Introduction of Strategic

Production & Operations

Management
 Introduction
 We typically use the term production
to denote the process of converting or
transforming resources materials,
machines, employees, time - into
goods or services.
 Many people equate the term
production with manufacturing,
however, it applies equally to the
creation of services & to “quasi
manufacturing” activities.
 Introduction
 The term operations broadly describe
the set of all activities associated with
the production of goods and services.
 Operations involves not only
production but also transportation,
supply, and service and others.
 Definition
 Production – is the intentional act of
creating something useful and process
of converting or transforming resources
into products.
 Operations – are set of all activities
associated with the production of a
product.
 System
 A system provides an efficient and
effective framework of activities
necessary to attain an objective.
 The system viewed as purposeful
grouping of elements that as a whole
perform specific & meaningful function.
 It is a dynamic arrangement of
elements; each designed to interact
harmoniously with the other.
 Production System
 The elements of production system
consist of a physical network of men,
materials, machines and processes, and
an information network so planned and
built as to interact harmoniously.
 Characteristics of Production System
1. Transformation Process – consists
of inputs, activities, and output.
2. Degree of Repetitiveness –
repetition to some extent results in
economic and efficient production.
3. Information System – include the
organizational structure, directives,
reports & network of mechanized or
electronic servo-system.
 Characteristics of Production System
4. Material Process Flow –is
dependent on the nature of the product
or service rendered by the firm.
 Production/Operations
Management (P/OM)
 Managing the resources needed to
produce goods and services is called
Production/Operations Management,
or simply Operation Management.
Functions of Management to P/OM
 Planning–is the process of establishing
guidelines and actions should be
pursued and when they should be
completed in order to meet the goals of
the organization.
 Organizing – is the process of bringing
together all input resources necessary to
complete a task.
Functions of Management to P/OM
 Directing – is the process of turning
plans into realities by assigning specific
responsibilities to employees.
 Controlling – the process of
monitoring and evaluating
performances and correcting any
problems as necessary.
Scope of Production/Operation Mngt
 Production and Operation
management activities are not confined
to the manufacturing of products.
People also perform production
activities in organizations, which
provides services.
Scope of Production/Operation Mngt
 In general, however, production and
operations management deals with the
supply side of the work of
organizations, and marketing deals with
the demand side.
Scope of Production/Operation Mngt
 The production manager’s aim to create the
end product in the market in the right
quantity, of the right quality, at the right
time, economically.
 To achieve this objectives, he must involve
himself in product planning, process
planning, production planning, quality
control, and he must be concerned with
methods improvement, work
measurement, physical facilities mngt,
materials mngt, & personnel mngt.
Scope of Production/Operation Mngt
 Product Planning – involving all
sectors of the firms, such as finance,
marketing, production & technical
department.
 Process Planning – It involves
determining required machines, tools,
men, and methods.
Scope of Production/Operation Mngt
 Physical Facilities Management –
this area of activity includes plant
location, engineering economics, plant
layout, plant engineering, and materials
handling.
 Quality Control – this activity
responsible for the provision of the
correct product quality to the consumer,
consistent with the minimum resources
used.
Scope of Production/Operation Mngt
 Methods Improvement – this is a never-
ending analysis to develop alternate
methods and choose the most efficient
one. It includes searching new materials,
new machines, new knowledge.
 Work Measurement – the application of
techniques designed to establish the time
for a qualified worker to carry out a
specified job at a defined level of
performance.
Scope of Production/Operation Mngt
 Personnel Management – this is the
application of different management
functions to the personnel engaged by
the enterprise to optimize their
contribution toward the realization of
corporate activities.
Functions related to Personnel Mngt.
 Manpower planning
 Manpower procurement
 Manpower development
 Wage administration
 Personal relations
 Maintaining personnel safety,
health and benefits.
 Why other Profession study about
P/OM
 Marketing managers – can better
serve their markets and sales forces if
they understand the capabilities and
limitations of their demand-supply
system.
 Financial managers – can better plan
capacity planning, activities, and
forecasting cash requirements to pay for
new machines, materials, and overhead.
 Why other Profession study about
P/OM
 Accountants - needs to learn about
computer systems that provide
accounting information, capacity
utilization ratio and others for internal
control, auditing, financial reporting.
 Personnel managers – it can aid in
the design of training programs,
compensation systems, an in recruiting
and selection functions.
Why other Profession study about
P/OM
 Computer & Information System
Specialist – in charge for developing,
operating P/OM related system for
inventory control, job scheduling, and
customer order entry, automated bills of
materials.