PRODUCTION AND OPERATION

MANAGEMENT.

CONCEPT. According to Jae K Shim and Joel G.

Siegel, “Production and operation management is the management of all activities directly related to the production of goods and services”.

It involve a set of activities performed to manage the available resources in an efficient manner in order to convert inputs into desired outputs.

CONVERSION OF INPUT INTO OUTPUT The conversion of an input into output

can be done in one of the following ways:

1. Alteration.2. Transportation.3. Storage.4. Inspection.

OBJECTIVES OF POM Common objectives that an effective

POM is expected to achieve are:1. Customer satisfaction.2. Profitability.3. Timeliness.

CUSTOMER SATISFACTION. The various factors that led to customer

satisfaction are:1. Utility of the in accordance with the

acceptable standards.2. Competitive product cost.3. Easy maintenance and reliability of the

product.4. Product is in compliance with all

functional specifications.

PROFITABILITY. To achieve customer satisfaction the

pricing of the product should be competitive. Any organization is into the business with the aim of providing products or services for growth and profitability. Therefore, the management should focus on reducing the costs in order to increase sales or maintain high profitability with the existing sales.

TIMELINESS. The product produced or a service

rendered has to be qualitative and cost competitive. Further, even though if all the above criteria are met with and the product or the service does not reach the consumer when required, the whole purpose is lost. Therefore, to enable the successful sale for a product or service, it should be timely delivered.

FUNCTIONS OF POM. The functions that the production

management perform can be broadly categorized into three categories:

1. Planning.2. Organizing3. Controlling.

PLANNING.1. Product design and development.2. Production process selection.3. Planning facility location.4. Planning facility layout.5. Capacity planning.6. Production planning.

ORGANISING.1. Work study.2. Material management.3. Purchasing management.

CONTROLLING.1. Stores management.2. Value Analysis.3. Quality control.4. Maintenance management.5. Inventory management.

PRODUCT DESIGN. Product design is a term that refers to

transforming an idea of how a product should be and the specification, which are required for producing that product. These specifications are created keeping in mind the constraints of the production process, feasibility to produce and meeting the customer expectation without sacrificing the quality.

PRODUCT DEVELOPMENT. It refers to the process of creating new

products or modifying the existing ones. The needs or requirements of consumers keep on changing over the period of time. Therefore, to meet these needs successfully, new products need to be introduced in the market.

It as a process targets to create or modify the products within the predetermined time frame, at the targeted cost price while achieving the preset quality requirements, thereby providing the organization both growth and profitability.

NEED FOR PRODUCT DESIGN & DEVELOPMENT. Product design and development is

required to achieve the following goals for any organization:

1. Introduction of new products.2. Modify the existing products.

INTRODUCTION OF NEW PRODUCTS.1. Addressing the changes required by

the customers.2. Growth in the market share.3. Attracting the customers that are

sensitive to changing fashions.4. Filling in the missing products in the

product range.5. Breaking the monotony in the designs.

MODIFY THE EXISTING PRODUCTS.1. Improving the life cycle of the product

in the market.2. Providing economics.3. Providing satisfaction to the

consumers.4. Keeping the advantage of already

established product.5. Utilizing the production resources

effectively. 6. Increasing market share with

economical pricing.

CHARACTERISTICS OF GOOD DESIGN.1. Functionality.2. Reliability.3. Productivity.4. Quality.5. Standardization.6. Maintainability.7. Cost effective.

PRODUCT LIFE CYCLE. Product development life cycle is a

pattern of demand of a product throughout the life of a product.

The stages of product development can be understood as follows:

1. Introduction.2. Growth.3. Maturity.4. Decline.5. Withdrawal.

INTRODUCTION. At this stage, the product is launched in

the market and there is no pressure to earn immediate profit. The main aim of this stage is to create awareness about the products among the customers.

GROWTH. At this stage, the product enters into the

growth stage. Product becomes more profitable and organizations enter into joint ventures. More competitors come into the market that offer similar quality at cheap prices.

MATURITY. At this stage, the sales of the product

stabilizes and grow at a decreasing rate. Producers try to differentiate the products from the competitors product. At this point market reaches a saturation point and price wars and intense competition occur in the market.

DECLINE. At this stage, there is downfall in the

market. Many producers have withdrawn from the market and there is intense price cutting by the producers in the market.

PRODUCT DEVELOPMENT PROCESS. Conception stage. Acceptance stage. Execution stage. Evaluation stage. Translation stage. Pre production stage. Product use and support.

THE CONCEPTION STAGE. The first step from where the

development process starts is to conceive the idea of the product and document it as per the specifications or requirements that the product is expected to meet. The marketing department and design department prepares specification for the product from its feedback and documents it as a draft. This draft forms the very basis for designing the product.

THE ACCEPTANCE STAGE. In this stage, the confirmation on the

estimated cost for the product and also if it is practical to produce, is also achieved. Based on this feedback, the product may be given a go ahead for the next stage or referred to for further discussions. If the feedback is extremely negative, then the decision to drop the product may also be taken.

THE EXECUTION STAGE. In this stage, a proto type of the product

is produced or in certain cases, even a mock sample production is also carried out. Proto type is a model of the product made in the laboratory conditions.

THE EVALUATION STAGE. After the execution stage, the design is

offered for further evaluation. At this stage, other departments of the management also get involved. These other concerned departments evaluate the design with the prime objective to achieve the most feasible way to produce.

THE TRANSLATION STAGE. At this stage, the design of the product

is translated into blue prints, detailed drawings with dimensions and tolerances specified, work instructions, process sheets and quality assurance plan. This enables the design of the product to take be ready for production.

THE PRE PRODUCTION STAGE. This is the final stage in the

development process and once all the specifications, drawings and plans are ready, a pre production trial run is carried out.

The small batch that is produced in the pre production stage can further be forwarded to the market to check upon the acceptability for the product with the customers.

THE PRODUCT USE AND SUPPORT. This is the final stage of product

development process, it involves educating the consumers about the use of the product. This stage involves the post production activities, such as repairs etc.

PRODUCT DEVELOPMENT TECHNIQUES. Various product development

techniques that can be used in order to develop a product are as follows:

1. Standardization.2. Simplification.3. Specialization.4. Diversification.

STANDARDISATION. It is product development technique in

which a company establishes standards, such as product dimensions etc. and quality for its product to maintain consistency.

SIMPLIFICATION. It is a product development technique

that involves decrease in the number and variety of product of a company. It is an economical process that helps minimize the product items to restrict the production of unbeneficial products.

SPECIALISATION. It is a technique that involves

concentration of efforts upon a limited field of endeavor. The activities are divided and sub divided and allocated to the employees concerned.

Every industry uses services of different engineers having specialized knowledge in different fields, such as production, mechanical and electrical.

DIVERSIFICATION. It is the technique that involves

introducing new products and new models of the old products. This technique also involves introducing new markets, new technologies and new product line in the company.

PROCESS DESIGN. It can be defined as a set of activities

performed to modify and add value to the input and convert it into the desired output. The process design is interrelated to the product design.

A process design requires effective combination of various sub activities working together in coordination with each other.

PRODUCTION PROCESS. The production process can be defined

as a set of activities that are performed to modify and add value to the input and convert it into the desired output. The value addition can be in terms of changing the shape or characteristics of the input or even when we change the location of the goods to a place where it is more required, is adding value to it.

TYPES OF PRODUCTION PROCESS.1. Process production.2. Mass and Flow production.3. Batch production.4. Jobbing production.5. Project production.

PROCESS PRODUCTION.1. Infrastructure.2. Cost and quality.3. Manpower.4. Management role.

MASS AND FLOW PRODUCTION.1. Infrastructure.2. Cost and quality.3. Manpower.4. Management role.

BATCH PRODUCTION.1. Infrastructure.2. Cost and quality.3. Manpower.4. Management role.

JOBBING PRODUCTION.1. Infrastructure.2. Cost and quality.3. Manpower.4. Management role.

PROJECT PRODUCTION.1. Infrastructure.2. Cost and quality.3. Manpower.4. Management role.

PRODUCT PROCESS MIX. One of the components of marketing

mix is product process mix, which helps the manufacturer in understanding how and why they should change their production process. The change in equipments, process, procedures and human resources. If process change are not carried out to accommodate process life cycles, products and processes will become incompatible, result in competitive disadvantage.

DECIDING AMONG PROCESSING ALTERNATIVES.1. Batch size.2. Product variety.3. Capital requirements.4. Economic analysis.

CONSIDERATIONS WHILE SELECTING A PRODUCTION PROCESS.

1. All specifications for the product are met while maintaining a desirable quality standard.

2. The cost of production is feasible to produce the product.

3. The process is sustainable; it is dependable to produce for the estimated duration.

4. All environmental and government regulations are followed.

FACILITY LOCATION. It is the process of identifying the best

geographic location for a service or production facility. Facility location plays an important role while setting up a manufacturing assembly unit such as fertilizer plant, steel plant etc. or a service organization. While deciding about the location of a plant, you need to consider the long term consequences.

FACTORS AFFECTING LOCATION ANALYSIS.1. Location of market.2. Location of raw material sources.3. Infrastructure.4. Transportation cost.5. Availabilities of labour.6. Government policies.7. Climate factors.8. Community attitude.9. Safety measures.10. Social infrastructure.

PLANT LAYOUT. Plant layout is the repositioning of

machineries and equipments of a plant for economic and better quality productions. It begins with the selection of work site for the facilities required in production and then arranging all the machineries so that there is a flow of production operations. In addition, plant layout includes arrangement of workmen, materials available, storage space and all other supporting services.

OBJECTIVES OF PLANT LAYOUT.1. Economic handling of materials and

finished goods.2. Better supervision for faster and good

quality production.3. Better utilization of available space.4. Flexibility in change of plant design

and workspace expansion.5. Improvement in working condition.6. Unidirectional flow of production

operation.

ADVANTAGES OF PLANT LAYOUT.1. Better work conditions for workmen.2. Minimization in material handling.3. Minimization in damage and spoilage

of materials.4. Minimization in congestion of

materials, machinery and workmen.5. Flexibility in changing working

conditions.

TYPES OF LAYOUT.1. Process or functional.2. Product or line.3. Project or fixed position.

CAPACITY PLANNING. Capacity of a production unit refers to

the ability of a company to produce goods that are required by the customers. Capacity is the maximum limit of the load that a production unit of an organization can handle. Capacity planning is a process that helps identify the capacity of a production unit that is required for meeting the current and future customer demands. Capacity planning is required when you start a new manufacturing unit and introduce new products in the manufacturing unit.

FACTORS AFFECTING CAPACITY PLANNING.1. Product and services factors.2. Process.3. Availability of facilities.4. Human factors.5. Supply factors.6. External factors.

CAPACITY PLANNING PROCESS.1. Assessment of existing capacity.2. Forecast of future capacity

requirements.3. Identification of alternative ways to

modify capacity.4. Evaluation of short term and long term

capacity requirements.5. Selection of the most suitable

alternative to meet the future demand.

PRODUCTION PLANNING AND CONTROL. Production planning and control forms

the two important components of the management process. Planning includes the consideration of all input variables so that the pre determined output goals can be achieved. On the other hand, control means to take a remedial action to prevent the variation of actual output from the desired ones.

OBJECTIVES OF PRODUCTION PLANNING AND CONTROL.1. Effectiveness.2. Maximizing output.3. Quality control.4. Minimizing throughput time.5. Capacity utilization.6. Minimizing cost.7. Flexibility.8. Better coordination.

BENEFITS OF PRODUCTION PLANNING AND CONTROL.1. Higher quality.2. Better utilization of resources.3. Reduced inventories.4. Reduced manufacturing cycle time.5. Faster delivery.6. Better customer services.7. Lower production costs.8. Lower capital investment.9. Improve sales turnover.10. Flexibility.

WORK STUDY. Work study is a collection of techniques

required to perform the organized analysis of all the factors that affect the efficiency and effectiveness of methods being used.

The main objective of a work study is to improve the productivity and quality of a product economically.

The two techniques involved in a work study are method study and work measurement.

METHOD STUDY. Method study is a means of recording

and examining the existing and proposed way of working to improve the efficiency of system. It also provides a means to develop and apply effective methods in an easier formats that helps reduce the cost of production.

OBJECTIVES OF METHOD STUDY.1. To improve the processes and

procedures involved in the production.2. To identify the proper sequence of

production operations.3. To reduce the idle time of the operator

to optimize the utilization of human resources.

4. To optimize the utilization of the machineries.

5. To improve the working environment.6. To allocate the human effort

economically.

PROCEDURES OF METHOD STUDY.1. Selection of jobs.2. Recording of facts.3. Critical examination.4. Development and selection.5. Installation.6. Maintenance.

WORK MEASUREMENT. The process of determining the time

taken by an employee to complete a particular task is known as the work management.

Various methods that help measure the work performed by the employees include time study, work sampling, synthetic data and pre determined motion and time study.

OBJECTIVES OF WORK MEASUREMENT.1. To uncover various reasons responsible for

wastage of labor and machine time through study.

2. To compare the efficiency of all possible alternatives methods and determine the best alternatives.

3. To equally distribute the workload amongst various employees of the company.

4. To determine the number of machines that an employee can run.

5. To maintain standard time for completing a manufacturing task.

USES OF WORK MEASUREMENT.1. Manning.2. Planning.3. Estimating production cost.4. Cost reduction and cost control.5. Improving methods.6. Determining incentives.

PRODUCTIVITY. Productivity can be defined as the ratio

of financial output in a particular interval of time to the financial input in the same time interval.

In other words, we can say that productivity defines the quantitative relationship between the output produced and inputs used.

Productivity index is used to compare the productivity of a company in a particular time interval with the productivity during the base period.

FACTORS EFFECTING PRODUCTIVITY.1. Nature and quality of raw materials.2. Utilization of natural resources.3. Efficiency of plant and equipment

used.4. Volume of production.5. Continuity of production.6. Consistency of production.

MEASURES TO IMPROVE PRODUCTIVITY.1. Clearly understand the objectives of

the company.2. Clearly understand the requirements

of the users.3. Appoint right people for the right jobs.4. Reduce the complexity of product

design.5. Make the company as flexible as

possible.6. Use high quality production

equipments.7. Improve the process of production.

MATERIALS MANAGEMENT. According to Bethel, “Material

management is a term used to connote controlling the kind, amount, location, movement and timing of the various commodities used in and produced by the industrial enterprise”.

APPROACH TO MATERIALS MANAGEMENT.1. Materials planning.2. Make or buy decisions.3. Purchasing.4. Receiving and inspection.5. Storage.6. Inventory control.7. Transportation.8. Waste management.

OBJECTIVES OF MATERIAL MANAGEMENT.

OBJECTIVES

FUNCTIONS OF MATERIAL MANAGEMENT.

Functions

PURCHASE MANAGEMENT. Purchasing is a process of obtaining the

materials, tools and supplies that are required for manufacturing of a product.

Purchase management is the process that includes various responsibilities, such as buying quality goods in the right quantity, from the appropriate place, at the right time and of the right price.

OBJECTIVES OF PURCHASING.1. To obtain the required materials, tools

and services at a competitive price.2. To ensure that the supply of material is

according to the production requirement.

3. To guarantee the production of better quality goods at a competitive price.

4. To suggest better alternatives materials for production.

5. To encourage standardization.6. To maintain the goodwill of the

company.

FUNCTIONS OF PURCHASE DEPARTMENT.1. It provides source for the supply of

goods.2. It studies the market.3. It supports engineering and user

departments.4. It conducts discussions and releases

purchase orders.5. It sanctions suppliers statement for

payment.6. It disposes excess, outdated and

leftover materials.

METHODS FOR PURCHASING.1. Hand to mouth purchasing.2. Scheduled purchasing.3. Market purchasing.4. Speculative purchasing.5. Contract purchasing.6. Blanket order purchasing.7. Tender purchasing.8. Seasonal purchasing.9. Group purchasing.10. Sub contract purchasing.

MAINTENANCE MANAGEMENT. Maintenance is defined as the

combination of tasks that are required to manage a machine or part of a machine in the desirable condition. It can also be defined as a method used to rectify the damaged and deteriorated part of the machines to the functional level.

Maintenance management is all about managing the maintenance activities.

OBJECTIVES OF MAINTENANCE MANAGEMENT.1. Continuous and regular increase in the

production.2. Eliminating any risk of accidents in the

plant.3. Proper maintenance of the machines

and their parts.4. Thorough examination of the

machines.5. Delivery on time and customer

satisfaction.

TYPES OF MAINTENANCE MANAGEMENT.

Types

Planned maintenance

Unplanned

maintenance

TOTAL QUALITY CONTROL TQC is a Japanese approach to quality

control stressing continuous improvement through attention to manufacturing detail rather than attainment to a fixed quantitative quality standard.

In production function, quality control is a function of ensuring conformity of product as per the design parameters and giving full defect analysis. After the product is sold, it is necessary to monitor the performance in the field and get feedback for improvement.

REASONS TO BELIEVE IN QUALITY Quality is profitable. Poor quality is penalized. Quality distinguishes. Quality is expectation. Quality renews. Quality unites and inspires. Quality delivers. Quality has self interest.

BENEFITS OF QUALITY EFFORTS High employees morale. More efficient process. Higher productivity. Increased market share. Lower costs. Enhanced customer satisfaction. Higher profits.

CONCEPT OF TOTAL QUALITY Total quality may be defined as the

mobilization of the whole organization to achieve consistent quality. According to Atkinson (1993), total quality is a strategic approach to producing the best product/service possible through constant innovation. It includes full attention not only to the production but also to the service.

TQC IS CONCERN WITH THE FOLLOWING: Total customers satisfaction. Totality of functions. Total range of products and services offered

by the organization. Addressing all aspects and dimensions of

quality. Satisfying all customers: internal and

external. Involving everyone in the organization in

the attainment of the set objectives. Demanding total commitment from all in

the organization.

FUNCTIONS OF TQC Development of product specification. Interaction with product, design. Reliability and development testing. Process capability studies. Quality planning.

PLANNED MAINTENANCE.

PLANNED MS

Preventive Corrective

UNPLANNED MS