Understanding Production and Operations Management

Introduction
The very essence of any business is to cater needs of customer by providing services and goods, and in
process create value for customers and solve their problems. Production and operations management
talks about applying business organization and management concepts in creation of goods and services.

Production
Production is a scientific process which involves transformation of raw material (input) into desired
product or service (output) by adding economic value. Production can broadly categorize into following
based on technique:

Production through separation: It involves desired output is achieved through separation or extraction
from raw materials. A classic example of separation or extraction is Oil into various fuel products.

Production by modification or improvement: It involves change in chemical and mechanical

parameters of the raw material without altering physical attributes of the raw material. Annealing process
(heating at high temperatures and then cooling), is example of production by modification or
improvement.

Production by assembly: Car production and computer are example of production by assembly.

Importance of Production Function and Production Management

Successful organizations have well defined and efficient line function and support function. Production
comes under the category of line function which directly affects customer experience and there by future
of organization itself.

Aim of production function is to add value to product or service which will create a strong and long lasting
customer relationship or association. And this can be achieved by healthy and productive association
between Marketing and Production people. Marketing function people are frontline representative of the
company and provide insights to real product needs of customers.

An effective planning and control on production parameters to achieve or create value for customers is
called production management.

Operations Management
As to deliver value for customers in products and services, it is essential for the company to do the
following:

1. Identify the customer needs and convert that into a specific product or service (numbers of
products required for specific period of time)
2. Based on product requirement do back-ward working to identify raw material requirements
3. Engage internal and external vendors to create supply chain for raw material and finished goods
between vendor → production facility → customers.

Operations management captures above identified 3 points.

Production Management v/s Operations Management

A high level comparison which distinct production and operations management can be done on following
characteristics:

 Output: Production management deals with manufacturing of products like (computer, car, etc)
while operations management cover both products and services.
 Usage of Output: Products like computer/car are utilized over a period of time whereas services
need to be consumed immediately
 Classification of work: To produce products like computer/car more of capital equipment and
less labour are required while services require more labour and lesser capital equipment.
 Customer Contact: There is no participation of customer during production whereas for services
a constant contact with customer is required.

Production management and operations management both are very essential in meeting objective of an
organization.

Effective Product Design

Introduction
Organization success is dependent on customer satisfaction and delight. Customer satisfaction is
achieved through development of product and service, which have all attributes required by the customer.
A success product or services do not only have attractive package design but should be also able to
provide robust performance.

Thus, product design must be practical enough for production and powerful enough to provide a
competitive advantage.

Product Design
A good product design has following common features:

 Utility: The product design should make product utility as per expectation of customers and
provide steady performance through the product life.
 Aesthetics: Product aesthetics is important in success of the product. The product aesthetics is
dependent on market and end customer.
 Producible: Product design should enable effective production of product through available
production methods.
 Profitability: Product design should make economic sense as to deliver value to customer and
sustainability to the organization.
  Differentiable: A good product design should enable product to be differentiate among its
competition. This can be achieved by attractive packaging and also by providing additional
service on the product.

Objectives of Product Design

The essence of product design is to satisfy customer and maximizes the value for the customer at
minimum cost. The product or service should also be able to meet primary needs and desire of the
customer. This may not require development of new product, but enhancement to existing product or
service.

Stages of Product Design

Product design is a creative process which looks at all the available options and beyond. The process is
can be divided into three stages:

1. First stage: His stage involves brainstorming, bringing ideas and analysis of customer and
market feedback.
2. Second Stage: Idea is converted into a feasible solution to satisfy the customer expectation,
using available resource and technology.
3. Third Stage: This is the last stage in which the product is introduced in the market.

Factors Affecting Product Design

A successful product design is combination factors as follows:

Correct Team Selection: This is very essential to get the correct team in place which has expert
designers who are not only aware and comfortable with technology but also understanding of customer
expectation.

Customer Involvement: Involvement of customer in product design and testing can provide insight into
the direction of the project

Prototyping and testing: Product design is high risk concept as it involves commitment of capital and
man-power; therefore, it is imperative that extensive prototyping and testing are done with customer and
market.

Raw Material: It is essential that raw material to be used in the production meets the quality standards of
the end product. Furthermore, procurement system needs to be in place to ensure continuous, cost
effective supply.

Production method and process layout: Feasibility of production method and process layout
determines future success of the product.

External Factors: Environmental and government regulations plays an important part in product design.
And these norms are updated from time to time, so product design should have the flexibility to adapt.

Product Selection
Production selection process is done through a combination of financial analysis, risk analysis, existing
product portfolio, raw material supply and pre-determined product criteria.
Process Design and Analysis
Introduction
The objective of organization is to provide service and product, which satisfy customer and create value
for them. A product and service designed is based on the customer feedback and requirement of the
market. Process design is where the product is broken down into parts, which further can be helpful in the
actual manufacturing process.

A product, for example, has attractive packaging to provide the right aesthetics plus has function and
features, which provide value to customers. Process design ensures that there is smooth and continuous
relationship between required output and all the intermediate process.

For example, manufacturing of Air-Conditioners, process design has to be such that maximum supply is
achieved during the hot months of summer when demand of the product is at the highest. So people,
process and machines need to align to give continuous production throughout the year as to satisfy
seasonal demand.

Process Planning
Process development for process design can be summarized through following steps:

1. Process Requirement: The very 1st step is to collect and gather information to give structure
with the end objective. That is to make process requirement document highlighting various
stages, risk and stakeholders for production. This will include assessment of available
technology, raw material requirement, factory/plant layout and demand forecast.
2. Team Building: Once the process requirements are finalized, for each objective, a team is
finalized based on skill level and experience. Function of the team is to get familiarize with the
whole process.
3. Planning and Implementation: Process planning team will develop module; policies and
procedure require for production, which are after required approval internal as well as external is
implemented.
4. Audit: A regular audit is carried out to ensure that process thus implemented is in line and
delivering value to customers.
5. End of Life: Over a course of time there may be enhancement of the product or product may get
discontinued in these circumstances, process thus develop is discontinued.

Production Process
Based on the nature of product and service production or conversion process can be divided into two
broad categories, continuous production (assembly line, oil refinery) and intermittent production (job work,
service).

Production process for both manufacturing industry and service industry can be classified into broad
categories based on standardization of product or service. It can range from single project assignment
like a building or bridge (manufacturing) to interior design (service) and mass production project like a car
(manufacturing) to a fast-food joint (Services).

Process Design
A successful process design has to take into account the appropriateness of the process to overall
organization objective. Process design requires a broad view of the whole organization and should not
have a myopic outlook. And the process should deliver customer value with constant involvement of the
management at various stages.

In order to achieve a good process design, effective process strategy is required, which deals with a
singular line items required to manufacture the end product. Effective process strategy deals with raw
material procurement, customer participation, technology investment, etc.

Over a period of time process design has undergone change and new concepts like Flexible
Manufacturing Systems have been developed, which delivers efficient and effective production design
and analysis.