PRODUCTION MANAGEMENT: DEFINITION

Production management is a branch of management which is related to the

production function. Production may be referred to as the process concerned with the
conversion of inputs(raw materials, machinery, information, manpower, and other
factors of production) into output (Semi finished and finished goods and services) with
the help of certain processes (Planning, scheduling and controlling etc.) while
management is the process of exploitation of these factors of production in order to
achieve the desired results.
DEFINITION OF OPERATIONS MANAGEMENT
Operations Management is concerned with the production of goods and services.
It deals with the management of resources (inputs: machines, raw materials, human skills, etc)
AND the distribution of finished goods and services (outputs) to the customers.

OPERATIONS FUNCTION
Operations function is much broader than activities occur in a factory.
Products must be developed,
Materials must be purchased,
Facilities must be maintained,
Products must be distributed, and so on.
Three ways of studying POM
Production as a System
Concept:
- Production system: A system whose function is to convert a set of inputs into a set
of desired outputs.
- Conversion subsystem: A subsystem of the larger production system in which inputs
are converted into outputs.
- Control subsystem: A portion of the outputs is monitored for feedback signals to
provide corrective action if required.
Production as an Organization Function
- The process of conversion is at the heart of production and operations management
and is present in some form in all organizations. Where this conversion process is
carried out and what we call the department or function where it is located vary
greatly among organizations.
Decision Making in POM
The best way to understand how operations managers manage the examination of the
decisions in POM, these include:

Strategic decisions: Decisions about products, processes, and facilities. (long-term)

(launch a new-product development, design for a production process, allocate scarce raw
materials, utilities, production capacity, new factories need)

Operating decisions: Decisions about planning production to meet demand.

(how much finished-goods inventory to carry, what products and how muck of next
period, whether to increase by overtime or subcontract to suppliers)

Control decisions: Decisions about planning and controlling operations.(short term)

FRAMEWORK OF OPERATIONS
MANAGEMENT
 Distinction between Manufacturing Operations
and Service Operations
Following characteristics can be considered for
distinguishing manufacturing operations with service
operations:
1. Tangible/Intangible nature of output
2. Nature of work (job)
3. Degree of customer contact
4. Customer participation in conversion
5. Measurement of performance.
 EVOLUTION OF OPERATIONS MANAGEMENT
1.The Industrial Revolution - In England in the 1700s, this
advancement involved two principal elements: the widespread
substitution of machine power for human power and the
establishment of the factory system.

2. Post-Civil War Period - the beginning of modern forms of capital

through the establishment of joint stock companies. This
development led to the eventual separation of the capitalist from
the employer, with managers becoming salaried employees of the
financiers who owned the capital.

3. Scientific Management - contributions: time study, methods

analysis, motion study, human factor in work, Gantt charts - getting
the desired result with the least waste of time, effort, or materials.
4.Human Relations and Behaviorism - The human relations movement studies were
initially begun by industrial engineers and were aimed at determining the optimal level of
lighting to get the most production from work. When these studies produced confusing
results about the relationship between physical environment and worker efficiency, the
researchers realized that human factors must have been affecting
production. This is the first time that psychological and sociological factors affected not
only human motivation and attitude but production as well was recognized.

5. Operations Research - In World War II enormous quantities of manpower, supplier,

planes, ships, materials, and other resources had to be deployed in an extremely hectic
environment. The concepts of a total systems approach and of interdisciplinary teams
and the utilization of complex mathematical techniques had been used in solving the
industrial complex problems. Operations research, seeks to replace intuitive decision
making for large complex problems with an approach that identifies the optimal, or best,
alternative through analysis.

6. The Service Revolution – The creation of service organizations accelerated sharply after
World War II and is still expanding toady. More than two-thirds of the U.S. work force is
employed in services, roughly tow-thirds of the gross national product (GNP) is produced
by services, and investment per office worker now exceeds the investment per factory
worker.
7. Today’s Developments

Global competition - the rapid expansion of worldwide

communication and transportation systems, the conversion
of Eastern European countries to free-market economies, the
EC Market and free trade.
Productivity, Cost, and Quality Challenges - these are so
fundamental in global competition that basic changes may
need to be made in manufacturing and service operations.
Computers and High-Tech Production Technology
OBJECTIVES OF PRODUCTION MANAGEMENT
1.to produce the specified product by specified methods
so that the optimal utilization of available resources is
met.
2.marketability at the cheapest price by proper
planning, the manpower, material and processes.
3.Production management must see that it will deliver
right goods of right quantity at right place and at right
price.
When the above objective is achieved, we say that we
have effective Production Management system.
NEED FOR POM:
PRODUCT
Marketers in a business must ensure that a business sells products that meet customer needs
and wants. The role of Production and Operations is to ensure that the business actually
makes the required products in accordance with the plan.
- Performance
- Quality
- Reliability
- Quantity
- Production costs
- Delivery dates
PLANT
To make PRODUCT, PLANT of some kind is needed. This will comprise the bulk of the fixed
assets of the business. In determining which PLANT to use, management must consider area
such as:
- Future demand (volume, timing)
- Design and layout of factory, equipment, offices
- Productivity and reliability of equipment
- Need for (and costs of) maintenance
- Heath and safety (particularly the operation of equipment)
- Environmental issues (e.g. creation of waste products)
PROCESSES
There are many different ways of producing a product. Management must choose the best process, or
series of processes. They will consider:
- Available capacity
- Available skills
- Type of production
- Layout of plant and equipment
- Safety
- Production costs
- Maintenance requirements
PROGRAMMES
The production PROGRAMME concerns the dates and times of the products that are to be produced and
supplied to customers.
The decisions made about programme will be influenced by factors such as:
- Purchasing patterns (e.g. lead time)
- Cash flow
- Need for / availability of storage
- Transportation
PEOPLE
Production depends on PEOPLE, whose skills, experience and motivation vary. Key people-related
decisions will consider the following areas:
- Wages and salaries
- Safety and training
- Work conditions
- Leadership and motivation
 Types of Operations Systems
1.Mass production or flow line production system.
2. Batch production system.
3. Job shop.
4. Projects (unit manufacture)
Mass Production system or Flow-Line production Systems:
In these systems, the flow is in a straight line. All facilities
are arranged as per the sequence of operations. Output of
one operation becomes the input for the subsequent
operation. The system is cascaded. Some peculiar problems
of this system are balancing of assembly line/production
function. Maintenance must be very good to prevent the
breakdown of the whole system. Raw material fed initially
is very important since all the operations depend upon it.
Balanced workload results in a smooth output rate.
Batch Production System:
In this system, a batch consisting of a certain quantity
is made on a machine. The same machine then may be
used for another product. Thus here there are a variety
of products; and it is not possible to maintain a
separate assembly line for each product. Products
compete for the share of the machine. Machines are
general purpose. Pharmaceutical companies make
medicinal formulations by batch production system.
Production problems are complex here. There is
machine assignment problem. Again, what should be
the size of each batch is another problem. Scheduling
becomes more complex. Production planning, in
response to demand, becomes challenging. Layout of
the system also merits attention.
– For example, Bakery, Chemical industry, Printing press
Job Shop:
• Here, the shop accepts customers orders and executes them. It does not
have its own product mix. Primarily, we have facilities and processes in a
job shop to undertake a wide variety of customer jobs in different batch
quantities. Each order may be unique — requiring its own planning and
tooling. Here the flow of material is also complex. A busy job shop is a
difficult system to plan and control. There is need to priorities different
jobs for dispatching to customers.
• Job shop technology is appropriate for manufacturers of small batches of
many different products, each of which is custom designed and,
consequently, requires its own unique set of processing steps, or routing,
through the production process. For example, printing shop, restaurant,
etc.
Projects:
• Consider the manufacturing of a ship. Such products are never made in
large numbers. Manpower, facilities and other resources centre around
such products. Each such product can therefore be treated as a project,
requiring sequencing of certain activities either in series or concurrently.
PERT/CPM or network analysis is a useful technique to plan and control
such projects.
 Computer-integrated manufacturing
(CIM)
• Computer-integrated manufacturing (CIM) is the
use of computer techniques to integrate
manufacturing activities.
• These activities encompass all functions
necessary to translate customer needs into a final
product.
• Uses one computer system to control many
function of the manufacturing company.
• It also may handle the sales, invoicing,
production scheduling, design, equipment
control and many other functions of a company.
CIM starts with the development of a product concept that may exist in the marketing
organization; includes product design and specification, usually the responsibility of an
engineering organization; and extends through production into delivery and after-sales activities
that reside in a field service or sales organization. Integration of these activities requires that
accurate information be available when needed and in the format required by the person or
group requesting the data.
SUB-SYSTEMS OF CIM:
Computer-aided techniques:
•CAD (computer-aided design)
•CAE (computer-aided engineering)
•CAM (computer-aided manufacturing)
•CAPP (computer-aided process planning)
•CAQ (computer-aided quality assurance)
•PPC (production planning and control)
•ERP (enterprise resource planning)
CAD/CAM
• The designer can create a part or product on the
computer screen then sends it directly to a
machine tool, which makes the part.
 CAD
• CAD (Computer Aided
Design)
• A method of planning and
drawing a product using a
computer.
• The designs and
information is stored in
the computer.
• The computer can run
tests on the new product
or part without the part
even being there!
 TECHNOLOGIES IN CIM
Flexible Manufacturing Systems: FMS
• A flexible manufacturing system (FMS) is a
manufacturing system in which there is some amount
of flexibility that allows the system to react in the case
of changes, whether predicted or unpredicted. T
Advantages
• Faster, Lower- cost/unit, Greater labour productivity,
Greater machine efficiency, Improved quality,
Increased system reliability, Reduced parts inventories,
Adaptability to CAD/CAM operations. Shorter lead
times
Disadvantage: Cost to implement
 GROUP TECHNOLOGY
Group technology is the realization that many
problems are similar and that, by grouping similar
problems, single solution can be found to a set of
problems, thus saving time and effort”
One of long term benefits of group technology is it
helps implement a manufacturing strategy aimed at
greater automation.
GT viewed as: 
• An essential step in the move toward factory
automation.
• A necessary step in maintaining a high quality level and
profitable production.
 Impacts of Group Technology
 
• Reduced purchasing cost
• Less redundant purchases.
• Accurate cost estimation
• A more efficient process
• Quicker design changes
• Standardized Parts
• Improved customer service
• Classification builds customer relationships
 GLOBAL SUPPLY CHAIN
The overall objective of global supply chain
configuration is in meeting or exceeding
worldwide customer (internal and/or
external) expectations at the lowest cost.
Specific Objectives and Expectations of
Global Supply Chain
• Enable the transformation of supply chains into value
chains
• Integration of activities (buyers, suppliers, end-users)
to support organizational goals and strategies
• Optimize supply chain operation (no. of members,
capabilities, costs)
• Reduce inventories across the chain
• Reduce all costs (item costs and supply chain
operational costs)
• Assurance of supply of right quality items to support
operations.
 Global Complexities

• Currency exchange and risk

• Counter trade opportunities and requirements
• Varying laws and jurisdictional questions
• Cultural differences
• Language differences
• Labour and training availability, practices, laws,
regulations
• Transportation, packing, shipping, storing, import,
export, customs
• Security: materials, products, personnel, intellectual
property
 Bring About Change
• Seek Top Management mandate with visible support.
• Identify local sponsors and supporters of supply chain change early
in the transformation process.
• Use coordinated communication efforts to develop a dialog about
the benefits and obstacles to implementation.
• Target quick wins and immediate opportunities.
• Focus on overcoming obstacles to implementation by creating a
cross functional approach (Team) to address issues.
• Develop a supply chain agenda, manage the overall program and
frame goals to address major gaps in supply chain performance.
• Develop a business plan that will integrate the activities of the
supply chain members.
• Review results and make modifications as necessary to achieve
supply chain optimization.