Production management involves planning, organizing, directing, and controlling production to transform resources into valuable products according to organizational policies and specifications. The objectives of production management are to produce goods and services with the right quality, quantity, time, and cost. Strategic planning guides future decisions and results based on current conditions and missions. Operations objectives include product characteristics, process characteristics, quality, efficiency, customer service, and adaptability for survival. Priorities are set among quality, cost, dependability, and flexibility based on the organization's strategy.

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Lect.2
production management
Dr. Refaay 2018
refai95@yahoo.com

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1.6 PRODUCTION MANAGEMENT
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’.
E.S.Buffa defines production management as follows:
‘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’.

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Objectives of Production Management
‘To produce goods and services of Right Quality and Quantity at the
Right time and Right manufacturing cost’.
1. Right QualityRight Quality: The quality of product is established based upon
the customers need. The right quality is not necessarily being the
best quality. It is determined by the cost of the product and the
technical characteristics as suited to the specific requirements.
2. Right QuantityRight Quantity: The manufacturing organisation 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.

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Objectives of Production Management
3. Right TimeRight 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.
4. Right Manufacturing CostRight 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.

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STRATEGIC PLANNING
Strategic planningStrategic planning is the process of thinking
through the current mission of the organization and
the current environmental conditions facing it, then
setting a guide for tomorrow’s decisions and results.
Strategic planning is built on fundamental concepts:
that current decisions are based on futurecurrent decisions are based on future
conditions and resultsconditions and results.

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1.10HE STRATEGIC ROLE OF OPERATIONS
Primary goals of the organizations are related market opportunities.
EconomyEconomy and efficiencyefficiency of conversion operations are the secondarysecondary
goals, which will be predominant – controlled- with the study and
practice of operations management.
A STRATEGIC PERSPECTIVE
The general thrust -direction- of the process is guided by
competitive and market conditionscompetitive and market conditions in the industry, which
provide the basis for determining the organization’s strategyorganization’s strategy.

7. A careful analysis of market segmentsmarket segments and the ability
of our competitorscompetitors and ourselvesourselves to meet the needs of
these segments will determine the best directionbest direction for
focusing an organization’s efforts;
Where,
where??
What, what??

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-Where is the industry now, and
-where it will be in the future?
-What are the existing and potential markets?
-What market gaps exist, and
-what competencies do we have for filling
them?

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Priorities of operations strategy are established among the
following four characteristics:
Quality Cost efficiency
DependabilityFlexibility

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Priorities of operations strategy are established among the
following four characteristics:
• Quality (product performance).
• Cost efficiency (low product price).
• Dependability (reliable, timely delivery of orders to
customers).
• Flexibility (responding rapidly with new products or
changes in volume).
Time is emerging as a critical dimension of competition in
both manufacturing and service industries

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OPERATIONS OBJECTIVESOPERATIONS OBJECTIVES
The overall objective of the operations subsystem is to provide
conversionconversion capabilities for meeting the organization’s goals and
strategy
The sub-goals of the operations subsystem, must specify the following:
1.Product/service characteristics.
2.Process characteristics.
3. Product/service quality.
4. Efficiency
􀁺 Effective employee relations and cost control of labor.
􀁺 Cost control of material.
􀁺 Cost control in facility utilization.

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5. Customer service (schedule)
􀁺 Producing quantities to meet expected demand.
􀁺 Meeting the required delivery date for goods or services.
6. Adaptability for future survival.
The priorities among these operations’ sub-goals and their relative
emphases should be direct reflections of the organization’s mission.
Relating these six operations sub-goals to the broader strategic choices
above, it is clear that quality, efficiency, and dependability (customer
service) are reflected in the sub-goals. Flexibility encompasses
adaptability but also relates to product/service and process
characteristics: Once choices about product and process are made,
boundaries for meeting the other operations objectives are set.

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Any
Questions………….??
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