Production and Operation

Management
By
Dr Sumit Koul
(Course Coordinator)
Production Management
• According to E F L Breach,
• Production Management is the process of effectively planning and regulating the
operation of that part of an enterprise which is responsible for actual
transformation of materials into finished products.
Operation Management

The Business function responsible for

planning

coordination

Controlling

The resources needed to produce product and services for a company

Sample production and Operation System
Scope of Production and Operation
Management
Significant Events in Operations Management
Production System

Production System refers to that set-up of the organization,

which is engaged in producing products.

It is an activity in which resources are put together and

converted into a product.

This process enables adding value to that product. Further, the

process takes place as per the policies of the management.
Characteristics of Production System

Objective: Because the process of production is an organized

activity. So, it takes place with an objective.

Transformation: Conversion of various inputs into outputs

takes place in this process.

Feedback: Feedback about activities is necessary. This helps

in controlling and improving the performance of the system.
Processes & Operations Systems
Available Alternatives

Two broad process

classifications include

Intermittent Repetitive operations –

operations – produce a produce one or a few
variety of products in standardized products
lower volumes. in high volume.
Process Selection

Process selection is based on five considerations

• Type of process; range from intermittent to continuous

• Degree of vertical integration
• Flexibility of resources
• Mix between capital & human resources
• Degree of customer contact
Process Selection

Process types can be:

Batch process – small

Project process /Job Shop–
quantities of product in
make a one-at-a-time
groups or batches based on
product exactly to
customer orders or
customer specifications
specifications
Process Selection
• Process types can be:

• Line process – large quantities of a standard product

• Continuous process – very high volumes of a fully standard
product
Classification of Production System
Examples: Production Line of Vehicle
© 2007 Wiley
© 2007 Wiley
© 2007 Wiley
© 2007 Wiley
© 2007 Wiley
Differences between Intermittent and Repetitive
Operations
Decision Intermittent Operation Repetitive Operation
Product variety Great Small
Degree of standardization Low High
Organization of resources Grouped by Function Line flow
Path of products Varied, depends on product Line flow
Factor driving production Customer orders Forecast of demand
Critical resource Labor Capital
Type of equipment General purpose Specialized
Degree of automation Low High
Throughput time Longer Shorter
Work-in-process inventory More Less
Transformation Process
Business Functions: A bank Example
 Manufacturing (=Goods) vs. Service
operations

Production of goods (goods Services (TV and auto repair,

oriented) lawn care)
• Tangible products • Government
• Automobile • Regulatory bodies, FAA,
• Refrigerator FDA
• Wholesale/retail
• Financial services
• Education
Goods vs. Service Operations (Cont)

Differences

• Customer contact
• Uniformity of input
• Labor content of jobs
• Uniformity of output
• Measurement of productivity
• Production and delivery
• Quality assurance
• Amount of inventory
Process Analysis
• Process Analysis

• Process Flowcharting

• Types of Processes

• Process Performance Metrics

Process Analysis Terms
• Process: Is any part of an organization that takes inputs
and transforms them into outputs.
• Cycle Time: Is the average successive time between
completions of successive units.
• Utilization: Is the ratio of the time that a resource is
actually activated relative to the time that it is available
for use.
Process Flowcharting
Defined
• Process flowcharting is the use of a diagram to present
the major elements of a process. The basic elements
can include tasks or operations, flows of materials or
customers, decision points, and storage areas or queues.
• It is an ideal methodology by which to begin analyzing a
process.
 Flowchart Symbols

Tasks or operations Examples: Giving an

admission ticket to a
customer, installing a engine
in a car, etc.

Examples: How much change

Decision Points should be given to a
customer, which wrench
should be used, etc.

Process Analysis Terms

Process: Is any part of an organization that takes inputs
and transforms them into outputs
 Flowchart Symbols

Storage areas or Examples: Sheds, lines of

queues people waiting for a service,
etc.

Examples: Customers moving

Flows of materials or to a seat, mechanic getting a
customers tool, etc.

Process Analysis Terms

Cycle Time: Is the average successive time between
completions of successive units
Example: Process Flow Chart in Manufacturing
Types of Processes
Single-stage Process
Stage 1

Multi-stage Process
Stage 1 Stage 2 Stage 3

Other Process Terminology

Blocking
Occurs when the activities in a stage must stop because there is no place to deposit
the item just completed
Starving
If an employee is waiting at a work station and no work is coming to the employee
to process.
Other Types of Processes
• Make-to-order
• Only activated in response to an actual order.
• Both work-in-process and finished goods inventory kept to a minimum.
• Make-to-stock
• Process activated to meet expected or forecast demand.
• Customer orders are served from target stocking level.
Process Performance Metrics
Role of a operations manager
• Human resource management
• Asset management
• Cost management
• Decision making
Operations Managers
• Controlling
• Inventory
• Quality
• Costs
• Organization
• Degree of standardization
• Subcontracting
• Process selection
• Staffing
• Hiring/lay off
• Use of overtime
• Incentive plans
• Job assignments
PRODUCTION CYCLE With Example

Production Cycle of Bread Manufacturing Unit

PRODUCTIVITY COMPUTATION
Problem 1
Problem 2
Do yourself Exercise
• Q1 An organization produces 1000 steel glasses and uses 200 square
meters of steel sheet and 200 hours of labor. Calculate productivity if
the glasses are sold for ₹ 100 each, the cost of steel sheet is ₹ 100 per
square meter, and labor cost is ₹ 10 per hour.
Operation and Production Example (News Letters)

Steelbird to set up helmet

manufacturing plant in Hosur.
Rajeev Kapur, MD, Steelbird Helmets
Production SOP. Electronics,
mobile production corner over
50% share of PLI disbursals.

Chennai Petroleum Corporation more than

Vedanta joins International Aluminum doubles net profit in Q3.
Institute to strengthen sustainability efforts
Caselet: Home made Cookies
• Sarah has recently started her own business of baking homemade
cookies. She sells her delicious treats at local farmer's markets and
through online orders. Sarah's cookies are known for their unique
flavors and high-quality ingredients, attracting a loyal customer base.
• In the past month, Sarah noticed a significant increase in demand for
her cookies, especially during the weekends. This surge in demand
has prompted her to reconsider her production process and
marketing strategies to meet customer expectations and maximize
profits.
Questions
1.What factors should Sarah consider when scaling up her production
to meet increased demand?
2.How can Sarah effectively market her homemade cookies to attract
more customers?
3.What are the potential challenges Sarah might face in expanding her
homemade cookie business, and how can she overcome them?
4.Discuss the importance of maintaining the quality and consistency of
Sarah's homemade cookies as she scales up her production.
5.Suggest innovative flavors or packaging ideas that Sarah can
introduce to differentiate her cookies and stand out in the market.