Therefore, higher productivity is essential for improving
living standards and for the prosperity of a nation. Higher productivity requires
elimination of waste in all forms. Higher productivity leads to economic growth and
social progress.
 It is only by improving productivity that employees can get better wages and working
conditions and more employment opportunities.
 Higher productivity brings lower prices for consumers and higher dividend for
shareholders. It improves the exports and foreign exchange reserves of a country.
Thus, productivity is the key to prosperity.
 Higher productivity is of special significance in an underdeveloped country like India.
Mass poverty and unemployment cannot be eliminated without increasing productivity
in agriculture, industry and all other areas of human activity. According to John W.
Kendrick, “the chief means where by human kind can raise itself out of poverty to a
condition of relative material influence is by increasing productivity”.

In brief, higher productivity provides the following importance:
 It helps to reduce the cost of production per unit through more economical or efficient
use of resources.
 Reduction in costs helps to improve the profits of a business. The enterprise can more
successfully compete in the market.
 The gains of higher productivity can be passed on to consumers in the form of lower
prices and/or better quality of products.
 Similarly, gains of higher productivity can be shared with workers in the form of
higher wages or salaries and better working conditions.
Availability of quality goods at reasonably low prices helps to improve the standard of
living in the country.
 Due to higher productivity, a firm can survive and grow better. This helps to generate
more employment opportunities.
 A more productive enterprise can better export goods and earn valuable foreign
exchange for the country.
 Higher productivity means better utilization of the country’s resources, which helps to
control inflation in the country.
 Increase in materials productivity results to reduction or elimination of wastes thereby
making the environment cleaner. (Green Productivity).
 Increase in capital productivity will reduce the cost of capital and increases the firm’s
profitability.
 Increase in total factor productivity increases the firm’s profits and simultaneously, may
also result to lower prices of their products allowing consumers to buy more goods and
services.
 Increase in productivity results to improvement in the quality of goods and services as
firms invest their previous productivity gains to innovate their goods and services.
What makes productivity different from production?
It differs from the term ‘production’ in the sense that production is the process of converting
raw materials into finished goods. It determines the volume of output produced, which is an
absolute concept. But, productivity indicates surplus generation. That is to say, it is all about
higher output over the given input. It is a relative concept. So, what we have understood is:

Production = Addition of value to the raw material
Productivity = Efficiency in production
Example
Suppose Factory A produces 1,00,000 bread per day with a total budget of ₹ 10,000.
However, Factory B produces 1,20,000 bread per day with the same budget. This shows that
factory B is 20% more productive than factory A.
TECHNIQUES TO IMPROVE PRODUCTIVITY

1. Technology Based Measures:
This included use of advanced and updated technology to increase productivity. It consist
CAD/CAM/CIMS, Robotics, Laser technology, Modern maintenance technology, Energy
technology, Flexible manufacturing system (FMS).
(a )Computer Aided Design (CAD):
CAD refers to design of products, processes or systems with the help of computers. The
impact of CAD on human productivity is significant. Speed of evaluation of alternative
designs, Minimization of risk of functioning, and Error reductions are the advantages of CAD.
CAD (computer-aided design) is the use of computer-based software to aid in design
processes. CAD software is frequently used by different types of engineers and designers.
CAD software can be used to create two-dimensional (2-D) drawings or three-dimensional (3-
D) models.
Computer-aided design is used in a wide variety of professions. CAD software is used heavily
within various architecture, arts and engineering projects.
Example : Metal fabrication, carpentry, and 3D printing are some common applications for
CAD that are valuable in manufacturing.
The impact of CAD on human productivity is significant for the advantages of CAD are:
 Speed of evaluation of alternative designs,
 Minimization of risk of functioning, and
 Error reduction.
(b) Computer Added Machining (CAM):
CAM is very much useful to design and control the manufacturing. It helps to achieve the
effectiveness in production system by line balancing. CAM helps in production planning and

control (PPC), capacity requirements planning (CRP), manufacturing resources planning
(MRP-II) and materials requirement planning (MRP) and automated inspection.
(c) Computer Integrated Manufacturing (CIMS):
Computer-integrated manufacturing (CIM) is the manufacturing approach of using computers
to control the entire production process. This integration allows individual processes to
exchange information with each part. Manufacturing can be faster and less error-prone by the
integration of computers. Typically CIM relies on closed-loop control processes based on
real-time input from sensors. It is also known as flexible design and manufacturing.
computer-controlled machineries and automation systems in manufacturing products. CIM
combines various technologies like computer-aided design (CAD) and computer-aided
manufacturing (CAM) to provide an error-free manufacturing process that reduces manual
labor and automates repetitive tasks. The CIM approach increases the speed of the
manufacturing process and uses real-time sensors and closed-loop control processes to
automate the manufacturing process. It is widely used in the automotive, aviation, space and
ship-building industries.
Computer integrated manufacturing is characterized by automatic line balancing, machine
loading (scheduling and sequencing), automatic inventory control and inspection.
(d) Robotics
A robot is a reprogrammable, multifunctional manipulator designed to move material parts,
tools or specialized devices through variable programmed motions for the performance of variety
of tasks.
Today most robots are used in manufacturing operations; the applications can be divided into
three categories: (1) material handling, (2) processing operations, and (3) assembly and
inspection.
Today’s robots use sensors that enable them to see, hear, and even feel their surroundings.
Robots are capable of adapting and making decisions to respond to real-time operating
conditions and situations. The potential for robotics in manufacturing across all industries is
endless.
Robots add significant value to manufacturers due to their reliability, predictability, and
repeatability. All of which result in increased efficiency for the production line and ensure
manufacturers remain competitive.

(e) Laser technology
Laser” is an acronym for Light Amplification by Stimulated Emission of Radiation.
Complex engraving, cutting and marking processing that was unworkable by traditional systems
if not with definitely long times, has now become possible. In a few minutes, a quality laser
system can carry out sophisticated shapes and patterns with unique accuracy laser systems are
used in many manufacturing processes.
Industrial lasers are used to cut metals and fabrics, mark tracking codes for industrial traceability,
weld metals with high precision, clean metal surfaces, change the surface roughness, and
measure part dimensions.
The footwear sector is the perfect example of how the laser can optimize productivity as well
as the organization efficiency. Thanks to laser technology, the various parts of a shoe can now be
mounted without necessarily using expert and highly qualified staff. Once the parts have been
mass-manufactured, the laser allows easily assembling a shoe without any adjustment by the
operator. This way, less scrap is generated from non-complying pieces, thus considerably
reducing production waste.
(f) Modern maintenance techniques
Modern maintenance tools and technologies that will make life easier for maintenance
professionals. A modern maintenance professional requires technical knowledge on a variety of
equipment and sufficient digital knowledge to facilitate proactive detection, diagnosis, and
correction of equipment errors before they result in costly breakdowns.
Emerging technology trends are continually revolutionizing maintenance management.
Let’s review predominant technologies, their relevance in maintenance operations and
their effects on maintenance professionals.
For example IIoT and cloud technology .
Stiff competition dictates that companies should keep operations running. To avert breakdowns,
companies are implementing condition monitoring technologies, which consist of sensors and
communication networks. Sensors continuously monitor the health and the working conditions of
equipment. They collect vast amounts of data and transmit them to internal or cloud-based
servers.

Traditionally, to perform failure mode, cause, and effect analysis, it was necessary to sift through
physical maintenance records. It was a time-consuming and error-prone process. However, as
cloud technology advances, maintenance professionals can remotely access, summarize and
visualize thousands of maintenance records in a matter of seconds. That way, professionals
spend less time evaluating and troubleshooting equipment defects.
(g) Flexible Manufacturing System (FMS)
The concept of flexible manufacturing was developed by Jerome H. Lemelson (1923–
1997), an American industrial engineer and inventor who filed a number of related
patents in the early 1950s.
FMS is designed up front to be readily adapted to changes in the type and quantity of
goods being produced.
Production in an FMS is largely automated, reducing overall labor costs.
An FMS system is, however, more expensive to design and put in place than a fixed
system, and it requires skilled technicians.
2. Material Based Measures:
Materials management deals with optimum utilization of materials in the manufacturing
process. It involves scientific purchasing, systematic store keeping, proper inventory
control, etc. The main objective of materials management is to purchase the right quantity
and quality materials, at the right prices, at the right time, to maintain favorable relations
with suppliers, to reduce the cost of production, etc.
This method includes material planning and control (MPC), purchasing, logistics,
material storage and retrieval, source selection and procurement of quality material,
waste elimination.
It encompasses the following methods:
 Material planning and control.
 Material storage and retrieval.
 Source selection and procurement of quality material.
 Waste elimination.
 Recycling and reuse of waste materials.
 Purchasing logistics
 Just in Time concept of inventory management

3. PROCESS - BASED PROCESS
Process based productivity is based on management style, communication in the organization,
work culture, motivation, promotion group activities. Process based techniques include
improvements in doing work like; process design and human factor engineering, to increase
productivity; there are two main techniques (method Study and work measurement) of
simplifying any task.
PROCESS BASED INCLUDES
 Methods engineering and work simplification
 Job design, job evaluation, job safety
 Human factors engineering.
 (a) Method Engineering is the systematic recording and critical examination of the
present and the proposed way of doing work as a means of developing better
economical, easier and efficient way of doing work and implementing it.
 Job Enlargement is a horizontal expansion of a job. It is done to make jobs more
interesting and satisfying. It involves increasing the variety of duties. For e.g. a typist
may be given the job of accounts writing in addition to the typing work. This
technique is used for lower level jobs.
 Job Enrichment is a vertical expansion of a job. It makes routine jobs more meaningful
and satisfying. It involves providing more challenging tasks, and responsibilities. For
e.g. A manager who prepares performance reports is asked to make plans for his
department. The Job Enrichment technique is used for higher-level jobs.
 Job Evaluation is a process of fixing the value of each job in the organization. It is
done to fix the wage rate for each job. A proper job evaluation increases the moral of
the employees. This increases the productivity.
 Human factor engineering refers to the man-machine relationship. It is designed to
match the technology to a human requirement. The term Ergonomics has originated
from the Greek word Ergos meaning work and Nomikos implies law. So, it means
‘Law of Work’. It tells us how to fit a job to a man's psychological and physiological
characteristics to increase human efficiency and well-being.

4. PRODUCT BASED
Productivity can be improved by improving product design, by improving the quality of
parts of product.
Productivity can be improved by taking following action regarding product:
i. Value analysis and value engineering: is the process of improving the value of a product
at every stage of the product life cycle:
 At the development stage, it improves the value of a product by reducing the cost
without reducing quality.
 At the maturity stage, it reduces the cost by replacing the costly components (parts) by
cheaper components.
ii. Product diversification : offering different products to consumers.
iii. Standardization and simplification - if you use standard parts in your product
automatically your cost will be decreased and productivity will improve.
iv. Reliability engineering : the product must be reliable. It ensure that product
performs its intended function, without failure, for the required time duration in a
specified environment.
v. Product mix and promotion: the different kinds of promotional activities improve
productivity.
5. EMPLOYEE OR LABOUR BASED
Employee based method includes financial and non-financial incentives at individual and
group level, employee promotion, job design, job enlargement, job enrichment and job
rotation, worker participation in decision-making, Quality Circles (QC), Small Group
Activities (SGA), personal development.
It includes:
 Financial and non-financial incentives at individual and group level.
 Employee promotion.
 Job design, job enlargement, job enrichment and job rotation.
 Worker participation in decision-making: Scientific task planning ensures timely
supply of inputs, proper maintenance of plant, efficient work scheduling and regulation

of day-to-day ‘ activities in the plant. It facilitates full utilization of plant capacity and
achievement of production targets.
6. TASK BASED MEASURES
 Work Measurement techniques: is an application of technique designed to
establish and time required by qualified worker to carry out specified tasks at
defined level of performance. In short, measurement of time to do work.
 Motion study is the analysis of human work, to find out the best method of doing
it which involves least efforts.
 Job evaluation and merit rating: Job Evaluation is a process of fixing the value
of each job in the organization. It is done to fix the wage rate for each job. A
proper job evaluation increases the moral of the employees. This increases the
productivity.
 Ergonomics related with human factors.
 Production scheduling: Scientific task planning ensures timely supply of inputs,
proper maintenance of plant, efficient work scheduling and regulation of day-to-
day ‘ activities in the plant. It facilitates full utilization of plant capacity and
achievement of production targets.
PRODUCTIVITY INDEX
Productivity Index measures the total percentage change in productivity from the base period.
Productivity Index = (Present Productivity / Base Period Productivity ) x 100
Since productivity is a relative measure, for it to be meaningful or useful it must be
compared to something.
For example, businesses can compare their productivity values to that of similar firms, other
departments within the same firm, or against past productivity data for the same firm or
department (or even one machine). This allows firms to measure productivity improvement over
time, or measure the impact of certain decisions such as the introduction on new processes,
equipment, and worker motivation technique

In order to have a value for comparison purposes, organizations compute their productivity
index.
A productivity index is the ratio of productivity measured in some time period to the
productivity measured in a base period.
 In order to have a value for comparison purposes, organizations compute their
productivity index. By tracking productivity indexes over time, managers can evaluate
the success, or lack thereof, of projects and decisions. “A productivity index is the
ratio of productivity measured in some time period Current Period) to the productivity
measured in a base period”.

Example 1:
 If the base period’s productivity is calculated to be 1.75 and the following period’s
(Current Period) productivity is calculated to 1.93, Then-
This would indicate that the firm’s productivity had increased 10% of the productivity
of the base period.
Example 2:
If the following period’s (Current Period) productivity measurement fell to 1.66, Then
It would indicate that the organization’s productivity has fallen to 95%; that means
there is 5% drop in current year productivity from the base period productivity.

Some More Formulas:
Productivity may be measured either on aggregate bases or on individual basis, which
are called total and single factor productivity respectively.
Various productivity indexes are given below:
This index measures the efficiency in the use of all the resources. Partial productivity
Indices depends upon factors used; it measures the efficacy of individual factor of
production. Following are productivity indices for individual inputs.

Production and operational management Unit - 1 .pdf

Production and operational management Unit - 1 .pdf

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