Production and Operations Management (POM)

Session 1: An overview

AGENDA
Production Management
Goods versus Services Operations Management Role of an operations manager Operations: Evolution & New trends

PRODUCTION MANAGEMENT

Definitions
Management which by scientific planning and regulation sets into motion the
part of an enterprise to which it has been entrusted the task of actual transformation of inputs into output Production Management is the process of effectively planning and regulating the operations of that part of an enterprise which is responsible for the actual transformation of materials into finished products. Production management actually deals with decision making related to

production processes, so that the resulting goods and services are produced in
accordance with the quantitative specifications and demand schedule with minimum cost.

 All the processes which go into the making of production. Managing factors of production Work of planning and control Capacity, location and layout planning

Productivity Management: greatest output from the least inputs

Effective utilization of resources

GOODS VERSUS SERVICES

Goods vs Services
Production of goods results in a tangible output

Food grains , laptop, projectors etc.

Delivery of services implies an act.

Health care services, teaching etc.

Goods

Service Surgery, teaching Song writing, software development Computer repair, restaurant meal

Automobile repair, fast food Retail sales Automobile assembly, steelmaking

OPERATIONS MANAGEMENT

Operations Management
Definition: Operations management is management of systems or processes that creates goods and/or provide services.

Value- added

Inputs
Raw material Labour

Transformation process Feedback

Outputs
Goods Services

Feedback Control

Feedback

Scope of operations management

Example: Airline Industry Forecasting Weather and landing condition, seat demand Capacity planning How many plane required?? Correct number at correct place Scheduling Maintenance, scheduling of pilots, flight attendants Managing inventories Food items and beverages, in-flight magazines etc. Assuring quality Safety, dealing with customers Motivating and training employees

Why study Operations Management

Organization

Finance

Operations

Marketing

Why study Operations Management

Operations

Marketing

Finance

Why study Operations Management

Relation with Finance Budgeting Economic analysis of investment proposals Provision of funds Relation with marketing Demand forecasting over short term

Information sharing about change in customer needs

and preferences

Legal

Human resource management

Public relations

Operations

Accounting

MIS

ROLE OF AN OPERATIONS MANAGER???

OPERATIONS: EVOLUTION & NEW TRENDS

Evolution
Craft production (Before Industrial revolution) Highly skilled workers use simple, flexible tools to produce small quantities of customized goods Mass Production: Low skilled workers use specialized machinery to produce high volume of standardized products Interchangeable parts: Parts of a product made to such precision that they do not have to be custom fitted Division of labor: The breaking of production process into small tasks, so that each worker performs a small portion of the overall job.

Assembly lines
Introduced by Henry Ford An assembly line is a manufacturing process in which parts are added to a product in a sequential manner using optimally planned logistics to create a finished product much faster than handcrafting type methods Importance Employment to large number of unskilled workers Increased productivity Lower prices Better standard of living

New trends
Internet, e-commerce, e-business Management of technology: the application of scientific discoveries to the development and improvement of goods and services Outsourcing: Obtaining a product or service from outside the organization Agility: The ability of an organization to respond quickly to demands or opportunities Lean production: producing high quality goods with some variations using minimal resources. Supply chain: a sequence of activities and organizations involved in producing and delivering a good or service. Six Sigma: A process for reducing costs, improving quality and increasing customer satisfaction.