UNIT I

 Introduction: Definition, Objectives, Scope and

Functions of Production & Operations Management,
Types of Production Systems, Transformation
Process Model, Systems Perspectives of Operations
Management, and Relationship of Operations
Management with Other Functional Areas.
 Production Planning and Control: Objectives,
Importance, Levels and Procedures of Production
Planning and Control.
 Production Design and Development: Product
Design, Factors determining the Design of a
Product, Approaches to Product Design, Product
Development Process, and Factors influencing
Product Development.
 PRODUCTION MANAGEMENT?

The job of coordinating and controlling the activities

required makea product, involving
to effective control typically of cost,
performance, quality, andscheduling,
waste requirement.
 TWIN DEFINITION

Conversion of inputs into outputs using physical

resources and process to provide the desired utility
to customers while meeting the other organizational
objectives of effectiveness, efficiency & adaptability.
 HISTORICAL
EVOLUTION

 1776 -Specialization of labor in manufacturing -Adam Smith

 1799 -Interchangeable parts, cost accounting -Eli Viihitney and

others

 1832 -Division of labor by skill; assignment of jobs by skill; basics

of time study -Charles Babbage

 1900- Scientific management time study and work study

developed; dividing planning and doing of work -Frederick W.
Taylor

 1900- Motion of study of jobs -Frank B. Gilbreth

 HISTORICAL
EVOLUTION(CONT..)

 1901- Scheduling techniques for employees, machines jobs in

manufacturing -Henry L. Gantt

 1915 -Economic lot sizes for inventory control -F.W. Harris

 1927 -Human relations; the Hawthorne studies -Elton

Mayo

 1931 -Statistical inference applied to product quality: quality

control charts -W.A. Shewart

 1935 -Statistical sampling applied to quality control;

inspection sampling plans -H.F. Dodge &H.G. Roming
 HISTORICAL
EVOLUTION(CONT..)

 1940- Operations research applications in World War ll -

P.M. Blacker and others.

 1946- Digital computer -John Mauchlly and J.P. Eckert

 1947-Linear programming -GB. Dantzig, Williams &

others

 1950- Mathematical programming, on-Iinear and stochastic

processes –A. Charnes, W.W. Cooper & others

 1951- Commercial digital computer; large s-cale

computations available. -Sperry Univac
 HISTORICAL
EVOLUTION(CONT..)

 1960- Organizational behavior; continued study of people

at work -L. Cummings, L. Porter

 1970- Integrating operations into overall strategy and

policy. Computer applications to manufacturing.
Scheduling and control. Material requirement planning
(MRP)-W. Skinner J. Orlicky and G. Wright

 1980-Quality and productivity applications from Japan

robotics. CAD-CAM -W.E. Deming and J. Juran
 SPECIALIZATION OF LABOUR IN
MANUFACTURING

The specialization theory was devised by Adam Smith.

The specialization theory is better known as division
of labour.
 The theory was created for specialized knowledge
of a particular trade or task, also known as self
interest.
Division of labour involved in the production
of a particular product leads to increased
productivity
 SPECIALIZATION OF
LABOUR(CONT..)

Today specialization can be seen in companies

and businesses.
Kellogg specializes in cereals.
Coca-Cola specializes in soft drinks.
Hershey’s specializes in candy.
Apple specializes technology.
 MOTION OF STUDY OF
JOBS

Motion of study of jobs was devised by Frank

B. Gilbreth
 Motion study involves the analysis of the basic
hand, arm, and body movements of workers as they
perform work.
 HUMAN
RELATIONS

Human relations theory is characterized by a shift

in emphasis from TASK to WORKER
Need for attention
Social interaction
Individual achievement
Intended as a move away from the “organization as
machine” metaphor
Management recognizes employees as humans with
needs rather than cogs of a machine
 THE HAWTHORNE
STUDIES

 “The Hawthorne Studies were conducted from 1927-1932 at

the Western Electric Hawthorne Works in Chicago, where
Harvard Business School Professor Elton Mayo examined
productivity and work conditions.”
 “Mayo wanted to find out what effect fatigue and monotony
had on job productivity and how to control them through
such variables as rest breaks, work hours, temperatures and
humidity.”
 HISTORICAL MILESTONES IN OM

The Industrial Revolution

Post-Civil War Period
Scientific Management
Operations Research
The Service Revolution
The Computer Revolution
THE INDUSTRIAL REVOLUTION
The industrial revolution developed in England in
the 1700s.
The steam engine, invented by James Watt in 1764,
largely replaced human and water power for
factories.
Adam Smith’s The Wealth of Nations in 1776 touted
the economic benefits of the specialization of labor.
Thus the late-1700s factories had not only machine
power but also ways of planning and controlling the
tasks of workers
 THE INDUSTRIAL
REVOLUTION(CONT..)

The industrial revolution spread from England to

other European countries and to the United Sates.
In 1790 an American, Eli Whitney, developed the
concept of interchangeable parts.
The first great industry in the US was the textile
industry.
In the 1800s the development of the gasoline engine
and electricity further advanced the revolution.
 POST-CIVIL WAR
PERIOD

During the post-Civil War period great expansion of

production capacity occurred.
By post-Civil War the following developments set the
stage for the great production explosion of the 20th
century:
 increased capital and production capacity
 the expanded urban workforce
 new Western US markets
 an effective national transportation system
 SCIENTIFIC
MANAGEMENT

Frederick Taylor is known as the father of scientific

management. His system employed these steps:
 Each worker’s skill, strength, and learning ability were
determined.
 Stopwatch studies were conducted to precisely set standard
output per worker on each task.
 Material specifications, work methods, and routing sequences
were used to organize the shop.
 Supervisors were carefully selected and trained.
 Incentive pay systems were initiated.
 OPERATIONS RESEARCH

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.
 THE SERVICE
REVOLUTION

The creation of services organizations accelerated

sharply after World War II.
Today, more than two-thirds of the US workforce is
employed in services.
About two-thirds of the US GDP is from services.
There is a huge trade surplus in services.
Investment per office worker now exceeds
the investment per factory worker.
Thus there is a growing need for service operations
management.
 THE COMPUTER
REVOLUTION

Explosive growth of computer and communication

technologies
Easy access to information and the availability of
more information
Advances in software applications such as Enterprise
Resource Planning (ERP) software
Widespread use of email
More and more firms becoming involved in E-
Business using the Internet
Result: faster, better decisions over greater
distances
UNDERSTANDING PRODUCTION AND
OPERATION MANAGEMENT
 'Operations Management' is the term often used with
production management; therefore it is useful to understand
the nature of operations management.

 Operations are useful actions or activities which are done

methodically as part of plan of work by a process that is
designed to achieve the pre-decided objectives.

 Operations management consists of scheduling work,

assigning resources including people, equipment, managing
inventories, assessing quality standards, process type
decisions and the sequence for making individual items is a
product mix set.
5 P’s of Operations Management
 Plants: The factory, the location where all the
activities take place, machinery and heavy
equipments
 People: Direct or Indirect workforce

 Parts: The components, sub-assemblies or even

products
 Processes: Methodologies, technology, tooling,
fixtures for establishing, maintaining and
improving productivity;
 Planning and Control: This is an information
management system which initiates, directs,
monitors and collects feedback to enable efficient
use of all other resources
HISTORICAL MILESTONE IN
OPERATION MANAGEMENT
 Form a group and present the topic in class.
DEFINITIONS
 Production / Operations Management is defined as
the process which transforms the inputs/resources
of an organization into final goods (or services)
through a set of defined, controlled and
repeatable policies.

 E.S. Buffa defines production management as,

“Production Management deals with decision
making related to production processes so that
the resulting goods or services are produced
according to specifications, in the amount and by
the schedule demanded and out of minimum
cost.”
 OBJECTIVES OF PRODUCTION
MANAGEMENT
The objective of the production management is ‘to produce goods
services of right quality and quantity at the right time and right
manufacturing cost’.

1. RIGHT QUALITY: The quality of product is established based upon

the customers needs. The right quality is not necessarily best quality. It
is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.

2. RIGHT QUANTITY: The manufacturing organization should produce

the products in right number. If they are produced in excess of demand
the capital will block up in the form of inventory and if the quantity is
produced in short of demand, leads to shortage of products.
3. RIGHT TIME: Timeliness of delivery is one of the
important parameter to judge the effectiveness of
production department. So, the production
department has to make the optimal utilization of
input resources to achieve its objective.

4. RIGHT MANUFACTURING COST: Manufacturing

costs are established before the product is actually
manufactured. Hence, all attempts should be made
to produce the products at pre-established cost, so
as to reduce the variation between actual and the
standard (pre-established) cost.
OBJECTIVES OF OPERATION
MANAGEMENT

 CUSTOMER SERVICE
 RESOURCE UTILIZATION
 DIFFERENCE BETWEEN PRODUCTION AND
OPERATIONS MANAGEMENT
 Production management and operations management are
differentiated on the basis of tangibility of finished goods or
services. Production management and operations
management are used interchangeably.

There are only two points for describing the difference

between production and operations management.
 The term 'production management' is more frequently used
for a system where tangible goods are produced, whereas
operations management is used for various inputs are
transformed into intangible services.
 The second distinction relates to the evolution of the
subject. Operations management is the term used
nowadays whereas the production management precedes
operations management in the historical growth of the
subject.
 POM is the conversion of raw materials and
information into finished goods inventory or
product or services.
 In other words, the conversion of input into output
using physical resources ,so as to provide the
desired output while meeting the various
objectives such as ,productivity , effectiveness
,adoptability and efficiency.
Production System
THE EXAMPLES OF A PRODUCTION
SYSTEM ARE AS FOLLOWS:
Tangible goods : Consider an example of a
manufacturing  industry like a Sugar Industry. Here,
sugarcane is first used as an input, then the juice of
sugarcane is processed through a conversion process,
finally to get an output known as a refined sugar (used
for mass consumption).

Intangible goods : Consider an example from a

service industry that of a software-development firm
or company. Here, initially, written program codes are
used as an inputs. These codes are then integrated in
some database and are provided with a user-friendly
interface through a conversion process. Finally, an
output is made available in form of an executable
application program.
FUNCTIONAL AREAS OF PRODUCTION
AND OPERATION MANAGEMENT
 Facility location
 Facility layouts and material handling.

 Product design

 Process design

 Production and planning control

 Quality control

 Materials management

 Maintenance management

 Customer feedback mechanism

FACILITY LOCATION
 Location of facility (machines, department) for
operations is a long term capacity decision that
affects business organization.
 The selection of location is a key decision as a
heavy investment is made in building plant and
installing machineries.
 The purpose of facility location study is to
determine the optimal facility location that
provides greatest advantage to the organization.
FACILITY LAYOUT AND MATERIAL HANDLING
 It is defined as an optimal arrangement of
facilities in both manufacturing and service
environment.
 The objective of facility layout is to maximize the
material handling cost.
 Material handling refers to the movement of
materials from one machine to another during
the process of manufacturing.
 In other words it is defined as the art and science
of moving ,packaging and storing of product in
any form.
 Proper design of plant layout and material
handling devices increases the output, speeds
up the deliveries and decreases the cost of
production
PRODUCT DESIGN
 Product design deals with conversion of ideas
into reality
 Product development transforms the needs
of customers provided by the marketing into
usable products.
 The product design also optimizes the
processes by which the product can be
manufactured in the minimum possible
manufacturing time.
PROCESS DESIGN
 Product design is a routing of complete
process for converting the raw material into
finished goods inventory.
 The decision encompass process selection,
choice of technology, flow analysis and
layout facilities.
 Important decision in process design are to
analyze the workflow and optimize the
workflow
PRODUCTION PLANNING & CONTROL
 It is defined as the process of planning the
production to meet the demand at optimum
production cost.
 The main working principle of production
planning and control is “First plan your work
and then work on your plan”.
 The main function of production planning and
control includes planning, routing,
scheduling, dispatching,monitoring and
follow up
QUALITY CONTROL
 QC is defined as a systematic approach that
can be used to manufacture a product within
the approved design specification.
 QC also aims at the prevention of defects at
the source ,relies on effective feedback
system and corrective action procedures.
 The main objectives of QC are:
CONTD..

1. To minimize manufacturing cost through

reduction of losses due to defects.
2. To produce optimal quality at reduced price.
3. To ensure satisfaction of customers by
providing quality goods.
4. To make inspection prompt to ensure quality
control
5. To check the variation during
manufacturing.
MATERIAL MANAGEMENT
 Material management is that area of
production/operation management ,which
deals with the acquisition, control and use of
materials needed for timely completion of
manufacturing of finished goods.
 The main objectives of material management
are:
1. To minimize material cost.

2. To purchase ,receive and store materials

efficiently and to reduce the related cost.
3. To identify new suppliers that can deliver
order in time.
MAINTENANCE MANAGEMENT
 The main objective of maintenance
management are:
1. To achieve minimum breakdown and to
keep the plant in good working condition.
2. To keep the facilities in proper condition.

3. To ensure the availability of machines,

building and services in good and proper
condition.
SCOPE OF OPERATION MANAGEMENT
 Forecasting
 Capacity planning

 Scheduling

 Managing inventories

 Assuring quality

 Motivating employees

 Deciding where to locate facilities

 Design of work system

 Operations planning and control

 Resource requirement planning

 Project management

 Quality management
 OPERATIONS MANAGEMENT?

Operations management is an area of management

concerned with designing, and
controlling overseeing, the production and
processoperations
redesigning business of in the production of
goods or services.
ROLE OF OPERATION MANAGEMENT
 The role of operation management is to
produce the desired product in right quantity
and quality by specified methods so that the
optimal utilization of resources are met.
 Broadly the role of OM is categories as

Service
Operation level
manageme
nt Resource
utilization.
 Customer service Resource utilization
objective: objective
 To provide  To achieve adequate
agreed/adequate levels of resource
levels of customer utilization e.g. to
service by providing achieve agreed
goods services with levels of utilization
the right of materials,
specification at the machines and
right cost and at the labour.
right time.
CLASSIFICATION OF PRODUCTION
SYSTEM

Mass
Production volume

production
Batch
production
Job-shop
Production

Output/product variety
 Job shop production: In this system
products are manufactured to meet the
requirements of a specific order. The quantity
involved is small and the manufacturing of
the product will take place as per the
specifications provided by the customer .

 job production can be classified as:

1. Job produced only once

2. Job produces at irregular interval

3. Job produced at regular interval.

Some Examples: tailor shop, automobile

repair etc.
 Batch production: It is another type of
production system where similar types of
parts are produced in large volumes.

 This type of production system is classified

into:
1. A batch produced only once

2. A batch produced at irregular intervals

3. A batch produced at regular intervals.

Examples: tyre and tube production,

readymade garments, cosmetics
manufacturing industry.
 Continuous Production: in such type of
production system ,the machines and
resources such as manpower ,are completely
utilized for production of identical products.
As the name implies, the type of production
system is generally associated with the large
quantities having high rate of demand .
 It is classified into 2 types:

1. Mass production

2. Flow production
1.Mass Production: In this production
system the same product type is produced
in large volume in order to meet the
demand. In such system the firm needs
good planning of resources, such as
material, machines and manpower.
Examples: Auto parts,componenets of
industrial products.
2. Flow Production: in such production
system the design of the entire plant is
done as per the need of the product.
In contrast in mass production the design of
the plant is done as per the need of product
type and therefore the resources of mass
production can be used to produce similar
products.
Such flexibility is not associated with flow
production system .
Example: cement factory, sugar factory oil
refinery etc.
 CHARACTERISTICS OF PRODUCTION
SYSTEM
1. Type of layout: For batch/job shop system
process layout is most suitable while for
mass/flow product layout is most suitable.
2. Product type and its design: For
batch/job shop production system ,wide
ranges of products are manufactured but in
small quantities and product design in
change from lot to lot as per specifications
of the product. But for continuous
production system few or one product is
manufactures in large quantities and also
product design is standardized and does not
change frequently.
3. Machine setup time: the machine set up time in
batch/job shop production system is higher than the
continuous production system due to frequent
changes in the specifications of the product and its
design.
4. Order size: in case of batch/job shop production
system ,the order size is in small and orders are
generally not repeated.
5. Investment: machine investment in batch/job shop
production is slightly higher than the machine
investment in continuous production system.
6. Material handling equipment and its cost: the
cost is higher in batch/job shop system as the
material handling is done on various routes due to
the production of varieties of products, while in the
continuous production system material movement is
observed in well defined routes.
7. Maintenance and service: maintenance units
are functional in every production system.

8. Utilizing production capacity: it may or may

not be completely utilized as the production is
order based .
 BENEFITS OF AN EFFICIENT
OPERATIONS MANAGEMENT
1. Effective utilization of resources.
2. Reduced work-in-process inventory.
3. Increased responsiveness to customer
needs.
4. Reduced hidden cost
5. Reduced production cost
TRANSFORMATION
 Organisationsproduce goods and services
by converting input into outputs via a
process known as the transformation
process.
 Transformation process is any activity
or group of activities that takes one or
more inputs, transform and adds
value to them and provides output for
customers.
Transformation process includes:

 Changes in the physical characteristics of

materials or customers
 Changes in the location of materials,
information or customers
 Changes in the ownership of materials or
information
 Storage or accommodation of materials,
information or customers
 Changes in the purpose or form of
information
 Changes in the physiological or psychological
state of customers.
TRANSFORMATION PROCESS
 NEED FOR TRANSFORMATION
 “Nothing is permanent except change” .every
organization has to reinvent and rediscover
itself from time to time in view of the turbulent
change in its external environment.following
are the reasons for transformation
1. Obsolescence of existing management
system,routine and practices.
2. Continous change in the external
environmental forces
3. Increased competition in the market because of
entry of new players and launch of substitutes
4. Need to redefine the business i.e. formulation of
new mission and goals.
5. Integration of organizational restructuring
,technological innovation and human resource
development.
6. Adoption of TQM
7. Enhancing the public image of the organization.
 SYSTEMS PERSPECTIVES OF
OPERATIONS MANAGEMENT

Basics of System:
A System is a group of interrelated items
A system is divided into a series of parts or
subsystems, and any system is a part of a larger
system.
The system’s boundary defines what is inside the
system and what is outside.
A system’s environment is everything outside the
system boundary that may have an impact on the
behaviour of the system.
A system’s inputs are the physical objects of
information that enter it from the environment and
its outputs are the same which leave it for the
environment.
 Systems view of operations management
states that activities in an operations system
can be classified as inputs, transformation
process and output. Inputs are classified into
three general categories-external, market
and primary resources.
 PRODUCTIVITY

 Productivity is a relationship between the output

(product/service) and input (resources consumed
in providing them) of a business system. The
ratio of aggregate output to the aggregate input
is called productivity.

 Productivity = output/Input

 For survival of any organization, this productivity

ratio must be at least 1.If it is more than 1, the
organization is in a comfortable position. The
ratio of output produced to the input resources
utilized in the production.
 IMPORTANCE

 It helps to cut down cost per unit and thereby

improve the profits.
 Gains from productivity can be transferred to the
consumers in form of lower priced Products or
better quality products.
 These gains can also be shared with workers or
employees by paying them at higher rate.
 A more productive entrepreneur can have better
chances to exploit expert opportunities.
 It would generate more employment opportunity.

 Overall productivity reflects the efficiency of

production system.
 More output is produced with same or less input.
 PRODUCTIVITY MEASUREMENT
 Productivity may be measured either on
aggregate basis or on individual basis, which
are called total and partial measure.
 Total productivity Index/measure = Total
output
Total
input
Total production of goods and services
Labour+material+capital+Energy+manageme
nt

Partial Productivity: productivity of each

resource calculated seperately.
= Output in a given period
 JAPANESE TECHNIQUES FOR
PRODUCTIVITY IMPROVEMENT
 Toyota, a giant Japanese automobile
company was pioneer in development and
application of various productivity
improvement techniques under Toyota
Production System (TPS). Taiichi Ohno
developed the Toyota Production System
(TPS) after World War II. Some of the selected
Japanese Productivity Improvement
techniques are
 A) JIDOKA: Jidoka is a Toyota concept aimed at
describing the man-machine interface such that
people remain free to exercise judgment while
machines serve their purpose. The jidoka
system shows faith in the worker as a thinker
and allows all workers the right to stop the line
on which they are working. Jidoka is often
referred to as „automation with a human mind‟.
The jidoka way of working consists of following
three principles- Do not make defects, Do not
pass on defects, Do not accept defects.
 B) HEIJUNKA : focuses on achieving
consistent levels of production. It is defined
as „distributing the production of different
[body types] evenly over the course of a
day‟ It incorporates the principles of line
balancing by attempting to equate
workloads, leveling demand out by creating
an inventory buffer and replenishing that
buffer. It believes in providing even work load
for all employees. Heijunka has the capability
of reducing lead times by minimizing time
losses due to frequent process changeovers.
 C) KAIZEN Techniques: Kaizen (Continuous
improvement) is a management supported
employee driven process where, employees
make a great number of continuous
improvement efforts.
 5 P’S OF PRODUCTION MANAGEMENT
 The division of production management
functions in to 5 P’s (product, plant,
programme, processes and people) will
provide useful conceptual framework for the
various activities performed by production or
operations manager.
Product
Product

People Plant
People Plant
5
P’s5
P’s

Processes Programme
Processes Programme
1. THE PRODUCT:
Product is the link between production and marketing. It is
not enough that a customer requires product but the
organisation must be capable of producing the product.
As per the product policy of the organisation an agreement is
reached between the various functions on the following
aspects of the product,
1. Performance
2. Quality and reliability
3. Quantity and selling price
4. Delivery schedule
To arrive at the above, the external and the internal factors
which affect the various aspects such as market needs,
existing culture and legal constraints and the environmental
demands should be given due consideration. Thus the
major policy decisions regarding variety of product mix is
going to affect the producing system.
2. THE PLANT
 The plant accounts for major investment (fixed
assets).The plant should match the needs of the
product; market, the worker and the organisation.
The plant is concerned with;
1. Design and layout of building and offices
2. Reliability, perfect, maintenance of equipments
3. Safety of operations
4. The financial constraint
 Plant layout deals with physical arrangement of
plants and machineries within the selected site. The
layout should be such that it should allow for smooth
movement of men and materials with minimum back
tracking. The type of the layout is dependent on
production type, volume of demand, etc.
3. THE PROCESS:
 There are always number of alternative methods
of creating a product. But it is required to select
the one best method, which attains the
objectives.
In deciding about the process it is necessary
to examine the following factors:
1. Available capacity
2. Manpower skills available
3. Type of production
4. Layout of plant
5. Safety
6. Maintenance required
7. Manufacturing costs
4. THE PROGRAMME:
 The programme here refers to the timetable of
production.
Thus, the programme prepares schedules for:
1. Purchasing
2. Transforming
3. Maintenance
4. Cash
5. Storage and transport
5. THE PEOPLE:

 Production depends upon people. The people

vary in their attitudes, skill and expectations
from the work. Thus, to make best use of
available human resource, it is required to have
a good match between people and jobs which
may lead to job satisfaction.
The production manager should be involved
in issues like:
1. Wages/salary administration
2. Conditions of work/safety
3. Motivation
4. Training of employees
 NEW TRENDS
 Global market place: globalization of business has
compelled many manufacturing firms to have
operations in many countries where they have
certain economic advantage.
 Total Quality Management: adopted by many
firms to achieve customer satisfaction by a never
ending quest for improving the quality of goods and
services.
 Flexibility: the ability to adapt quickly to change in
volume of demand ,in the product mix ,product
design or delivery schedule. This is some times
called agile manufacturing.
 Time reduction: reduction of manufacturing cycle
time and speed to market for a new product provide
competitive edge.
 Technology: advancement of technology has led
way to new products, new processes, new material
and
components.Automation,computerization,information
and communication technologies have revolutionized
the way companies operates.
 Worker involvement: assigning responsibility for
decision making and problem solving to the lower
levels of the organization. This is also known as
employee involvement and empowerment.
 Re-Engineering: this involves drastic measures to
improve the performance of the firm. It involves the
concept of clean-slate approach or starting from
scratch redesigning the business process.
 Corporate Downsizing(right sizing): this is
become necessary due to competition, lowering
productivity, need for improvement.
PRODUCTION PLANNING AND CONTROL.

 Production planning and control can be defined as

the “direction and coordination of firms’ resources
towards attaining the prefixed goals.”
 It helps to achieve uninterrupted flow of materials
through production line by making available the
materials at right time and required quantity.
 Production planning starts with the analysis of the
given data, i.e., demand for products, delivery
schedule etc., and on the basis of the information
available, a scheme of utilisation of firms
resources like machines, materials and men are
worked out to obtain the target in the most
economical way.
Production Control
In spite of planning to the minute details, most of
the time it is not possible to achieve
production100 per cent as per the plan. There
may be innumerable factors which affect the
production system and because of which there is
a deviation from the actual plan. Some of the
factors that affect are:
1. Non-availability of materials (due to shortage,
etc.);
2. Plant, equipment and machine breakdown;
3. Changes in demand and rush orders;
4. Absenteeism of workers; and
5. Lack of coordination and communication between
various functional areas of business.
 NEED FOR PRODUCTION
PLANNING AND CONTROL
 Production planning and control serves as a useful
tool to coordinate the activities of the production
system by proper planning and control system.PPC is
needed to achieve:
1. Effective utilisation of firms’ resources.
2. To achieve the production objectives with respect to
quality, quantity, cost and timeliness of delivery.
3. To obtain the uninterrupted production flow in order
to meet customers varied demand with respect to
quality and committed delivery schedule.
4. To help the company to supply good quality products
to the customer on the continuous basis at
competitive rates.
 OBJECTIVES OF PRODUCTION
PLANNING AND CONTROL
1. Systematic planning of production activities to
achieve the highest efficiency in production of
goods/services.
2. To organize the production facilities like machines,
men, etc., to achieve stated production objectives
with respect to quantity and quality time and cost.
3. Optimum scheduling of resources.
4.Coordinate with other departments relating to
production to achieve regular balanced and
uninterrupted production flow.
5. To conform to delivery commitments.
6. Materials planning and control.
7. To be able to make adjustments due to changes in
demand and rush orders.
PHASES OF PRODUCTION
PLANNING AND CONTROL
FUNCTIONS OF PRODUCTION
PLANNING AND CONTROL
Functions of production planning and
controlling is classified into:
1. Pre-planning function
2. Planning function
3. Control function
The functions of production planning and
controlling are depicted in the Fig next slide
1. PRE-PLANNING FUNCTION
Pre-planning is a macro level planning and deals
with analysis of data and is an outline of the
planning policy based upon the forecasted
demand, market analysis and product design and
development.
This stage is concerned with process design (new
processes and developments, equipment policy
and replacement and work flow (Plant layout).
The pre-planning function of PPC is concerned with
decision-making with respect to methods,
machines and work flow with respect to
availability, scope and capacity.
2. PLANNING FUNCTION
The planning function starts once the task to be
accomplished is specified, with the analysis of
four M’s, i.e., Machines, Methods, Materials
and Manpower.
This is followed by process planning (routing).
Both short-term (near future) and long-term
planning are considered.
Standardisation, simplification of products and
processes are given due consideration.
3. CONTROL FUNCTION
Control phase is effected by dispatching, inspection
and expediting materials control, analysis of work-
in-process. Finally, evaluation makes the PPC cycle
complete and corrective actions are taken through a
feedback from analysis. A good communication, and
feedback system is essential to enhance and ensure
effectiveness of PPC.
PRODUCT DESIGN AND
DEVELOPMENT
 Product Design can be defined as the idea generation, concept
development, testing and manufacturing or implementation of
a physical object or service.
 Organization success is dependent on customer
satisfaction and delight.
 Customer satisfaction is achieved through
development of product and service, which have
all attributes required by the customer.
 A success product or services do not only have
attractive package design but should be also able
to provide robust performance.
 Thus, product design must be practical enough for
production and powerful enough to provide a
competitive advantage.
A good product design has following common
features:
Utility: The product design should make product
utility as per expectation of customers and provide
steady performance through the product life.
Producible: Product design should enable effective
production of product through available production
methods.
Profitability: Product design should make economic
sense as to deliver value to customer and
sustainability to the organization.
Differentiable: A good product design should enable
product to be differentiate among its competition.
This can be achieved by attractive packaging and
also by providing additional service on the product.
Factors Affecting Product Design
Correct Team Selection: This is very essential to get the correct
team in place which has expert designers who are not only aware
and comfortable with technology but also understanding of
customer expectation.
Customer Involvement: Involvement of customer in product design
and testing can provide insight into the direction of the project
Prototyping and testing: Product design is high risk concept as it
involves commitment of capital and man-power; therefore, it is
imperative that extensive prototyping and testing are done with
customer and market.
Raw Material: It is essential that raw material to be used in the
production meets the quality standards of the end product.
Production method and process layout: Feasibility of production
method and process layout determines future success of the
product.
External Factors: Environmental and government regulations plays
an important part in product design. And these norms are updated
from time to time.
REST NOTES IN PDF HANDOUT