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Definitions

• Production
– Step by step conversion of one form of material to other
through chemical or mechanical process.
• Production Management
– Planning, organizing, directing and controlling the activities
of the production function.
• Operation Management
– Service oriented industry is broadly known as operations
management.

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 The Product/Process Continuum

Automobile
Photocopier retailers Banks Consultancies
Automobile manufacturers &
manufacturers service providers Restaurants Airlines Undertakers

Product Process
orientation orientation

Organizations on a
Product/Process Continuum

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The Transformation Process

Quality of inputs Quality of outputs

monitored monitored

Random disturbances

INPUTS Transformation OUTPUTS

Process

Feedback Mechanisms

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 The Transformation Process
For a Service Organization (An MBA Institute)

Random disturbances
• Strikes of students,
Quality of
Quality of teachers or staff
• Undue interference of outputs
inputs monitored
Raw minds monitored the government in the
(students) working of institutions

Teachers
Class rooms Enlightened students with:
Transformation • Good communication skills
Computer lab Process • Pleasant personalities
• Leadership qualities
Library • Good analytical ability
Projectors • Team spirit
(OHP, • Decision making abilities
LCD etc) • Computer skills
Administrative
staff Feedback Mechanisms
• Success at placement interviews
• Grades obtained in examinations
INPUTS • Rising career graph of alumni in the industry OUTPUTS
• Number of applications for admission
in the institute
• Ratings of surveys

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 The Transformation Process For a Hybrid Service &
Manufacturing Organization
(A Restaurant)
Random disturbances
• High turnover of chefs,
Quality of
Customers Quality of waiters, etc.
• Inflation outputs
Building inputs monitored
monitored • Government’s taxation
Chef policy
Vegetables
Furniture
Customers satisfied with:
Mutton, Transformation • Good preparation of the
chicken, Process food
pork, • Pleasant behavior and
etc. personality of the waiter
Cooking oil,
• Genuine prices charged
Spices, etc.
Waiters
Manager
Feedback Mechanisms
• Rising Revenues
INPUTS • Repeat Customers OUTPUTS
• Appreciation of customers

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 The Transformation Process For a Purely Manufacturing
Organization (A Refrigerator Manufacturer)

Random disturbances
• High turnover of workers
Quality of
Machines & Quality of and managers
• Recession outputs
Equipments inputs monitored
monitored • Government’s taxation
Building policy
Components, • Strikes instigated by trade
parts, sub- unions
assemblies, etc. Customers satisfied with:
Transformation • Good cooling performance
Workers Process • Less consumption with
electricity
Office • Good after-sales service
infrastructure • New advanced features
(computers,
furniture, etc.)
Packaging
material
Feedback Mechanisms
Capital • Rising sales volume
• Lesser customer complaints
Managers
• Positive response of customers in
the feedback forms
INPUTS •Productivity OUTPUTS

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 Production & Operations
Management (POM) Defined

Production & Operations Management is

defined as the design, operation, and
improvement of the transformation process,
which converts the various inputs into desired
outputs of products and services.

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 Operations Steps in the
Strategy
production/operations
New Product process from the point of
Development
view of an entrepreneur
Business Process Outsourcing
and Off-shoring

Facility Facility Facility

Location Layout Capacity
Planning Planning Planning

Project
Management

Inventory Materials Total

Management Requirement Productive
for Planning (MRP)/ Maintenance
Independent Just-In-Time (JIT) (TPM)
Demand System/ Supply
Items Chain Mgt. (SCM)

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 Steps in the production/operations process
from the point of view of an entrepreneur

Aggregate Production/
Operations Planning

Work Design Operations Quality

Scheduling Management

Demand
Forecasting

Service
Operations
Management

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 Process Design

Types of Processes

Continuous Semi-continuous Intermittent Project

Process (Repetitive/Assembly) Process
Process

Batch Process Job Shop

Types of Processes

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 Green Operations Management

• Carbon emission is a measure of the amount

of carbon dioxide gas emitted.
• One tonne of carbon dioxide emission is
treated as one unit of carbon credit.
• A company reducing air pollution below
permissible limits can sell carbon credits to
another company that is exceeding air
pollution beyond the permissible limits.
• Avoidance or reduction to use of fossil fuels is
the way forward to minimize carbon
emissions.

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 Green Operations Management

• The building designs should allow as much

natural light as possible inside the building so
as to reduce the power consumption during
day time.
• Major hotel chains have redesigned the water-
flushing systems in toilets that consume much
less water. They encourage their guests to
reuse towels, bed sheets, and so on, to help
reduce consumption of water and energy (in
washing machines) used for washing.

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 Green Operations Management

• Recycling is increasingly becoming an

important mechanism to reduce raw material
consumption, energy, and pollution by
processing the seemingly waste products into
usable products.
• It is based on the premise that the resources
required to produce a product from scratch
would be much more compared to recycling
the products.

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 Automation

State-of-the-art fully Machines take Behavioral problems in

automated plants exactly the humans like boredom,
increase the market same time in frustration, fatigue, etc.
value of the firm/ repetitive tasks can be avoided by
improve client base using machines
in international
markets
Industrial relations
problems like
More reliable
Advantages strikes, lockouts,
and consistent
etc. can be avoided
performance
than that of
humans Automation

Usually more Loss of

expensive Disadvantages creativity on
than the the part of
human work workers due
force to inflexibility
in automation

Less flexible Leads to

than the unemployment/
humans; even retrenchment of
small changes the labor force
in the process
are expensive

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 Emerging Role of the Production &
Operations Manager in India Today
To act as internal quality
To take part in To implement total
auditors in certification
strategic decision
programmes like productive
making of the
ISO 9000 maintenance (TPM)
organization
programme

Increased attention
to technology To take part in the
management in view implementation & use
of JVs of MNCs with of ERP software in the
domestic companies organization
New
To act as supply Responsibilities To automate the
chain managers in of Operations processes according
forging long-term Managers to the requirements of
strategic the organization
relationships with
suppliers To enhance the R & D
effort of the
To act as a member organization for
of the concurrent becoming self-reliant in
engineering team developing new
in new product technologies
design
To implement the To oversee timely
To take care of issues
environmental and implementation of projects
To take decisions relating to services
pollution norms (like
regarding operations
established by the commissioning of facilities,
outsourcing/ off- management
government from launching of new products/
shoring of business time to time services, etc.) in view of the
processes increased competition

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