POM Introduction - M-1

Introduction to
Production & Operations Management
1
© Oxford University Press 2007. All rights reserved.
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
2
Operations Management
• What is operations?
– The part of a business organization that is
responsible for producing goods or services
• How can we define operations
management?
– The management of systems or processes
that create goods and/or provide services
3
Good or Service?
• Goods are physical items that include raw materials,

parts, subassemblies, and final products.
• Automobile
• Computer
• Oven
• Shampoo
• Services are activities that provide some combination of
time, location, form or psychological value.
• Air travel
• Education
• Haircut
• Legal counsel
4
Difference : Goods & Services
5
The Transformation Process
Quality of inputs Quality of outputs

monitored monitored
Random disturbances
INPUTS Transformation OUTPUTS

Process
Feedback Mechanisms
6
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
7
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
8
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 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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Product/Process Steps in the production/operations
Choice process from the point of view of
an entrepreneur
Service Operations
Management
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
Operations
Strategies
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Product Design
Manufacturability Reverse Engineering
Research &
Standardization Development
Concepts
Product Life in Product
Cycle Robust Design
Design
Concurrent
Engineering Modular Design
Computer Aided
Design (CAD)
Concepts in Product Design

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Product development process
• The eight stages or process or steps

involved in the development of a new
product are as follows:
• Idea generation.
• Idea screening.
• Concept testing.
• Business analysis.
• Product development.
• Test marketing.
• Commercialization.
• Review of market performance.
14
Process Design
Types of Processes
Continuous Semi-continuous Intermittent Project

Process (Repetitive/Assembly) Process
Process
Batch Process Job Shop
Types of Processes
15
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
17
Key Issues for Operations
Managers Today
• Economic conditions
• Innovating
• Quality problems
• Risk management
• Competing in a global economy
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Decision Making
⚫ Most operations decisions involve many alternatives that can have

quite different impacts on costs or profits
⚫ Typical operations decisions include:
⚫ What: What resources are needed, and in what amounts?
⚫ When: When will each resource be needed? When should the work be
scheduled? When should materials and other supplies be ordered?
⚫ Where: Where will the work be done?
⚫ How: How will he product or service be designed? How will the work be
done? How will resources be allocated?
⚫ Who: Who will do the work?
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Scope of Operations Management
The operations function includes many interrelated

activities such as:
⚫ Forecasting
⚫ Capacity planning
⚫ Facilities and layout
⚫ Scheduling
⚫ Managing inventories
⚫ Assuring quality
⚫ Motivating employees
⚫ Deciding where to locate facilities
⚫ And more . . .
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Manufacturing vs. Service
1. Degree of customer contact

2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory
9. Evaluation of work
10.Ability to patent design
21

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Introduction to

Production & Operations Management

• Goods are physical items that include raw materials,

Quality of inputs Quality of outputs

INPUTS Transformation OUTPUTS

Production & Operations Management is

Business Process Outsourcing

Facility Facility Facility

Inventory Materials Total

Work Design Operations Quality

Manufacturability Reverse Engineering

Concepts in Product Design

• The eight stages or process or steps

Continuous Semi-continuous Intermittent Project

Batch Process Job Shop

Usually more Loss of

Less flexible Leads to

To act as internal quality

⚫ Most operations decisions involve many alternatives that can have

The operations function includes many interrelated

1. Degree of customer contact

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