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Production and Operations Management

The document discusses key concepts in production and operations management. It defines an operations system as the part of an organization that produces physical goods and services. It also defines the conversion process as changing inputs like labor, capital, land and management into outputs of goods and services through a continuous process of planning, organizing and controlling. Finally, it presents a general model of operations management that shows how inputs are converted into outputs through a conversion process and feedback is used to determine if adjustments are needed.

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annie
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52 views28 pages

Production and Operations Management

The document discusses key concepts in production and operations management. It defines an operations system as the part of an organization that produces physical goods and services. It also defines the conversion process as changing inputs like labor, capital, land and management into outputs of goods and services through a continuous process of planning, organizing and controlling. Finally, it presents a general model of operations management that shows how inputs are converted into outputs through a conversion process and feedback is used to determine if adjustments are needed.

Uploaded by

annie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Production and

Operations Management

Operations System
The part of an organization that produces the
organizations physical goods and services
Conversion Process
The process of changing inputs of labour,
capital, land and management into Outputs
of goods and Services
Management
Continuous process of Planning, Organizing
and Controlling

General Model of Operations Management

Random Fluctuations
Inputs
Land
Labour
Capital
Managemnt

Adjsmnt
Needed?

Conversion
Process

Feedback
Comparison
Actual Vs
Desired

Monitor
Output

Outputs
Goods
Services

Management of Conversion process, which


converts land, labour, Capital and
management inputs into desired outputs of
Goods and services

During World War II, enormous quantities of resources


(personnel, supplies, equipment, ) had to be deployed.

Military operations research (OR) teams were formed to


deal with the complexity of the deployment.

After the war, operations researchers found their way


back to universities, industry, government, and
consulting firms.

OR helps operations managers make decisions when


problems are complex and wrong decisions are costly.

A pure good is a tangible product that


can be stored, transported, and
purchased for later use
A pure service is an intangible product
which cannot be stored since it is
consumed as it is produced.

Tangiblity
Consumption of Output
Nature of Work (labour-equipment)
Degree of customer contact
Customer Participation in conversion
Process
Measurement of Performance

Transformation/Conversion subsystem:
which converts inputs into goods or
services. It consists of

Concepts
Procedures
Non-equipment technologies
Rules, Guideline, Steps, etc.

PRODUCT, PLANT, PROCESSES, PROGRAMMES,


PEOPLE. [5 Ps]

1. PRODUCT

Marketers in a business must ensure that a business sells


products that meet customer needs and wants. The role
of Production and Operations is to ensure that the
business actually makes the required products in
accordance with the plan. The role of PRODUCT in
POM therefore concerns areas such as:

- Performance
- Aesthetics
- Quality
- Reliability
- Quantity
- Production costs
- Delivery dates

2. PLANT
To make PRODUCT, PLANT of some kind is
needed. This will comprise the bulk of the fixed
assets of the business. In determining which
PLANT to use, management must consider areas
such as:
- Future demand (volume, timing)
- Design and layout of factory, equipment, offices
- Productivity and reliability of equipment
- Need for (and costs of) maintenance
- Heath and safety (particularly the operation of
equipment)
- Environmental issues (e.g. creation of waste
products)

3. PROCESSES
There are many different ways of producing a
product. Management must choose the best
process, or series of processes. They will consider:
- Available capacity
- Available skills
- Type of production
- Layout of plant and equipment
- Safety
- Production costs
- Maintenance requirements

4. PROGRAMMES
The production PROGRAMME concerns the dates
and times of the products that are to be produced
and supplied to customers. The decisions made
about programme will be influenced by factors
such as:
- Purchasing patterns (e.g. lead time)
- Cash flow
- Need for / availability of storage
- Transportation

5. PEOPLE
Production depends on PEOPLE, whose
skills, experience and motivation vary. Key
people-related decisions will consider the
following areas:
- Wages and salaries
- Safety and training
- Work conditions
- Leadership and motivation
- Communication

Major trends

The Internet, e-commerce, e-business


Management technology
Globalization
Management of supply chains
Lean production

Operation Objectives

Overall Objective:
To provide conversion capabilities for meeting the
Organizations Goals and Strategy

Sub goals of Operations Subsystem


1.
2.
3.
4.

Product/Service Characteristics
Process Characteristics
Product/Services Quality
Efficiency :Effective Cost Control of Labour,
Material, Facility Utilization
5. Delivery Schedule
6.Adaptabilty for future survival

Planning:
Operations Strategies
Forecasting
Product and Process choices
Operations capacity
Facility Location Planning
Layout Planning
Scheduling Systems and Aggregate Planning
Operations Scheduling

Organizing
Job Design
Productions/Standards
Work Measurement
Project Management
Controlling
Material Control (Inventory, MRP)
Managing for World class Competition
Managing for Quality
Quality Analysis and Control Feedback

Product Life Cycle


Theodre Levitt

Introduction:
product enters the market.
The product launch is accompanied by high
promotional costs to educate the buyer and
induce product trial.
Distributors have to be offered higher than
normal discounts for stocking the product
and pushing its sale.
Usually prices are high because costs are
high.
Sales rise slowly.
There is little or no profit.

Growth:
The product gains acceptance by consumers
and sales rise rapidly.
Many competitors arrive in the marketplace,.
leads to an improvement of product quality
and promotion of individual brands by
manufacturers for differentiating their offer
from that by competition.
Some of the manufacturers may lower their
price to beat competition.
Profits of individual manufacturers follow the
increase in sales and rise rapidly.

Maturity:
Sales flatten out.
There is increased competition in the
market.
Manufacturers undertake niche marketing
or target only a select group of customers in
order to beat competition.
Profits reach their peak and level off.

Decline:
The demand for the product declines, at least
from its initial form.
Sales and profits dip accordingly.
Many manufacturers withdraw from the
market and many brands are discontinued

Process Life Cycle

Mfg
cost/Unit

Job
Shop
Batch
Start-Up

Rapid Growth

Time

Assembly Line
Maturation

Continuous
Flow
Commodity

Manufacturing Process Technology


Project/ Project Technology:
Suitable for producing one-of-a kind product
Tailored to the unique requirements of the
company
eg. Construction Works, Ship Bulding
Problem Solving, Teamwork, Sequencing

Job Shop Technology


A process technology suitable for a variety of
Custom-Designed products in Small
Volumes
Elaborate Job-tracking and Control Systems
Some equipment overloaded some are idle

Batch Technology
A process technology suitable for a variety
of products in large volumes
Several products are demanded in Large
volumes
System must be flexible to handle different
volumes and more variety

Assembly Line Technology


suitable for a narrow range of standardized
products in high Volumes
Product designs are relatively stable,
Specialized equipment , human skills and
management systems

Continuous Flow Technology


Suitable for producing a continuous flow
of products
Highly Standardized
High Volume, Round-the-clock operation
Capital Intensive and specialized
Automation
Eg. Chemical Plants and Oil Refineries

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