PRODUCTION AND OPERATION
MANAGEMENT
Session
1&2
By Suman Kumar Deb
B.Sc. (H) Maths, M.Sc. Stats, PGDM- Marketing, Six Sigma Black Belt Certified
CASE STUDY
Hard Rock Café, London - Page 2&3 of OM
Eight Edition - Jay Heizer and Barry Render
Operations Management Production Management
The study of set of activities comprising Production management on the other
side focuses specifically on the
supervision, planning and designing production of goods and services and is
of business operations in the field of concentrated upon churning output from
manufacturing of goods and services is input.
termed as operations management. Total activities that go into turning raw
Objective is to have efficient and material into final, finished product.
effective result in minimum of wastage. Many a times its been considered that
Operations management is more production management is a subset of
concerned on processes than operations management, but production
management in itself is a broad subject
people or products. that comprises production planning and
Operations management uses physical control, inventory management, and
resources in an optimum manner, operations control.
converting input into output, so as to Production management includes all
supply to the market the desired and management activities spanning
finished product at competitive rates . selection. Designing, operating,
controlling and updating production
system.
Operations Management
Operations function consists of all activities
directly
related to producing goods or providing services
Organization
Finance Production Marketing
FRAMEWORK FOR MANAGING
OPERATIONS
OM JOBS
OPERATIONS / PRODUCTION
SYSTEM
EVOLUTION OF OPERATION
MANAGEMENT
•Industrial Revolution
•1770 – 1800, Machine Power replace Human Power, Factory System.
1 •Great Inventions 8 in nos. 6 from UK, 1 from France and one from USA
•Scientific Management – A System Approach
•Developing science for each element of persons work that will replace the thumb rule method.
•Selecting worker scientifically training and developing them
2 •Dividing work between management and works scientifically
•Human relations Movement
•Around 1900 workers were treated as human and given the right respect as they deserve.
3
•Operation Research
•Use of mathematics to solve management problems
4
•Service Revolution
•Emerging of service industry
5
OBJECTIVE OF OPERATION
MANAGEMENT
Producing the goods and services that satisfy
customers’ needs (effectiveness objective).
Maximizing output with minimum resource inputs
(efficiency objective).
Ensuring that goods and services produced conform
to pre-set quality specifications (quality objective).
Minimizing throughput-time- the time that elapses in
the conversion process- by reducing delays, waiting
time and idle time (lead time objective).
Maximizing utilization of manpower, machines, etc.
(Capacity utilization objective).
Minimizing cost of producing goods or rendering a
service (Cost objective).
OPERATIONS MANAGEMENT FOR A
MANUFACTURER
Marketing Finance/
Operations
Accounting
Manufacturing Production Quality
Purchasing
Control Control
OPERATIONS MANAGEMENT FOR AN
AIRLINE
Marketing Finance/
Operations
Accounting
Flight Ground Facility
Catering
Operations Support Maintenance
Business Operations Overlap
Production/
Operations
Marketing Finance
Types of Operations
Operations Examples
Goods Producing Farming, mining, construction ,
manufacturing, power generation
Storage/Transportation Warehousing, trucking, mail
service, moving, taxis, buses,
hotels, airlines
Exchange Retailing, wholesaling, banking,
renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and television
newscasts, telephone, satellites
CRITICAL DECISIONS FOR OM
Product & service design.
Quality management.
Process design.
Capacity & location of facilities.
Layout of facilities.
Human resources & Job design.
Supply-chain management.
Inventory management.
Scheduling.
Maintenance.
Food Processor
Inputs Processing Outputs
Raw Vegetables Cleaning Canned
Metal Sheets Making cans vegetables
Water Cutting
Energy Cooking
Labor Packing
Building Labeling
Equipment
Hospital Process
Inputs Processing Outputs
Doctors, nurses Examination Healthy
Hospital Surgery Patients
Medical Supplies Monitoring
Equipment Medication
Laboratories Therapy
Operations Interfaces
Manufacturing vs. Service
Characteristic Manufacturing Service
Output Tangible Intangible
Customer contact Low High
Uniformity of input High Low
Labor content Low High
Uniformity of output High Low
Measurement of productivity Easy Difficult
Opportunity to correct High Low
quality problems
High
Responsibilities of
Operations Management
• Planning • Organizing
– Capacity – Degree of centralization
– Location – Subcontracting
–Products and services • Staffing
– Make or buy – Hiring/laying off
– Layout – Use of Overtime
– Projects • Directing
– Scheduling – Incentive plans
• Controlling – Issuance of work orders
– Inventory – Job assignments
– Quality
Recent Trends
• Global competition
• Operations strategy
• TQM, Lean, Six Sigma
• Flexibility
• Time reduction Technology
Recent Trends (Continued)
• Worker involvement
• Reengineering
• Environmental issues
• Service
