introduction to operation management.ppt

8/14/2019 Introduction to Operation Management.ppt

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Introduction to Operations

Management


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Basic Concept of Production/Transformation

Introduction

Four Functional areas in a Business:- Marketing, Production, Finance and

Personnel. Production is the basic function around which all other activities revolve like

marketing, storing, personnel, research and development.

Thus, very important that Production function must be managed efficiently and

effectively. So, as to achieve organizational Goals.


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Production

The process by which, raw materials and other inputs

are converted into finished products.

It involves step by step conversion of one form of

materials into another to increase the utility of products

or services.

Production and operations management (POM) is the management of an

organizations production system.

A production system takes inputs and converts them into outputs.

The conversion process is the predominant activity of a production system.

The primary concern of an operations manager is the activities of the

conversion process.


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Organizational Model

POM

Marketing

MISEngineering

HRM

IB

Accounting

SalesFinance


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Importance

High Productivity (Controlling the machine and manpoweridle time, reducing wastage) Higher Quality (meet the quality specifications)

Reduction of Wastage (reasons, stages, corrective decisions)

Shorter Manufacturing Lead Time (by reducing machinesetup time, making raw materials available in time in sufficient quality ofright quantity, reducing rejection rate)

Plant Utilities (services such as lighting, ventilation)

Safety and Health (protection of workers from the danger ofindustrial accidents)

Better Customer Service (quick response to complaint,replacement during guarantee period, repair and maintenancefacility, quality products, after sale services)

Use of latest Technology (Automation)


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Historical Background

The Industrial Revolution

Scientific Management

The Human Relations Movement Operations Research


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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 powerfor factories.

Adam Smiths The Wealth of Nationsin 1776

quoted 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.


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The industrial revolution spread from England toother European countries and to the UnitedSates.

The first great industry in the U.S. was the textileindustry.

In the 1800s the development of electricityfurther advanced the revolution.

By the mid-1800s, the old cottage system ofproduction had been replaced by the factorysystem.


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Scientific Management

Frederick Taylor is known as the father ofscientific management. His shop systememployed these steps: Each workers skill, strength, and learning ability were

determined.

Stopwatch studies were conducted to precisely setstandard 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.


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The Service Revolution

The creation of services organizations acceleratedsharply after World War II.

Today, more than two-thirds of the U.S. workforce

is employed in services. About two-thirds of U.S. GDP is from services.

There is a huge trade surplus in services.

Thus there is a growing need for service

operations management.


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Factors Affecting POM

Global Competition

Quality, Customer Service, and Cost

Challenges

Computers and Advanced Production

Technology

Growth of Service Sector Scarcity of Production Resources

Issues of Social Responsibility


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Continuous Production System

Continuous means something that operates constantly

without any irregularities or frequent halts (Stops).

In the continuous production system, goods are

produced constantly as per demand forecast. Goods are produced on a large scale for stocking and

selling.

They are not produced on customer's orders. Here, the inputs and outputs are homogeneous along

with the production process and sequence.


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Features

Volume of output is large.

Identical products are produced.

Machines and equipments are arrangedaccording to Product layout Pattern.

Special purpose automatic machines areused.

Fixed path material handling equipment isused due to the predetermined sequence ofoperations.


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Following chart highlights the concept of a

continuous production system.
http://lh6.googleusercontent.com/-O-xQb35tWmI/T0OJInP0s0I/AAAAAAAAF4M/fBsJSd7W7yw/s640/Continuous-Production-System.png


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The Production system of a food industry is purelybased on the demand forecast. Here, a large-scaleproduction of food takes place.

Similarly, the production and processing system of afuel industry is also purely based on, demandforecast. Crude oil and other raw sources are

processed continuously on a large scale to yieldusable form of fuel.


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Merits

As the processing of material is

continuous there is no waiting period as

each work is passed to the next stage

immediately.

Cost of materials handling are minimized.

Quality of output is kept uniform.

Any delay at any stage is automatically

detected.


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Demerits

Very rigid.

If there is fault in one operation, the entire

process is disturbed.


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Suitability

Best suited to the organizations which

intend to produce a limited variety of

products on a large scale.


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Continuous Production is of the following types


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Process Production Flows

Here, a single product is produced and stocked in warehouses until it is

demanded in the market.


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Features

There is a highly automated system for handlingmaterials. Conveyors and automatic transfer machines areused to move the materials from one stage to another.

Low-skilled labour and skilled technicians are required.

There is very less work-in-progress because material flow iscontinuous.

The production planning and scheduling can be decided wellin advance.

The full production system is designed to produce only onespecific type of item


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Types

Analytical Process of Production

Synthetic Process of Production

Assembling Process of Production


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Analytical Process of Production

Raw Material is broken into different products

Raw Material

Coal

Finished Product

Finished Product

Finished Product

Ammonical Liquor

Coaltar


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Synthetic Process of Production

Mixing of two or more materials to

manufacture a product.

Finished ProductRaw Material

Soap

Raw material- Castic Soda, acids and perfumes


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Assembling Process of Production

Two or more components are combined to

manufacture a finished product.

Finished Product

Raw Material Parts

Automobiles, TV


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Intermittent Production System

Intermittent means something that starts (initiates) and stops (halts) atirregular (unfixed) intervals (time gaps).

In the intermittent production system, goods are produced based oncustomer's orders.

These goods are produced on a small scale.

The flow of production is intermittent (irregular).

In other words, the flow of production is not continuous. In this system,

large varieties of products are produced.

These products are of different sizes. The design of these products goeson changing. It keeps changing according to the design and size of theproduct.

Therefore, this system is very flexible.


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Following chart highlights the concept of an intermittent

production system.


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The work of a goldsmith is purely based on the frequency ofhis customer's orders. The goldsmith makes goods

(ornaments) on a small-scale basis as per his customer'srequirements. Here, ornaments are not done on acontinuous basis.

Similarly, the work of a tailor is also based on the number oforders he gets from his customers. The clothes are stitchedfor every customer independently by the tailor as per one'smeasurement and size. Goods (stitched clothes) are made

on a limited scale and is proportional to the number of ordersreceived from customers. Here, stitching is not done on acontinuous basis.

f


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The characteristics of an intermittent production

system are listed as follows:

The flow of production is not continuous. It isintermittent.

Wide varieties of products are produced.

The volume of production is small.

General purpose machines are used. Thesemachines can be used to produce different typesof 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


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Types


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Project production flows

Here, in project production flows, company

accepts a single, complex order or

contract.

The order must be completed within a given

period of time and at an estimated cost.


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Features

The requirement of resources is not same (it varies).Generally, it slows down when the project is near itscompletion phase.

Many agencies are involved in the project. Eachagency performs specialized jobs. Here, coordination

between agencies is important because all jobs areinterrelated.

Delays take place in completion of projects due to itscomplexity and massiveness.

As routing and scheduling changes with fresh orders,

proper inspection is required at each stage ofproduction.


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Job Production Flows

Here, in job production flows, company

accepts a contract to produce either one

or few units of a product strictly as

per specifications given by the customer.

The product is produced within a given

period and at a fixed cost. This cost is

fixed at the time of signing the contract


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Features

The production of items takes place in smalllots. Sometimes only one product is producedat one time.

The items are manufactured strictly as per

customer's specifications. Highly skilled labour is required to perform

specialized jobs.

There is disproportionate manufacturing cycle

time. e.g. the time needed to design theproduct may be more than the manufacturingtime.


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Batch Production Flows

In batch production flows, the productionschedule is decided according to specificorders or are based on the

demand forecasts. Here, the production of items takes place

in lots or batches. A product is divided intodifferent jobs. All jobs of one batch ofproduction must be completed beforestarting the next batch of production.


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Features

The products are made and kept in stock untiltheir demand arises in the market.

General purpose machines and handlingequipments, which can do many different jobsquickly are installed. This is because largevarieties of items are to be produced.

There is a possibility of large work-in-progressdue to many reasons.

There is a need for detailed productionplanning and control.


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Difference

introduction to operation management.ppt

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