PRODUCTION AND OPERATIONS

MANAGEMENT. 1
PROFESSOR E .S. WICKRAMASINGHE
 LECTURE 1. INTRODUCTION to POM

• Production and Operation management is the

process
which Transforms various scarce resources of
the country into value added Products or
services
Eg. Milk Powder , Cement, Sugar, Gasoline, Rice
Vaccine, Chemical Fertilizer, Organic Fertilizer,
School Education, Banking Services, Insurance
Production is the basic activity in
the organization and all other
activities revolved around the
production is called operations
Eg. Milk powder production -
 CORE CONCEPTS of POM
• NEEDS, WANTS, AND DEMANDS Creates a
PRODUCT or a SERVICE
• PRODUCTs and SERVICEs create a
VALUE, COST, SATISACTION
• Then it creates MARKETS and MARKETERS to
Exchange, Transaction, and develop
Relationships
Looking at the concepts –with an
Example
Firm that sells Televisions, like SONY,
the functions, they responsible for
Designing televisions, acquiring
materials, coordinating equipments
and resources to convert them into
products, moving the products and
exchanging the final product with the
customer.
 The production is a
creation of goods and services
which satisfy
the needs and
wants of the consumers or users
Customers and Beneficiaries
In some organization, the product is
physical (tangible) good. For
example, refrigerators, motor cars,
television, toothpaste etc.,
while in
others it is a service that is
intangible
(Insurance, Healthcare, Bank etc.).
 Production is a
well organized activity, society use
scarce recourses to produce,
consume and exchange what society
needs and wants,
so that
every production system has a
clear
Vision, Mission, Goals, Objectives
and Strategies.
Operations are the large volume
of involvements of people for
Exchanging, doing transactions,
and developing relationships
with customers
which creates an active world .
 Production and Operations
Production
• well organized activity,
society use scarce recourses
to produce, consume and
exchange what society
needs and wants
Operations
• are the large volume of
involvements of people for
Exchanging, doing
transactions, and
developing relationships
with customers
which creates an active
world
 Production and Operations
• Small ball on the large oval

PROCTION

OPERATIONS
 Part two - ORGANIZATIONAL
PERSPECTIVES of POM
Production system doesn’t operate
in isolation from the other
organization’s systems such as
Marketing, Finance HR and
Logistics are integrated.
 Then, Organization needs a
Leadership, Structure, MIS, Work
groups and Motivation to
accomplish the production and
operation tasks.
Subcsequalty organization executes

Its authority, continues its

functions, do operations,
creates subordination and
demonstrates its discipline
 An Organization is continuously
engaged in Improving the
system performance though
• Planning, Budgeting, Monitoring, Controlling,
and getting Feed backs from it’s environment

Cyclical Process
 Supporting concepts
Product Features,
Productivity, Job
performance and
Competitive Advantage
,Quality, Total Quality
Management, Six sigma,
Fish bone
Product Features
Basic Features
Generic Features
Expected Features
Augmented Features
Surprise Features
Premium Features
Supreme Features
Premio Features
 Productivity
Ratio between inputs and output
Organization concerns Labor
Productivity, Capital Intensity and
Material Efficiency
 Competitive Advantage
Firms’ ability to perform better than
competitors
This is done through finding the best
inputs, best resources, best
knowledge, best experience and best
technology
 Quality Standards
Product features that manufacturer
continuously added to th the existing
products to find the competitive
advantage
 TQM

TQM is a long term process that

leadership can make
Vision articulation down ward and
focus the Mission towards total
quality standards
And done through six sigma
 Six Sigma
Define, Measure and Implement
the six variables of the competitive
advantage
 Product
Features versus services
Features
 PRODUCT FEATURES
Tangibility, Durability, Non-
Perishable
SERVICE FEATURES
Intangibility
Perish ability
Heterogeneity
 COMPARING
GOODS SERVICES
• Tangible • Intangible
• Standardized • Heterogeneous
• Production separate from • Simultaneous production
consumption and consumption
• Non perishable • Perishable