Introduction– General

Management
It is the process of getting things done through
others.

The process of planning, organizing, leading and

controlling the work of organization members and
using all resources to reach the goal.

It is a distinct process consisting of different steps.

Characteristics of Management.
It is intangible

It has a purpose

It make things happen

It is an activity

It has impact on human life

 Classification of Management

 Financial Management
 Marketing Management
 Personal Management
 Human Resource Management
 Operations Management
 Entrepreneurship Management
 Quality Management
 Environmental Management
 Crisis Management
 Change Management
 Security Management
 Systems Management etc…
PRODUCTION AND OPERATIONS
MANAGEMENT
 *Organizational wealth is determined by production
 *The production system can be viewed as a frame work
of activities.
 *The production of any component or service can be
viewed in terms of a production system.
 *Production system can contain goods and services.
 *Production of goods is the fabrication of physical
objects.
 *The resources include man, money, material etc.
 *Production is any process or procedure developed to
transform input materials into finished output.
 POM
There are four recognized factors of
production
 Nature (land & other natural resources)
 Labour(Human efforts)
 Capital (factory, building, machinery,
building etc.)
 Enterprise (Activity for transformation of
production into operating units.)
 Organizational activity can be
represented by the hierarchy of
input & output diagrams.

customer (needs) Satisfied customer

organization
 Customer needs Explicit forecasts
Identification &forecasting facility

Explicit forecasts Resource plans

Analyzing & integrating facility
 Production/operating
Resource plans inputs
Supplying facility

Production/operating
outputs
inputs
Transformation facility

outputs Satisfied customer

Distribution facility
Consider the case of closed loop
of customer satisfaction

organization

needs satisfier

customer
 Scope and importance
OM is substituted for Production
Management
 It has wide scope, begins with idea
stage, and goes through development.
 manufacturing, inspection, quality control
etc.
 Production is a subset of OM
 -It is focusing on

 Product design
 Forecasting
 Facility location
 Capacity Planning
 Process Planning
 Plant Layout
 Shop Floor Management
 Resource Management
 Job Design
 Maintenance
 Quality Management
 Project Management
 Importance
 OM is playing a vital role in all branches of
Management.
 Here it will be utilizing the bulk of work
force into required output.
 It is playing a vital role in every step of
organization.
 OM has an importance in getting things
done in proper order and manner.
The determinants of a successful and
continuous operation of the
organization include the following

 Quality
 Reliability
 Transfer
 Cost --- all these of product / service
 Cash flow of the organization
 The main importance of POM is
related to

 # Utilization of plant

 # Utilization of labour

 # Utilization of stock

 # Utilization of cost.
 Operations Effectiveness
 The fundamental principle behind OM is the capacity of
transformation of input into the corresponding output as
per the requirement of the organization.
 The ultimate responsibility of creating goods and
services lies with in the operations management
personnel.
 The main effectiveness of task is the process of utilizing
the resources.
 Effectiveness is the planning for determining the future
course of action.
 Its effectiveness is in organizing and the main intention
is in administering the structure of the organization.
 Effectiveness lies in the staffing process.

 Effectiveness also has stress in the case of

directing. This is by making appropriate
suggestions and motivating factors.

 Controlling involves measuring the results of

operations, deciding weather it is acceptable or
not.
 Objectives of OM as a system.

 The main objective of OM is to create viability so as to

provide more customer satisfaction.
 It also possess the objective of covering the analysis,
supply & transformation activities.
 It has the objective of creating the operations very easily
so that the organization can survive in the market by
providing the needs and want of the customers.
 A good frame work of thinking of the functions is
created by POM
 A good OM can provide / ensure high level of
productivity through efficient conversion of inputs into
finished products.
 The 4Ps of OM Vs. Production.
 Among all managerial tasks, the
production / operations management
function is the difficult one since it
incorporates many tasks; which are
interdependent.
 In this situation all the works are divided
and assigned to the concerned employees.
 Here the complete POM function is divided
into the following categories.
 Product
 Plant
 Process
 Programmes
 People
 The Product
It is the most obvious embodiment of the interface
between marketing and production.
It is not sufficient that the customers require the product
,the organization must be capable of providing it.
There should be an agreement between the business
matters such as
 Performance
 Aesthetics
 Quality
 Reliability
 Quantity
 Selling price / production cost /operating cost.
 Delivery dates /times.
 In reaching agreement in all
these cases, cognizance must be taken of
external factors such as the needs of the
market and the existing culture; the legal
constraints and environmental demands.
At the same time there are a
number of internal constraints which must
be examined.
It is not possible for POM alone
to operate with in a variety control policy,
but must be an essential part of the
corporate strategy of the organization
 The Plant
To make the product both the building & equipment is
required. This accounts for the bulk of the fixed assets of
the organization, must match the needs of the product,
of the market, of the operator and the organization.POM
is concerned with the following queries such as
 Future possible demands
 Design & lay out of building & offices
 Performance & reliability of equipments
 Maintenance of performance
 Safety of installation & operation
 Social responsibility
 The plant continues……

To make the product both the building & equipment is required. This
accounts for the bulk of the fixed assets of the organization, must
match the needs of the product, of the market, of the operator and
the organization.POM is concerned with the following queries such
as
 Future possible demands
 Design & lay out of building & offices
 Performance & reliability of equipments
 Maintenance of performance
 Safety of installation & operation
 Social responsibility
 All these questions must be properly answered in conjunction with
the financial, political / cultural constraints imposed by the
environment with in which the business is carried out.
 All these questions must be properly
answered in conjunction with the financial,
political / cultural constraints imposed by
the environment with in which the
business is carried out.
 The process
The decision on product / service creation is
made by bringing together the technical &
organizational needs of the product, the
organization and the people in the organization.
In deciding the process it is necessary to
examine the factors such as
 Available capacity
 Available skills
 Type of production / operation
 Lay out of plant and equipment
 Safety
 Maintenance requirements
 Costs to be achieved
 The programmes
Time tables setting down the
dates /times of the transfer of products or
services to the consumer are the visible
expression of the production / marketing
interface, not simply setting down the
dates and or times, also determining cash
flow, the control of the organizational
viability.
 Transfer time tables generate
timetables for…….
 Purchasing
 Transforming
 Maintenance
 Cash
 Storage
 Transport
Even though the setting
timetable is very simple their resolution is
very complex.
 The people
Production from the very first to last
depends on the people Just like other products
humans are also vary in intellect, in skill, in
expectations etc.The production and operations
should involve in the following
 Wages / salaries
 Safety
 Condition of work
 Motivation
 Trade unions
 Education and training.
 Conclusion……

From the analysis it is clear that for the

proper functioning of the production /
operation function these parameters
namely plant,programme,people ,process
etc.should work in a proper order and
proper manner…
 Factors affecting productivity….
 Human resources
 Technology & capital investment
 Government regulations
 System design
 Machinery & design
 Skill & effectiveness of the worker
 Production volume
Increasing productivity of resources…
 Material
 Labour
 Plant equipment
 Machinery
 Land and building
 Kinds of productivity measures…
 Labour productivity
 Direct labour cost productivity
 Capital productivity
 Direct cost productivity
 Energy productivity
 Raw material productivity
 Product-process matrix
Proc Low vol. Multiple Few High vol
Str.-l Stndrzn. Pdts.low-vol pdts.l v stnd.

Jumpd
Commercial printer
Flow Void

Heavy equipment
Discon
ctd.
flow Auto assembly

Conn Sugar refinery

ctd.fl.

Cont. void
flow
 Product-process matrix
 Typical combination of process-product matrix is
represented in the above diagram.
 Representative industries represented by diagonal of the
matrix.
 Void corners indicates combinations that are
incompatible and infeasible.
 This matrix helps to understand why and how companies
change their production operation.
 As product shifts to a different stage, manufacturing
stage must also shift to another stage.
 The Operations Function
 Operations is a transformation process

 Operations is a basic function

 Operations is the technical core

Operations as a Transformation
Process

INPUT Transformation OUTPUT

process

Material Feedback Goods

Machines or
Labour Services
Management
Capital
 Transformation Processes
 Physical (manufacturing)
 Locational (transport/storage)
 Exchange (retail)
 Physiological (healthcare)
 Psychological (entertainment)
 Informational (communications)
Operations as a Basic Function

OPERATIONS

MARKETING FINANCE
Companies globalize to . . .

Take advantage of favourable costs

Gain access to foreign markets

Reduce trade barriers

Adapt to changing markets

Hourly Wage Rates
 Risks In Globalization
 Weak infrastructure

 Distinct languages, customs, trade barriers

 Inefficient distribution channels

 Instability of governments

 Poor economic conditions

 Barriers To Entry………
 Economies of scale

 Capital investment

 Access to supply and distribution channels

 Learning curves
 Issues & Trends In Operations
1. Intense competition
2. Global markets, global sourcing, global financing
3. Importance of strategy
4. Product variety and customization
5. More services
6. Emphasis on quality
7. Flexibility
8. Advances in technology
9. Worker involvement
10. Environmental and ethical concerns
 Primary Topics In Operations
Management
 Deploying strategy
 Assuring quality
 Designing products & services
 Planning the production process
 Laying out the facility
 Designing jobs & work
 Managing the supply chain
 Forecasting demand for products & services
 Production planning & scheduling
 Managerial Issues/significance
 To gain an appreciation of the strategic importance
of operations and how operations can provide a
competitive advantage in the marketplace.

 To understand the relationship between operations

and other business functions, such as marketing,
finance, accounting, and human resources.

 To develop a working knowledge of the issues

related to designing and managing operations and
the techniques to do so.
 The Strategic Importance of
Productive Systems
 1. Introduction to operations &
competitiveness

 2. Operations strategy

 3. Quality management

 4. Statistical quality control

Designing Productive Systems
 Product & service design

 Process planning & technology decisions

 Facility layout

 Human resources in operations management

 Supply chain management

Operating Productive Systems
 Capacity & aggregate production planning

 Inventory management

 Materials requirements planning

 Scheduling

 Just-in-time systems

 Waiting line models for service

improvement

 Project management
 Process Fundamentals
 Process: Any part of an organization that takes
inputs and transforms them into outputs.
 Operation / Operating System: A set of
processes or in some cases the entire
organization
 Capacity: Potential output rate (output / time)
 Utilization: Is the ratio of: amount of a resource
actually used relative to the amount available for
use.
 Raw Materials, Finished Goods,Machineries etc.
Examples of Processes within an
Organization
 Process Description Inputs Outputs

 Market research Surveys, interviews, Customer preferences,

 focus groups suggestions

 Payroll Time sheets, Paycheck

 time cards

 Customer service Complaints, Resolution of issues

 inquiries

 Hiring new employees Advertisements, New employees

 interviews, tests
 Make to order and make to stock
approaches
The purpose of record keeping is to facilitate materials control by
collecting information on the quantity of ordering and that in stock.
The management must get information in the following.

Daily operations of the stores giving details of

receipts,issues,direct deliveries etc.
Stock at each location
Allocation of stocks for certain projects or jobs
Review and provisioning of stocks
Order performance giving details on quantity
ordered,supplier,delivery promised,progress chasing action.
Stock consumption history and changes in consumptions rates.
 Facility Location
A location /a plant is a place where men,materials,equipment
machinery etc.are brought together for manufacturing products.
The various factors affecting the location facility are the following…
*Nearness to raw materials
*Transport facilities
*Nearness to Markets
*Availability of labour
*Availability of fuel and power
*Availability of water
*Climatic conditions
*Financial and other aids
*Land
*Community attitude...
 Layout
 Layout means the deposition of the various facilities and services of the
plant with in the area of the site selected previously. The main objectives of
a good plant layout are listed below…
@Material handling and transportation is minimized and efficiently controlled.
@Work stations are designed suitably and properly.
@Suitable spaces are allocated to production centers and services centers.
@The movements made by workers are minimized.
@Waiting time of the semi-finished products is minimized.
@Working conditions are safer, better and improved.
@Plant maintenance must be simpler.
@There is increased productivity and better quality.
@A good layout permits materials to move through the plant at the desired
speed with lowest cost.
 Principles of a plant layout
For the guidance of plant layout Engineers, many principles
have been developed which are essential for the smooth
functioning of the organization. A few sound principles
of plant layout are briefed here…
1.Integration
2.Minimum movements and material handling
3.Smooth and continuous flow
4.Space utilization
5.Safe and improved environments.
6.Flexibility
 Process layout
It is the functional layout characterized by keeping similar machines or
operations at one location.
Eg. All lathes will be at one place, all milling machines at one place,
here machines of the same operations are placed at the nearest
place.
Advantages
# Wide flexibility exists as regards allotment of work to equipment and
workers.
# Better utilization of available equipments.
# Time consumption.
# Better product quality.
# Works becomes more interesting.
# Workers in one section are nor affected by the nature of the
operations carried out in another section.
 Product layout
It is also known as line / type layout. Here various operations are
performed in a specific sequence and the machines are placed along
the product flow line. This type of layout is preferred in continuous
operation.
Advantages:
 Less space requirements in for the same volume of production.
 Automatic material handling.
 Less in process inventory.
 Product completes in lesser time.
 Better co-ordination and simple production.
 Smooth and continuous work flow.
 Less skilled may serve the purpose.
 Combination layout
A combination of both product and process layouts
combines the advantage of both the types
layouts. A combination layout is possible where
an item is being made in different types and
sizes. Here machinery is arranged in a process
layout but the process grouping is then arranged
in a sequence to manufacture various types and
sizes of products.
 Flow charting
One of the important phases of plant layout
is to achieve an optimum effective flow of
materials. The principle of minimum
movements reduces material handling
costs, in process inventory and space for
processing. Here supervision and control
becomes easier.
 Flow charting
A flow process chart is a graphic tool to analyze and categorize different activities so that
the flow of the product throughout the overall production process is represented.
It is analyzing interstation activities, attempting to the flow throughout the overall
production process.
These charts provide a broader level of analysis. Here the five categories of product
movements are listed….

*operation

*transportation

*storage

*inspection

*delay
 The different flow patterns and its
characteristics are listed below.
1. Line flow ---simplest, materials enters at one end and
leaves at the other end.
2. L-Type flow --- Resembles line flow and is used where
more wide but less long as compared to line flow.
3. Circular type ---Preferred for rotary systems. Different
work stations are located along the circular path.
4. U-Type --- Preferred for square shaped production.
5. S –Type
6. Combination of S and line flow
7. Combination of U and line flow pattern etc.
 Performance measures in
operations….
An operation measurement system has the
following basic components.
--A statement of well defined objectives.
--A list of the units of output of the
organization.
--Standard time, standard cost, raw material
use etc..
Productivity concepts and measures.
Productivity of a production system is analogous to
the efficiency of a machine. This is actually used
to increased the efficiency of a machine, it is
also aimed to increase the productivity within
the available resources. It is actually the ratio
between output and input.
Factors affecting productivity are…
@ Human resources.
@ Technology
@ Govt.regulations
 Productivity measures…
 Labour productivity
 Direct labour cost productivity
 Capital productivity
 Direct cost productivity
 Energy productivity
 Raw material productivity
 Performance measures in
operations…...
A productivity measurement system has certain important
components.
*A statement of the objectives of the organization
*A list of the units of the output of the organization.
*Standard time, standard cost, raw materials use,
equipment use, tool use etc.
*A method of building a proper budget.
*A method of computing the productivity index.
*A means of comparing output forecasts.
*A means of adding resource usage data and associated
productivity indexes.
 Utilization……..
This is measuring the output with the
corresponding input. This is actually
measuring the utility of the input
resources and it is used to identify the
extent to which the input has turned to
the out put. This in turn measures the
efficiency of the system…..
 Cycle time……
It is the time elapsing between completed
units coming off an assembly line
The balancing loss (Lj)at a particular station
“j”is the balance delay (Dj) represented as
a percentage of the cycle time( C) as
Lj=(Dj/C)X100%
={(C-Sj)/C}X100%
Productivity concepts and measures…
Productivity of a production system is analogous to the efficiency of a machine.Incresing
productivity is aimed at to raise the efficiency of a machine
It can also be the ratio between input and the output.
Purpose to increase productivity are as follows…

1.For management
*To produce good earnings.
*To clear the debts.
*To sell more
*To stand better in the market.
2.For workers
*High wages.
*Better working conditions.
*Higher standard of living.
*Job security.
3.For customers
*Reduced price and better quality of the product.
 Through put
Through put is analyzing the amount of material involved or required in
the production or manufacturing process. It implies ,getting more
number of goods {outputs} from the same amount of resources
{input}.
Through put can include the following categories of input materials.

*Material
*Labour
*Plant
*Equipment
*Machinery
*Land
*Building etc…..
 Process Fundamentals
 Process: Any part of an organization that takes inputs
and transforms them into outputs.
 Operation / Operating System: A set of processes or in
some cases the entire organization
 Capacity: Potential output rate (output / time)
 Utilization: Is the ratio of: amount of a resource actually
used relative to the amount available for use.
 Raw Materials, WIP, Finished Goods
 Process Fundamentals
Continued
 Throughput time = Average time for a unit
to move through the system

 Cycle time = Average time between

completion of successive units

.Throughput rate = 1\Cycle time