PRODUCTION & OPERATION MANAGEMENT
(BBA632)
Twinkle Singh
twinkle.singh@christuniversity.in
MISSION
VISION
CORE VALUES
CHRIST is a nurturing ground for an individual’s holistic development to
make effective contribution to the society in a dynamic environment
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Faith in God | Moral Uprightness
Love of Fellow Beings
Social Responsibility | Pursuit of Excellence
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Course outline
1. INTRODUCTION TO PRODUCTION AND OPERATIONS
2. PLANT LOCATION AND LAYOUT
3. MATERIALS MANAGEMENT AND HANDLING
4. PRODUCTION PLANNING AND CONTROL
5. QUALITY CONTROL TECHNIQUES
6. WORK, TIME AND MOTION STUDY
7. MAINTENANCE AND WASTE MANAGEMENT
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Prescribed Textbook
●
S N Chary (2019). 6th Edition, Production and Operations
management. McGrawHill Publications.
●
Aswathappa, Sudarsana Reddy, Krishna Reddy, (2009)
Production and Operations Management, Himalaya
Publishers
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Unit-1
INTRODUCTION TO PRODUCTION AND OPERATIONS
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Systems
Components of system
● Two types of control:
○ Proactive
○ Reactive
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Business System
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Production / Operation System
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What is operation management (OM)?
Operations management (OM) is defined as the design, operation, and
improvement of the systems that create and deliver the firm’s primary
products and services
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EXAMPLES OF OPERATIONS:
Operations
Examples
Goods Production
Farming, Mining, Construction, Manufacturing, Power Generation
Storage / Transportation
Warehousing, Trucking, Mail Service, Moving, Taxis, Buses, Hotels,
Airlines
Exchange
Retailing, Wholesaling, Banking, Renting, Leasing, Library, Loans
Entertainment
Films, Radio, Television, Concerts, Recordings
Communication
Newspapers, Radio and Television, Newscasts, Telephone,
Satellites
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The Importance of Operations Management
●
Synergies must exist with other functional areas of the
organization
●
Operations account for 60-80% of the direct expenses that
burden a firm’s profit.
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The Historical Development of Operations Management
Year / Period
of Concept
Concept/Tools and System Used
(14-16) Century
Evolution of Production system
18th Century
New Technology for Production Process Management
Adam Smith and
Charles Babbage
1895
Scientific Management Principles (Work Study Motion) Study
for Psychological Factors Activity Scheduling Chart, Gantt
F.W.T. Taylor, Frank
& Lillian, Gilbreth
Henry
1935
Hawthrone Studies of Worker Motivation
Elton Mayo
1950’s
Operation Research for Decision Making Long term Medium
term, Short term decision by Critical Path Method (CPM),
Program Evaluation and Review Technique (PERT), WaitingLine Theory
Many Researcher
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Developers/
Originators
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Year / Period
of Concept
Concept/Tools and System Used
Developers/
Originators
1970’s
Just In Time (JIT), Total Quality Control (TQC) Kanban System,
CAD/CAM, Computer Integrated Manufacturing (CIM) Flexible
Manufacturing System (FMS)
IBM, Joseph Orlicky,
Oliver Wieght
1980’s
New Technology for Production Process Management
Toyota
1990’s
• Total Quality Management (TQM), Concurrent (COM),
Engineering, Value Engineering
• Business Process Engineering
• Supply Chain Management
Asqc(U.S.). IOS,
(England), Michael
Hammer, Oracle, SAP
(Germany)
2000’s
Logistics, Enterprise Resource Planning (ERP), E-Commerce,
E-Business
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Three Major Phases
Craft Manufacturing
Craft manufacturing describes the process by which skilled
craftspeople produce goods in low volume, with a high degree of
variety, to meet the requirements of their individual customers.
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Three Major Phases…
Mass Production
In many industries, craft manufacturing began to be replaced by mass production in the
19th century. Mass production involves producing goods in high volume with low variety –
the opposite of craft manufacturing.
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Mass Production (Innovation 1)
Standardization:
An important innovation in operations that made mass production possible was the
system of standardized and interchangeable parts known as the ‘American system of
manufacture’, which developed in the United States and spread to the United Kingdom
and other countries.
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Mass Production (Innovation 2)
Scientific Management:
● A second innovation was the development by Frederick Taylor (1911) of the system of
'scientific management’, which sought to redesign jobs using similar principles to those used in
designing machines.
The scientific management approach propounded by F.W. Taylor is based upon the
following four principles:
1.
2.
3.
4.
Science, Not Rule of Thumb:
Harmony, Not Discord
Cooperation, Not Individualism:
Development of Each and Every Person to His / Her Greatest Efficiency and Prosperity:
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Mass Production (Innovation 3)
Moving Assembly Line:
A third innovation was the development of the moving assembly line
by Henry Ford. Instead of workers bringing all the parts and tools to a
fixed location where one car was put together at a time, the assembly
line brought the cars to the workers.
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Three Major Phases…
Modern Period
During the 1970s, markets became highly fragmented, product life cycles reduced
dramatically and consumers had far greater choice than ever before.
(JIT, TQM, SCM)
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Modern Period..
The different approaches for managing operations that are currently
popular include:
●
●
●
●
Flexible specialization (1980)
Lean production (1990)
Mass customization (1993)
Agile manufacturing (1994)
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The Transformation Model
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Input
●
Some inputs are used up in the process of creating goods
or services; others play a part in the creation process but
are not used up. To distinguish between these, input
resources are usually classified as:
•
•
Transformed resources
Transforming resources
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Three types of resource
that may be transformed
in operations are:
●
●
●
Materials
Information
customers
The two types of
transforming resource
are:
●
●
Staff
Facilities
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Activity 1
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Output
●
●
●
The principal outputs of a doctor's surgery are cured
patients; the outputs of a nuclear reprocessing plant include
reprocessed fuel and nuclear waste.
Many transformation processes produce both goods and
services. For example, a restaurant provides a service, but
also produces goods such as food and drinks.
Transformation processes may result in some undesirable
outputs (such as nuclear waste)
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Transformation Process
A transformation process is defined as a user of resources to
transform inputs into some desired outputs
TRANSFORMATIONS
 Storage--warehousing
 Physical--manufacturing
 Locational--transportation
 Physiological--health care
 Informational--telecommunication
 Exchange--retailing
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Transformation Process
One useful way of categorizing different types of
transformation is into:
○
○
○
○
manufacture
transport
supply
service
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FEEDBACK
Feedback information is used to control the operations
system, by adjusting the inputs and transformation processes
that are used to achieve desired outputs.
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RANDOM DISTURBANCES
●
It is unplanned or uncontrollable environmental influences.
It causes planned and actual output to differ.
●
Examples
●
○
○
○
Inflation
Equipment breakdown
Government controls
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Activity 2
Organization
Inputs
Outputs
Restaurant
MBA Institute
Refrigerator Mfc.
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Random
Disturbances
Feedback
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Boundary Of Operations
Suppliers
Customers
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Environment
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Objectives of Production Management
●
Right Quality
●
Right Quantity
●
Right Time
●
Right Manufacturing Cost
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PRODUCT & SERVICES
● Services
● Products
○
○
Tangible products that customers
can see, hear, smell, taste, or
touch.
Purely Manufacturing
organizations do not just sell a
product but provides services
also.
○
○
Intangible tasks that satisfy the
needs of consumer and business
users
Pure service industries such as
banks , hospitals , education and
consultancies also often provides
a product.
Some organizations may be considered as hybrid
Example: Restaurant, Flying in an aeroplane
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Distinction between Manufacturing Operations and Service
Operations
Following characteristics can be considered for distinguishing manufacturing
operations with service operations:
●
●
●
●
●
●
Tangible/Intangible nature of output
Consumption of output
Nature of work (job)
Degree of customer contact
Customer participation in conversion
Measurement of performance.
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A Framework for Managing Operations
● PLANNING
○ Activities that establishes a course of action and guide future decision-making is planning.
● ORGANIZING
○ Activities that establishes a structure of tasks and authority.
● CONTROLLING
○ Activities that assure the actual performance in accordance with planned performance.
● BEHAVIOUR
○ Operation managers are concerned with how their efforts to plan, organize, and control
affect human behaviour.
● MODELS
○ RBV, OIPT, Breakeven analysis, aggregate planning models, decision tree etc
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Objectives of Operations Management
Customer Service
Resource Utilization
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The twin objectives of operations management
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SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
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SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
1. Location of facilities- The purpose of the location study is to find the optimal location that will
results in the greatest advantage to the organization.
2. Plant layouts and material handling- “Plant layout is a plan of an optimum arrangement of
facilities including personnel, operating equipment, storage space, material handling
equipments and all other supporting services along with the design of best structure to contain
all these facilities”.
○ ‘Material Handling’ refers to the ‘moving of materials from the store room to the machine
and from one machine to the next during the process of manufacture’.
3. Product design- Product design deals with conversion of ideas into reality. Every business
organization have to design, develop and introduce new products as a survival and growth
strategy.
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SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
4.
Process design- Process design is a macroscopic decisionmaking of an overall process route for converting the raw material
into finished goods.
5.
Production and planning control- Production planning and
control can be defined as the process of planning the production in
advance, setting the exact route of each item, fixing the starting
and finishing dates for each item, to give production orders to
shops and to follow up the progress of products according to
orders.
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SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT……
6. Quality control- Quality Control (QC) may be defined as ‘a system that is
used to maintain a desired level of quality in a product or service’.
● The main objectives of quality control are:
○
○
○
○
○
○
○
○
To improve the companies income by making the production more acceptable to the
customers i.e., by providing long life, greater usefulness, maintainability, etc.
To reduce companies cost through reduction of losses due to defects.
To achieve interchangeability of manufacture in large scale production.
To produce optimal quality at reduced price.
To ensure satisfaction of customers with productions or services or high quality level, to
build customer goodwill, confidence and reputation of manufacturer.
To make inspection prompt to ensure quality control.
To check the variation during manufacturing.
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7. Materials management- Materials management is that aspect of management
function which is primarily concerned with the acquisition, control and use of
materials needed and flow of goods and services connected with the
production process having some predetermined objectives in view.
● The main objectives of materials management are:
○ To minimise material cost.
○
To purchase, receive, transport and store materials efficiently and to reduce the related
cost.
○ To cut down costs through simplification, standardisation, value analysis, import
substitution, etc.
○ To trace new sources of supply and to develop cordial relations with them in order to
ensure continuous supply at reasonable rates.
○ To reduce investment tied in the inventories for use in other productive purposes and to
develop high inventory turnover ratios.
8. Maintenance Management
○
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MANAGING GLOBAL OPERATIONS
●
The term ‘globalization’ describes businesses’ deployment of
facilities and operations around the world.
●
Globalization can be defined as a process in which geographic
distance becomes a factor of diminishing importance in the
establishment and maintenance of cross border economic, political
and socio-cultural relations.
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MANAGING GLOBAL OPERATIONS
There are four developments, which have spurred the trend toward globalization. These
are:
● 1. Improved transportation and communication technologies;
● 2. Opened financial systems;
● 3. Increased demand for imports; and
● 4. Reduced import quotas and other trade barriers.
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