UNIT -1 INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT PRODUCTION DEFINITION - 1 : It is defined as the step by step conversion of one form

of material in to another form through chemical or mechanical process to create or enhance the utility of the product to the user. - MARTAND T. TELSANG For E.g.,: The iron ore exists in the nature. it will be converted into steel by a chemical process, which is put to various uses like making bars, pipes, angles, channels etc., DEFINITION - 2 : It is "a process by which goods and services are created". - EDWOOD BUFFA PRODUCTION/OPERATION MANAGEMENT DEFINITION - 1 - Production / Operations management is the process, which combines and transforms various resources used in the production/operations subsystem of the organization into value added product/services in a controlled manner as per the policies of the organization. DEFINITION - 2 - Production management deals with decision - making related to production processes so that the resulting goods or services are produced according to the specifications, in the amounts and by the schedule demanded and at minimum cost. - EDWOOD BUFFA DEFINITION - 3 - Production management is a process of planning, organising, directing and controlling the activities of the production function. - MARTAND T. TELSANG OBJECTIVES OF PRODUCTION MANAGEMENT Production is an organised activity and each organised activity has its objective, which helps to evaluate its performance against the set objectives. 1. Right Quality 2. Right Quantity 3. Predetermined time 4. Pre established cost (Manufacturing cost)

1. Right Quality - The quality of the product is established based upon the customers needs. Customer's needs are translated into product specifications by the design or engineering department. The manufacturing department then translates these specifications in to measurable objectives. 2. Right Quantity - If the products are produced in quantity excess of demand the capital will block up in the form of inventory and if it is produced in quantity short of demand, there will be shortages of products. Thus a decision is to be taken regarding how much to produce. 3. Manufacturing costs/ Predetermined time - Manufacturing costs are established before the product is actually manufactured. The manufacturing department has to manufacture the products at the pre-established cost. In any case, any variation between the actual costs and the standard should be kept at minimum. 4. Manufacturing schedule / Predetermined time - Timeliness of delivery is one of the important parameter to judge the effectiveness of production department. So the manufacturing department should organize its activities in such a way that the products will be manufactured as per schedule. FUNCTIONS OF PRODUCTION DEPARTMENT The activities of production department of an organisation are grouped into two broad categories. 1. The activities that convert the available capital into physical resources required for production. 2. The activities that convert the physical resources into saleable goods and services. In carrying out the above activities, the production department must perform the following activities A. production of goods at the right time and in sufficient quantity to meet the demand B. production of goods at minimum possible cost. C. production of goods of acceptable quality. Thus the functions of production personnel are: 1. Forecasting the demand for the products and using the forecast to determine the requirements of various factors of production. 2. Arranging for the procurement of required factors of production.

3. Arranging for the services such as maintenance, store keeping material handling, inspection and quality control etc that would be required to attain the targeted level of production. 4. Utilising effectively the factors of production and service facilities available to produce the product. SCOPE OF PRODUCTION MANAGEMENT The scope of production management can be considered from the point of view of both strategic decision influencing the production system and at the operation level The strategic level decisions are 1. New product identification and design 2. Process design and planning 3. Facilities location and layout planning 4. Design of material handling system 5. Capacity planning The operational level decisions are : 6. Production planning 7. Production control 8. Inventory control 9. Maintenance and replacement 10. Cost reduction 11. Cost control 12. Work system design