UNIVERSITY OF MINDANAO

BATCH 2027***
CBM
EVELYN TROPICO
ADAPTED FROM: POWERPOINT/LECTURE

INTRODUCTION OF PRODUCTION Evolution Of production and Operations

MANAGEMENT
- Production/Operations managements
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.
Operation Management Topics
 Scheduling
 Aggregate planning
 Inventory
 Forecasting
 Strategy
 Quality
 Quality tools
 Flows and waiting lines
The differences between production and
Operation
Production:
- It involves the manufacturing of a
tangible product
- It is used in a narrow sense
- It is applied to manufacturing
organizations, such as industry
- It will have closing stock at the end of
an accounting year
- Demand for the product is regular
Operation
- It involves a rendering kind of
services, such as electricity, cooking
gas etc.
- It is used in a broad sense
- It is applied to non-manufacturing
organizations, such as banks,
insurance, agriculture,
transportation, warehousing, etc.
- There is nothing like closing stocks
- Demands for services fluctuate from
time to time.
management
- For OVER TWO CENTURY operations
and production management has been
recognized as an important factor in a
country’s economic growth. The
traditional view of manufacturing
management began in 18 CENTURY
when ADAM SMITH recognized the
economics benefits of
SPECIALIZATION OF LABOUR
- He recommended breaking of jobs
down into subtasks and recognizes
workers to specialize tasks in which
they would become highly skilled and
efficient. In the EARLY 2OTH
CENTURY. F.W TAYLOR
implemented SMITH THEORIES and
DEVELOPED SCIENTIFIC
MANAGEMENT
Production Concept
- Production is defined as the step by
step conversion of one forms of
material into another form through
chemical of mechanical process to
creates or enhance the utility of the
product to the user.
- EDWOOD BUFFA defines productions
as “PROCESS BY WHICH GOODS
AND SERVICES ARE CREATED
- Examples of Production
- Manufacturing custom-made
products like, boilers with a specific
capacity, constructing flats, some
structural fabrications works for
selected customers, etc., and
manufacturing standardized products
like, car, bus, motor cycle, radio,
television, etc.

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UNIVERSITY OF MINDANAO
BATCH 2027***
CBM
EVELYN TROPICO
ADAPTED FROM: POWERPOINT/LECTURE
Production System
- The production system of an
organization is that part, which
produces products of an organization.
It is the activity where by resources,
flowing with in a defines system, are
combined and transformed in a
controlled manner to add value in
accordance with the policies
communicated by management
- Production is an organized activity, so
every production system has an
objective.
- It does not operate in isolation from
the other organization system
- The system transforms the various
inputs to useful outputs
- There exists feedback about the
activities which is essential to control
and improve system performance
Production Management
E.S. BUFFA defines production management
as, “PRODUCION MANAGEMENT DEALS
WITH DECISION MAKING RELATED TO
PRODUCTION PROCESSES SO THAT THE
RESULTING GOODS OR SERVICES ARE
PRODUCED ACCORDING TO
SPECIFICATIONS, IN THE AMOUNT AND BY
THE SCHEDULE DEMANDED AND OUT OF
MINIMUM COST.”
Objectives of Production Management
- Is to produce goods services of right
quality and quantity at the right time
and right manufacturing cost.
 Right Quality
 Right Quantity
 Right Time
 Right Manufacturing Cost
Operating System
- Operating system converts inputs in
order to provide outputs which are
required by a customer. It converts
physical resources into outputs, the
function of which is to satisfy
customer wants i.e., to provide some
utility for the customer.
Concepts of Operation
- An operation is defined in terms of the
mission it serves for the organization,
technology it employs and the human
and managerial processes it involves.
Operations in an organization can be
categorized into manufacturing
operations and service operations.
DISTRIBUTION BETWEEN
MANUFACTURING OPERATIONS AND
SERVICE OPERATIONS
1. Tangible/Intangible nature of output
2. Consumption of output
3. Nature of work (job)
4. Degree of customer contact
5. Customer participation in conversion
6. Measurement of performance.
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UNIVERSITY OF MINDANAO
BATCH 2027***
CBM
EVELYN TROPICO
ADAPTED FROM: POWERPOINT/LECTURE
ELEMENTS OF PRODUCTION
MANAGEMENT AND OPERATION
MANAGEMENT
PLANNING - An activity that establishes a
course of action and guide future decision-
making is planning.
ORGANIZING - Activities that establish a
structure of tasks and authority.
CONTROLLING - Activities that assure the
actual performance in accordance with
planned performance.
BEHAVIOUR - Operation manager is
concerned with how their efforts to plan,
organize, and control affect human behavior,
they also want to know how the behavior of
subordinates can affect management
planning, organizing, and controlling actions
MODEL - As operation managers plan,
organize, and control the conversion process,
they encounter many problems and must
make many decisions.
Objective of Operation Management
- Objectives of operations management
can be categorized into customer
service and resource utilization
 Customer Service - The first objective
of operating systems is the customer
service to the satisfaction of customer
wants. Therefore, customer service is
a key objective of operations
management. The operating system
must provide something to a
specification which can satisfy the
customer in terms of cost and timing.
Scope of Production and Operations
Management
- Production and operations
management concern with the
conversion of inputs into outputs,
using physical resources, so as to
provide the desired utilities to the
customer while meeting the other
organizational objectives of
effectiveness, efficiency and
adoptability.
1. Location of facilities
- Location of facilities for operations is
a long-term capacity decision which
involves a long-term commitment
about the geographically static factors
that affect a business organization. It
is an important strategic level
decision- making for an organization.
2. Plant layouts and material handling
- Plant layout refers to the physical
arrangement of facilities. It is the
configuration of departments, work
centers and equipment in the conversion
process. The overall objective of the plant
layout is to design a physical
arrangement that meets the required
output quality and quantity most
economically
3. Product design
- Product design deals with conversion of
ideas into reality. Every business
organization has to design, develop and
introduce new products as a survival and
growth strategy. Developing the new
products and launching them in the
market is the biggest challenge faced by
the organizations
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UNIVERSITY OF MINDANAO
BATCH 2027***
CBM
EVELYN TROPICO
ADAPTED FROM: POWERPOINT/LECTURE

4. Process design - In modern industry, equipment and

machinery are a very important part of
- Process design is a macroscopic
the total productive effort. Therefore,
decision-making of an overall process
their idleness or downtime becomes are
route for converting the raw material into
very expensive. Hence, it is very
finished goods. These decisions
important that the plant machinery
encompass the selection of a process,
should be properly maintained.
choice of technology, process flow
analysis and layout of the facilities SCOPE OF PRODUCTION AND
OPERATION MGT.
5. Production and planning control
- Commencing w/ the selection of
- Production planning and control can be
location production mgt. covers such
defined as the process of planning the
activities as acquisition of land,
production in advance, setting the exact
construction building, procuring, and
route of each item, fixing the starting and
installing machinery, purchasing and
finishing dates for each item, to give
sorting raw materials and converting
production orders to shops and to follow
them into saleable products
up the progress of products according to
orders. Six Historical Developments:
---------Planning • The industrial Revolution
---------Routing • Scientific management
---------Scheduling • Human Relation Movement
---------Dispatching • Operation Research
6. Quality control • Computers and advanced
production technology
- Quality Control (QC) may be defined as
a system that is used to maintain a • Service Revolution
desired level of quality in a product or
service‟. It is a systematic control of
various factors that affect the quality of
the product. Quality control aims at
prevention of defects at the source, relies
on effective feedback system and
corrective action procedure.
7. Materials management
- Materials management is that aspect of
management function which is primarily
concerned with the acquisition, control
and use of materials needed and flow of
goods and services connected with the
production process having some
predetermined objectives in view.
STRATEGIES OF OPERATION
MANAGEMENT
8. Maintenance management

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UNIVERSITY OF MINDANAO
BATCH 2027***
CBM
EVELYN TROPICO
ADAPTED FROM: POWERPOINT/LECTURE

. Design of goods and services

2. Quality
3. Design Process and capacity
4. Site selection
5. Design layout
6. Human resource (HR) and design work
7. Supply chain mgt
8. Inventory
9. Scheduling
10. Maintenance.

Factors of Production
Land – Overall natural Resources
Labor – Human, capital and technology
Capital – Wages, fund, equipment, payment
of interest, resent value of investment
owners return
Entrepreneurship – Ownership, Capital,
profit, organizer, innovator, older as to create
new, willing risk, producer and distributors
return to entrepreneurship

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