POM –Introduction & History
Production and Operations Management ("POM") is about the transformation of production and
operational inputs into "outputs" that, when distributed, meet the needs of customers.
Production: Production can be defined as, the process and methods employed in transformation of
tangible inputs(raw materials, semi finished goods or sub assemblies) and intangible inputs(ideas,
information, know how) into goods or services. Major elements of production system are:
1. Input: Raw material labor, power and other consumables
2. Resources: Machinery, plant, building, human resources etc.
3. Process: Series of operations which are performed.
4. Output: Output resulting from conversion process.
Operations: Operations is frequently used where various inputs are transformed into intangible
services in addition to tangible goods. It is now being realized that goods like cars, washing machines,
televisions, etc, has to be supported by a host of services like information, training, warranty, back-up,
hire purchase, leasing, etc. Therefore the process of manufacturing of goods comes under Production
Management whereas the process of providing after sales services comes under Operations
Management.
Production and Operation Management: Production & Operations Management is the
process of planning, organizing, directing and controlling the activities of the production process or
production function i.e. transformation of inputs into outputs.
Irrespective of whether it is an industrial, agricultural or service organization, it requires a large number
of input resources like plant and building, equipment, materials and capital, labour and management,
energy and consumables, information and knowledge, etc.
Diverse enterprises like a manufacturing company, an agricultural farm or an insurance firm have a
number of common features as illustrated below.
Environment
Input Output
Men Goods
Machine
Methods Conversion Process
Materials
Money
Management
Measurement
Message Comparing actual with
Motive desired Performance
standards
Fig. : A Manufacturing Firm
Raw Materials are converted into value added goods which can be sold in the market at a profit
Environment
Input Output
Men Grains
Machine Milk
Methods Conversion Process Poultry
Materials Mutton
Money
Management
Measurement
Message Comparing actual with
Motive desired Performance
standards
Fig. : An Agricultural Firm
Grain, milk poultry, meat etc can be sold in the market at a profit
Environment
Input Output
Men Satisfied
Machine Customer
Methods Conversion Process
Materials
Money
Management
Measurement
Message Comparing actual with
Motive desired Performance
Standards
Fig. : A Service Organization
Criteria of Performance for the Production and Operations Management
System: The objectives or criteria of performance of the production and operations management
system are:
a) Production at Pre-established Cost: Primary objective of production and operations
management is to make every effort to stick to the standard cost. It can be done through
optimal utilization of resources.
b) Quality Product: Organizations should try to meet established quality standards through POM. A
proper balance must be maintained between quality and cost as well as quality and time
schedule.
c) Time Bound Production: Another important objective of POM is to produce goods and services
on pre-defined time for delivery.
Jobs/Decisions of Production/Operations Management: As a discipline of management
some of the jobs/decisions involved in the production and operations management function can be
fragmented as under:
Jobs of Production and Operations Management
Long Time Horizon Immediate Time Horizon Short Time Horizon
Product Design Product Variations Production Scheduling
Quality Policy Methods Selection Available materials
Technology to be Quality implementation allocation and handling
employed inspection and control Scheduling of manpower
Process Selection methods Breakdown maintenance
Machinery and Plant Forecasting Progress check and
Selection Deployment of change in priorities in
Plant size selection manpower production scheduling
Manpower training and Overtime decisions Temporary manpower
development Shift working decisions Supervision and
Warehousing Temporary hiring or lay- immediate attention to
Arrangements off manpower problem areas in labour,
Design of Jobs Purchasing policy materials, machines, etc.
Setting up work Purchasing source
standards selection
Effluent and waste Make or buy decision
disposal system Inventory policy
Safety and maintenance Transport and delivery
system arrangements
Preventive maintenance
scheduling
Brief History of the Production and
Operations Management Function
At the turn of this century, the economic structure in most of the developed countries of today was fast
changing from a feudalistic economy to that of an industrial or capitalistic economy. The nature of
industrial workers was changing and methods of exercising control over the workers, to get desired
output, had also to be changed. The changed economic climate produced the new techniques and
concepts.
1. Individual Efficiency: Fredric W. Taylor (1878) studied the simple output-to-time relationship for
manual labour such as brick-laying. This formed the precursor of the present day ‘time-study’.
Gilberth (1911) examined the motions of the limbs of the workers (such as hands, legs, eyes,
etc.) in performing the jobs and tried to standardize these motions in certain categories and
utilized the classification to arrive at the standards for time required to perform a given job. This
was precursor of present day ‘motion study’.
2. Collective Efficiency: The primary objective of production management was that of efficiency –
efficiency of the individual operator i.e. manual labour or machine operator. The aspects of
collective efficiency came into being later, expressed through efforts of scientists such as Gantt
who shifted the attention to scheduling of the operations.
3. Quality Era: The focus of production was to maximize the quantity. In 1931, Walter Shewart
came up with his theory regarding Control Charts for controlling the quality of goods produced.
These charts suggested a simple graphical methodology to monitor the quality characteristics of
the output and how to control it. In 1935, H.F. Doge and H.G. Romig came up with application of
statistical to accept or reject consignment supplied by the suppliers to exercise control over the
quality.
4. Effectiveness as a Function of Internal Climate: Hawthrone experiments conducted in 1933-39
showed that workers efficiency went up when the intensity of illumination was gradually
increased, and even when it was gradually decreased, the workers efficiency still kept rising.
Experiments proved the very fact that somebody cared, mattered much to the workers who
gave increased output.
5. Advent of Operational Research Techniques: During World War II, the Allied Forces took the
help of statisticians, scientists, engineers, etc. to analyse and answer questions such as: What is
the optimum way of mining the harbours of the areas occupied by the Japanese? What should
be the optimum size of the fleet of the supply ships, taking into account the costs of loss due to
enemy attack and the costs of employing the defence fleet? Such studies about the military
operations was termed as Operations Research. After World War II, this field was further
investigated and developed by academic institutions.
6. The Computer Era: Around 1955, IBM developed digital computers. This made possible the
complex and repeated computations involved in various Operations Research and other
Management Science techniques. It helped to spread the use of Management Science concepts
and techniques in fields of decision making.
7. Service & Relationship Era: In recent times demand for services such as transportation,
telecommunication, entertainment, business process services have also grew at a rapid pace.
Worldwide service economy became as important as that of physical goods. Therefore, almost
all production management principles have been finding their place in services in order to
improve efficiency & effectiveness.
