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Production Systems and Operations Management

Operations management provides a systematic way of looking at organizational processes and presents interesting career opportunities. It is a core business function that involves converting inputs into outputs through production processes. Key concepts include production systems, conversion and control subsystems, and strategic, operating, and control decisions related to planning, organizing, and managing operations.

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Amit Verma
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22 views

Production Systems and Operations Management

Operations management provides a systematic way of looking at organizational processes and presents interesting career opportunities. It is a core business function that involves converting inputs into outputs through production processes. Key concepts include production systems, conversion and control subsystems, and strategic, operating, and control decisions related to planning, organizing, and managing operations.

Uploaded by

Amit Verma
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Chapter 1

Production Systems
And
Operations Management
Why Should you study POM
• A business education is incomplete without an
understanding of modern approaches to
managing operations.
• Operations management provides a systematic
way of looking at organizational processes.
• Operations management presents interesting
career opportunities.
• The concepts and tools of OM are widely used
in managing other functions of a business.
Back office Kitchen unit
operation in manufacturing
a bank operation

They are all


operations

Take-out /
Retail restaurant
operation operation
The operations function is fashionable!

The consultancy services market


% of world revenues of 40 largest firms

Financial Marketing/sales
6 2

Organizational
design
11 Operations and process
management
31

Benefits/Actuarial
16

IT strategy Corporate strategy


17 17
OPERATION

THE PROCESS OF CHANGING INPUTS INTO


OUTPUTS AND THEREBY ADDING VALUE
PROCESS

ADJUSTMENT MONITOR

INPUT TRANSFORMATION OUTPUT

COMPARISON

•THE PROCESSES CONSUME RESOURCES


•PROCESS LEADS TO VALUE ADDITION
VALUE ADDED PROCESSES

• ALTER

• TRANSPORT

• STORE

• INSPECT
MANAGEMENT PROCESS

PLANNING ORGANISING

•PRODUCT •STAFFING
•PROCESS •JOB AND WORK DESIGN
•FACILITY LOCATION •STANDARDS
•FACILITY LAYOUT •PAYMENT SYSTEM
•CAPACITY

CONTROLLING
•QUANTITY
•QUALITY
•TIME
•INVENTORY
•COST
•MAINTENANCE
Managers Need Knowledge Of
• Production processes
• Operations management processes
• Decision making tools
NATURE OF PRODUCTION
MANAGEMENT
Nature of production management can be
better understood, from three angles:

Production as a system
Production as an organizational function
Decision making in production
PRODUCTION AS A SYSTEM

Production system
Conversion sub-system
Control sub-system
PRODUCTION SYSTEM
CONCEPTS
CONCEPT DEFINITION
1. PRODUCTION SYSTEM A system, whose function is to convert a set
of inputs into a set of desired outputs

2. CONVERSION SUB-SYSTEM A sub-system of the larger production


system where, inputs are converted into
outputs

3. CONTROL SUB-SYSTEM A sub-system of the larger production


system where, a portion of the output is
monitored for feedback signals to provide
corrective action, if required
PRODUCTION AS AN
ORGANISATION FUNCTION

 Core of production system is its conversion


sub-system

Process of conversion is the heart of


production function
PRODUCTION SYSTEM MODEL

CONVERSION
INPUTS
SUB-SYSTEM OUTPUTS

Physical
ENVIRONMENT (manufacturing , Mining)
Legal./political, social, Locational services
Technological & (Transportation)
economic Exchange services
(retailing/ wholesaling)
d or services
Goods
Storage services
(warehousing)
MARKET
Competition Other private services
Product information (Insurance, finance , utilities
Customer desires ,real estate, health, business
Services & personal services)
PRIMARY RESOURCES Government services
Materials & supplies ( Local state, control)
Personnel
Capital assets
Capital (Money)
Utilities
CONTROL
SUBSYSTEM
DECISION –MAKING IN
PRODUCTION

 Strategic Decisions

 Operating Decisions

 Control Decisions
Types of Decisions Area of Involvement Nature of Activities

1. Strategic Decisions 1. Production Processes Developing long range production plans


including process design
2. Production Technology Selecting and managing production
technology
3. Facility Layout Planning the arrangement of facilities

4. Allocation of resources to Strategic Planning for the optimal distribution of


Alternatives scarce resources among the product
lines or business units
Answering the ‘how much’ and ‘where’
5. Long Range Capacity Planning and Facility questions about long range production
Location capacity
2. Operating Decisions 1. Production planning systems Aggregate planning and master
production scheduling
2. Independent Demand Inventory Systems Planning and controlling finished good
inventories
3. Resource Requirements planning Systems Planning materials and capacity
requirements
Short range decisions about what to
4. Shop Floor planning and control produce and when to produce at each
work centre
5. Materials management Managing all facts of materials systems
3. Control Decisions 1. Productivity and Employees Planning for the effective and efficient
use of human resources in operations.
Planning and controlling the quality of
2. Total Quality management products and services.

3. Project Planning and Control Techniques Planning and controlling projects .


Planning for maintaining the machines
& facilities of production
4. Maintainence Management and Reliability
SCOPE OF PRODUCTION AND
OPERATION MANAGEMENT
It includes activities such as :-
 Acquisition of land
Construction building
Procuring and installing machinery
Purchasing and storing raw materials
Converting them into saleable products
PRODUCTION MANAGEMENT

Production management involves application


of planning , organizing , directing and
controlling to the production process.
 Development of factory system of
production
 Development of large corporation
 Scientific Management
PRODUCTION MANAGEMENT
Production function can offer competitive
advantage to a firm in the following areas:-

 Shorter-new product lead time


More inventory terms
Shorter manufacturing lead time
Higher quality
OPERATIONS MANAGEMENT
It is a process whereby resources are converted into more
useful products.

TWO POINTS OF DISTINCTION B/W PRODUCTION &


OPERATIONS MGT:-
 Production management-intangible goods are produced
whereas operations management-inputs are transformed
into tangible services.
PRODUCTION &
OPERATIONS MGMT
 Evolution of the subject

Production management precedes operations


management in historical growth of the
subject. Operations management is a term
that is used now a days.
PRODUCTION &
OPERATIONS MGMT
 Production management is a subset of
operation management
Operation Management may be defined as
the design, operation and improvement of
the production system that creates the firm’s
primary products or services like marketing ,
finance and other functional areas which
deals with their own areas of activities
EVOLUTION OF OPERATIONS MANAGEMENT

1764 INVENTION OF STEAM ENGINE JAMES WATT


1776 THEORY OF DIVISION OF LABOUR ADAM SMITH
& JOB SPECIALISATION
1913 CONCEPT OF ASSEMBLY LINE HENRY FORD
1919 SCIENTIFIC MANAGEMENT FW TAYLOR
# HUMAN WORK AS A SCIENCE
# SCIENTIFIC SELECTION & TRAINING
# DIVISION OF WORK
GANTT CHART HENRY GANTT
MOTION STUDY GILBERTH

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