PRODUCTION AND OPERATIONS MANAGEMENT

UNIT – I
INTRODUCTION

Production/operations management is the process, which combines and transforms

variousresources used in the production/operations subsystem of the organization into value
addedproduct/services in a controlled manner as per the policies of the organization.
It isthat part of an organization, which is concerned with the transformation of a range of
inputs intothe required (products/services) having the requisite quality level.
MEANING
The set of interrelated management activities, which are involved in manufacturing
certainproducts, is called as production management.
If the same concept is extended to services management, then the corresponding set of
management activities is called as operations management.
Production means application of processes. (Technology) to the raw material to add the
use andeconomic values to arrive at desired product by the best method, with out sacrificing the
desiredquality.

DEFINITIONS
Production and Operations Management ("POM") is defined about the transformation of
production and operational inputs into "outputs" that, when distributed, meet the needs of
customers.

It may be defined as:

(i)The performance of the management activities with regards to selecting, designing,
operating,Controlling and updating production system.
(ii) It is the processes of effectively planning, coordinating and controlling the
production, thatis the operations of that part of an enterprise, it means to say that production and
operationsManagement is responsible for the actual transformation of raw materials into
finishedproducts.
(iii) Production management is a function of Management, related to planning,
coordinating andcontrolling the resources required for production to produce specified product
by specifiedmethods, by optimal utilization of resources.
(iv) Production management is defined as management function which plans, organizes,
co-ordinates, directs and controls the material supply and Processing activities of an enterprise,so
that specified products are produced by specified methods to meet an approved salesProgramme.
These activities are being carried out in such a manner that Labour, Plant andCapital available
are used to the best advantage of the organization.
 OBJECTIVES OF PRODUCTION AND OPERATION MANAGEMENT

Main Objectives

To attain maximum output with given set of resources (input).

To produce maximum with lowest cost.
Right Quality
Right Quantity
Right Time
Right Manufacturing Costs

Subsidiary objectives
 To control pollution and wastage.
 To ensure optimum capacity utilization.
 To exercise inventory control.
 To control and reduce cost of operation.
 To ensure optimum utilization of resources.
 To ensure timely delivery of output.
 To ensure quality of products.
 To suggest changes in machinery and equipment.

NEED/ IMPORTANCE / BENEFITS OF P&OM

The efficient operations management will give the various benefits to the society
1. Organisation
More effective utilisation of human and material resources
Better responsiveness to consumer needs
The discovery of hidden capacity
2. Consumer
Product are available at
Right Quality
Right Quantity
Right Time
Right Place
3. Investors
Increased security for investors
Adequate Market returns
Good image to the society
4.Employee
Adequate wages
Job security
Improved working conditions
Increased personal and Job satisfaction
5.Suppliers
Confidence in management and their bills can be realized without any delay
6.Community
It enjoys benefits from Economic and Social stability
7.Nation
Nation will achieve Prosperity & Security
Healthy Industrial Atmosphere
SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
 REFER CLASS NOTES

Difference between Production and Operations Management

Evolutions and History of POM
Functions of Production Management
Functions of Production Manager
Role and responsibilities of Production / Operation Manager

PRODUCTION SYSTEM
Production : P roduction as ‘a process by which goods and services are created’.
System : System is an arrangement or assembly of inter-dependent processes (activities) that
are based on some logic and function.

Production system
Production system may be defined as "The methods, procedure or arrangement which
includes all functions required to accumulate (gather) the inputs, process or reprocess the
inputs, and deliver the marketable output (goods)."
 Production system utilizes materials, funds, infrastructure, and labourto produce the
required output in form of goods.
Production system is a result of arranging inputs, their conversion process and output
based on some logic and functions. Production system fails if any such arrangement made
doesn’t give a desired level of outcome.

Components of Production System

Production system consists of three main components viz., Inputs, Conversion Process and
Output.

1. Inputs include raw-materials, machines, man-hours, components or parts, drawing,

instructions and other paper works.
2. Conversion process includes operations (actual production process). Operations may be
either manual or mechanical or chemical. Operations convert inputs into output.
Conversion process also includes supporting activities, which help the process of
conversion.The supporting activities include; production planning and control, purchase
of raw-materials, receipt, storage and issue of materials, inspection of parts and work-in-
progress, testing of products, quality control, warehousing of finished products, etc.
3. Output includes finished products, finished goods (parts), and services.

Examples : The examples of a production system are as follows:

1. Tangible goods : Consider an example of a manufacturing industry like a Sugar
Industry. Here, sugarcane is first used as an input, then the juice of sugarcane is
processed through a conversion process, finally to get an output known as a refined sugar
(used for mass consumption).
2. Intangible goods : Consider an example from a service industry that of a Software-
development firm or company. Here, initially, written program codes are used as an
inputs. These codes are then integrated in some database and are provided with a user-
friendly interface through a conversion process. Finally, an output is made available in
form of an executable application program.

System View of Operations / Production Management

 CLASSIFICATION OF PRODUCTION SYSTEM / TYPES
Production systems are usually classified on the basis of the following:
Type of product,
Type of production line,
 Rate of production,
Equipments used etc.
They are broadly classified into three categories:
 Job shop production
 Batch production
 Mass production 
The TYPES OF PRODUCTION SYSTEM are grouped under two categories viz.,
 Intermittent production system, and
 Continuous production system.

Intermittent Production System

Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed)
intervals (time gaps).
In the intermittent production system, goods are produced based on customer's orders.
These goods are produced on a small scale.
The flow of production is intermittent (irregular).
In other words, the flow of production is not continuous.
In this system, large varieties of products are produced.
These products are of different sizes.
The design of these products goes on changing.
It keeps changing according to the design and size of the product.
Therefore, this system is very flexible.
 The quantity, size, shape, design, etc. of the product depends on the customer's orders.
Examples

The types of intermittent production system include:

1. Jobbing production flows,
2. Batch production flows and
3. Project production flows.

Continuous production system

Continuous means something that operates constantly without any irregularities or
frequent halts.
In the continuous production system, goods are produced constantly as per demand
forecast. Goods are produced on a large scale for stocking and selling.
They are not produced on customer's orders.
Here, the inputs and outputs are standardized along with the production process and
sequence.
Examples

The types of continuous production system include:

1. Mass production flows,
2. Process production flows and
3. Assembly Line Poduction

Production System with Examples

 Types of Production System

Intermittent System Continuous System

Job Production Mass Production

Printing Job, Haircut, Tailor

Shops, Repair Shops, Special Tooth paste / Soaps / Combs /
Machine tools , Restaurants, Pens/ Spoons / Hair Pins /
Hospitals , Machine Building Chocolates
Architects,Officebuilding,Plumbe
rs, Ship builders.

Process Production
Batch Production
Steel / Cement / Paper / Sugar
Bakeries made Bread, Cakes, / Plastic products / Chemical
Cookies, Drugs and
Industries
Pharmaceuticals,Washing Ex: Crude oil into petrol
Machine/ Fridge / TV
 Classification of Production System

JOB SHOP PRODUCTION

 Job shop production are characterized by manufacturing of one or few quantity of products
designed and produced as per the specification of customers within prefixed time and cost.
 The distinguishing feature of this is low volume and high variety of products.
 A job shop comprises of general purpose machines arranged into different departments.
 Each job demands unique technological requirements, demands processing on machines in a
certain sequence.
Characteristics

High variety of products and low volume.

Use of general purpose machines and facilities.
Highly skilled operators who can take up each job as a challenge because of
uniqueness.
Large inventory of materials, tools, parts.
Detailed planning is essential for sequencing the requirements of each product,
capacities for each work centre and order priorities.

Advantages

1. Because of general purpose machines and facilities variety of products can be produced.
2. Operators will become more skilled and competent, as each job gives them learning
opportunities.
3. Full potential of operators can be utilised.
4. Opportunity exists for creative methods and innovative ideas.

Limitations
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.
3. Production planning is complicated.
4. Larger space requirements.

Example:

BATCH PRODUCTION

 Batch production is defined by American Production and Inventory Control Society

(APICS) “as a form of manufacturing in which the job passes through the functional
departments in lots or batches and each lot may have a different routing.”
 It is characterised by the manufacture of limited number of products produced at regular
intervals and stocked awaiting sales.

Characteristics

When there is shorter production runs.

When plant and machinery are flexible.
When plant and machinery set up is used for the production of item in a batch and
change of set up is required for processing the next batch.
When manufacturing lead time and cost are lower as compared to job order
production.

Advantages

1. Better utilisation of plant and machinery.

2. Promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of products.
6. Job satisfaction exists for operators.

Limitations

1. Material handling is complex because of irregular and longer flows.

2. Production planning and control is complex.
3. Work in process inventory is higher compared to continuous production.
4. Higher set up costs due to frequent changes in set up.
Example

Project production
It is characterized by complex sets of activities that must be performed in a particular order
within the given period and within the estimated expenditure. Where output of a project is a
product, such products are generally characterized by immobility during transformation.
Operations of such products are carried out in “fixed position assembly type of layout” which
can be observed in production of ships, locomotive and aircraft, construction of roads, buildings,
etc.
Characteristics of Project Production
1. Definite beginning and definite end: Each project has a definite beginning and a
definite end.
2. “Fixed position” layout: Where the output of a project is a product, such products are
generally characterized by immobility during transformation. Operations on such
products are carried out in “fixed position assembly type of layout” which can be
observed in production of ships, locomotive, aircraft, construction of roads/ buildings,
etc.
3. High cost overruns: Often delays take place in the completion of the projects. Such
delays are generally very expensive due to escalation in the cost of factors of production
and incident of penalties.
4. Personnel problems: Project production has many personnel related problems namely:
 When there is a fast build up, staff is either borrowed from other departments or
hired for short duration. Therefore, personnel involved in the project have limited
(or short lived) interest in the project.
 Since each project has a limited duration, the staff starts spending more time
forgetting prepared for the next project.
 Site for the project may be in the underdeveloped region and it may change from
project to project which causes dislocation of the normal life.
MASS PRODUCTION

 Manufacture of discrete parts or assemblies using a continuous process are called mass
production.
 This production system is justified by very large volume of production.
 The machines are arranged in a line or product layout.
 Product and process standardisation exists and all outputs follow the same path.

Characteristics

Standardisation of product and process sequence.

Dedicated special purpose machines having higher production capacities and
output rates.
Large volume of products.
Supervision is easy
Limited work in progress
Shorter cycle time of production.
Lower in process inventory.
Perfectly balanced production lines.
Flow of materials, components and parts is continuous and without any back
tracking.
Production planning and control is easy.
Material handling can be completely automatic.

Advantages

1. Higher rate of production with reduced cycle time.

2. Higher capacity utilisation due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.

Limitations

1. Breakdown of one machine will stop an entire production line.

2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.

Example

CONTINUOUS FLOW PRODUCTION

 Production facilities are arranged as per the sequence of production operations from the
first operations to the finished product.
 The items are made to flow through the sequence of operations through material handling
devices such as conveyors, transfer devices, etc.
Characteristics

Dedicated plant and equipment with zero flexibility.

Material handling is fully automated.
Process follows a predetermined sequence of operations.
Component materials cannot be readily identified with final product.
Planning and scheduling is a routine action.

Advantages

1. Standardisation of product and process sequence.

2. Higher rate of production with reduced cycle time.
3. Higher capacity utilisation due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.

Limitations

1. Flexibility to accommodate and process number of products does not exist.

2. Very high investment for setting flow lines.
3. Product differentiation is limited.

Difference between Intermittent and Continuous Production System

Now let's distinguish intermittent and continuous production system.

1. Nature of product :
a. In intermittent production system, goods are produced based on customer
orders and not for stocking.
b. In continuous production system, goods are produced based on demand forecast
and for stocking.
2. Flexibility of process :
a. In intermittent production system, production process is flexible. The product
design goes on changing.
b. In continuous production system, production process is not flexible. It is
standardized. The same product is manufactured continuously.
3. Scale of production :
a. In intermittent production system, goods are produced on a small scale, so there
is no economies of scale.
 b. In continuous Production System, goods are produced on a large scale, so there
are economies of large-scale production.
4. Per unit cost :
a. In intermittent production system, cost per unit may be higher because
production is done on a small-scale.
b. In continuous production system, cost per unit may be lower because production
is done on large-scale.
5. Range of products :
a. In intermittent production system, wide ranges of products are manufactured.
b. In continuous production system, normally one particular type of product is
manufactured.
6. Instructions :
a. In an intermittent production system, many detailed instructions must be provided
depending upon the customer's specification.
b. In continuous production system, single set of instructions is sufficient for
operation. Here, there is no need to repeat the instructions.
7. Staff :
a. Intermittent production system requires staff with high technical skills and
abilities.
b. Continuous production system requires more managerial skillsand less technical
skills.
8. Storage of final products :
a. In an intermittent production system, there is no need to store and stock the final
products, because items are produced as per customer's orders.
b. In a continuous production system, there is a need to store and stock the final
products until they are demanded in the market.
9. Location change :
a. In an intermittent production system, change in location is easy.
b. In a continuous production system, change in location is difficult.
10. Capital invested :
a. In an Intermittent production system, capital invested is small.
b. In a continuous production system, capital invested is very huge.
 CELLULAR MANUFACTURING

NOTE : REFER CELLULAR LAYOUT NOTES ALSO

 COMPUTER-INTEGRATED MANUFACTURING SYSTEM (CIM)

Computer-integrated manufacturing (CIM) is the manufacturing approach of using computers to

control the entire production process.
“CIM is the integration of the total manufacturing enterprise through the use of integrated
systems and data communications coupled with new managerial philosophies that improve
organizational and personnel efficiency.”
What is CIM?
 CIM is the integration of all enterprise operations and activities around a common
corporate data repository.
 It is the use of integrated systems and data communications coupled with new managerial
philosophies.
 CIM is not a product that can be purchased and installed.
 It is a way of thinking and solving problems.
 This integration allows individual processes to exchange information with each other and
initiate actions.
Potential Benefits of CIM
 Improved customer service
 Improved quality
 Shorter time to market with new products
 Shorter flow time, Shorter vendor lead time
 Reduced inventory levels
 Improved schedule performance
 Greater flexibility and responsiveness
 Improved competitiveness
 Lower total cost
 Shorter customer lead time
 Increase in manufacturing productivity
 Decrease in work-in process inventory
Role of Computer in Manufacturing
 The computer has had a substantial impact on almost all activities of a factory.
 The operation of a CIM system gives the user substantial benefits:
 Reduction of design costs by 15-30%;
 Reduction of the in-shop time of a part by 30-60%;
 Increase of productivity by 40-70%;
 Better product quality, reduction of scrap 20-50%.
SUBSYSTEMS IN COMPUTER-INTEGRATED MANUFACTURING

 CAD (Computer-Aided Design) involves the use of computers to create design

drawings and product models.
 CAE (Computer-Aided Engineering)  is the broad usage of computer software to aid
in engineering tasks .
 CAM (Computer-Aided Manufacturing) is the use of computer software to
control machine tools and related machinery in the manufacturing of work pieces.
 CAPP (Computer-Aided Process Planning)  is the use of computer technology to aid in
the process planning of a part or product, in manufacturing.
 CAQ (Computer-Aided Quality Assurance)  is the engineering application of
computers and computer controlled machines for the inspection of the quality of
products.
 PPC (Production Planning and Control) A production (or manufacturing) planning and
control (MPC) system is concerned with planning and controlling all aspects of
manufacturing, including materials, scheduling machines and people, and coordinating
suppliers and customers.
 ERP (Enterprise Resource Planning) systems integrate internal and external 
management information across an entire organization, embracing finance/accounting,
manufacturing, and sales and services.
Other Devices
1. Robotics
2. Computers
3. Software
4. Controllers
5. Netwoks & Interfacing
Technologies in CIM
FMS (Flexible Manufacturing System)
ASRS (Automated Storage and Retrieval System)
AGV (Automated Guided Vehicle)
Automated conveyance systems & Robotics

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