Power point slides by

M.VENKATESWARA RAO
2nd semester MBA
M.S.N.P.G.Center
Andhra University Campus
KAKINADA.
 Definition of Production and Operation Management
 Organizational Functions

 Why study OM

 Cases of production and operation management

 Nature and Scope of operation and management

 A brief history of operations management

 Types of Manufacturing systems

 Services

 Characteristics and classification of services

 Goods versus Services

 Measuring productivity

 Role of production manager

 Production is the creation of goods and services
 Operation Management is the set of activities that

create value in the form of goods and services by

transforming inputs in to outputs.
Organizing to produce goods and services:
Essential functions:
 Marketing-Generates demand

 Production/operations-Creates the products

 Finance/accounting-Tracks how well the organization is

doing, pay bills,collect the money

 Human resources-Provides labour, wage and salary

administration and job evaluation

 OM is one of the four major functions of any
organization, we want to study how people organize
themselves for productive enterprise

 We want to know how goods and services are produced

 We want to understand what operations managers do

 OM is such a costly part of an organization

 Production and operation management is defined as the
design, operation, and improvement of transformation
process, which converts the various inputs into the
desired outputs of products and services.

 Definition : According to E.S.Buffa “Production

management deals with decision making related to
production process so that result the goods or services
are produced according to specifications in the amounts
and by the scheduled demanded and at minimum cost.’’
 Inputs Outputs

Labor
Products

Materials
Services

Capital
Information

Energy

Resources
Products/services
Organisation Input Resources Transformation Output

Auto mobile Steel sheets, Tools Fabrication and High quality

plant engine parts Workers Assembling auto mobile
Taxi services Customers Driver, taxi, Driving Destination
petrol
Hospital Pharmacy Doctors Health care Healthy
In patient Nurses individual
Out patient
 Production as a system: Convert a set off inputs into a set of
desired outputs.

 Production as a operation function: Achieving the objectives

of the organisations.

 Decision making system: Operation managers are required to

make a series of decisions in production function.

 EX: Plan,organise,staff,directing and control all the activities

in the process of converting all the inputs into finished
products.
 Production planning and control
 Scheduling, dispatching and rooting
 Job shop or flow shop scheduling
 Planning for mass production
 Designing plant layout
 Plant location and the factors influencing location
 Program Evolution Review Techniques
 Total Quality Management
 Time study
 Inventory control
 Safety management
Year contribution contributor

1799 Standardized parts, Cost Eli Whitney and others

accounting
1832 Job and Measures study Charles Babbage

1900 Scientific management, Motion F.W.Taylor

study Frank B.Gilberth
1901 Gantt chart and incentive pay Henry L.Gantt
system
1915 Inventory control F.W.Harris

1927 Human relations and Hortheren Elton Mayo

studies
Year contribution contributor

1931 Quality control charts W.A.Shewart

1935 Statistical sampling applied to quality H.F.Dodge &
control H.G.Roming
1940 Operation research application in P.M.Blacker and others
world war II
1946 Digital computer John Mauchlly and
J.P.Eckert
1947 Linear Programming G.B.Dantzig, Williams
1950 Mathematical programming on- A.Charnes,W.W.Cooper
linear and stochastic process and others
1951 Commercial digital computer. Sperry Univac
1960 Organizational behavior: Continued L.Cummings, L.Porter
study of people at work
Year contribution contributor

1970 Integrating operations into overall W.Skinner J.Orlicky and

strategy and policy, Computer G.Wright
applications to manufacturing,
Scheduling and control, Material
requirement planning (MRP)
1980 Quality and productivity applications W.E.Deming and J.Juran
from Japan:
Robotics, CAD-CAM
These are 2 types.
1.Flow or Continuous production.
2.Intermittent production.

 Flow or Continuous production : This is also classified into

2types.
 A)Mass production
 B)Process production
 Intermittent production : This is classified into 2 types.
 A)Job production
 B)Batch production.
 Improved work/material flow

 Reduced skills

 Added value/completed work faster

 Standardisation is the fundamental of the mass
production.

 Large quantity of production .

 Ex: Steel plant and text tile mills

 In this process are inter linked and production is carried
on continuously thorough a uniform and standardized
sequence of operations.

 This type of production is used in bulk processing of

crude oil into petroleum,kerosene,diesel oil etc.
 Job, ‘one-off ” or ‘make complete’’ are descriptions given into
the organisation where by the complete task is handled by a
single worker or group of workers.

 Usually associated with low technology ,through to the large

scale ,often relying on higher technology.

 Volume of output is small

 Machines and equipment are arranged at one place.

 It is not usually to see the conversation process organised so
that batch methods can be used.
 Such methods required that the work for any task is divided

into parts or operations and that each operation is completed

throughout the hole batch before the next operation is under
taken.
Aims of batch productions:
 Concentrate skills

 High equipment utilization.

Characteristics:
 Organizationally difficult

 Use of specialised skills

 Possibility of high equipment utilization

These are three types:

 Forging process

 Machining process

 Assembly process
 Casting: This process is transforming of metals into
required shape
 Forging: In this process the metal is heated to plastic
state and then forced to the desired shape by pressure
or impact
 Stamping: In this process, force is applied on the metal
to get required shape of the product
 Embossing and coining: In embossing the metal is
stitched or formed as per the configuration were as
coining is performed in an enclosed die and the metal
flow is restricted
 Spinning : It is process of shaping a metal by pressing it
against a from while it is rotating on a high speed lathe
 Turning: in this process , work piece is yield in the lathe
and rotated whiled cutting tool
 Drilling: the using metal bits (drill bit and boring bit)
necessary changes will be made in the work piece
 Grinding: the process refers to the whirring aware by
friction of metals. A rotating grinding wheel will be
useful for finishing product
 Milling: operation removes metals by feeding the work
piece against roofing multipoint cutting tool (milling
cutter)
 Electro chemical machining: in this process the metal to
be removed is dissolved off the piece and carried away
by the electro type.
 Vending process.

 Bracing process.

 Shouldering.

 Riveting.
 Meaning: a service is any or performance that one party can
offer to another that is essentially intangible and does not
result in the ownership of anything.

 Definition: According to American Marketing Association “

activities ,benefits and satisfaction that are offered for sale or
provided in connection with the sale of goods”.
Characteristics:

1. Service is intangible.
2. Service output is variable.
3. High customer contacts.

Services are Classified into three types:

1. Personal services.
2. Domestic services.
3. Maintenance services.
 Manufacturing Services

 It is concern with the production  It is concerned with providing

or Manufacturing of goods. services.
 In this the output is Tangible.  In this output is InTangible.

 There is less consumer contact.  There is more consumer contact.

 There is easiness is quality  In this quality control is difficult.

control .
 Capacity planning is easily  Capacity planning is difficult.
possible .
 Capital intensive.  Labour intensive.

 Long lead time.  Short lead time.

 Products quality stored.  Not measured it is difficult.

Duties of Production Manager :
1) Production manager should concern itself with
production planning.
2) Production control.

3) Production manager should concern itself with quality

control.
4) Plant layout

Plant layout is three types:

 Product layout.

 Process layout.

 Fixed layout.
5) Materiel handling.
6) Proper inventory control.
These are five types:
a) Re-Order level.

b) Minimum level.

c) Maximum level.

d) Danger level.
e) Average stock level.

7) Systematic control ( it refers to control of cost of

products )
M.VENKATESWARA RAO