JASHORE UNIVERSITY OF SCIENCE AND TECHNOLOGY (JUST)

IPE- 3211: Industrial and Operations Management (2 credit

hours)
Dr. Md Mahfuzur Rahman
Assistant Professor, Dept. of IPE
21st Aug, 2023
1
Intended Learning Outcomes (ILOs)
❖ Review of OM and PM
❖ Production Planning

– ILO 1: What is an operations system? give some examples of operations

systems.
– ILO 2: Describe different types of production process and their characteristics
– ILO 3: How does one classify the differences between continuous-flow, mass
production, batch processing, job shop, and project systems?
– ILO 4: Identify the meaning of productivity and describe different factors of
productivity.
– ILO 5: Explain different Work standards and methods of work measurement.
– ILO 6: Solving problems related to productivity and time study.
– ILO 7: Describe process planning and value chain management.
– ILO 8: What are the limitations of quality function deployment for designing a
product or service?

2
Comparison between PM and OM

3
A Comparison of Manufacturing and Service Organizations

4
Comparison of Goods and Services

5
Current Priorities for Operations Management

Relate the operations system to customer/market requirements.

✓ All the choices made in an organization demand that the customer is central to the design,
whether it concerns performance measures, manufacturing and service-delivery system
design, supplier management, or product development.

Acquire capabilities to tolerate product/service proliferation.

✓ Customers are likely to demand more choices and value-offerings from manufacturing and
service organizations. In order to remain competitive, every organization needs to understand
customer requirements and incorporate them in new product development initiatives.
✓ However, large product/service variations often result in a spectrum of offerings ranging from
“low-volume, high-variety” to “high-volume, low-variety.” Operation management practices
need to address these requirements and enable managers to handle the complexities arising
out of variety.

6
Current Priorities for Operations Management
Develop systems and procedures that promote learning

✓ Continuous improvements in factors affecting competition, such as quality, delivery,

cost, and responsiveness, are very important for every organization.
✓ Improvements happen out of continuous learning on the part of the employees in an
organization.
✓ A good operations management practice in an organization will help the organization
set up a continuous improvement methodology.

Develop green manufacturing practices

✓ Green manufacturing practices are operational practices that ensure that products are
manufactured in a sustainable manner by conserving scarce natural resources and
minimizing pollution and other negative impacts on society and nature.

7
Key Product and Service Attributes
Intangibility

Services are experiences rather than objects, they cannot be touched, tasted or felt as in the
case of objects. On the other hand, in a product-oriented operation, the product is defined by
certain attributes and the customer faces less ambiguity with respect to the product, its
attributes, and its performance.

Heterogeneity

Since the experiential component is dominant in a service, it is likely that no two services are
exactly alike. The differences are attributed to the differences in the service receivers
(customers), the service providers, and other parameters of the service delivery system. High
heterogeneity results in high variability in the operations system performance.

Perishability

Services are perishable. This implies that they cannot be inventoried. Thirty minutes of a
doctor’s consulting expertise today cannot be stored for future use, reused, or returned in a
future period.
8
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.”

Production is a value addition process. At each stage of processing, there will be

value addition.

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

Examples:
➢ Manufacturing custom-made products like, boilers with a specific capacity,
constructing flats, some structural fabrication works for selected customers, etc.

➢ Manufacturing standardized products like, car, bus, motor cycle, radio,

television, etc.
https://senate.universityofcalifornia.edu/_files/inmemoriam/html/elwoodbuffa.html
9
PRODUCTION SYSTEMS

The production system of an organization is that part, which produces products of an

organization.
It is that activity whereby resources, flowing within a defined system, are combined
and transformed in a controlled manner to add value in accordance with the policies
communicated by management.

Schematic Production System

10
Types of Production System
The type of product line decides the organization of manufacturing system and
planning and control of production.
Four types of production system.
❖ Job Shop Production
❖ Batch Production
❖ Mass Production
❖ Continuous Production

Classification of Production Systems

11
Types of Production System
Job Shop Production

✓ Characterised by manufacturing of one or few quantity of products designed and 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.
❖ Characteristics
The Job-shop production system is followed when there is:
o High variety of products and low volume.
o Use of general purpose machines and facilities.
o Highly skilled operators who can take up each job as a challenge because of uniqueness.
o Large inventory of materials, tools, parts.
o Detailed planning is essential for sequencing the requirements of each product, capacities for
each work centre and order priorities.

12
Types of Production System
• Advantages
• Following are the advantages of job shop production:
• 1. Because of general purpose machines and facilities variety of products can be produced.
• 2. Operators will become more skilled and competent, as each job gives them learning
• opportunities.
• 3. Full potential of operators can be utilised.
• 4. Opportunity exists for creative methods and innovative ideas.
• Limitations
• Following are the limitations of job shop production:
• 1. Higher cost due to frequent set up changes.
• 2. Higher level of inventory at all levels and hence higher inventory cost.
• 3. Production planning is complicated.
• 4. Larger space requirements.
13
Types of Production
Batch Production

✓ Batch production is defined by American Production and Inventory Control Society (APICS)
“as a form of manufacturing in which the job passes through the functional departments in
lots or batches and each lot may have a different routing.” It is characterised by the
manufacture of limited number of products produced at regular intervals and stocked
awaiting sales.

Characteristics
Batch production system is used under the following circumstances:
✓ When there is shorter production runs.
✓ When plant and machinery are flexible.
✓ When plant and machinery set up is used for the production of item in a batch and change of
set up is required for processing the next batch.
✓ When manufacturing lead time and cost are lower as compared to job order production.

14
Types of Production
Advantages

➢ Better utilisation of plant and machinery.

➢ Promotes functional specialisation.
➢ Cost per unit is lower as compared to job order production.
➢ Lower investment in plant and machinery.
➢ Flexibility to accommodate and process number of products.
➢ Job satisfaction exists for operators.

Limitations

➢ Material handling is complex because of irregular and longer flows.

➢ Production planning and control is complex.
➢ Work in process inventory is higher compared to continuous production.
➢ Higher set up costs due to frequent changes in set up.

15
Types of Production
Mass Production
Manufacture of discrete parts or assemblies using a continuous process are called mass production.
This production system is justified by very large volume of production. The machines are arranged
in a line or product layout.
Characteristics
Mass production is used under the following circumstances:
✓ Standardisation of product and process sequence.
✓ Dedicated special purpose machines having higher production capacities and output rates.
✓ Large volume of products.
✓ Shorter cycle time of production.
✓ Lower in process inventory.
✓ Perfectly balanced production lines.
✓ Flow of materials, components and parts is continuous and without any back tracking.
✓ Production planning and control is easy.
✓ Material handling can be completely automatic. 16
Types of Production
Advantages
Following are the advantages of mass production:
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilisation due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.
Limitations
Following are the limitations of mass production:
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.

17
Types of Production
Continuous Production

Production facilities are arranged as per the sequence of production operations from the
first operations to the finished product. The items are made to flow through the
sequence of operations through material handling devices such as conveyors, transfer
devices, etc.

Characteristics
Continuous production is used under the following circumstances:
✓ Dedicated plant and equipment with zero flexibility.
✓ Material handling is fully automated.
✓ Process follows a predetermined sequence of operations.
✓ Component materials cannot be readily identified with final product.
✓ Planning and scheduling is a routine action.
18
Types of Production
Advantages
Following are the advantages of continuous production:
✓ Standardisation of product and process sequence.
✓ Higher rate of production with reduced cycle time.
✓ Higher capacity utilisation due to line balancing.
✓ Manpower is not required for material handling as it is completely automatic.
✓ Person with limited skills can be used on the production line.
✓ Unit cost is lower due to high volume of production.
Limitations
Following are the limitations of continuous production:
– Flexibility to accommodate and process number of products does not exist.
– Very high investment for setting flow lines.
– Product differentiation is limited.
19
What is Productivity ?
Productivity is the quantitative relation between what we produce and what we use as a source
of produce them. So, Productivity is the arithmetic ratio of output to the amount of input.
Productivity refers to the efficiency of the production system.
PRODUCTIVITY = Output / Input
PRODUCTIVITY MEASURES
Partial Productivity Measure (PPM)
Partial Productivity = Total output / individual input.
(a) Labor Productivity =Total output / Labor input
(b) Capital Productivity = Total output / Capital input
(c) Material Productivity = Total output / Material input
(d) Energy Productivity = Total output / Energy input.
Total Productivity Measure (TPM) = Total tangible output / Total tangible input
Tangible output = Value of finished goods and Partial units produced, dividend from
securities, interest, other incomes
Tangible input = Value of ( human , material, capital, other inputs)

20
Homework

❖ Chapter 01 and Chapter 02 of Production and Operations Management by

Anil Kumar.

✓ Solve examples and exercise problems.

21