Introduction to

Production & Operations Management

sandeepnemlekar@gmail.com Phone # +91-9987209747

Organizations on Product/Process Continuum

Product tangible & identifiable result of a series of transformation processes subjected to it. Service Intangible Process The customer is processed .

Automobile manufacturers

Automobile retailers Photocopier Banks Consultancies manufacturers & service providers Restaurants Airlines Undertakers

Product Pure Manufacturing What the customer buys

Orientation Industry Emphasis

Deposit Schemes Credit Cards Monetary Instruments

Process Pure Service How it is provided

Reports of findings, analysis & recommendation

After Sales Service / Information / Warranty Service / Onsite Service

A continuous sequence / series adjacent elements not perceptibly different from each other although the extremes quite distinct.

The Transformation Process

Quality of inputs monitored Random disturbances Quality of outputs monitored

INPUTS

Transformation Process

OUTPUTS

Feedback Mechanisms

The Transformation Process For a Service Organization (An MBA Institute)

Random disturbances Strikes of students, teachers or staff Undue interference of the government in the working of institutions

Raw minds (students) Teachers Class rooms Computer lab Library Projectors (OHP, LCD etc) Administrative staff

Quality of inputs monitored

Quality of outputs monitored

Transformation Process

Enlightened students with: Good communication skills Pleasant personalities Leadership qualities Good analytical ability Team spirit Decision making abilities Computer skills

INPUTS

Feedback Mechanisms Success at placement interviews Grades obtained in examinations Rising career graph of alumni in the industry Number of applications for admission in the institute Ratings of surveys

OUTPUTS

The Transformation Process For a Hybrid Service & Manufacturing Organization (A Restaurant)
Random disturbances High turnover of chefs, waiters, etc. Inflation Governments taxation policy

Customers
Building Chef Vegetables Furniture

Quality of inputs monitored

Quality of outputs monitored

Mutton, chicken, pork, etc.

Cooking oil, Spices, etc. Waiters Manager

Transformation Process

Customers satisfied with: Good preparation of the food Pleasant behavior and personality of the waiter Genuine prices charged

INPUTS

Feedback Mechanisms Rising Revenues Repeat Customers Appreciation of customers

OUTPUTS

The Transformation Process For a Purely Manufacturing Organization (A Refrigerator Manufacturer)

Random disturbances High turnover of workers and managers Recession Governments taxation policy Strikes instigated by trade unions Transformation Process

Machines & Equipments

Building Components, parts, subassemblies, etc. Workers Office infrastructure (computers, furniture, etc.) Packaging material Capital Managers

Quality of inputs monitored

Quality of outputs monitored

Customers satisfied with: Good cooling performance Less consumption with electricity Good after-sales service New advanced features

INPUTS

Feedback Mechanisms Rising sales volume Lesser customer complaints Positive response of customers in the feedback forms

OUTPUTS
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Production & Operations Management (POM)

Defined

Production & Operations Management is defined as the design, operation, and improvement of the transformation process, which converts the various inputs into desired outputs of products and services.
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Product/Process Choice Service Operations Management Business Process Outsourcing and Off-shoring

Steps in the production/operations process from the point of view of an entrepreneur

Facility Location Planning

Facility Layout Planning

Facility Capacity Planning

Project Management

Inventory Management for Independent Demand Items

Materials Requirement Planning (MRP)/ Just-In-Time (JIT) System/ Supply Chain Mgt. (SCM)

Total Productive Maintenance (TPM)

Steps in the production/operations process from the point of view of an entrepreneur

Aggregate Production/ Operations Planning

Work Design

Operations Scheduling

Quality Management

Demand Forecasting

Operations Strategies

Concepts in Product Design

Manufacturability

Reverse Engineering Research & Development

Standardization Concepts in Product Design

Product Life Cycle

Robust Design

Concurrent Engineering Computer Aided Design (CAD)

Modular Design

Concepts in Product Design

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Concepts in Product Design

1. Research & Development fundamental research Advancement of state of knowledge e.g. Law of Gravity Applied research for developing commercial applications e.g. space rocket propulsion, high speed elevators etc on law of gravity 2. Reverse Engineering carefully dismantling competitors existing product in steps to understand unique underlying concept Competitors of Sony Corp handycam, digicam 3. Manufacturability Designing in such a way that manufacturing can be done easily considering existing capabilities low investments
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Concepts in Product Design

4. Standardization less variety new products with no major variation from existing products e.g. Keyboards low design cost & easy availability of components lack of standardization e.g. OS Windows, Linux, etc. compatibility? 5. Modular Design type of standardization designing in parts & modules modules are subassemblies of components reduces efforts & time in designing & inventory management entire module can be replaced in case of defect 6. Robust Design Designing a product that can be operational in varying environments easier than changing environment to suit product - Jeep vs. Car
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Concepts in Product Design

7. Concurrent Engineering design team includes marketing, engineering, production, finance, materials to advise on respective feasibilities opposite to classical sequential approach saves time & efforts . 8. Computer Aided Design (CAD) a software to help making 3D design can be seen at different places through intranet-internet Earlier (without CAD) front, top & side views to be drawn tedious & time consuming

9. Product Life Cycle 5 stages

demand low as customer unaware
Awareness increases demand stabilizes Rise in Demand slows down

New features added over time

demand reducing

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Process Design

Types of Processes

Continuous Process

Semi-continuous (Repetitive/Assembly) Process

Intermittent Process

Project

Batch Process

Job Shop

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Type of processes
Continuous Process unceasing in nature set up time for starting very long after start continue for long duration products highly standardized with almost no variety & measured on continuous basis (tons per day meters per day, etc.) rather than discrete units e.g. urea, chemicals, steel, plastic, sugar, textiles, detergents, etc. Such industries called process industries. 1. 2. Semi-continuous Process - are assembly processes repetitive in nature produce high volume of output products have little variety e.g. automobiles, electronics, white goods, etc. Highly Specialized machines, Semiskilled labor, low cost per unit

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Type of processes
3. Intermittent Process stop at regular interval of time Product needs processing on various machines Products are of different varieties Production process slower than earlier two processes 2 types Batch Process & Job Process

3.1 Batch Process adopted when batches / lots to be produced using same set of machines in same sequence e.g. bakery batches in oven salted biscuits chocolates breads. Same equipment same steps but cleaning & adjustment after each production run.

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Type of processes
Job Shop process can handle larger variety than batch process Products quite different from each other So, need varied processes, on different machines, different sequences & different processing time. Batches vary from large to small size (many to single unit) e.g. restaurant different cooks / recipes / utensils etc. Low volume of output So, costlier products 3.2

4.

Project process handles very complex & unique set of activities or tasks It shall be completed in limited span of time. e.g. R&D projects, construction of plants, building complexes, implementation of specialized software, etc.
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Automation
Machines take exactly the same time in repetitive tasks Behavioral problems in humans like boredom, frustration, fatigue, etc. can be avoided by using machines Industrial relations problems like strikes, lockouts, etc. can be avoided

State-of-the-art fully automated plants increase the market value of the firm/ improve client base in international markets More reliable and consistent performance than that of humans Usually more expensive than the human work force

Advantages
Automation

Disadvantages

Loss of creativity on the part of workers due to inflexibility in automation

Less flexible than the humans; even small changes in the process are expensive

Leads to unemployment/ retrenchment of the labor force

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Emerging Role of the Production & Operations Manager in India today

To act as internal quality auditors in certification program like ISO 9000 Increased attention to technology management in view of JVs of MNCs with domestic companies To act as supply chain managers in forging longterm strategic relationships with suppliers To act as a member of the concurrent engineering team in new product design To take part in strategic decision making of the organization To implement total productive maintenance (TPM) program To take part in the implementation & use of ERP software in the organization

New Responsibilities of Operations Managers

To automate the processes according to the requirements of the organization To enhance R&D effort of the organization for becoming self-reliant in developing new technologies

To take decisions regarding outsourcing/ offshoring of business processes

To implement the environmental and pollution norms established by the government from time to time

To oversee timely implementation of projects (like commissioning of facilities, launching of new products/ services, etc.) in view of the increased competition

To take care of issues relating to services operations management 19