SUMMARY
BBA N- 403
PRODUCTION MANAGEMENT
UNIT-1
Meaning of Production system
Production system is the means by which we transform resource inputs to create useful goods
and services as outputs. It involves three types of decision making
(1) Strategic decisions: related to products, processes and manufacturing facilities. these
decisions are major ones and have long term significance for the organization.
(2) Operational planning and control decisions: These are short term decisions which are
necessary in order to ensure ongoing production of goods and services and provide profits for the
organization.
(3) Tactical decisions: These decisions concern the day today activities of workers, quality of
products and services, production and maintenance of machines.
Mechanism of Production system
Inputs
Transformation Process
Outputs
Material
Labor
Operations management
Machines
System design
Goods
Capital assets
Operation planning and control
and
Capital money
Services
Energy
Facilities
Information
Control Sub- system
Manufacturing system
A combination of all activities and operations to produce some goods and services is known as
manufacturing systems.
Manufacturing system can be divided into two categories –
(a) Intermittent system
(b) Continuous system
Intermittent system
Intermittent systems are those where the production facilities are flexible enough to handle wide
variety of products and services.
Characteristics are as follows
(i) It is flexible to suit production varieties
(ii) Most products are produced in small quatities
(iii) Machines and equipments are laid out by process focused system
(iv)Physical facilities are organized around the nature of processes
(v) Personnel are specialized by generic process type.
(vi) In process inventory is large
(vii) Workloads are generally unbalanced
Intermittent system of production can be classified into two categories:

Job production

batch production
Job Production

Whole product is taken as a single operation

versatile and skilled labour is required

high capital investment

high unit cost of production

Control operations are relatively simple
Batch Production

Items are produced to definite customer orders and not for stock

more specialized labour is required

low capital investment
Continuous system
In this system the items are produced for the stocks and not for specific orders. Characteristics of
continuous system are as follows:(i) The product in continuous system is standardized.
(ii) Material should be as per specifications and delivered in time.
(iii) There must be continuity of demand
(iv) Continuous system is more focused when product is demanded in more volume.
(v) All operations must be balanced
(vi) Appropriate plant and machinery must be provided
(vii) Work must confirm to quality standards
Continuous system can be of two types
a)
Mass production
b)
Process production
Mass production: - It is generally used to manufacture sub assemblies or particular parts of an
item. These parts are assembled together by the enterprise to get a final product. Standardization
is fundamental characteristic of this system.
Process production:- This method is used to produce those items whose demand is continuous
and high e.g. petroleum products,chemical industries,medicines etc.
Product development and design
“A product is a bundle of physical service and symbolic particulars expected to yield satisfaction
or benefits to buyer”. here are two types of products:a)
b)
Consumer products
i.
Convenience goods
ii.
shopping goods
iii.
speciality goods
Industrial products
Definition of Product Development
“Product development is that system through and by which new products are launched in the
markets to fulfill the expectations of existing markets”
Principles of Product development

Standardization

Simplification

Specialization
Stages of New Product Development
Creation of new
product ideas
Commercializatio
n of product
Evaluation of
ideas
Decision to
accept the
project
Testing the
product
Failure of New product

Inadequate market analysis

product defect

higher cost

poor timing

competition

insufficient marketing effort

inadequate sales forecast

weakness in distribution
Definition of Product design
“Product designs provide much needed variety in terms of the features and the appearance. An
appropriate product design also helps an organization to compete in the market place on the basis
of cost, quality and time”.