Production & Operations Management MBG301

Content: Unit 1
➢ Productions & Operations : Introduction & Definition
➢ Productions & Operations in view of Manufacturing function
➢ Productions & Operations management
➢ Productions & Operations functions
➢ Difference between Productions & Operations/ Manufacturing & Services
➢ Role of Productions & Operations manager

Text Books:

Productions & Operations management by K Ashwattappa

Productions & Operations management by Panneerselvam

Productions & Operations management by S N chary

1 Prepared by Ms.Hitaishini Honnappa , Department of ME, GST, Bengaluru

 Production & Operations Management MBG301

Introduction:
The last century, has seen an upsurge in industrial activity. Industries are producing variety of
components. Consumerism has been on a steep rise. Thus, it is obvious that a lot is being demanded of
Productions & Operations management function. The responsibility of that function is to see that required
products and devices are of a good quality with acceptable price & delivered at a time and place to the
customer desires. In order to have differentiation and unique selling proposition(USP) a firm & its
Productions & Operations function has to make a continous effort. thus the support of Productions &
Operations function plays key role to keep the firm in competitive edge.

Production: Production is the process by which raw materials & other inputs are converted into finished
goods.

Operations: Operations transform resource or data inputs into desired goods, services, or results, and create
and deliver value to the customers. Two or more connected operations constitute a process.

Functional subsystems of Organisation:

An organisation mainy consists of four functional subsystems viz., Marketing, Finanace, production &
personnel.

• The marketing function of an organisation aims to promote its products among customers which
helps it to obtain substantial sales orders.
• This is communicated to production subsystem, which concerned with management of physical
resources required for the production of an item/ provision of a service.
• The finance function provides authorization & control to all other subsystems to utilize money more
economically through a well designed mechanism.
• The personnel function is a support function which plans and provides man power to all other
subsystems of the organization & to itself. It also monitors performance of employees.

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 Production & Operations Management MBG301

A complete integration among all functional subsystem of organization is essential for their effective
functioning & overall improvement of results.

Production as a system :

1. Production system
2. Conversion sub system
3. Control sub system

Production system: receives inputs in the form of materials, personnel, capital, utilities & information.
These inputs are changed in a conversion sub system into desired products & services, which are called the
outputs. A portion of output is maintained in the control sub system to determine if it is acceptable in
terms of quantity, cost , quality & provides necessary corrective actions.

Production as an Organizational function:

The process of conversion is at the heart of the production function & is present in some form in all
organizations. Thus every organization irrespective of its purpose, has a production function where departs
& personnel play a central role in achieving the objective of the organization.

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 Production & Operations Management MBG301

Decision making in Production

The decisions made by operations managers about the activities of production systems tend to fal into three
general categories:

Production/ Operations Management:

Production / Operations Management is defined as the process which transforms the inputs/resources of an
organization into final goods (or services) through a set of defined, controlled and repeatable policies.

By policies, we refer to the rules that add value to the final output. The value added can be in different
dimensions, but the industrial set-up is mostly concerned with the duo of quality and throughput.

4 Prepared by Ms.Hitaishini Honnappa , Department of ME, GST, Bengaluru

 Production & Operations Management MBG301

Pre-defined objectives of production management:

• right quality,

• right quantity,
• right time and
• right cost
The objectives of operations management are:

• Almost all the things in operation management converge towards a single focal point: the customer.
Customer satisfaction is a barometer of things moving in the right direction.
• Resource utilization is equally imperative — the process of obtaining the output from input through
the path of least resistance, i.e. through least wastage and maximum utilization of resources.
• Scoring high on one usually leads to deterioration in performance of the other (utilization v/s customer
service), and their balance is usually the nightmare of an operations manager — but is definitely a
worthy goal to look forward to.
Criteria / Objectives of performance for Production & Operations Management(POM) system:
• Customer Satisfaction
• Effectiveness
• Efficiency
The 'Efficiency' or 'Productive' utilization of resource inputs is always a desired objective. However
efficiency has more dimensions to it. It involves an optimality in fulfillment of multiple objectives, with
possible prioritization within the objectives. Apart from being "efficient' POM must satisfy its many more
customers. This is because modern day POM has to serve customers, people working within, as also the
region, country or society at large. Therefore, criteria's again has to be viewed in Long & Short term
horizons for multi objective satisfaction & also to maintain flexibility & adaptability to changing situations

Production and Operation Functions:

1. Improving Volume of production
2. Reducing rejection & rework rate.
3. Maintaining delivery schedule
4. Controlling idle m/c & man hours
5. Establishing/updating/improving/ setting Industrial engineering norms
6. Maintaining accuracy & timeliness of MIS
7. Effective grievance-handling
8. Enhancing customer satisfaction
9. Total quality management
10. Business process re-engineering.

5 Prepared by Ms.Hitaishini Honnappa , Department of ME, GST, Bengaluru

 Production & Operations Management MBG301

Schematic representations of Production subsystem techniques

The techniques and procedures used in production / operation systems are as follows:
1. Forecasting •Scheduling & controlling
2. Location & layout techniques o Line balancing
3. Product design & analysis, work study o Single m/c scheduling
4. Product control techniques o Flow shop scheduling
• Aggregate planning o Job shop scheduling
• Master production schedule 5. Maintenance management
• Master requirement planning 6. Feedback & control techniques
• Capacity planning • Quality &
• Inventory control

6 Prepared by Ms.Hitaishini Honnappa , Department of ME, GST, Bengaluru

 Production & Operations Management MBG301

Difference between Manufacturing & Service Industry

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 Production & Operations Management MBG301

Roles & Resposibilities of Production Manager

1. Planning Geographical location of the factory
2. Purchasing production equipments
3. Layout of equipment within the factory
4. Designing production process
5. Product design & establishing work standards
6. Capacity planning
7. Production planning, scheduling & controlling
8. Quality & inventory management
9. Production equipment maintenance & repair
10. Industrial relations
11. Health & safety of workers
12. Staff selection & liaisoning

Nature and Scope of Production and Operations Management

POM of today presents certain characters which make it look totally different from what it was earlier.
Modern day nature & scope of POM includes at least four main features,

1. Manufacturing as Competitive advantage: In today's scenario, manufacturing plants have excess

capacities, competition is mounting & firms look & gain competitive advantage to survive &
succeed. Production system offers vast scope to gain competitive edge & firms intend to exploit the
potential. Total quality management(TQM), Time-based competition, Business process re-
engineering, Just in time(JIT), Flexible manufacturing system(FMS), Computer integrated

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 Production & Operations Management MBG301

Manufacturing(CIM) & the virtual corporation are some of techniques which the companies are
employing to gain competitive advantage.
2. Services Orientation: As service sector is gaining greater relevance these days. The production
system, needs to be more organized to fulfill peculiar requirements of the component. Like, the
entire manufacturing needs to serve(i) Intangible & perishable nature of the services, (ii) Constant
interaction with clients & customers (iii) Small volume of production to serve local markets (iv) close
to market facility locations.
3. Disappearance of smokestacks: Protective labour legislation, environmental movement & gradual
emergence of knowledge based organizations have brought total transformation in the production
system. Today's factories are aesthetically designed & built, environment friendly. A visit to ABB,
L&T or Smith Kline & Beecham should convince about transformation that has been taken place in
wealth creation.
4. Small has become beautiful: " Small is Beautiful", is E F Schumacher's philosophy. where he pointed
out, Increasing customization, flexible manufacturing system & similar other developments have
made economies of scale outdated & giant organizations irrelevant. Days are not far off when the
giants of today like HMT, & ITI will be decomposed into antiquity. These organizations are already
showing signs of decay. In their place, tiny units are doing roaring business.

Questions:
1. Define production/Operations Management.
2. What is the nature and scope of Production and Operations Management?
3. How do long term, intermediate & short term decision vary? Discuss the differences in terms of their
characteristics.
4. What are the various functions to be performed by Production and Operations Manager?
5. What is the criteria of POM?
6. Differentiate production and operations?
7. Mention situations in (a) banking (b)advertising (c)hoteliering & (d) agriculture where production &
management is involved. Describe the inputs, outputs, processes, utilities.
8. Is the production & Operations management function getting to be increasingly people centric? If
so, what may be the reasons?

9 Prepared by Ms.Hitaishini Honnappa , Department of ME, GST, Bengaluru

 Production & Operations Management MBG301

10 Prepared by Ms.Hitaishini Honnappa , Department of ME, GST, Bengaluru