Session 1 Introduction to Production Management, Nature and Scope, Interface with other Functions

1. Session 1 Introduction to Production Management, Nature and Scope, Interface with other Functions Books • Operations management By Mahadevan • Production Operations management by KanishaBedi • Production Operations management by Chary • Production Operations management by AshwathapaBhat

2. Value added Inputs Outputs Transformation/ Land Goods Conversion Labor Services process Capital Feedback Control Feedback Feedback Value-Added Process The operations function involves the conversion of inputs into outputs

3. What is Operations Ops management will address the questions that the organisation faces in its choice of products and manufacturing technology, utilization of capacity , quality, costing and sourcing of raw materials and customer handling policies. SCOPE Manufacturing, Service and Agriculture are components of the economy About 70 % of GDP is through manufacturing and services Growth is in manufacturing and services

4. MTR food - Fastest growing veg processed food company in india, market leader • In 2008 it had turnover of USD 20 million, grwing at 30% pa • Provides authentic mean solutions to today’s consumer • Product Portfolio: Processed foods, ready to eat, ready to cook, frozen, spices, and pickles • Employs about 800 people factory has 8 divisions each with modern manufacturing facilities. Makes use of technology derived from DFRL • -maintains consistency and quality standards • Food is packed in aluminum foils increases shelf life , autoclave process, • Scan through X ray • Large variety of packing material, for range of product and pack sizes. • Major challenge for them is forecasting the demand for food . Frecasting accuracy is important. Forecast is based on experience, seaonal variation and growth • New product devlopment innovation new tastes /prefernces and the capacity to translate them to final product • Planning and supply of raw material ingredients.

5. An operations system is defined as one in which • several activities are performed • to transform a set of inputs into useful output • using a transformation process. • Operations Management is • a systematic approach to • address all the issues pertaining to • the transformation process that converts some inputs into output that are useful, and • can fetch revenue to the operations system

6. Production Management – Definition - 1 • Planning, implementation, and control of industrial production processes to ensure smooth and efficient operation. Production management techniques are used in both manufacturing and service industries. Production management responsibilities include the traditional “five M's”: Men , Machines, Methods, Materials, and Money. • The design, Operation and Control of systems for the manufacture and distribution of products

7. Managers are expected to maintain an efficient production process with a workforce that can readily adapt to new equipment and schedules. • Managers may use industrial engineering methods, such as time-and-motion studies, to design efficient work methods. • The Managers are responsible for managing both physical (raw) materials and information materials (paperwork or electronic documentation). • The production cycle requires that sales, financial, engineering, and planning departments exchange information—such as sales forecasts, inventory levels, and budgets—until detailed production orders are dispatched by a production-control division. Managers must also monitor operations to ensure that planned output levels, cost levels, and quality objectives are met.

8. Operations ManagementSalient Aspects • A systematic approach using scientific tools & techniques and solution methodologies to analyse problems • Addressing several issues varying in terms of time horizon, nature of decisions • Addressing design & operational control issues in the transformation process • Focusing on keeping costs to the minimum • Developing a set of measures to assess performance of the system

9. Operations A key functional area in an Organisation Finance Operations Marketing H R M

10. Manufacturing Organisations Service Organisations Differences Physical durable product Intangible, perishable product Output can be inventoried Output can’t be inventoried Low customer contact High customer contact Long response time Short response time Large facilities Small facilities Capital intensive Labour intensive Quality easily measured Quality not easily measured Similarities Is concerned about quality, productivity & timely response to its customers Must make choices about capacity, location, layout Has suppliers to deal with Has to plan its operations, schedules and resources Balance capacity with demand by a careful choice of resources Has to make an estimate of demand Manufacturing & ServiceSimilarities & Differences

11. Service Operations • Tangibility: Services are performances and actions rather than objects, therefore having poor tangibility • Heterogeneity: High variability in the operation system performance • Simultaneous Production & Consumption: Degree of customer contact is very high • Perishability: Services cannot be inventoried as in the case of manufactured products

12. Service – Manufacturing Continuum Pure Product Pure Service Ayurvedic Healing Treatment Legal/Tax Consulting Cyber Café – Telephone Booths Emergency Maintenance Services Facilities Maintenance High quality restaurant meal Fast food in a eat out joint Customised durable goods Fast moving commodities Vending Machines

13. Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment Food Processing Industry Outputs Inputs Processing

14. Doctors, nurses Examination Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy Hospital Process Inputs Processing Outputs

15. Scope of Operations Management • Operations Management includes: • Forecasting • Capacity planning • Scheduling • Managing inventories • Assuring quality • Motivating employees • Deciding where to locate facilities • Supply chain management • And more . . .

16. Operations Examples Goods Producing mining, construction , manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts Communication Newspapers, radio and television telephone, satellites Types of Operations Table 1.4

17. Operations ManagementA systems Perspective Forecasting PROCESSING INPUT OUTPUT Purchasing & Inventory Control Process & Product Design Labour Goods Material Capital Services Material & Capacity Planning Operations Planning & Control Feedback Quality Management Maintenance Management Process Improvement

18. MANUFACTURING STRATEGIES raw materials components semi finished finished goods prod eng prod prod make-to-stock supplier customer assemble-to-order make-to-order engineer-to-order customer driven standard

19. INDUSTRY CLASSIFICATION • EXTRACTIVE MINING • TRANSFORMATIVE * MACHINERY, CHEMICAL & PHARMA, METALS, TEXTILES * MANUFATURING, CONSTRUCTION, FOOD PRODUCTS, UTILITIES • DISTRIBUTIVE * TRANSPORTATION & STORAGE * WHOLESALE & RETAIL TRADE * COMMUNICATIONS * POSTAL & COURIER SERVICES • SERVICES * BANKING/ CREDIT/ FINANTIAL SERVICES, INSURANCE, LEGAL * ACCOUNTING/ BOOK-KEEPING, ENGG./ ARCH, MGT. CONSULTANCY *HOTELS/LODGING, LAUNDRY, REPAIRS and MAINT, ENTERTAINMENT *MEDICAL/ HEALTH, EDUCATION, WELFARE, RELIGIOUS

20. Resources of an Enterprise • Machines • Methods • Materials • Men • Money -------------------------------------- • Time • Information

21. Key Decisions of Operations Managers • What What resources/what amounts • When Needed/scheduled/ordered • Where Work to be done • How Designed • Who To do the work

22. Some of the challenges faced by operation Department include • Addressing several issues varying in terms of time horizon, nature of decisions • Addressing design & operational control issues in the transformation process • Developing a set of measures to assess performance of the system • Extent of cooperation with other departments • Competition after the economic reforms • Customer expectations • Change: technology, environmental • Keeping costs to a minimum • low productivity and long lead time • customer satisfaction, reducing lead times and meeting due dates

23. Production and manufacturing: Manuf includes all activities made by a company engaged in Production Manuf includes: Demand mgt Field service Product development Production and inventory Quality Procurement Distribution Industrial facilities mgt