Production and Operations

Management (POM):
An Introduction

By
Dr. Ajay Singh
Introduction
Operations management is the management of an
organization’s productive resources or its production
system.
A production system takes inputs and converts them into
outputs.
The conversion process is the predominant activity of a
production system.
The primary concern of an operations manager is the
activities of the conversion process.
Production
Production is conversion of input into output
Input-man , machine, material, money, methods ,
management
Output-goods produced and services rendered
Control is required at each stage
Production have impact on quality of goods and cost of
production.
Operation
Operation is activities related to production and services
thereafter
Management is the process of designing and maintaining an
environment in which individuals work to accomplish
aims.
Production management is the process of planning,
organizing, directing, controlling the activities of the
production function.
Operation management is the management of products and
services . If service concept is added to production
management , it can be called as operation management .
Operation management is concerned with production of
goods & services , management of resources, distribution of
goods & services to customers.
Production deals with the manufacturing (or other such)
business end while operations are more sales related.
Production management function
Planning –product design, production process selection,
location layout, plant &machinery layout, capacity planning
Organizing –time &motion study, scheduling, material
management, purchasing management
Controlling-stores management, quality control, inventory
management, maintenance mgt,
Objectives of production management
To produce quality goods
To increase productivity
To reduce waste
Customer satisfaction
Profitability
Optimum utilization of resources
Deliver the product in time to the right place
Scope of production management, before
actual production starts
Design of tools
Plant layout-placing machines at right place
Human resource requirement
Method of performance judgement
Selection & operation of the size of the firm
Scope of production mgt.during the
production
Preparation of production schedules
Plan for maintaining records of raw material, finished
goods
Control over the quality
Control on inventory
How any variance will be tackled
Activity 1
Write Down the different roles of Production Manager
and Operations Manager of any Automobile Company (
10 Minutes)
Productivity and waste
Efficiency through which input is converted in output is
called productivity
Productivity –output/input
Other way to look at productivity is by the wastage
produced
Waste can be unnecessary input, defective output, idling of
resources
Reduction in scrap by 1% can increase in productivity by
10%
Organizational Model
Finance
Sales HRM

OM
QA
Marketing

MIS Accounting
Engineering
Organization Chart-Major Elements
M a n u fa c tu r in g O r g a n iz a tio n

O p e ra t io n s F in a n c e / A c c o u n t in g M a r k e t in g

F a c ilit ie s D is b u r s e m e n ts S a le s P r o m o t io n
P r o d u c tio n & & C r e d its A d v e r t is in g
In v e n to ry C o n tro l F unds M anagem ent S a le s
Q u a lity A s s u r a n c e C a p ita l R e q u ir e m e n ts M a rk e t R e s e a rc h
& C o n tro l
P ro c u re m e n t
E n g i n e e r in g D e s i g n
I n d u s t r ia l E n g in e e r in g
P r o c e s s E n g in e e r in g
Operations as a System
Production System

Conversion
Inputs Outputs
Subsystem

Control
Subsystem
Inputs of an Operations System
External
Legal, Economic, Social, Technological
Market
Competition, Customer Desires, Product Info.
Primary Resources
Materials, Personnel, Capital, Utilities
Conversion Subsystem
Physical (Manufacturing)
Locational Services (Transportation)
Exchange Services (Retailing)
Storage Services (Warehousing)
Other Private Services (Insurance)
Government Services (Federal)
Outputs of an Operations System
Direct
Products
Services
Indirect
Waste
Pollution
Technological Advances
Production as an Organization Function
US companies cannot compete with marketing, finance,
accounting, and engineering alone.
We focus on OM as we think of global competitiveness,
because that is where the vast majority of a firm’s workers,
capital assets, and expenses reside.
To succeed, a firm must have a strong operations function
teaming with the other organization functions.
Service Operations
Decision Making in OM
Strategic Decisions
Operating Decisions
Control Decisions
Strategic Decisions
These decisions are of strategic importance and have long-
term significance for the organization.
Examples include deciding:
the design for a new product’s production process
where to locate a new factory
whether to launch a new-product development plan
Operating Decisions
These decisions are necessary if the ongoing production of
goods and services is to satisfy market demands and
provide profits.
Examples include deciding:
how much finished-goods inventory to carry
the amount of overtime to use next week
the details for purchasing raw material next month
Control Decisions
These decisions concern the day-to-day activities of
workers, quality of products and services, production and
overhead costs, and machine maintenance.
Examples include deciding:
labor cost standards for a new product
frequency of preventive maintenance
new quality control acceptance criteria
What Controls the Operations System?
Information about the outputs, the conversions, and the
inputs is fed back to management.
This information is matched with management’s
expectations
When there is a difference, management must take
corrective action to maintain control of the system
Activity-2
Classify the types of decision(Strategic/Operation/Control) in the following process(5 Min)
Design of Goods and Services. ...
Quality Management. ...
Process and Capacity Design. ...
Location Strategy. ...
Layout Design and Strategy. ...
Human Resources and Job Design. ...
Supply Chain Management. ...
Inventory Management.
Activity-3
 For a fast food restaurant like Pizza hut or Domino’s Pizza identify the
concept taught for getting the information of the following questions.(15
Min)
 1. Identify the type of production system followed.
 2. Check how production system is managed.
 3. Find out utilisation of the resources namely manpower, capacity and
material.
 4. How the customer services is rendered