by sachin sharma manipal jaipur

1. •Production is defined as “the step-by-step
conversion of one form of material into another
form through chemical or mechanical process to
create or enhance the utility of the product to the
user.”
•Edwood Buffa defines production as ‘a process
by which goods and services are created’.

3.  Production management is a process of planning,
organizing, directing and controlling the
activities of the production function. It combines
and transforms various resources used in the
production subsystem of the organization into
value added product in a controlled manner as
per the policies of the organization.
 “Production management deals with decision
making related to production processes so that
the resulting goods or services are produced
according to specifications, in the amount and by
the schedule demanded and out of minimum
cost.”

4.  Operating system converts inputs in order to
provide outputs which are required by a
customer. It converts physical resources into
outputs, the function of which is to satisfy
customer wants i.e., to provide some utility for
the customer
 Everett E. Adam & Ronald J. Ebert define
operating system as, “An operating system(
function) of an organization is the part of an
organization that produces the organization’s
physical goods and services.”

5.  An operation is defined in terms of the mission it
serves for the organization, technology it
employs and the human and managerial
processes it involves. Operations in an
organization can be categorized into
manufacturing operations and service operations.
 Manufacturing operations is a conversion process
that includes manufacturing yields a tangible
output: a product, whereas, a conversion process
that includes service yields an intangible output:
a deed, a performance, an effort.

6.  Operations management is an area of business
that is concerned with the production of goods
and services, and involves the responsibility of
ensuring that business operations are efficient
and effective. It is the management of resources,
the distribution of goods and services to
customers, and the analysis of queue systems
 The business function responsible for planning,
coordinating, and controlling the resources
needed to produce products and services for a
company

7.  While operations management is focused
upon administration, planning and execution
of operations involved in production of goods
and services and trying to minimize the
resources at the same time increasing output,
production management is more concerned
with input/output and churning out products
in the shape of desired finished product.

9. System Inputs Conversion Output
(desired)
Hospital Patients
MDs, Nurses
Medical Supplies
Equipment
Health Care Healthy
Individuals
Restaurant Hungry Customers
Food, Chef
Servers
Atmosphere
Prepare Food
Serve Food
Satisfied
Customers
Automobile
Plant
Sheet Steel
Engine Parts
Tools, Equipment
Workers
Fabrication
and Assembly
of Cars
High Quality
Automobiles
University High School Grads
Teachers, Books
Classroom
Transferring
of Knowledge
and Skills
Educated
Individuals

10.  Planning
◦ Capacity, utilization
◦ Location
◦ Choosing products or
services
◦ Make or buy
◦ Layout
◦ Projects
◦ Scheduling
◦ Market share
◦ Plan for risk reduction,
plan B?
◦ Forecasting
10
SUPPLY SIDE DEMAND SIDE
 Controlling
– Inventory
– Quality
– Costs
 Organization
– Degree of
standardization
– Subcontracting
– Process selection
 Staffing
– Hiring/lay off
– Use of overtime
– Incentive plans
In a nutshell, the challenge is
“Matching the Supply with Demand”

11.  Planning
 Organizing
 Staffing
 Leading
 Controlling
Basic Management Functions

12. Ten Decision Areas Chapter(s)
1. Design of goods and services 5
2. Managing quality 6, Supplement 6
3. Process and capacity 7, Supplement 7
design
4. Location strategy 8
5. Layout strategy 9
6. Human resources and 10
job design
7. Supply-chain 11, Supplement 11
management
8. Inventory, MRP, JIT 12, 14, 16
9. Scheduling 13, 15
10. Maintenance 17
Table 1.2

13. 1. Design of goods and services
◦ What good or service should we offer?
◦ How should we design these products and
services?
2. Managing quality
◦ How do we define quality?
◦ Who is responsible for quality?
Table 1.2 (cont.)

14. 3. Process and capacity design
◦ What process and what capacity will these
products require?
◦ What equipment and technology is necessary
for these processes?
4. Location strategy
◦ Where should we put the facility?
◦ On what criteria should we base the location
decision?
Table 1.2 (cont.)

15. 5. Layout strategy
◦ How should we arrange the facility?
◦ How large must the facility be to meet our
plan?
6. Human resources and job design
◦ How do we provide a reasonable work
environment?
◦ How much can we expect our employees to
produce?
Table 1.2 (cont.)

16. 7. Supply-chain management
◦ Should we make or buy this component?
◦ Who should be our suppliers and how can we
integrate them into our strategy?
8. Inventory, material requirements planning,
and JIT
◦ How much inventory of each item should we
have?
◦ When do we re-order?
Table 1.2 (cont.)

17. 9. Intermediate and short–term scheduling
◦ Are we better off keeping people on the
payroll during slowdowns?
◦ Which jobs do we perform next?
10. Maintenance
◦ How do we build reliability into our
processes?
◦ Who is responsible for maintenance?
Table 1.2 (cont.)

18.  Tangible product
 Consistent
product definition
 Production usually
separate from
consumption
 Can be inventoried
 Low customer
interaction

19.  Intangible product
 Produced and consumed
at same time
 Often unique
 High customer interaction
 Inconsistent product
definition
 Often knowledge-based
 Frequently dispersed

20. Quality
Management
Statistical
Process Control
Just in Time
Materials Requirement
Planning
Inventory Control
Aggregate
Planning
Operations Management - Overview
Project
Management
Supply Chain
Management
Process Analysis
and Design
Process Control
and Improvement
Waiting Line Analysis
and Simulation
Services
Manufacturing
Operations
Strategy
Facility Layout
Consulting
and
Reengineering
Process Analysis
Job Design
Capacity Management
Planning for Production
Supply Chain
Strategy

21. 21
Operations Examples
Goods producing Farming, mining, construction
Storage/transportation Warehousing, trucking, mail, taxis, buses, hotels
Exchange Trade, retailing, wholesaling, renting, leasing, loans
Entertainment Radio, movies, TV, concerts, recording
Communication Newspapers, journals, radio, TV, telephones, satellite

22.  Three basic functions
◦ Operations/Production
 Goods oriented (manufacturing and assembly)
 Service oriented (health care, transportation and retailing)
 Value-added (the essence of the operations functions)
◦ Finance-Accounting
 Budgets (plan financial requirements)
 Provision of funds (the necessary funding of the operations)
◦ Marketing
 Selling, Promoting
 Assessing customer wants and needs
22
Organization
Finance Operations Marketing

23. 23
Operations
Finance
Marketing
Accounting
Industrial
Engineering
Operations
Maintenance
Public
Relations
PersonnelPurchasing
Distribution

24.  Production of goods
◦ Tangible products
 Automobiles, Refrigerators, Aircrafts, Coats, Books, Sodas
 Services
◦ Repairs, Improvements, Transportation, Regulation
 Regulatory bodies: Government, Judicial system,
 Entertainment services: Theaters, Sport activities
 Exchange services: Wholesale/retail
 Appraisal services: Valuation, House appraisal
 Security services: Police force, Army
 Financial services: Banks
 Education: Universities,
24

25.  Differences with respect to
1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
25

26. Characteristic Manufacturing Service
Output Tangible Intangible
Customer contact Low High
Uniformity of output High Low
Labor content Low High
Uniformity of input High Low
Measurement of productivity Easy Difficult
Opportunity to correct quality problems Easy Difficult
26
Steel production
Automobile fabrication
Home remodeling
Retail sales
Auto Repair
Appliance
repair
Maid Service
Manual car wash
Teaching
Lawn mowing
High percentage goods Low percentage goods

27.  Objectives of operations management can be categorised
into customer service and resource utilisation.
 CUSTOMER SERVICE:
 satisfaction of customer wants

29. The customer service objective.
 To provide agreed/adequate levels of customer
service (and hence customer satisfaction) by
providing goods or services with the right
specification, at the right cost and at the right
time.
The resource utilisation objective. To achieve
adequate levels of resource utilisation (or
productivity) e.g., to achieve agreed levels of
utilisation of materials, machines and labour.

30.  Location of facilities
 Plant layouts and material handling
 Product design
 Process design
 Production and planning control
 Quality control
 Materials management
 Maintenance management

31. Strategic:
◦ Product/Service Design
◦ Process Selection
◦ Capacity Planning
◦ Facility Location
◦ Facility Layout
◦ Job Design
Tactical:
◦ Quality Control
◦ Demand Forecasting
◦ Supply Chain Management
◦ Production Planning
◦ Inventory Control
◦ Scheduling

32.  When planning on producing a new product and/or
service, the key factor is the product and service
design.
Principles of product/service design:
 translate customers' wants and needs,
 refine existing products and services,
 develop new products and services,
 formulate quality goals,
 formulate cost targets,
 construct and test prototypes,
 document specifications, and translate products and
service specification into process specifications

33.  In the product process innovations, research and
development play a significant role. Because of
the influence a product and service design can
have on an organization, the design process is
encouraged to be tied in with the organization's
strategy and take into account some key
considerations.
 Technological changes, the competitive market,
and economic and demographic changes are
some market opportunities and threats that all
organizations must be aware of when planning a
product and service design.

34.  Computer-aided design (CAD) and Computer-aided
manufacturing (CAM) are important tools in the
design process because they can anticipate what the
design will look like, as well as allow for better
manufacturing. Businesses also must take in account
environmental and legal concerns when designing a
new product. Most importantly, the manufacturing
process must ensure the product's safety.
 Companies choose various ways to design their
products and the type of services they provide. Which
include: standardization, mass customization,
delayed differentiation, modular design, and robust
design. Deciding which method to use is very
important along with deciding the company's target
market. Deciding the right method, establishes good
productivity and efficient way for operations.

35.  Service design is an activity of organizing and planning people,
communication and material components in order to improve
service quality.

 It is the interaction between the service provider and customers
and the customers' experience. A service is anything that is done
to or for a client and is created and delivered simultaneously.
 The two most important issues in service design are the degree of
variation in requirements and the degree of customer contact in
which determines how standardized the service can be.
 The greater the degree of customer contact, the greater the
opportunity for selling. In addition, concepts and ideas generated
are captured in sketches or in service prototypes. The strong
visual element, combined with the opportunity to test and rapidly
change services and interfaces, delivers real value in today's
competitive markets.

36.  Product Design combines with product and
business knowledge to generate ideas and
concepts and convert them into physical and
usable objects or services.
 The discipline covers the entire range of activities
from concept, manufacturing, testing to product
launch
 Product Designers conceptualize and evaluate
ideas and themes they find profitable. The
designers make these ideas tangible through
products using a systematic approach.

37. 1. Introduction: During the first stage, the product is introduced into
the market. Proper research and forecasting should be done to
ensure the product/service is adequate for a specific market and for a
specific time. It is crucial to have a proper amount of supply that can
meet the expected demand for the product/service.
2. Growth: The second stage involves the increase in demand for the
product/service. Reputation for the product grows and an accurate
forecast of demand is needed to determine the length of time the
product/service will remain in the market. Enhancements and
improvements are common in this stage.
3. Maturity: This third stage deals with the product reaching a steady
demand. Few or no improvements or product changes are needed at
this stage. Forecasting should provide an estimate of how long it will
be before the market dies down, causing the product to die out.
4. Decline: The last stage involves choosing to discontinue the
product/service, replacing the product with a new product, or finding
new uses for the product.