Management

Introduction Product & services Product / Process continuum Transformation process Production & operations management Product & process design

Automation
Production manager POM in India: First 40 years of Republic

Production/operations management
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Production/operations management is the process, which

combines and transforms various resources used in the production system of the organization into value added product/services.
It is concerned with the transformation of a range of inputs

into the required products/services

The set of interrelated management activities, which are

involved in manufacturing certain products, is called as production management.

If the same concept is extended to services management,

then the corresponding set of management activities is called as operations management.

HISTORICAL EVOLUTION OF PRODUCTION AND OPERATIONS MANAGEMENT

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The traditional view of PRODUCTION management began

in eighteenth century when AdamSmith recognised the economic benefits of specialisation of labour.

He recommended breaking of jobs down into subtasks and

recognises workers to specialised in tasks.

In the early twentieth century, F.W. Taylor implemented

Smiths theories and developed scientific management.

Production management becomes the acceptable

term from 1930s to 1950s. As F.W. Taylors works become more widely known, managers developed techniques that focussed on economic efficiency in manufacturing.

With the 1970s emerges two distinct changes that

reflected in the new name ie. operations management in the service and manufacturing sectors of the economy.

Product & services

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Manufacturing organizations & service organizations. 1) Product - Process 2) Tangible intangible 3) Features of end product is focused- how customer is being

processed.
Hybrid product & services

Eg: Restaurant

The Product/Process Continuum (various organizations placed on continuum)

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Automobile manufacturers

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

Product orientation

Process orientation

Organizations on a Product/Process Continuum

CONCEPT OF PRODUCTION7 Production as a process by which goods and services are created.

0r
step-by-step conversion of one form of material into another

form through chemical or mechanical process to create or enhance the utility of the product to the user.

PRODUCTION SYSTEM
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System of an organization is that part, which produces products of an organization. It is that activity whereby resources, flowing within a defined system, are combined and transformed

in a controlled manner to add value in accordance with the policies

- organized activity

- Transforms
- does not operate in isolation - feedback

The Transformation Process

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Quality of inputs monitored Random disturbances Quality of outputs monitored

INPUTS

Transformation Process

OUTPUTS

Feedback Mechanisms

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

Random disturbances Strikes of students, teachers or staff Undue interference of the government in the working of institutions

Raw minds (students) Teachers Class rooms

Quality of inputs monitored

Quality of outputs monitored

Computer lab
Library Projectors (OHP, LCD etc) Administrative staff

Transformation Process

Enlightened students with: Good communication skills Pleasant personalities Leadership qualities Good analytical ability Team spirit Decision making abilities Computer skills

INPUTS

Feedback Mechanisms Success at placement interviews Grades obtained in examinations Rising career graph of alumni in the industry Number of applications for admission in the institute Ratings of surveys 10

OUTPUTS

The Transformation Process For a Hybrid Service & Manufacturing Organization (A Restaurant)
Random disturbances High turnover of chefs, waiters, etc. Inflation Governments taxation policy Quality of outputs monitored

Customers Building Chef Vegetables Furniture Mutton, chicken, pork, etc. Cooking oil, Spices, etc. Waiters Manager

Quality of inputs monitored

Transformation Process

Customers satisfied with: Good preparation of the food Pleasant behavior and personality of the waiter Genuine prices charged

INPUTS

Feedback Mechanisms Rising Revenues Repeat Customers Appreciation of customers

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

Random disturbances High turnover of workers and managers Recession Governments taxation policy Strikes instigated by trade unions Transformation Process

Machines & Equipments Building Components, parts, subassemblies, etc. Workers Office infrastructure (computers, furniture, etc.) Packaging material Capital Managers

Quality of inputs monitored

Quality of outputs monitored

Customers satisfied with: Good cooling performance Less consumption with electricity Good after-sales service New advanced features

INPUTS

Feedback Mechanisms Rising sales volume Lesser customer complaints Positive response of customers in the feedback forms

OUTPUTS

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Product/Process Choice Service Operations Management Business Process Outsourcing and Off-shoring

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

Facility Location Planning

Facility Layout Planning

Facility Capacity Planning

Project Management

Inventory Management for Independent Demand Items

Materials Requirement Planning (MRP)/ Just-In-Time (JIT) System/ Supply Chain Mgt. (SCM)

Total Productive Maintenance (TPM)

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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 Scheduling

Quality Management

Demand Forecasting

Operations Strategies

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Importance of production & operations management

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Globalization

Corporations expanding their operations

End of License Raj Quality & cost considerations became important Liberalization led to entry of many MNCs So implementation of world class POM practices

even in domestic companies.

Current trends
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Exporting of industries has increased and are

characterized by early investments in advanced product and process technologies. $ worth of exports.

96 of the top 100 industries in the U.S. have large

Productivity is increasing and has become a basis

for competition. Success domestically and globally is dependent on the ability to compete on many fronts, including operations.

Outsourcing of manufacturing and services (e.g.,

India and China) is accelerating.

Key OM Concepts
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Efficiency - Doing something at the lowest possible

cost

Effectiveness - Doing the right things to create the

most value for the organization

Value - Quality divided by price

Management decisions in OM
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Operations management is all concerned with

management of the entire system that produces goods or delivers product.

Management decisions in operations management .

1) Strategic decisions 2) Tactical decisions

3) Operation planning & control decisions

Operation as a service
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Every organization is in service business. In manufacturing, services can be divided into core &

value added services are provided to customers. Core Services are basic things that customers want from products that they purchase.
Quality

Flexibility
Speed Price

(Customized products)

(delivery)

(or production cost)

Value-Added Services
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Value-added services differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way.
Information Problem

Solving

Field
Sales

Support
Support

Product Design
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Manufacturability

Reverse Engineering Research & Development

Standardization Concepts in Product Design

Product Life Cycle

Robust Design

Concurrent Engineering

Modular Design

Computer Aided Design (CAD)

Concepts in Product Design

Process Design
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Types of Processes

Continuous Process

Semi-continuous (Repetitive/Assembly) Process

Intermittent Process

Project

Batch Process

Job Shop

Types of Processes

Automation
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State-of-the-art fully automated plants increase the market value of the firm/ improve client base in international markets More reliable and consistent performance than that of humans Machines take exactly the same time in repetitive tasks Behavioral problems in humans like boredom, frustration, fatigue, etc. can be avoided by using machines

Advantages

Industrial relations problems like strikes, lockouts, etc. can be avoided

Automation

Usually more expensive than the human work force

Disadvantages

Loss of creativity on the part of workers due to inflexibility in automation

Less flexible than the humans; even small changes in the process are expensive

Leads to unemployment/ retrenchment of the labor force

Emerging Role of the Production & Operations Manager in India today

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To act as internal quality auditors in certification programmes like ISO 9000 Increased attention to technology management in view of JVs of MNCs with domestic companies To act as supply chain managers in forging long-term strategic relationships with suppliers To act as a member of the concurrent engineering team in new product design To implement the environmental and pollution norms established by the government from time to time To take part in strategic decision making of the organization To implement total productive maintenance (TPM) programme

To take part in the implementation & use of ERP software in the organization

New Responsibilities of Operations Managers

To automate the processes according to the requirements of the organization To enhance the R & D effort of the organization for becoming self-reliant in developing new technologies

To take decisions regarding outsourcing/ offshoring of business processes

To oversee timely implementation of projects (like commissioning of facilities, launching of new products/ services, etc.) in view of the increased competition

To take care of issues relating to services operations management