Module 1.

Introduction To Production and Operations Management

1. Meaning of Production and Operations Management

Production is the process of making or manufacturing goods and products from raw materials
or components.

Operations is the process of planning, organizing, and oversight of business practices that
maximize efficiency and ensure company processes are driving value.

Production and operations management is a field of management that focuses on planning,

organizing, coordinating, and controlling the process involved in producing goods and
delivering services.

Production management only focuses on the domain of producing products, whereas

operations management looks into streamlining the whole process involved in it.

2. Differences between Production and Operations Management

Production Management Production Management

It refers to managing various processes It refers to managing various processes
involved in the production of goods. involved in business, which may
eventually result in the production of
goods or services and the effective
working of business.
Related to production Related to overall working and business
activities
Present in organizations where Present in every organization in
production takes place factories hospitals schools etc
To provide the right quantity of goods in To utilise resources up to the optimum
the right amount in the right time at the level and provide customer satisfaction
right price
Tangible output both tangible and intangible output

3. Scope of Production Management

a) Production engineering
b) Production planning
c) Production control
4. Production System

A production system implies the step up consisting of assets such as facilities, machines and
equipment that transform resources into valuable output using processes and technology.

In simple words, we can understand it as a system that converts factors, inputs into Outputs,
which should be capable of satisfying the market demand.

a) Input: capital machines, equipment, tools and labour

b) Conversion process
c) Output.

5. Types of Production

a) Mass Production
b) Batch Production
c) Job Shop Production
d) Just-in-Time
e) Flexible Production System

6. Benefits of Production Management

a) Competitive advantage
b) Perfect utilisation of capital and resources
c) Fulfilling the organisational objective
d) Reducing risk of failure,
e) Reducing waste,
f) Better quality products,
g) Increasing process efficiency

7. Responsibilities of Production Manager

a) Production planning and scheduling

b) Resource allocation
c) Quality control and assurance process in improvement
d) Inventory management,
e) Health and safety compliance,
f) Equipment maintenance,
g) Supplier coordination,
h) Budget management
i) Team leadership
8. Decisions of Production Management

a) Project scheduling decisions

b) Preventive maintenance decisions
c) Designing reward system
d) Make or buy decisions.
e) Equipment decisions
f) Pricing of the product
g) Budget analysis product improvement
h) Evaluating credit or buyers
i) Short-term forecasting
j) Capacity planning
k) Inventory management
l) Quality control and assurance

9. Operations Management: Concept and Functions

It is the administration of business structure practices and processes to enhance efficiency and
maximize profit.

It refers to the management of functions that a business needs to run effectively day to day,
including overseeing multiple departments and providing goals.

Functions

a) Process design and improvement

b) Capacity planning
c) Supply chain management
d) Inventory management
e) Quality control and assurance
f) Resource allocation
g) Scheduling and production planning.
h) Lean six sigma implementations.
 Module 2.
Plant Location and Layout

Plant Location
Plant location refers to the choice of region and the selection of a particular site for setting up a
business or factory. But the choice is made only after considering cost and benefits of different
alternative sites. It is a strategic decision that cannot be changed once taken.

Plant Layout
Plant layout can be defined as a technique of locating machines, processes and plant services within
the factory so as to achieve the greatest possible output of high quality at the lowest possible total
cost of manufacturing.

Factors Affecting Location

1. Within the country or Outside

2. Selecting Region
a) Availability of raw materials
b) Nearness to the market
c) Transport facilities,
d) Suitability of climate
3. Selection of locality or community,
a) Labor and wages,
b) Civic amenities
c) Finance and research facilities,
d) Complementary and competing industries,
e) Legislation and taxation,
f) State assistance,
4. Selection of the exact site
a) Suitability of land,
b) Availability of land
c) Cost of the land
d) waste disposal

Theory and Practices

1. Median Location Theory
2. Linear Market Competition (Hotelling)
3. Alfred Weber’s Plant Location Theory
Cost Factor in Location
1. Labour costs
2. Real estate costs
3. Rental cost
4. Utilities and infrastructure costs
5. Transportation and distribution cost
6. Taxation and incentives
7. Regulatory and compliance costs
8. Supply chain cost
9. Labour market
10. Market demand
11. Competition,
12. Currency and exchange rate risk
13. Cultural and social factors
14. Risk factors

Plant Layout Principles

1. Principle of minimum movement
2. Principle of unidirectional flow
3. Principle of efficient space handling
4. Principle of inherent safety
5. Principle of maximum observation capacity
6. Principle of maximum accessibility
7. Principle of minimum handling
8. Principle of maximum protection
9. Principle of maximum flexibility
10. Principle of integration of all factors

Space Requirement
1. Layout design
2. Capacity planning
3. Safety and regulations
4. Material handling
5. Flexibility and expansion.
6. Quality control and inspection
Different types of facilities
1. Production area
2. Storage facilities
3. Utility facilities
4. Employee amenities
5. Quality control and testing laboratories
6. Maintenance facilities
7. Loading and unloading areas,
8. Office spaces,
9. Research and development lab
10. Safety facilities

Organization of physical facilities

1. Building
2. Sanitation
3. Lighting
4. Air conditioning
5. Safety
 Module 3
Production Planning and Control

Production Planning
Production planning creates an efficient process for production, according to customer and
organizational needs.
Production planning is a manufacturing strategy that outlines the step by step process of creating
your product from conception to completion.

Production Control
Production control is the activity of monitoring and controlling any particular production or
operation.
It ensures that optimum utilization of production capacity is achieved by proper scheduling of
machine items, quality control and resource management, and cost savings.

Characteristics of Production Planning and Control

1. Integration
2. Forecasting
3. Capacity planning
4. Scheduling
5. Material planning
6. Optimization
7. Coordination
8. Flexibility
9. Quality control
10. Feedback and continuous improvement

Objectives of Production Planning and Control

1. Optimal resource utilization
2. Meeting customer demands
3. Minimising costs
4. Smooth production flow
5. Shorter lead times
6. Effective capacity planning
7. Quality assurance
8. Flexibility and adaptability
Stages of Production Planning and Control
1. Planning
a. Routine
b. Loading
c. Scheduling
2. Control
a. Dispatching
b. Follow up.
c. Inspection
d. Corrective action

Scope of Production Planning and Control

Production planning and control encompasses the Scope of following areas
1. Materials
2. Methods
3. Machine and equipment
4. Manpower routing
5. Estimating
6. Loading and scheduling
7. Dispatching
8. Expediting
9. Inspection
10. Evaluating
11. Cost control

Production Planning System

Factors Affecting Production Planning and Control

Role of Production Planning and Control in Manufacturing Industry.

1. Demand Forecasting And Planning
2. Capacity Planning
3. Scheduling
4. Inventory Management
5. Resource Allocation
6. Quality Control
7. Risk Management
8. Cost Management
9. Coordination And Communication
10. Continuous Improvement
11. Adaptation To Changes
Process Planning Manufacturing

Planning And Control System

 Module 4
Inventory Management

Inventory Management
Inventory management is considered with the activities employed in maintaining the optimum
number of amounts of each inventory item.
The objective inventory management is to provide uninterrupted production sales and our customer
service levels at the minimum cost.
Inventory means stock of course meant for sale that have inventory consist of raw materials work in
progress. Considerable example, cotton oil, soap, Etcetera.

Classification
1. ABC analysis
2. Just-in-Time inventory (JIT)
3. Economic Order quantity (EOQ)
4. Vendor Managed inventory (VMI)
5. Perpetual Inventory system
6. Stock Keeping Units (SKU)
7. Lead Time Management
8. Technology Driven Inventory Management.

Objectives
 To keep the investment in inventories to the minimum
 To minimize ordering and carrying cost
 To improve the quality of products
 To ensure uninterrupted supply of raw materials to production debt
 To maintain sufficient finished goods to ensure smooth sales operations and efficient
customer service.
Factors Affecting Inventory Control Policy.
1. Demand Variability
2. Lead Time
3. Order Quantity
4. Supply Chain Complexity
5. Seasonality
6. Storage Cost
7. Inventory Turnover
8. Technology And Automation
9. Supplier Relationships
10. Cost Of Capital
11. Product Life Cycle
12. Quality Control
13. External Factors.

Inventory costs
A. Inventory cost system
An inventory cost system is a method or approach used by business to track, allocate and manage the
various costs associated with their inventory.
FIFO and LIFO are the commonly used methods under inventory cost system.

B. Cost of holding inventory.

There are three types of costs involved in holding and managing inventory.
1. Ordering costs,
2. Carrying costs and
3. Stockout costs.

Basic EOQ model

Economic order quantity is the order quantity that minimizes total inventory holding costs and
ordering costs.
When the size of an order minimizes the total inventory cost, it is known as the EOQ. The best lot
size will result in adequate inventory to reduce some costs.
Assumptions of EOQ.
a) The ordering cost is constant.
b) The rate of demand is known and spread evenly throughout the year.
c) The lead time is fixed.
d) The purchase price of the item is constant. That is no discount is available.
 e) The replenishment is made instantaneously. The whole batch is delivered at once.
f) Only one product is involved.

Formula of EOQ

Reorder level
It is that level of material at which a new order for materials is to be placed.
In other words, this is the level at which purchase requisition is made. This level will be a fix for
somewhere between Max and Minimum level.

ABC Analysis
ABC analysis refers to the inventory control technique.
Which attempts to relate how the inventory value is concentrated among the individual items.

The ABC analysis suggests that the inventories of an organization are not of equal value. Thus, the
inventories are grouped into three categories, A, B, and C, in order of their estimated importance.

‘A’ item: Very tight control and accurate records are items that are very important for an organization
because of the high value of these ‘A’ items. Frequent value analysis is required.
In addition to that, an organization needs to choose any appropriate order pattern. For example, just
in time to avoid excess capacity.
‘B’ items: Less tightly controlled and good records. ‘B’ items are important, but of course less
important than ‘A’ items and more important than ‘C’ items, therefore B items are intergroup items.
‘C’ items: simplest controls possible and minimal records. ‘C’ items are marginally important.
Quality Management
Quality Management refers to the systematic approach practices and strategies that an organization
implements to ensure that its products, services, and processes consistently meet or exceed
established quality standards and customer expectations.
Quality management is the holistic approach that covers every aspect of an organization’s operations,
from design and production to delivery and customer support.

Quality Concepts
Quality refers to the sum of the attributes of properties and describe a product. These are generally
expressed in terms of Specific product characteristics such as length, weight, colour, specific gravity,
etc.

Difference Between Inspections, Quality Control, Quality Assurance.

Inspection refers to the act of examining a protest service or processes to identify defects, deviations
from standards, or non-conformities.
Quality control is the process by which entities review the quality of all factors involved in
production. Quality control emphasizes testing products to uncover defects and reporting to
management who decide to allow or recheck the product to be released.
Quality assurance refers to a systematic and comprehensive approach that organizations use to ensure
that their products or services meet established quality standards and customer expectations.
It involves processes, practices, and techniques aimed at preventing defects mandating consistency
and continuously improving the quality of product services and processes.

Total Quality Management,

Total Quality Management (TQM) refers to an active approach encompassing a companywide
operating philosophy and system for continuous improvement of quality. Its philosophy extends
beyond product quality to human quality.
Total quality management helps to find out what the customer wants. Include both internal
customers. Or the next person in the process as well as external customer.
 Propose a product or service that will meet or exceed what customer wants.
 Design a product that facilitates doing the right job.
 The first time keep way of the results and use those to guide improvement in the system.
Never stop trying to improve.
Control Charts
Control charts are the charts to know variations and to control the same control charts are the graph
showing the standards called control limits for a process. The process measurements obtained from
samples over a period of time. It can be used in conjunction with sampling either by variables or
attributes.
A control chart consists of
 points representing statistics of measurements of a quality carrier stick in sample taken from
the process at different times.
 The mean of the statistic using all the samples is calculated example. The mean of the means,
mean of the ranges, mean of the proportions.
 A centre line is drawn at the value of the mean of the statistic.
 Standard error of the statistic is also calculated using all the samples.
 Upper and lower control limits that indicate the threshold at which the process output is
considered statistically unlikely or drawn typically at 3 standard errors from the centre line.
 The child may have other optional features, including upper and lower warning limits, drawn
as separate lines, typically two standard errors above and below the center line.
 Division into zones with the addition of rules governing frequencies of observations in each
zone. Annotation with events of interest, as determined by the quality engineer in charge of
process quality.

Acceptance sampling
 Module 5
Maintenance And Waste Management

Introduction and Meaning

Maintenance management involves managing the functions of maintenance equipment in the field
has been a challenging task since the beginning of Industrial Revolution.
To keep the equipment in operational condition for the period to its operational mode.
The Main objective of maintenance is to have increased ability of production systems with increased
safety and optimized cost.
Maintenance management is concerned with the direction and organization of resources to control
the availability and performance of the industrial plants to some specified levels.

Objectives
1. To formulate an efficient, utilize of labour and equipment.
2. today. Is the repair time and repair cost
3. To reduce the loss due to production stoppages
4. To develop the quality of products
5. To improve productivity
6. To extend the life of capital assets by minimizing the rate of erosion
7. To remain all productive assets and good working conditions
8. To exploit efficiency and economic introduction
9. To minimize accident through regular inspection and repair of safety devices
10. To reduce the loss of productive time due to equipment failure.

Types of Maintenance
1. Breakdown Maintenance Or Collective Maintenance
2. Preventive Maintenance
3. Predictive Maintenance.

Breakdown
Spares Planning and Control
Most companies are relieved to maintain a comprehensive spare part inventory. Because they fear
that stocking assets like spares in counterintuitive when trying to effectively the control operating
cost.
They expect plant managers to identify ways to reduce costs while maintaining the performance and
efficiency of plant operations.
The decision to include a part in the assortment is usually taken shortly after procurement of a
subsystem and strongly depends on the maintenance policy/program. Parts are excluded from the
assortment in case its applicability has expired.
Spare parts monitoring system: Under the system information about a spare part such as its
description, anticipated life and date of its installation is equipment is recorded as and when a
particular spare part is replaced during breakdown failures or scheduled maintenance, the updating of
the information is done in the respective file stored in the computer. This helps to prepare the
following report.
Spare parts tracking system: The spare parts tracking system is beneficial in getting required
material at the earliest. A spare part file is created that contains information about the material code,
spare part identification number, the assembly or some assembly number, and the place where the
spare part is used. This helps in knowing the current position about a particular and timely
requirement for future demands.

Preventive Routine
Relative To Advantages.

Maintenance Scheduling
Maintenance scheduling is a list of planned maintenance tasks to be performed during a given time.
Together with the expected start times and durations of each of these tasks schedules and be applied
to different time periods. That is daily schedule weekly schedule, etc.

Maintenance Schedule Techniques

1. Daily Schedule
2. Weekly Schedule
3. Gantt Charts
4. Bar Charts
5. PERT/CPM
Equipment Reliability
Equipment reactivity is the unexpected and untimely nature of a breakdown that causes the greatest
damage disrupting operations when they seem to be most crucial.
Hence, greater emphasis is placed on the capability of equipment or a machine not to breakdown in
operation. This is referred to as reliability.

Reliability can be classified into

A. Component reliability: Where each part of the component of machine equipment is
designed for a single level of reliability.
It is defined as the probability that the type of part component will not fail in a given time
period or number of trials under ordinary condition of use.
B. System Reliability: Is the compound reality of all the components of parts that make up the
machine equipment. It is the mathematical probability of a system performing a specific
function in a given environment for a specific length of time, or numbers of cycles.

Modern Scientific Maintenance Methods.

1. Reliability Centred Maintenance (RCM)
2. Six Sigma Maintenance
3. DMAIC in Maintenance
4. Enterprise Asset Management
5. Lean Maintenance
6. Computer Aided Maintenance

Waste Management – Scrap and Surplus Disposal, Salvage And Recovery.

Waste represents a portion of basic raw materials lost in processing, having no recovery value. Waste
may be visible reminisce of basic raw materials or invisible Disappearance of basic raw materials
through evaporations, smoke, etc. Shrinkage of material due to natural causes may also form a part
of material wastage.
Waste management is the collection transport processing or disposal managing and monitoring of
waste materials.
Waste management is a distinct practise from resource recovery, which focuses on delaying the rate
of consumption of natural resources. All waste materials, whether they are solid, liquid gaseous or
radioactive, fall within the remit of waste management.
Types of waste
1. Scrap
2. Surplus
3. Spoilage
4. Defectives
5. Salvaged items

Scrap is the incidental residue from certain types of manufacture, usually of small account and low
value recoverable without further processing It is unavoidable. Scrap metal originates just a
frequently between business and homes as well The proper disposal in recycling of scrap material is
typically done by business or service.
Typically, a scrapper will advertise his services to conveniently remove scrap metal for people who
don’t need it or need to get rid of it.

Surplus refers to those materials which are in excess of reasonable operational requirements of the
concern. These are imperial cells, materials and equipment that are no longer required by the
organisation. This could range from scrap metals, warehouse metals and production equipment to
entire refineries.

Spoilage is outcome of materials being damaged in manufacturing operations in such a way that they
cannot be rectified and brought back to normal specifications. It can be avoided. It is a term used for
materials which are badly damaged in manufacturing operations.

Defective work is that portion of production which is below standard specification or quality, and
can be rectified by incurring additional expenditure on material, labour and worse overheads known
as rectification cost

Salvaged items are those which cannot be put to use for their original purpose, for which they were
produced.

Methods of disposal of waste

1. Landfill
2. Incineration
3. Recycling
4. Sustainability
5. Resource recovery
6. Avoidance and reduction methods