unit 1&2
DESCRIPTION
Production & Operation ManagementTRANSCRIPT
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Production • Production is defined as “the 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.” At each stage production is a value addition process.
• “A process by which goods and services are created”- Buffa • Conversion of input(raw material) into output (finished products). • Input-man , machine, material, money, methods , management • Output-goods produced and services rendered • Directly impact on quality of goods and cost of production. • Management is the process of designing and maintaining an
environment in which individuals work to accomplish aims. • Production management is the process of planning, organizing,
directing, controlling the activities of the production function.
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Objectives • Right Quality, Right Quantity, Right Time, Right Cost • Produce quality goods • Increase productivity • Reduce waste • Customer satisfaction • Increase Profitability • Optimum utilization of 4M’s of POM • Deliver the product in time to the right place
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Function of POM
The components or functions of production & operation management are as follows: • Selection of Product and Design, • Selection of Production Process, • Selecting Right Production Capacity, • Production Planning, • Production Control, • Quality and Cost Control, • Inventory Control, and • Maintenance and Replacement of Machines
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Function of POM • Planning – Activities that establishes a course of action and guide
future decision-making is planning. • Human Resources Planning, Forecasting, Product design,
Production process, Location layout, Plant & Machinery layout, Capacity planning, Operation Strategies.
• Organizing –Activities that establishes a structure of tasks and authority.
• Time &Motion study, Scheduling, Material management, Purchasing management
• Controlling- Activities that assure the actual performance in accordance with planned performance
• Stores management, Quality control, Inventory control, Maintenance management,
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'Fig. 1.3 General model for managing operations
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Production manager roles and responsibilities • To plan the location, to purchase production equipment and lay out
equipment in the factory • To design the production process, production work, product and
establish work standards • To plan the capacity planning, production control, inventory
mgnt,supply chain management, quality control • To maintain the equipment's and repair • To train and select the staff • To do budgeting and capital planning • To act as a member of concurrent engg. Team in NPD • To act as supply chain managers in forging long term strategic
relationships with suppliers
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• To ensure safety and health • To implement total productive maintenance (TPM) programme • To automate processes according to the requirements • To enhance the R&D effort of the organisation for becoming
self-reliant in developing new technologies • To take care of issues relating to production operations
management • Increased attention to timely implementations of projects • To implement the environment and pollution norms established
by the government from time to time
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Manufacturing/Production Systems • The Manufacturing system has the following characteristics:
– "The methods, procedure or arrangement which includes all Share functions required to accumulate (gather) the inputs, process or reprocess the inputs, and deliver the marketable output (goods)."
– An organized activity, so every system has an objective. – Transforms the various inputs to useful outputs. – Feedback about the activities, which is essential to control and improve
system performance. • Types of production system are grouped under two categories viz.,
– Continuous Production System • Continuous/Process Production System • Mass Production System
– Intermittent Production System • Batch Production System • Job-Shop Production System • Project Production System
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Continuous Production System Characteristics of Continuous Production system • Production process is continuous. It is not intermittent. • Products are standardized (Limited no. of products variety). • The products are produced on predetermined quality standards. • The products are produced in large-scale. • Standardized routing sheets and schedules are prepared.
• Continuous Production System includes • Continuous/Process Production System • Mass Production System
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Intermittent Production System Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed) intervals (time gaps). Characteristics of Intermittent Production system • The flow of production is not continuous. It is intermittent. • Wide varieties of products are produced. • The volume of production is small. • General purpose machines are used. These machines can be used to
produce different types of products. • The sequence of operation goes on changing as per the design of the product. • The quantity, size, shape, design, etc. of the product depends on the
customer's orders.
• Intermittent Production System includes • Batch Production System • Job-Shop Production System • Project Production System
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Continuous/Process Production • Production facilities are arranged in sequence of production
operations from the first operations to the finished product • Continuous production is a flow production method used
to manufacture, produce, or process materials without interruption.
• Similar product is produced continuously in large quantity – .e.g. steel inputs, cement, sugar etc.
• Cost of production is almost constant because variety is less • Use Material handling devices such as conveyors, transfer
devices, etc. & fully automated material handling system
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Continuous/Process Production Advantages • Standardisation of product and process sequence • Production(Unit) cost is lower due to high volume of production • Higher rate of production with reduced cycle time • Higher capacity utilization due to line balancing • Less Manpower is required for material handling as it is
completely automatic • Person with limited skills can be used on the production line Disadvantage • Less Flexible cause Line production • Very high investment for setting flow lines • Product differentiation is limited
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Mass Production • Max 2 or 3 types of product are manufactured in very large
volume of production e.g. automobiles • Cost of production is more or less constant provided other
variables such as input material cost, wages remain same. • The machines are arranged as product layout • Production planning and control is easy. • Material handling can be completely automatic
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Mass Production Advantages • Manufacturing cost per unit is low • Low process inventory • Higher capacity utilisation
Disadvantage • Breakdown of one machine will stop an entire production line • layout needs major change with changes in the product design • High investment in production facilities
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Batch Production • “As a form of manufacturing in which the job passes through the
functional departments in lots or batches and each lot may have a different routing.” -American Production and Inventory Control Society (APICS)
• Variety of products in diff volumes e.g. paint manufacturing • Products are produced in lots & in planned quantity (Lots). • Change of set up is required for processing the next batch. • Material handling & storage is high(heavy cost)
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Advantages • Plant and machinery are flexible. • Shorter production runs • Promotes functional specialization • Lower investment in plant and machinery Disadvantage • Material handling is complex because of irregular and longer
flows • Production planning and control is complex • Work in process inventory is higher • Higher set up costs due to frequent changes in set up
Batch Production
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Job-Shop Production • Manufacturing of one or few quantity of products designed and
produced as per the specification of customers • low volume and high variety of products e.g. Machine tools
manufactures etc. • Requires highly skill ,experienced manpower. • Large inventory of materials, tools, parts • Detailed planning is essential
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Advantages • Variety of products can be produced. • Full potential of operators can be utilized • Opportunity exists for creative methods and innovative ideas Disadvantage • Higher cost • Higher level of inventory at all levels (Higher Inventory Cost) • Production planning is complicated
Job-Shop Production
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Manufacturing System
Basis Continuous Mass Batch Job Volume Very High High Normal less Variety Low 2-5 High Very High Investment Very High High Normal Lowest Unit Cost Min. Min. High Very High Breakdown Effect
Effects Effects Less Effects
Less Effects
Flexibility Low Low High High Material Handling
Lesser Lesser Greater amount of MH
Greater amount of MH
Inventory Low Low High Very High Manpower Semi & Un Semi High High & exp. Machine Automatic Automatic Semi &
Manual Manual
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Project Production • It involves various set of activities to make a particular product.
And the product is immobile (cannot be moved). • Production of a single complete unit by one operator or group of
operators . • The product is provided to customer at a single delivery. eg
bridge construction, construction of building etc. • high level of coordination is required • Delay in one operation can lead to delay in other operations .
(un)skilled labor is reqd. • The management is required to plan d activities in a way that
each n every activity is conducted without a time lag.
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New Product Design & Development • Idea about a product and transformation of the idea into a reality. • Considering different constraints such as production process,
customer expectation, etc. • Success or failure of the product decides company’s business,
market share and reputation. So during design stage various factors related to the product needs to be addressed.
• Product Development is the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product
• Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts.
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Objectives of product design
• To ensure growth of the organization • To utilize the surplus capacity of the organization, such as
physical facility, man power, etc. • To utilize the surplus fund of the organization • To meet new requirement of the customers • To increase company’s market share and to target new
market segment • To ensure complete product range in company’s portfolio • New Product Life cycle
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Features of a good product design • Functionality: The product must function properly for intended purpose. • Reliability: The product must perform properly for the designated period
of time. • Productivity: The product must be produced with a required quantity
and quality at a defined and feasible cost. • Quality: The product must satisfy customer’s stated and unstated
needs. • Standardization: The product should be designed in such a fashion so
that most of the components are standardized and easily available in the market.
• Maintainability: The product must perform for a designated period with a minimum and defined maintenance.
• Cost effectiveness: The product must be cost effective. The must be manufactured in the most cost effective environment.
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Innovations that Changed Our Lives • Personal Computer • Microwave Oven • Photocopier • Pocket Calculator • Answering Machine • Touch-Tone Telephone • Laser Surgery • Computer Disk Drive • MS-OFFICE • Fax Machine • Bar coding • Automatic Teller Machine
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New Product Development Process
• Stage 1: Idea Generation – Internal idea sources: –R & D – External idea sources: –Customers, competitors, distributors, suppliers
• Stage 2: Idea Screening – Product development costs increase substantially in later stages. – Ideas are evaluated against criteria; most are eliminated.
• Stage 3: Concept Development and Testing – Product concepts provide detailed versions of new product ideas. – Concept tests ask target consumers to evaluate product concepts.
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New Product Development Process • Stage 4: Marketing Strategy Development
– Strategy statements describe: – The target market, product positioning, and sales, share, and profit goals
for the first few years. – Product price, distribution, and marketing budget for the first year. – Long-run sales and profit goals and the marketing mix strategy.
• Stage 5: Business Analysis – Sales, cost, and profit projections
• Stage 6: Product Development – Prototype development and testing
• Stage 7: Test Marketing • Stage 8: Commercialization