Production Management Unit 1- Introduction and Operations Strategy

Significance of Operations Function 2011

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Subject: 70% - Theory and 30% - Problems

Unit 1 - Topics
Significance of Operations Function. Products and Services Concepts Characteristics. Different Systems. Concept of Productivity. Evolutions of Operations Management Discipline. Competitive Positioning of products and services. Strategic and Tactical Decisions of Operations Management.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Today we are going to discuss about

Introduction to Production Management. Significance of Operations Function.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Definition
Production/Operations management is the process which combines and transforms various resources used in the production or operations subsystem of the organization into value added products/services in a controlled manner as per the policies of the organization.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

The set of interrelated management activities which are involved in manufacturing certain products is called as production management. If the same concept is extended to services management, then the corresponding set of management activities is called as operations management.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

In general, the concept of manufacturing products or providing services is called as production or operations management

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Examples - Production
Manufacturing custom made products like, boilers with a specific capacity, constructing flats, some structural fabrication works for selected customers, etc. Manufacturing standardized products like, car, bus, etc. Examples of services Custom made services like Medical Facilities and clinical tests, arranging food for parties, travel booking services, etc. Standardized Services Developing Standard computer software, Providing standard insurance policies, etc.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Functional Sub-systems of Organizations

Functional subsystems

Finance Marketing production

Personnel
KVIMIS-MBA0931-PM 1. Introduction and Operations Strategy

Subsystems
Marketing function Production function Finance function Personnel function

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Organizational Model
Finance
Sales HRM

OM
Marketing MIS
Quality

Engineering

Accounting

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Productions or operations Function

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Production Function
It is the part of an organization which is concerned with the transformation of a range of inputs into the required outputs (products/Services) having the requisite quality level

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Systems concept of production

Systems aspect of production/operations function
Random Fluctuation

Monitor Output
Adjustments needed? Inputs Land Labor Capital Material

Conversion Process

Outputs Goods Services

Comparison: Actual vs. desired

Feedback
Source: Everett E. KVIMIS-MBA0931-PM Adam Jr. and Ronald J. Ebert and Operations 1. Introduction Production and Operations Management Strategy

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

 System: It is a collection of interrelated entities. Inputs: The inputs to the system are materials, labor, equipment and capital as shown in Fig 1.3.
These inputs are combined and converted into goods and /or services by a suitable process technology. The types of inputs used vary from one industry to another.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Product Manufacturing Major Inputs

4 Ms Capital = Money Equipment = Machines Labor = Men Materials Now, 4 Ms is Transformed to 5 Ms with the addition of Methods.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

 Fig 1.3 explains the systems aspect of production/operation function of an organization. The organization receives several inputs as indicated on the left hand side and converts them into useful products and or services using its facilities.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Transformation Process
In the process of conversion, definitely there will be some deviations in the products attributes like quality, size, shape and number of units produced.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Feedback
Just to cope up with the predetermined plans and policies, it is highly essential to communicate these deviations to the input stage in the form of feedback for making necessary corrections.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Sample List of Corrections

Tight quality check on the incoming raw materials. Adjustment of machine settings.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

 Change of tools.

Proper allocation of operators to machines with matching skills.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

 Change in the production plans, like increase or decrease in volume of production. Rigid in process quality Programme to avoid re work.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

 Based on this feedback, the system once again tries to produce the product/service with modified parameters, in order to meet the specifications. The feedback mechanism is a continuous exercise to monitor the status of the system.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Production or Operation Subsystem

A detailed schematic diagram of the production/operation subsystems is shown in Fig 1.4, where in the different components of the production or operation systems are indicated. This system receives different inputs as indicated in the figure and converts them into useful products or services by utilizing the equipments at the transformation stage.

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Techniques and procedures used in production/operation system 1 Forecasting 2 Location and layout techniques 3 Product design and analysis, work study 4 Production control techniques (a) Aggregate planning (b) Master production scheduling (c) MRP (d) Capacity planning
KVIMIS-MBA0931-PM 1. Introduction and Operations Strategy

Techniques
(e) 5 6 Scheduling and Control Line balancing Line of balance Single machine scheduling Flow shop scheduling Job shop scheduling Maintenance management Feedback and control techniques (a) quality control (b) inventory control
1. Introduction and Operations Strategy

KVIMIS-MBA0931-PM

Functions of production and operations management

As production and operations management is a separate functional field of management, the main functions of production and operations manager are as follows:
Planning, Organizing, Controlling Behaviors (know behaviors and interests of subordinates) Modeling (use mathematical and quantitative techniques in decision making such as network analysis, linear programming, queuing theory, etc)
KVIMIS-MBA0931-PM 1. Introduction and Operations Strategy

Overview
The concept of manufacturing products or providing services is called as production or operations management. Production Function: It is the part of an organization which is concerned with the transformation of a range of inputs into the required outputs (products/Services) having the requisite quality level

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy

Thank You

KVIMIS-MBA0931-PM

1. Introduction and Operations Strategy