Management control of

production and operations

Prof. PUTTU GURU

PRASAD
FACULTY MEMBER
INC GUNTUR
pgp4149@gmail.com
 Introduction
Production and operations are tightly
knitted activities which influence an
organization’s performance. For
manufacturing units, the conversion of
inputs to outputs is viewed as the
production activity
For example, milk is the raw material
used to produce curd, milk powder ,
and butter milk.
 Introduction
The various activities involved in the
production process like heating,
cooling, and freezing are called
production operations.
The non production operations included
the procurement of milk and
transportation of curd , milk powder ,
and butter to the customers.
 Introduction
When production and operations are
combined and synchronized, they
Are classified as supply chain
management . The goal of supply
chain Management is to ensure that
the organization produces those
products which are being demanded
by the market by the right quantities.
 Control of production and operations -
For example , in the case of Frito
lays , potatoes are the raw
material and the spices and oil
used in the production process
are the consumables.
Land is used to house the factory
where the production process is
carried out . Various machine are
used for cleaning and peeling the
potatoes, and cutting them into
different shapes and sizes.
 Control of production and operations
The employees supervise the
production process and are the human
resources involved in the production
process.
A variety of information like the recipe
for each type of potato chip and
automated settings on the plant which
control the production process are
examples of information in the
production process.
 Control of production and operations
The objective of controlling the
production activities or
operations is to ensure optimal
utilization of production
capacities, minimize wastages
and reduce down time of
machines
 Control of production and operations
Take for incidence , hospital, here, the two
important control parameters would be To
ensure that there is a doctor available as
and when the patience come in for
Treatment and the wait time is low. And
another control parameter would be to
Synchronize the mix of doctors available
with the time of the day when they are
needed
 Control of production and operations
For example, those belonging to the out
patience category generally coming
during Morning hours and evening hours.
Therefore there are more doctors and
specialist Available like eye specialist,
gynecologist , and skin specialist during
the out patience Hours. The control
parameters should also address the
question of which patience Should get
priority
Production controls
The production controls dependent on two broad
variables. The nature of the Production process
and the degree of mechanization involved in the
production Process.

Process production of carbonated drinks like

sprite or Fanta, the controls would be With
respect to the quantity of water to be channelize
in the production process, the Quantum of the
soft drinks concentrate to be added and the
machine settings with Reference to the capping
of the bottles and the carbonation process
 Production controls
Discreet production , to make a
ceiling fan the blades, the metallic rod ,
the motor ,The central hub in which the
motor rests, the plastic molding in the
form of a cup Are all produced or
procured, and electrical wires are
integrated into the product. All these
raw materials and components are
assembled together to form a fan.
 Measuring production performance
Productivity is a measure of the
organizations efficiency in terms of
ratio of Out puts to inputs. The higher
the numeral value of this ratio, the
grater the Efficiency. It is an important
tool for mangers because it helps them
track Progress in terms of the efficient
use of resources in producing goods
and Services
Measuring production performance

Labor productivity= goods

produced/ man-hours spent
Material productivity = goods
produced/ material used
Total productivity = goods
produced / labor+ capital+ energy+
technology+ materials
Production control reports
Decision making in production control
often depends on the appropriate use of
quantitative inputs in a timely manner.
For example the queuing theory model
can be used to find out the probability of
machines breaking down on a given
day using various inputs like the
number of machines, their average
breakdown rate, and the replacement
time required.
 Production control reports
Some of the input parameters that are
used in this model are : number of
machines that can be used for backup,
number of workers who can repair the
machines, the mean time between
failures (MTBF) , the mean repair time,
cost of workers who can repair the
machines, and cost in terms of
production that has been lost due to the
breakdown.
 Production control reports
For effective production control, management
requires regular reports on Various
production-related parameters and activities
like

Production efficiency report

Production planning report
Daily production report
Downtime analysis report
Shift handover report
 Operations controls
The purchase operations comprise activities
like identification of vendors comparing
vendors, placing orders with vendors, and
scheduling and monitoring deliveries from
the vendors.
The objective of the purchase operations is
to ensure timely supply of various Materials
required to conduct business, whether it is
raw material or packaging material. It also
aims at procuring the materials at optimal
cost and quality
 Quality controls
In an air conditioner, the speed and direction
of air flow reflects the circulation
capability of the air conditioner, the tike it
takes to cool a room of a given
dimension reflects the quality of the
compressor , the power which it consumes
in an hour reflects the quality of the electrical
design and compressor design, and
the space which it occupies reflects the
quality of the physical design
 Inventory control
The objective of inventory control is to
maintain stocks of material at various
stages of production in the desired
quantities so that production can
continue uninterrupted by shortages,
while at the same time , keeping the
overall cost of production to the
minimum.
 Purchasing control
These controls will track the costs of material being
procured, the effectiveness of the vendors in terms of
the quality and timeliness of supplies, and rejection
rates.
A centralized purchasing systems allows pooling of all
the requirements so that The benefits of bulk
purchasing can be realized in a decentralized
purchase in systems, the procurement mangers of
different departments purchase the needed material
according to their specific requirements. This
methods gives each department the flexibility to alter
its purchasing policy based
on its specific requirements.
 Supply chain management
The main goal of supply chain
management is to completely
synchronize every supply chain cycle
with the customer's final demands.
It aims at controlling and monitoring the
supply chains of the vendors as well.
Take for instance, a car manufacturing
company called Indus.
 Supply chain management
It procures seats from a vendor V, who , in
turn, buys foam from X, the wheels and
bearings used in seats from Y, and the fabric
used in the seats from Z. if the demand fro
Indus cars go up, its ability to meet the
demand will depend on its Ability to procure
the seats in an adequate number from V,
which in turn, will depend On the abilities of
X,Y and Z to fulfill the requirements of V.
hence it is important to monitor the supply
chins of the vendors also.
 Performance assessment of the Supply
chain management

• Inventory turnover
cycle time
customer order
promised cycle time
customer order actual
cycle time
cash to cash cycle time
supply chain cycle time
defects per million
opportunities
Information systems in production and
operations management
Operations information systems are now
designed to automatically initiate, plan, and
execute the logistics of stock movement from
the warehouse to the braches or the
customer locations. Third party transportation
companies like DHL also facilitate the
Tracking of the exact location of the shipment
at any given point of time, en route
to the destination