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Basic Concept of Production/Transformation
• • Four Functional areas in a Business:- Marketing, Production, Finance and Personnel. Production is the basic function around which all other activities revolve like marketing, storing, personnel, research and development. Thus, very important that Production function must be managed efficiently and effectively. So, as to achieve organizational Goals.
• The process by which, raw materials and other inputs are converted into finished products. • It involves step by step conversion of one form of materials into another to increase the utility of products or services.
Production and operations management (POM) is the management of an organization’s production system. A production system takes inputs and converts them into outputs. The conversion process is the predominant activity of a production system. The primary concern of an operations manager is the activities of the conversion process.
Finance Sales POM Marketing IB HRM
replacement during guarantee period. corrective decisions) • Shorter Manufacturing Lead Time (by reducing machine setup time. reducing rejection rate) • Plant Utilities (services such as lighting. reducing wastage) • Higher Quality (meet the quality specifications) • Reduction of Wastage (reasons. stages.Importance • High Productivity (Controlling the machine and manpower idle time. making raw materials available in time in sufficient quality of right quantity. ventilation) • Safety and Health (protection of workers from the danger of industrial accidents) • Better Customer Service (quick response to complaint. quality products. after sale services) • Use of latest Technology (Automation) . repair and maintenance facility.
Historical Background • • • • The Industrial Revolution Scientific Management The Human Relations Movement Operations Research .
• Thus the late-1700s factories had not only machine power but also ways of planning and controlling the tasks of workers. . • Adam Smith’s The Wealth of Nations in 1776 quoted the economic benefits of the specialization of labor. largely replaced human and water power for factories. • The steam engine. invented by James Watt in 1764.The Industrial Revolution • The industrial revolution developed in England in the 1700s.
. was the textile industry. the old cottage system of production had been replaced by the factory system.• The industrial revolution spread from England to other European countries and to the United Sates. • The first great industry in the U.S. • In the 1800s the development of electricity further advanced the revolution. • By the mid-1800s.
– Supervisors were carefully selected and trained.Scientific Management • Frederick Taylor is known as the father of scientific management. – Incentive pay systems were initiated. work methods. – Material specifications. His shop system employed these steps: – Each worker’s skill. strength. and routing sequences were used to organize the shop. . – Stopwatch studies were conducted to precisely set standard output per worker on each task. and learning ability were determined.
Ford Motor Company’s operation embodied the key elements of scientific management: – identical product designs – mass production – low manufacturing costs – automatic assembly lines – specialization of labour .• In the 1920s.
researchers in the Hawthorne Studies realized that human factors were affecting production. .Human Relations • In the 1927-1932 period. • From the work of behavioralists came a gradual change in the way managers thought about and treated workers. • Researchers and managers alike were recognizing that psychological and sociological factors affected production.
The Service Revolution • The creation of services organizations accelerated sharply after World War II. • About two-thirds of U. • Thus there is a growing need for service operations management. • Today.S. GDP is from services. • There is a huge trade surplus in services.S. more than two-thirds of the U. . workforce is employed in services.
Customer Service.Factors Affecting POM • Global Competition • Quality. and Cost Challenges • Computers and Advanced Production Technology • Growth of Service Sector • Scarcity of Production Resources • Issues of Social Responsibility .
Types Of Transformation Systems Continuous or Flow Production Intermittent Production Mass Production Process Production Project Production Job Production Batch Production .
• In the continuous production system. • They are not produced on customer's orders. the inputs and outputs are homogeneous along with the production process and sequence. goods are produced constantly as per demand forecast.Continuous Production System • Continuous means something that operates constantly without any irregularities or frequent halts (Stops). . • Goods are produced on a large scale for stocking and selling. • Here.
• Identical products are produced. • Special purpose automatic machines are used.Features • Volume of output is large. • Machines and equipments are arranged according to Product layout Pattern. • Fixed path material handling equipment is used due to the predetermined sequence of operations. .
.Following chart highlights the concept of a continuous production system.
a large-scale production of food takes place.• The Production system of a food industry is purely based on the demand forecast. Here. . demand forecast. Crude oil and other raw sources are processed continuously on a large scale to yield usable form of fuel. the production and processing system of a fuel industry is also purely based on. • Similarly.
Merits • As the processing of material is continuous there is no waiting period as each work is passed to the next stage immediately. • Any delay at any stage is automatically detected. • Quality of output is kept uniform. . • Cost of materials handling are minimized.
the entire process is disturbed. . • If there is fault in one operation.Demerits • Very rigid.
Suitability • Best suited to the organizations which intend to produce a limited variety of products on a large scale. .
Continuous Production is of the following types .
Mass Production Flows Here. . • The goods are produced either with the help of a single operation or uses a series of operations. company produces different types of products on a large-scale and stock them in warehouses until they are demanded in the market.
.Process Production Flows Here. a single product is produced and stocked in warehouses until it is demanded in the market.
The full production system is designed to produce only one specific type of item . There is very less work-in-progress because material flow is continuous. The production planning and scheduling can be decided well in advance. Conveyors and automatic transfer machines are used to move the materials from one stage to another. Low-skilled labour and skilled technicians are required.Features • • • • • There is a highly automated system for handling materials.
Types • Analytical Process of Production • Synthetic Process of Production • Assembling Process of Production .
Analytical Process of Production Raw Material is broken into different products Finished Product Raw Material Coal Coaltar Finished Product Ammonical Liquor Finished Product .
Synthetic Process of Production • Mixing of two or more materials to manufacture a product. Soap Raw Material Finished Product Raw material. acids and perfumes .Castic Soda.
Assembling Process of Production • Two or more components are combined to manufacture a finished product. TV . Raw Material Parts Finished Product Automobiles.
• The flow of production is intermittent (irregular). It keeps changing according to the design and size of the product. . the flow of production is not continuous. goods are produced based on customer's orders. In this system. The design of these products goes on changing.Intermittent Production System • Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed) intervals (time gaps). • In the intermittent production system. • In other words. • These goods are produced on a small scale. • Therefore. • These products are of different sizes. large varieties of products are produced. this system is very flexible.
Following chart highlights the concept of an intermittent production system. .
• The work of a goldsmith is purely based on the frequency of his customer's orders. Here. stitching is not done on a continuous basis. ornaments are not done on a continuous basis. • Similarly. The goldsmith makes goods (ornaments) on a small-scale basis as per his customer's requirements. Goods (stitched clothes) are made on a limited scale and is proportional to the number of orders received from customers. The clothes are stitched for every customer independently by the tailor as per one's measurement and size. Here. . the work of a tailor is also based on the number of orders he gets from his customers.
etc. shape. • Wide varieties of products are produced. • General purpose machines are used. • The volume of production is small. size. These machines can be used to produce different types of products. It is intermittent.The characteristics of an intermittent production system are listed as follows: • The flow of production is not continuous. of the product depends on the customer's orders . design. • The sequence of operation goes on changing as per the design of the product. • The quantity.
complex order or contract.Project production flows Here. The order must be completed within a given period of time and at an estimated cost. in project production flows. company accepts a single. .
Features • • The requirement of resources is not same (it varies). coordination between agencies is important because all jobs are interrelated. Each agency performs specialized jobs. As routing and scheduling changes with fresh orders. it slows down when the project is near its completion phase. proper inspection is required at each stage of production. Many agencies are involved in the project. Delays take place in completion of projects due to its complexity and massiveness. Here. Generally. • • .
in job production flows. This cost is fixed at the time of signing the contract .Job Production Flows Here. The product is produced within a given period and at a fixed cost. company accepts a contract to produce either one or few units of a product strictly as per specifications given by the customer.
The items are manufactured strictly as per customer's specifications.Features • • The production of items takes place in small lots.g. the time needed to design the product may be more than the manufacturing time. • • . Highly skilled labour is required to perform specialized jobs. There is disproportionate manufacturing cycle time. e. Sometimes only one product is produced at one time.
All jobs of one batch of production must be completed before starting the next batch of production. . • Here.Batch Production Flows • In batch production flows. the production schedule is decided according to specific orders or are based on the demand forecasts. A product is divided into different jobs. the production of items takes place in lots or batches.
• • . General purpose machines and handling equipments. which can do many different jobs quickly are installed.Features • • The products are made and kept in stock until their demand arises in the market. There is a possibility of large work-in-progress due to many reasons. This is because large varieties of items are to be produced. There is a need for detailed production planning and control.
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