CHAPTER 1

Introduction to Production
and Operations Management

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 History of Production and
Operations Management
The successful creation of the steam engine by James Watt
(1736–1819), a Scottish inventor and mechanical engineer,
served as a harbinger of the industrial revolution in Great Britain
and the rest of the world.

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 History of Production and
Operations Management
Charles Babbage (1772–1871), a British inventor, was a firm
believer of the merits of division of labour. He promoted the idea
of profit sharing with workers based on their productivity and
encouraged the use of employee suggestion schemes.

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History of Production and
Operations Management
Robert Owen (1771–1858), a British
social reformer, is remembered for his
reforms regarding child labour in
factories, providing meals in the
factories to on-the-job workers, and
creating suitable housing facilities for the
workers.

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History of Production and
Operations Management
Thomas Alva Edison (1847–1931), an
American inventor and businessman, made
several significant inventions and had set
up the world’s first industrial research
laboratory. Some of his prominent
inventions are the long-lasting electric
bulb, motion picture camera, and the
phonograph.

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History of Production and
Operations Management
Frederick Winslow Taylor (1856–1915),
an American mechanical engineer, is
aptly hailed as the father of scientific
management. His book The Principles
of Scientific Management was
published in 1911 and is regarded a
cornerstone of management thought. He
is famous for his stop watch time
studies, in which he measured the time
taken by workers in performing various
parts of a task.

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History of Production and
Operations Management
Henry Ford (1863–1947), an
American entrepreneur, engineer
and innovator, is best known for his
invention of the modern assembly
line. In his factory, Ford
implemented several concepts of
Frederick Taylor, including
standardized and interchangeable
parts, precision manufacturing, and
division of labour.

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The Product/Process Continuum

Automobile
Photocopier retailers Banks Consultancies
Automobile manufacturers &
manufacturers service providers Restaurants Airlines Undertakers

Product Process
orientation orientation

Organizations on a
Product/Process Continuum

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The Transformation Process
Quality of inputs Quality of outputs
monitored monitored

Random disturbances

INPUTS Transformation OUTPUTS

Process

Feedback Mechanisms

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 The Transformation Process
For a Service Organization (An MBA Institute)

Random disturbances
• Strikes of students,
Quality of
Quality of teachers or staff
• Undue interference of outputs
inputs monitored
Raw minds monitored the government in the
(students) working of institutions

Teachers
Class rooms Enlightened students with:
Transformation • Good communication skills
Computer lab Process • Pleasant personalities
• Leadership qualities
Library • Good analytical ability
Projectors • Team spirit
(OHP, • Decision making abilities
LCD etc) • Computer skills
Administrative
staff Feedback Mechanisms
• Success at placement interviews
• Grades obtained in examinations
INPUTS • Rising career graph of alumni in the industry OUTPUTS
• Number of applications for admission
in the institute
• Ratings of surveys

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 The Transformation Process For a Hybrid
Service & Manufacturing Organization
(A Restaurant)
Random disturbances
• High turnover of chefs,
Quality of
Customers Quality of waiters, etc.
• Inflation outputs
Building inputs monitored
monitored • Government’s taxation
Chef policy
Vegetables
Furniture
Customers satisfied with:
Mutton, Transformation • Good preparation of the
chicken, Process food
pork, • Pleasant behavior and
etc. personality of the waiter
Cooking oil,
• Genuine prices charged
Spices, etc.
Waiters
Manager
Feedback Mechanisms
• Rising Revenues
INPUTS • Repeat Customers OUTPUTS
• Appreciation of customers

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 The Transformation Process For a Purely
Manufacturing Organization (A Refrigerator
Manufacturer)
Random disturbances
• High turnover of workers
Quality of
Machines & Quality of and managers
• Recession outputs
Equipments inputs monitored
monitored • Government’s taxation
Building policy
Components, • Strikes instigated by trade
parts, sub- unions
assemblies, etc. Customers satisfied with:
Transformation • Good cooling performance
Workers Process • Less consumption with
electricity
Office • Good after-sales service
infrastructure • New advanced features
(computers,
furniture, etc.)
Packaging
material
Feedback Mechanisms
Capital • Rising sales volume
• Lesser customer complaints
Managers
• Positive response of customers in
the feedback forms
INPUTS •Productivity OUTPUTS

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 Production & Operations
Management (POM) Defined
Production & Operations Management is defined as the design,
operation, and improvement of the transformation process,
which converts the various inputs into desired outputs of
products and services.

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 Operations Steps in the
Strategy
production/operations
New Product process from the point of
Development
view of an entrepreneur
Business Process Outsourcing
and Off-shoring

Facility Facility Facility

Location Layout Capacity
Planning Planning Planning

Project
Management

Inventory Materials Total

Management Requirement Productive
for Planning (MRP)/ Maintenance
Independent Just-In-Time (JIT) (TPM)
Demand System/ Supply
Items Chain Mgt. (SCM)

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 Steps in the production/operations process
from the point of view of an entrepreneur

Aggregate Production/
Operations Planning

Work Design Operations Quality

Scheduling Management

Demand
Forecasting

Service
Operations
Management

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 Process Design

Types of Processes

Continuous Semi-continuous Intermittent Project

Process (Repetitive/Assembly) Process
Process

Batch Process Job Shop

Types of Processes

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 Green Operations
Management
• Carbon emission is a measure of the amount of carbon dioxide
gas emitted.
• One tonne of carbon dioxide emission is treated as one unit of
carbon credit.
• A company reducing air pollution below permissible limits can
sell carbon credits to another company that is exceeding air
pollution beyond the permissible limits.
• Avoidance or reduction to use of fossil fuels is the way
forward to minimize carbon emissions.

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 Green Operations
Management
• The building designs should allow as much natural light as
possible inside the building so as to reduce the power
consumption during day time.
• Major hotel chains have redesigned the water-flushing systems
in toilets that consume much less water. They encourage their
guests to reuse towels, bed sheets, and so on, to help reduce
consumption of water and energy (in washing machines) used
for washing.

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 Green Operations
Management
• Recycling is increasingly becoming an important mechanism
to reduce raw material consumption, energy, and pollution by
processing the seemingly waste products into usable products.
• It is based on the premise that the resources required to
produce a product from scratch would be much more
compared to recycling the products.

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 Automation
State-of-the-art fully Machines take Behavioral problems in
automated plants exactly the humans like boredom,
increase the market same time in frustration, fatigue, etc.
value of the firm/ repetitive tasks can be avoided by
improve client base using machines
in international
markets
Industrial relations
problems like
More reliable
Advantages strikes, lockouts,
and consistent
etc. can be avoided
performance
than that of
humans Automation

Usually more Loss of

expensive Disadvantages creativity on
than the the part of
human work workers due
force to inflexibility
in automation

Less flexible Leads to

than the unemployment/
humans; even retrenchment of
small changes the labor force
in the process
are expensive

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 Emerging Role of the Production &
Operations Manager in India Today
To act as internal quality
To take part in To implement total
auditors in certification
strategic decision productive
programmes like
making of the maintenance (TPM)
ISO 9000
organization programme

Increased attention
to technology To take part in the
management in view implementation & use
of JVs of MNCs with of ERP software in the
domestic companies organization
New
To act as supply Responsibilities To automate the
chain managers in of Operations processes according
forging long-term Managers to the requirements of
strategic the organization
relationships with
suppliers To enhance the R & D
effort of the
To act as a member organization for
of the concurrent becoming self-reliant in
engineering team developing new
in new product technologies
design
To implement the To oversee timely To take care of issues
environmental and implementation of projects
To take decisions relating to services
pollution norms (like
regarding operations
established by the commissioning of facilities,
outsourcing/ off- management
government from launching of new products/
shoring of business time to time services, etc.) in view of the
processes increased competition

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