INTRODUCTION TO

PRODUCTION AND
OPERATIONS MANAGEMENT CHAPTER 1
 CONTENT

1. From ‘production’, to ‘operations’,

to ‘operations and process
management;
2. Operations processes’
characteristics;
3. Designing and operating systems
4. Type of operation.
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 1. FROM ‘PRODUCTION’, TO ‘OPERATIONS’
TO ‘OPERATIONS AND PROCESS
MANAGEMENT(1/4)
A set of various activities, which are involved in
manufacturing certain products, is named as
« Production Management ». If the same concept
is extended to service management, then the set
of various management activities are called
« Operations Management »;
In general, the concept of manufacturing
products/offering services is called
Production/Operations Management.

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 1. FROM ‘PRODUCTION’, TO ‘OPERATIONS’
TO ‘OPERATIONS AND PROCESS
MANAGEMENT(2/4)
Types of operations Examples

Goods producing Farming, mining, construction,

manufacturing, power generation.

Storage / transportation Warehousing, trucking, mail service,

moving, taxis, hotels, airlines.

Exchange Retailing, wholesaling, banking, renting or

leasing, library loans.

Entertainment Films, radio and television, plays, concerts,

recording.

Communication Newspapers, radio and TV newcasts,

telephone, satellites. 4
 1. FROM ‘PRODUCTION’, TO ‘OPERATIONS’
TO ‘OPERATIONS AND PROCESS
MANAGEMENT(3/4)
Within any operation, the mechanisms that
actually transform inputs into outputs are these
processes. A process is ‘an arrangement of
resources that produce some mixture of products
and services’. They are the ‘building blocks’ of all
operations, and they form an ‘internal network’
within an operation.
Each process is, at the same time, an internal
supplier and an internal customer for other
processes .
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1. FROM ‘PRODUCTION’, TO ‘OPERATIONS’
TO ‘OPERATIONS AND PROCESS
MANAGEMENT(4/4)
So any business, or operation, is made up of a
network of processes and any process is made
up of a network of resources. But also any
business or operation can itself be viewed as
part of a greater network of businesses or
operations. This network of operations is
called the supply network.

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 2. OPERATIONS PROCESSES’
CHARACTERISTICS (1/2)

Although all operations processes are similar

in that they all transform inputs, they do differ
in a number of ways, four of which, known as
the four Vs, are particularly important:
▪ The volume of their output;
▪ The variety of their output;
▪ The variation in the demand for their output;
▪ The degree of visibility which customers have of
the production of their output.

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2. OPERATIONS PROCESSES’
CHARACTERISTICS (2/2)

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 3. DESIGNING AND OPERATING
PRODUCTION SYSTEMS (1/3)
 A primary function of an operation manager is to guide the
system by decision making. Certain decisions affect the
design of the system, and others affect the operation of the
system;
 Sytem design involves decisions that relate to system
capacity, the geographic location of facilities, arrangement of
departments and placement of equipment within physical
structures;
 System operation involves management of personnel,
inventory planning and control, scheduling, project
management;
 System design essentially determines many of the parameters
of system operation.

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 3. DESIGNING AND OPERATING
PRODUCTION SYSTEMS (2/3)
System design Basic questions Chapter

Product and service design How can products and services be improved? 2

Process selection What processes should the organization use? 2

Capacity management How much capacity will be needed? How can 4

the organization best meet capacity
requirements?
Layout What is the best arrangement for departments, 2
equipment, work flow, and storage in terms of
cost and productivity?
Design of work systems How to improve work methods? How can 2
productivity be improved?
Location What is a satisfactory location for a facility? 2-4
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 3. DESIGNING AND OPERATING
PRODUCTION SYSTEMS (3/3)
System operation Basic questions Chapter

Forecasting What will demand be? 3

Inventory management How much to order? When to order? Which 3

items should get the most attention?
Aggregate planning How much capacity will be needed over the 3
intermediate range? How can capacity needs
best be met?
Materials requirements What materials, parts and subassemblies will 4
planning be needed, and when?
Project management Which activities are the most critical to the 5
success of a project? What are the goals of a
project? What resources will be needed and
when will they be needed?
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 4. T YPE OF OPERATION(1/7)

Operations are classified according to

the volume of production and product
standardization as follows:
 4.1 Project
 4.2 Job shop production
 4.3 Batch processing
 4.4 Repetitive production
 4.5 Continuous processing

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 4.1 PROJECT

A set of activities directed toward a

unique goal, usually large scale, with a
limited time frame;
All projects do not continue indefinitely
but have specific starting and ending
points. They are also nonroutine;
Exp: construction of a hospital

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 4.2 JOB SHOP PRODUCTION

Job shop production industries are

characterised by manufacturing of one or
few quantity of products designed and
produced as per the specification of
customers within prefixed time and cost;
The distinguishing feature of job shop is
low volume and high variety of products;
Exp: health care, tool and die shops.
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 4.3 BATCH PROCESSING

Batch production is characterised by the

manufacture of limited number of products
produced at regular intervals and stocked
awaiting sales;
Exp: Food processors (ice cream producer will
produce a batch of one type of icre cream:
vanilla, and then a second type: strawberry.
The processing requirements and equipment
are the same, but some of the ingredients
vary from one batch to the next).
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 4.4 REPETITIVE PRODUCTION

A common method used to produce high

volumes of standardized goods are is
repetitive production;
Both work and the output tend to be highly
standardized. These production systems often
lend themselves to automation or other use of
specialized equipment.

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 4.5 CONTINUOUS PRODUCTION

Process industries manufacture highly

standardized products in extremely large
volumes using a continuous process;
Process industries develop extensive long
range resource requirement and they are
more capital intensive;
Exp: processing of chemicals, oil products.

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 4. T YPE OF OPERATION(7/7)

Characteristics Continuous flow Batch flow job flow

Product Large Batch type Single or very few

Variety Large Medium Very large
Market Mass Customized Unique
Volume High Medium Single or very low
Labor skill Low High Very high
Job nature Repetitive May repeat Non repetitive
Investment High Medium Low
Flexibility Low Medium High
Cost of product Low Medium High
Type of layout Product Process Functional
Planning & easy Difficult difficult
control

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