Production & Operational Management

1. Production & Operational Management

2. Product • The product is an output obtained by transforming the inputs like materials & labour. Product have a value in exchange.

3. Product Vs Service • Product • Physical outputs • Quality measured directly • There may be time gap between production & consumption of the product . • Standardized output • Service • Non-physical outputs • Quality perceived and difficult to measure • Service do not exist until they are provided at the call of the customer. • IV. Customized output

4. Product Vs Service V. Capital intensive VI. Products can be evaluated against specification & criteria V. Labour intensive VI. Service quality is evaluated against the satisfaction of the customer.

5. 75 25 50 100 75 0 100 50 25 Goods Contain Services / Services Contain Goods Automobile Computer Installed Carpeting Fast-food Meal Restaurant Meal Auto Repair Hospital Care Advertising Agency Investment Management Consulting Service Counseling Percent of Product that is a Good Percent of Product that is a Service

6. Production • Production is a process of making products. In production, different inputs like materials, human, capital & other resources are transformed into higher value goods & services.

7. Working of Production System E NV I R O N M E N T I N P U T S O U T P U T E N V I R O N M E N T P L A N N I N G S C H E D U LING C O N T R O LING

8. What is Production Management According to H.A.Harding “Production Management is concerned with those processes which convert the inputs into outputs. The inputs are various resources like raw materials, men, machines, methods, etc. and outputs are goods and services.” According to E.S.Buffa, “ Production Management deals with decisions making related to production process so that the resulting goods or service is produced according to specifications, in the amounts and by the schedule demanded & at minimum cost.”

9. Scope/Functions of Production Management • Production Design & Development of Production Process(Fabricating & Assembly process & Analytical, synthetic, & modifying process) • Production Planning & Control • Purchasing • Plan implementation • Inventory Control

10. Objectives of Production Management • Primary Objectives • Quality • Quantity • Cost\Price • Time

11. Secondary Objectives • Men • Machines • Materials • Services • Techniques

12. Operations Management • Operations is a process of changing inputs into output with the creation or adding value to some entity • An operation management is the systematic design, direction & control of the processes that transform inputs into services & products for the customers. • It encompasses all management activities using resources such as • Plants • People • Parts • Processes • Planning & control

13. Operations Management is: • A management Core function • In every organization whether Service or Manufacturing, profit or Not for profit

14. Production & operation Management It is defined as design, operations & improvement of transformation process which converts various inputs to outputs.

15. Ten Decision Areas of POM • Goods & Services Design • Process & Capacity Design • Location Selection • Layout Design • Human Resource and Job Design • Supply-chain Management • Inventory • Scheduling • Quality • Maintenance

16. What is Role of OM? • OM Transforms inputs to outputs • Inputs are resources such as • People, Material, and Money • Outputs are goods and services

17. OM’s Transformation Process

18. Transformation process for a purely service organization Quality of output monitored Quality of input monitored • Inputs • Raw minds • (students) • Teachers • Administrative staff • Classrooms • Computer lab • Library • Projectors • Output • Enlightened students with • Good communication skills • Good analytical ability • Team sprit • Decision making ability Transformation Process • Feedback Mechanisms • Success at Placement interviews • Grades obtained in examination • Rising career graph of alumni in • corporate • Number of applications for admission in the institute • Rating of surveys

19. Transformation process for a purely manufacturing organization Quality of output monitored Quality of input monitored • Inputs • Machines & equipments • Components, parts, sub assemblies • Packaging material • capital • Building • Workers • managers • Output • Refrigerators with • Good cooling performance • Less consumptions of electricity • Genuine prices • New advance features Transformation Process • Feedback Mechanisms • Rising sales volumes • Lesser customer complaints • Positive response of customers in the feedback forms

20. OM’s Transformation Role • To add value • Increase product value at each stage • Value added is the net increase between output product value and input material value • Provide an efficient transformation • Efficiency – means performing activities well for least possible cost

21. Functions of operations mgt • Planning • Organizing • Controlling • Behaviour • Models

22. Ops. Mgmt. Decisions

23. 4 Important Operations Strategies • Will you compete on – Cost? Quality? Response? Flexibility? • All of the above? Some? Tradeoffs?

24. Competing on Cost? • Limit product range & offer little customization • Automation to reduce unit costs • Better designs of products/services

25. Competing on Quality? • High performance design: • Superior features, high durability & excellent customer service • Product & Service consistency: • Meets design specifications • Improved technology • Error free delivery

26. Competing on Responsiveness? • Fast delivery: • Shorter time between order and delivery • On-time delivery: • Deliver product exactly when needed • Rapid development speed • Using concurrent processes to shorten product development time

27. Competing on Flexibility? • Product flexibility: • Easily switch production from one item to another • Easily customize product/service to meet specific requirements of a customer • Volume flexibility: • Ability to ramp production up and down to match market demands

28. Classification of Operations Classification of operations Continuous Semi-Continuous Intermittent process Project Batch Process Job Shop

29. 1. Continuous Process • Continuous process has long set up time & once started, they continue for a long duration. Products are standarised with almost no variety. It is normally associated with large quantities and with high rate of demand. • Examples : Urea, chemicals, detergents, sugar, textile, etc. industries are based on continuous process

30. 2. Semi continuous process • These are assembly processes, which are repitative in nature. Products have high volume & with little variety. • These processes require highly specialized machines, semi skilled labour. • Examples: automobiles, electronic items, etc.

31. 3. Intermittent process • Intermittent processes stop at regular intervals of time because the product require processing of variety of machines. Intermittent processes are of two types: Batch process: this process is adopted when batches or lots or items are produced using the same set of machines in same sequence. E.g. bakery etc Job Shop: Products are produced as per the specification of customers within prefixed time and cost. The distinguishing feature of this is low volume and high variety of products.

32. 4. Project shop • Projects are processes that handle very complex & unique sets of activities or tasks which have to be completed in limited span of time. • Example: R & D projects, building complexes, etc.

33. Duties & Responsibilities of Operational manager • understanding strategic objectives • Developing an operations strategy • Designing the operation's products, services and processes • Purchasing product equipments • Product design • Capacity Planning and inventory controlling • Improving the performance of operation • Quality control • Budgeting & capital planning