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Production – The process of manufacturing goods or services by taking raw materials as inputs and
converting it into useful outputs. It is the process of adding value to inputs in order to create an
output that fulfils the consumers’ need.
Production and operations management are more similar than different: if manufacturing products
is a prime concern, then it is called production management, while operation management is the
area of management concerned with designing and controlling the process of production of goods
and/or services.
refers to the application of management principles to the production function in a factory. In other
words, production management involves application of planning, organizing, directing and
controlling the operations of that section of an enterprise which is responsible for the actual
transformation of materials into finished products.
Operations management is the administration of business practices to create the highest level of
efficiency possible within an organization. Operations management is an area of management
concerned with designing and controlling the process of production and redesigning business
operations in the production of goods or services.
5 P’s of production
Production and operations management concern with the conversion of inputs into outputs,
using physical resources, so as to provide the desired utilities to the customer while meeting
the other organizational objectives of effectiveness, efficiency and adaptability. It
distinguishes itself from other functions such as personnel, marketing, finance, etc., by its
primary concern for ‘conversion by using physical resources.’ Following are the activities
which are listed under production and operations management functions:
1. Location of facilities
2. Plant layouts and material handling
3. Product design
4. Process design
5. Production and planning control
6. Quality control
7. Materials management
8. Maintenance management.
Location of facilities for operations is a long-term capacity decision which involves a long term
commitment about the geographically static factors that affect a business organization. It is an
important strategic level decision-making for an organization. It deals with the questions such as
‘where our main operations should be based?’
‘Material Handling’ refers to the ‘moving of materials from the store room to the machine
and from one machine to the next during the process of manufacture’. It is also defined as the
‘art and science of moving, packing and storing of products in any form’. It is a specialized
activity for a modern manufacturing concern, with 50 to 75% of the cost of production.
Product design deals with conversion of ideas into reality. Every business organization have
to design, develop and introduce new products as a survival and growth strategy. Developing
the new products and launching them in the market is the biggest challenge faced by the
organizations.
Production planning and control is the predetermined process which includes the use of
human resources, machines and raw material etc. PPC is the technique to plan each and every
step in the long series of operation. It will help you take right decision at the right time and at
the right place to achieve the hight efficiency possible.
Quality Control (QC) may be defined as ‘a system that is used to maintain a desired level of
quality in a product or service’. It is a systematic control of various factors that affect the
quality of the product. Quality control aims at prevention of defects at the source, relies on
effective feed back system and corrective action procedure. Quality control can also be
defined as ‘that industrial management technique by means of which product of uniform
acceptable quality is manufactured’. It is the entire collection of activities which ensures that
the operation will produce the optimum quality products at minimum cost.
Advantages
Operators will become more skilled and competent as each job gives
them new learning opportunities.
Opportunities always exist for creative and innovative ideas.
Full potential of operators can be utilised.
Limitations
Characteristics
Advantages
Limitations
Characteristics
Advantages
Limitations
Characteristics
Advantages
Transformation model
The transformation model for analysing operations. This is shown in Figure 1, which
represents the three components of operations: inputs, transformation processes
and outputs. Operations management involves the systematic direction and control
of the processes that transform resources (inputs) into finished goods or services for
customers or clients (outputs).
Some inputs are used up in the process of creating goods or services; others play a
part in the creation process but are not used up. To distinguish between these, input
resources are usually classified as:
transformed resources – those that are transformed in some way by the
operation to produce the goods or services that are its outputs
transforming resources – those that are used to perform the
transformation process.
Inputs include different types of both transformed and transforming resources.
Three types of resource that may be transformed in operations are:
materials – the physical inputs to the process
information that is being processed or used in the process
customers – the people who are transformed in some way.
Many people think of operations as being mainly about the transformation of
materials or components into finished products, as when limestone and sand are
transformed into glass or an automobile is assembled from its various parts. But all
organisations that produce goods or services transform resources: many are
concerned mainly with the transformation of information (for example, consultancy
firms or accountants) or the transformation of customers (for example, hairdressing
or hospitals).
The two types of transforming resource are:
staff – the people involved directly in the transformation process or
supporting it
facilities – land, buildings, machines and equipment.
The staff involved in the transformation process may include both people who are
directly employed by the organisation and those contracted to supply services to it.
They are sometimes described as ‘labour’. The facilities of an organisation –
including buildings, machinery and equipment – are sometimes referred to as
‘capital’. Operations vary greatly in the mix of labour and capital that make up their
inputs. Highly automated operations depend largely on capital; others rely mainly on
labour.
Discussion
The transformed resources of a restaurant include food and drink, and its
transforming resources include equipment such as cookers, refrigerators, tables and
chairs, and the chefs and waiters. In a university, the transformed resources include
students and knowledge and the transforming resources include lecturers, tutors and
support staff, as well as classrooms, books and instructional materials.
Transformation process
A transformation process is any activity or group of activities that takes one or more inputs,
transforms and adds value to them, and provides outputs for customers or clients. Where the
inputs are raw materials, it is relatively easy to identify the transformation involved, as when
milk is transformed into cheese and butter. Where the inputs are information or people, the
nature of the transformation may be less obvious. For example, a hospital transforms ill
patients (the input) into healthy patients (the output).
Feedback
A further component of the transformation model in Figure 1 is the feedback loop.
Feedback information is used to control the operations system, by adjusting the
inputs and transformation processes that are used to achieve desired outputs. For
example, a chef relies on a flow of information from the customer, through the waiter,
about the quality of the food. Adverse feedback might lead the chef to change the
inputs (for example by buying better quality potatoes) or the transformation process
(for example by changing the recipe or the cooking method).
Feedback is essential for operations managers. It can come from both internal and
external sources. Internal sources include testing, evaluation and continuously
improving goods and services; external sources include those who supply products
or services to end-customers as well as feedback from customers themselves.
Planning
Operations management professionals are responsible for collaborating with other managers and
executives to determine how operational planning can contribute to the long-term strategy of the
organization. They provide the functional component of the strategic operations of the company by
planning the activities that contribute to the overall goals of the organization. This planning can
include determining goals and policies for logistics management, budget management and support
services management. In short, the operations manager ensures that all departments on the same page
about the direction the company is heading.
Direction
To ensure that planning is carried out, operations management professionals are also responsible for
providing direction to various managers under their watch. Operations managers ensure that all
departments are completing their necessary function within the organization by meeting productivity
goals and budgetary guidelines. The operations manager may need to make corrections or
modifications when goals are not being met or carried out in a manner consistent with company
policy.
Coordination
Operations managers also help in the achievement of organizational strategy goals by coordinating the
activities between various departments within their companies. They improve efficiency and focus by
facilitating and improving relations between departments, especially those that often operate
independently of one another. They play the same role that an orchestra conductor plays in the field of
music, coordinating and directing the activities of each section of musicians (departments) as it
completes its part in the production.
Resources
The operations manager is also integral to the continued strategy and vision of a company in his role
as a resource manager. Operational managers must be able to assess the resources of the organization,
whether they be monetary or otherwise, and ensure that the resources are used as efficiently as
possible. An effective operations manager can assess whether or not resources are being used wisely
and increase profitability as a result of his assessment. Profitability contributes to long-term company
goals and strategies by providing additional resources for planning strategy.
Systems view of operations management states that activities in an operations system can be
classified as inputs, transformation process and output. Inputs are classified into three general
categories-external, market and primary resources.
Transformation resources are the elements that act on, or carry out, the transformation process on
other elements. These include such elements as labour, equipment/plant and energy. The nature
and mix of these resources will differ between operations. The transformed resources are the
elements which give the operations system its purpose and goal. The operations system is
concerned with converting the transformed resources from inputs into outputs in the form of goods
and services. There are three main types of transformed resource of materials which can be
transformed either physically (e.g. manufacturing), by location (e.g. transportation), by ownership
(e.g. retail) or by storage(e.g. Warehousing)
These sub systems are present in all the 4 major sections. They are centrally controlled by the
Plant Management Office (PMO).The PMO controls the central decision making and is
responsible for running all the departments in sync. The PMO ensures that the decisions
made by the departments do not contradict and a healthy harmony is maintained so that all of
them work together as a part of a system.
Thus we see how systems view in operations can be put to a practical use. The idea behind
systems model is that the operations function can concentrate solely on transforming input of
raw material into goods and services without considering the external environment. The
systems view gives a very simplified view of the company and thus helps us in understanding
the basic processes in a company. We can see what are the major areas of attention in
accompany and helps us in understanding the hierarchy and layout of an organization.
However the disadvantages of this model include the slowness of response to change in
environment as they are transmitted through various connected functions and the inability of
operations to develop in response of the needs of the customers. Systems view gives us an
oversimplified view. In real life the processes are much more complex and cannot be
differentiated so easily
Production Planning and Control
Production planning and control is the predetermined process which includes the use of
human resources, machines and raw material etc. PPC is the technique to plan each and
every step in the long series of operation. It will help you take right decision at the right time
and at the right place to achieve the hight efficiency possible
Objective of PPC
Elements
1. Routing – It is about the selection of the route or path through which the raw
material will pass in order to convert it into finished products. Points to be noted
while routing is- full capacity of the machinery, economical and short route, and also
an alternative route. Setting up time for process of each stage of route has to be
fixed. Once overall sequence is fixed the standard time for operation are noted using
work measurement techniques.
2. Loading & Scheduling – are concerned with the preparation of workloads and fixing
the start and finish date of each operation. On the basis of performance of each
machine loading and scheduling are done.
4. Follow up – It is the tool which brings the idea on the breaking up, delay and
rectifying tools, etc. during the progress of work.
Fewer Rush Orders: In an organization, where there is effective system of production planning and
control, production, operations move smoothly as per original planning and matching with the
promised delivery dates. Consequently, there will be fewer rush orders in the plant and less overtime.
Better Control of Inventory: A sound system of production planning and control helps
in maintaining inventory at proper levels and, thereby, minimizing investment in inventory.
More Effective Use of Equipment: An efficient system of production planning and control makes
for the most effective use of equipment. It provides information to the management on regular basis
pertaining to the present position of all orders in process, equipment and personnel requirements for
next few weeks.
Reduced Idle Time: Production planning and control helps in reducing idle time i.e. loss of time by
workers waiting for materials and other facilities; because ensures that materials and other facilities
are available to the workers in time as per the production schedule. Consequently, less man-hours are
lost, which has a positive impact on the cost of production.
Good public image: A proper system of production planning and control is helpful in keeping
systematized operations in an organization. Such an organization is in a position to meet its orders in
time to the satisfaction of its customers. Customer’s satisfaction leads to increased sales, increased
profits, industrial harmony and ultimately good public image of the enterprise.
Lower capital requirements: Under a sound system of production planning and control, everything
relating to production is planned well in advance of operations. Where, when and what is required in
the form of input is known before the actual production process starts. Inputs are made available as
per schedule which ensures even flow of production without any bottlenecks.
Levels of PPC
Strategic planning:
Strategic planning is a process of thinking through the organizations current mission and
environment and then setting forth a guide for future decisions and results.
Example: Technology forecasting and choice of appropriate technology for the long range
time horizon.
Strategic plans are usually long range plans done at the top management level. For example,
the vice-president-operations, together with the top executives of the firm develop long range
capacity and facility plans.
Tactical Planning
Tactical Planning is done over an intermediate term or medium range time horizon by the middle
level management (Operations at departmental level). These plans focus on aggregate products
rather than individual specific products. These aggregate plans have a time span of 6 to 18 months.
They specify the employment plan; machinery and utility plans, the sub-contractor and materials
supply plans and facility modification/ expansion plans
Operational Planning
Operational planning is done over a short range time span developed by the junior level
management. It is concerned with the utilization of existing facilities rather than the creation
of new facilities. It involves proper utilization of key resources such as raw materials,
machine capacity, energy etc.
Short term planning takes into account, current customer orders, priorities, material
availability, absenteeism rate, cash flows, etc., and it is designed to respond quickly to
changes in production levels and market conditions.
Short range planning establishes short range schedules which specify the quantity of specific
products to be produced in each week of the planning horizon which varies from a week to a
few months.
The product design is the process of imagining, creating and designing the product that
solves the user’s problem, or address specific need of customer in a given market. The key
to successful product design is to understand the need of the end user customer the person
for whom the product is being created. Ideally, product design’s execution is so flawless that
no one notices; users can intuitively use the product as needed because product design
understood their needs and anticipated their usage
The two basic steps in designing a product are functional design and production design
Functional Design
In the functional design step the product is designed to be functional. Decisions are
made on dimensions, materials to be used, type of final finish required for appearance
and so on. At this stage, the designer is more concerned with the product itself than the
methods of production. The main concerns are functional considerations, customer
appeal, cost and ease of operation and maintenance
In the production design stage, the designer considers introduction of modifications and
new concepts into the product to make it more suitable for production. Some of the
concepts employed in this stage include:
2. Production facilities- The product designers must check that production department
has got all necessary facilities to produce a product. Simple product design requires
minimum production facilities. This will make the job of production department
easy, and it will also minimize the cost of production. The machines and tools which
are used to produce the product must give comfort and convenience to the
employees of production department.
3. Functionality- Meeting the purpose for which the product is being made will derive
the greater customer satisfaction. The designed product should be functionally
commanding and should be extensively be able to meet the end goal. Functionality is
again one such factor influencing the product design so, again it is the responsibility
of the designer to maintain the coordination between the look the way it needs to
be work.
4. Cost- cost is one of the main factors that influences the product design. The product
designer is informed about the maximum cost of the product, in such a case the
designer has not freedom to over design the product and has to do it within the cost
limit. The designer is also guided by the competitor’s product designs. It is also
possible that product is being designed first then the cost of that product is decided.
In such cases designer has the freedom to over design the product. However, he
must never over design the product.
5. Materials- The type and quality of the raw material used also greatly influences the
design of the product. The product designer must have the proper knowledge about
the material which is to be used in the production and designing of the product. He
should collect the information about the material from primary and secondary
sources. He should also keep the knowledge of the material which is used by their
competitors to design the products.
6. Quality policy- The design of the product is guided by the quality policy, which is
fixed by the top level of management of the company. The quality policy sets the
standard for the product which has to be maintained. It also builds a particular
quality image of the product for the company.
7. Effects on the existing products- The product designer must consider the factors that
the design of the new product may impact the existing product of the company. For
an instance it can badly affect the sale of the existing product of the company. The
designer must avoid this situation. For ex Company may design a low-quality product
which might affect their sale of product of the high quality. And if the new product is
going to replace the existing product, then it must be able to use the same
manufacturing and distribution strategies.
8. Reputation of the company- The product designer must consider the reputation of
the company in the market. Companies which have a good name and goodwill in the
market will want their new product designs to match or keep up their positive
image.
ANALYSIS
1. Start by accepting the situation at hand. Find out the resources you have to meet the
needs and make the best out of them.
2. Once you are ready with all your tools, now the research begins. Start by finding out
the problem which your design will solve.
CONCEPTUALIZE
So, the problems have been identified. Take notes of all the issues you figured out in the
first step. Now how do you solve them? Your design is the solution to the problem.
Conceptualize the problems into potential ideas. This can be done by breaking down each
problem and visualizing the needs associated with it. The needs of your user can be
reflected in these problems. The objectives of product design are mainly to suffice the needs
of the customer. A product that cannot serve the purpose is a failed product. That is why it
is crucial to create a product that satisfies your customer.
SYNTHESIS
You have the ideas, solutions to problems figured out in the previous step. The immediate
step is to transform those ideas into a blueprint of your product. This is the stage where you
create a prototype. You put all your ideas into practice in this step. Many designers get lost
in the vast sea of ideas generated by them. It becomes challenging to give a structure to all
these solutions. The ideal method to create a framework is to find a relation between the
different data generated from the first two steps. You can achieve this by manipulating,
organizing, and finding out relevant data. All the information generated may not be helpful,
so you have to pick the ones that will serve your purpose.