Chapter 10 Part 2

Production and Operations

Management
Dr. Amer Rajput
Department of Management Sciences
COMSATS University Islamabad
Wah Campus, Pakistan
Learning Objectives

5 Explain the major tasks of production and operations managers and

outline the three activities involved in implementing the production plan.

6 List the steps in the purchasing process.

7 Discuss the importance of quality control.

The Job of Production Managers

Oversee the work of people and machinery to convert

inputs (materials and resources) into finished goods
and services.
Planning the Production Process
Choose what goods or services to offer customers.
Convert original product ideas into final specifications.
Design the most efficient facilities to produce those
products.

Planning Selecting Implementing Controlling

the the Most the
the
Production Appropriate Production
Production
Process Layout Process
Plan
Process Layout

Process layout groups

machinery and equipment
according to their
functions.

Facilitates production of a
variety of nonstandard
items in relatively small
batches.
Product Layout

Product layout sets up production equipment along a

product-flow line, and the work in process moves along
this line past workstations.
Efficiently produces large numbers of similar items.
Fixed-Position Layout

A fixed-position layout places the product in one spot, and

workers, materials, and equipment come to it.
Customer-Oriented Layout
Customer-oriented layout arranges facilities to enhance
the interactions between customers and a service.
Implementing the Production Plan
Make, Buy, or Lease Decision
Choosing whether to manufacture a needed product or
component in-house, purchase it from an outside
supplier, or lease it.
Factors in the decision include cost, availability of
reliable outside suppliers, duration of the firm’s supply
needs, and the need for confidentiality.
Selection of Suppliers
Based on comparison of quality, prices, dependability
of delivery, and services offered by competing
companies.
Inventory Control
Inventory Control
function requiring production and operations managers to balance
the need to keep stock on hand to meet demand against the costs of
carrying inventory
Perpetual inventory
Vendor-managed inventory

Just-in-Time Systems
broad management philosophy that reaches beyond the narrow
activity of inventory control to influence the entire system of
production and operations management.
Materials Requirement Planning
computer-based production planning system that lets a firm ensure
that it has all the parts and materials it needs to produce its output
at the right time and place and in the right amounts.
Controlling the Production
Process
Production control creates a well-defined set of
procedures for coordinating people, materials, and
machinery to provide maximum production
efficiency.
1. Planning
2. Routing
3. Scheduling
4. Dispatching
5. Follow-up
Gantt Chart
PERT Diagram
Importance of Quality
A good or service free of deficiencies.
Poor quality can account for 20% loss in revenue.
Benchmarking is the process of analyzing other firms’
best practices.
Quality control is measuring goods and services against
established quality standards.
Many companies evaluate quality using the Six Sigma
concept.
A company tries to make error-free products 99.9997% of the
time, a tiny 3.4 errors per million opportunities.
ISO Standards
International Organization for Standardization (ISO)-
mission is to promote the development of standardized
products to facilitate trade and cooperation across
national borders.
Representatives from more than 146 nations.
ISO 9000 series of standards sets requirements for quality
processes.
Nearly half a million ISO 9000 certificates have been
awarded to companies around the world.
ISO 14000 series also sets standards for operations that
minimize harm to the environment.
Thank you !