What is production?

• Production is defined as “the step-by-step conversion of one form of material into another
form through chemical or mechanical process to create or enhance the utility of the product to
the user.”

• Thus production is a value addition process.

• At each stage of processing, there will be value addition. 

• Edwood Buffa defines production as ‘a process by which goods and services are created’.

Production Function: System Approach

Difference between production of good and service
Production and operation management

• Production management means planning, organizing, directing and controlling of production

activities.

• Production management deals with converting raw materials into finished goods or products.
It brings together the 6M's i.e. men, money, machines, materials, methods and markets to
satisfy the wants of the people

• Production management is a part of business management. It is also called "Production

Function." Production management is slowly being replaced by operations management.

• “Production management is the process of effective planning and regulating the operations of
that section of an enterprise which is responsible for the actual transformation of raw
materials into finished products.” - E.L. Breach 

• “The term production and operation management refers to the direction and control of the
processes that transform inputs into products and services”

- Lee J Krajewski, Larry P. Ritzman

**Transformation, inputs (raw materials) to outputs (products/ services/finished goods)

Functions of production management:

• Planning

• Organizing

• Controlling
Functions of production management:

1. Selection of Product and Design

Production management first selects the right product for production. Then it selects the right design for
the product. Care must be taken while selecting the product and design because the survival and
success of the company depend on it. The product must be selected only after detailed evaluation of all
the other alternative products. After selecting the right product, the right design must be selected. The
design must be according to the customers' requirements. It must give the customers maximum value at
the lowest cost. So, production management must use techniques such as value engineering and value
analysis.

2.Selection of Production Process

Production management must select the right production process. They must decide about the type of
technology, machines, material handling system, etc.
3. Selecting Right Production Capacity
Production management must select the right production capacity to match the demand for the
product. This is because more or less capacity will create problems. The production manager must plan
the capacity for both short and long term's production. He must use break-even analysis for capacity
planning.

4. Production Planning
Production management includes production planning. Here, the production manager decides about the
routing and scheduling. 

• Routing means deciding the path of work and the sequence of operations. The main objective of
routing is to find out the best and most economical sequence of operations to be followed in the
manufacturing process. Routing ensures a smooth flow of work.

• Scheduling means to decide when to start and when to complete a particular production

activity.

• 5. Production Control
Production management also includes production control. The manager has to monitor and
control the production. He has to find out whether the actual production is done as per plans or
not. He has to compare actual production with the plans and finds out the deviations. He then
takes necessary steps to correct these deviations.

• 6. Quality and Cost Control

Production management also includes quality and cost control. Quality and Cost Control are
given a lot of importance in today's competitive world. Customers all over the world want good-
quality products at cheapest prices. To satisfy this demand of consumers, the production
manager must continuously improve the quality of his products. Along with this, he must also
take essential steps to reduce the cost of his products.

7. Inventory Control:

Production management also includes inventory control. The production manager must monitor the
level of inventories. There must be neither over stocking nor under stocking of inventories.

• If there is an overstocking, then the working capital will be blocked, and the materials may be
spoiled, wasted or misused. 

• If there is an understocking, then production will not take place as per schedule, and deliveries
will be affected

• 8. Maintenance and Replacement of Machines

•
Production management ensures proper maintenance and replacement of machines and
equipments. The production manager must have an efficient system for continuous inspection
 (routine checks), cleaning, oiling, maintenance and replacement of machines, equipments, spare
parts, etc. This prevents breakdown of machines and avoids production halts.

Roles and responsibilities of production function in organization

• Planning the geographical location of factory.

• Purchasing production equipments

• Layout of equipments within the factory

• Designing production process and equipments

• Product design

• Designing production work and establishing work standards

• Capacity planning

• Production planning and scheduling 

• Production control

• Inventory management

• Supply chain management

• Quality control

• Production equipment maintenance and repair

• Measurement and monitoring of productivity

• Industrial relations— Health and safety—

• Staff selection and liaisoning

• Budgeting

Type of Production System:

1. Continuous production system

1. Flow/process Production (steel, sugar, oil, cement)

2. Mass Production (toothpaste, soaps, pens)

2. Intermittent production system

3. Batch production (medicine, heavy equipments)

4. Job production ( tailor, Jet planes )

5. Project (airport, dams, buildings)

 Type of Production System:

Continuous production system

• Continuous means something that operates constantly without any irregularities or frequent
halts.

• 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 standardized along with the production
process and sequence.

• Eg: Food Industry, Fuel Industry

• Character

• Flow of production is continuous

• Products are standardized.

• Products are produced as per quality standards

 • Products are produced in anticipated demand volume.

• Standardized routing sheet and schedules are produced.

The types of continuous production system include:

• Mass production flows, and

• Process production flows

• Mass production flows:

• Here, company produces different types of products on a large-scale and stock them in
warehouses until they are demanded in the market.

• The goods are produced either with the help of a single operation or uses a series of
operations.

Eg: Toothpaste, Soap, comb, pens

• Character of Mass Production

• There is a continuous flow of production. However, this depends on the demand in the market.

• Here, there is limited work-in-progress.

• Supervision is easy because only few instructions are necessary.

• The material handling is done mostly by machines, i.e. conveyors and automatic transfer
machines.

• The flow of materials is continuous. There is little or no queuing at any stage of production.

• Process production flows/Flow Production

• Here, a single product is produced and stocked in warehouses until it is demanded in the
market. The flexibility of these plants is almost zero because only one product can be produced.

• Examples of these plants include, steel, cement, paper, sugar, etc

• Character of Flow Production

• There is a highly mechanized system for handling materials. Conveyors and automatic transfer
machines are used 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 is continuous.

• The production planning and scheduling can be decided well in advance.

• The full production system is designed to produce only one specific type of item.

Intermittent production system

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

• In the intermittent production system, goods are produced based on customer'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 goes on changing.
It keeps changing according to the design and size of the product. Therefore, this system is very
flexible.

• The types of intermittent production system include:

• Project production flows,

• Jobbing production flows, and

• Batch production flows.

Batch Production

• In batch production flows, the production schedule is decided according to specific orders or are
based on the demand forecasts. Here, the production of items takes place in lots or batches. A
product is divided into different jobs. All jobs of one batch of production must be completed
before starting the next batch of production.

• Eg: manufacturing of drugs & pharmaceuticals, medium & heavy machineries, etc.

Character:

• The products are made and kept in stock until their demand arises in the market.

• General purpose machines and handling equipments, which can do many different jobs quickly
are installed. This is because large varieties of items are to be produced.

• There is a possibility of large work-in-progress due to many reasons.

• There is a need for detailed production planning and control.

Job Shop Production

• Here, in jobbing 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.

• Eg: services given by repair shops, tailoring shops, manufacturer of special machine tools, etc.

Character:

• The production of items takes place in small lots. Sometimes only one product is produced at
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. For e.g. the time needed to design the
product may be more than the manufacturing time.

Project Production

• 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.

• Examples :construction of airports, dams, roads, buildings, ship building, etc.

Character:

• The requirement of resources is not same (it varies). Generally, the resource requirement at the
beginning is low. Then in mid of production, the requirement increases. Finally, it slows down
when the project is near its completion phase.

• Many agencies are involved in the project. Each agency performs specialized jobs. Here,
coordination between agencies is important because all jobs are interrelated.

• Delays take place in completion of projects due to its complexity and massiveness.

• As routing and scheduling changes with fresh orders, proper inspection is required at each stage
of production.
Plant layout

• Plant layout refers to the physical arrangement of production facilities. It is the configuration of
departments, work centers and equipment in the conversion process. It is a floor plan of the
physical facilities, which are used in production.
 • According to Moore “Plant layout is a plan of an optimum arrangement of facilities including
personnel, operating equipment, storage space, material handling equipment and all other
supporting services along with the design of best structure to contain all these facilities”.

Objectives of Plant Layout

The primary goal of the plant layout is to maximize the profit by arrangement of all the plant facilities to
the best advantage of total manufacturing of the product. The objectives of plant layout are:

• Streamline the flow of materials through the plant.

• Facilitate the manufacturing process.

• Maintain high turnover of in-process inventory.

• Minimize materials handling and cost.

• Effective utilization of men, equipment and space.

• Make effective utilization of cubic space.

• Flexibility of manufacturing operations and arrangements.

• Provide for employee convenience, safety and comfort.

• Minimize investment in equipment.

• Minimize overall production time.

• Maintain flexibility of arrangement and operation.

• Facilitate the organizational structure.

• Principles of Plant Layout

• Principle of integration:  A good layout is one that integrates men, materials, machines and
supporting services and others in order to get the optimum utilization of resources and
maximum effectiveness.

• Principle of minimum distance:  This principle is concerned with the minimum travel (or
movement) of man and materials. The facilities should be arranged such that, the total distance
travelled by the men and materials should be minimum and as far as possible straight line
movement should be preferred.

• Principle of cubic space utilization:  The good layout is one that utilizes both horizontal and
vertical space. It is not only enough if only the floor space is utilized optimally but the third
dimension, i.e.,  the height is also to be utilized effectively.

• Principle of flow:  A good layout is one that makes the materials to move in forward direction
towards the completion stage, i.e.,  there should not be any backtracking.
 • Principle of maximum flexibility: The good layout is one that can be altered without much cost
and time, i.e.,  future requirements should be taken into account while designing the present
layout.

• Principle of safety, security and satisfaction:  A good layout is one that gives due consideration
to workers safety and satisfaction and safeguards the plant and machinery against fire, theft,
etc.

• Principle of minimum handling:  A good layout is one that reduces the material handling to the
minimum

Layouts can be classified into the following five categories:

• Process layout.

• Product layout

• Combination layout

• Fixed position layout

• Group layout

1. Process Layout

• Process layouts, also known as functional layouts, group similar activities together in
departments or work centers according to the process or function they perform.

• For example, in a machine shop, all drills would be located in one work center, lathes in another
work center, and milling machines in still another work center. In a department store, women's
clothes, men's clothes, children's clothes, cosmetics, and shoes are located in separate
departments.

• A process layout is characteristic of intermittent operations, service shops, job shops, or batch
production, which serve different customers with different needs. The volume of each
customer's order is low, and the sequence of operations required to complete a customer's
order can vary considerably.

The equipment in a process layout is general purpose, and the workers are skilled at operating the
equipment in their particular department.

• The advantage of this layout is flexibility.

• The disadvantage is inefficiency .

Eg:

• Hospital (Radiology, lab, wards, pharmacy, operation)

• University (different depts: science, maths, commerce, library)

Advantages
• In process layout machines are better utilized and fewer machines are required.

• Flexibility of equipment and personnel is possible in process layout.

• Lower investment on account of comparatively less number of machines and lower cost of
general purpose machines.

• Higher utilization of production facilities.

• A high degree of flexibility with regards to work distribution to machineries and workers.

• The diversity of tasks and variety of job makes the job challenging and interesting.

• Supervisors will become highly knowledgeable about the functions under their department.
Product layout

• In this type of layout, machines and auxiliary services are located according to the processing
sequence of the product. If the volume of production of one or more products is large, the
facilities can be arranged to achieve efficient flow of materials and lower cost per unit. Special
purpose machines are used which perform the required function quickly and reliably.
• The product layout is selected when the volume of production of a product is high such that a
separate production line to manufacture it can be justified. In a strict product layout, machines
are not shared by different products. Therefore, the production volume must be sufficient to
achieve satisfactory utilization of the equipment.

• Eg: Sugar refineries / Paper mills / Cement plants / Rolling mills / paper mills