Production Systems And Operations Management

Anubha Walia
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1. MANAGING OPERATIONS Nature and scope of production/operation management Relationship with other functional areas Standardisation and simplification Reliability and redundancy Value engineering Ergonomic considerations Product (and service) design for differentiation 2. PROCESS DESIGNING Types of production systems and layouts Capacity requirements planning Facilities, location and influencing factors; evaluation of alternatives JIT, FMS, and Group Technology 3. PRODUCTIVITY AND WORK STUDY Method study: Basic procedure, charts, diagram Work measurement & Time study Work sampling, learning curve, production standards Aggregate production planning; heuristic methods 4. PROCESS CONTROL Inventory management: Basic concepts; selective inventory control models; ordering systems; material requirement planning; operations scheduling: Meaning; dynamic and static scheduling; design rules Quality control; variables and attributes Process control and acceptance sampling Maintenance: Facilities; total productive maintenance C1 - 2

Production
Inputs (6Ms-Man, Machine, Method, Material, Money, Management) Process- Conversion Output-Good / Services Production is heart of Org Fin, Mktg, HR Material Mgmt dependant
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(Input

Conversion / Transformation
Environment :- *Customer * Competitors *Suppliers *Government regulations * Technology * Economy

Output)

Input Transformed Resources Material Information Customer

The Transformation Process Physical Properties Informational Properties Possession Location

Storage/Accommodation

Output Good or Services

Input Transforming Resources Facilities Staff

Physiological State Psychological State

Volume Variety Variation Visibility

Monitoring & Control

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Production Management Function

Planning- Course of Action. Pdt planning, facility planning, Designing Organizing- Est structure of tasks and assigning authority. Controlling ensure actual performance is in accordance with planned performance. We prepare standard

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Introduction
Operations management is the management of an organizations 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. C1 - 6

Organizational Model
Finance
Sales HRM

OM
Marketing MIS QA

Engineering

Accounting

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Some inter-functional relationships between the operations function and other core and support functions
Engineering/ technical function
Understanding of the capabilities and constraints of the operations process

Product/service development function

Analysis of new technology options Understanding of process technology needs New product and Accounting service ideas Provision and finance Understanding of the of relevant capabilities and function data Operations constraints of the Financial analysis operations process function for performance Market and decisions requirements Understanding of human resource needs Understanding Provision of systems for of infrastuctural design, planning and and system control, and improvement Recruitment needs development and training

Marketing function

Human resources function

Information technology (IT) function

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Objective of PM
Optimal use of resources Max use of Manpower and resource Quality of good at minimal cost Contributing towards all round productivity through Decision Making & QT

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Scope of POM
A) GENERAL PHASE
1Operations Management (Input Conversion / Transformation Output) 2Strategic Role ( Strategy and performance objectives)

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Scope of POM Cont

B) DESIGN PHASE

3 4

Design of Products and Services Design of Operations Network a) Capacity Decision b) Layout Decision c) Location Decision Process Technology Job Design & Work Organization
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Scope of POM Cont

C) PLANNING & CONTROL
7 8 9 10 11 12 13 Capacity Planning and Control Inventory Planning and Control Supply Chain Planning and Control MRP ( Material Requirement Planning ) Quality Planning and Control Project Planning and Control JIT ( Just In Time) Planning and Control
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Scope of POM Cont

D) IMPROVEMENT 14 Failure Prevention & Recovery 15 TQM ( Total Quality Management)

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Scope of POM Cont

a) b) c) d) e) E) OPERATION CHALLENGES Globalization and Environmental Protection Social Responsibility Technology Awareness Knowledge Management Industrial Safety and Security

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Why Should you study POM

A business education is incomplete without an understanding of modern approaches to managing operations. Operations management provides a systematic way of looking at organizational processes. Operations management presents interesting career opportunities. The concepts and tools of OM are widely used in managing other functions of a business.
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Back office operation in a bank

Kitchen unit manufacturing operation

They are all operations

Retail operation

Take-out / restaurant operation

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POM
Plan, design and operate production system / subsystems that create and deliver the firms primary products and services and to achieve organizational goals

Note that:
Operations management deals with process Management in a broad, systems sense Subsystems are operations too Multiple goals: efficiency, productivity, cost minimization

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Managers Need Knowledge Of

Production processes Operations management processes Decision making tools

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Operations Management As a Function

Skill Areas
Quantitative methods Organizational behavior General management Information systems Economics International business Business ethics and law
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Figure 1.3

Japanese Production System

Quality comes first Continuous improvement of products & processes Eliminate all forms of waste
7 waste

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Operations Management Today

Service economy Environmental awareness

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Operations Management Uses

apply quality tools to tax work project management used on merger inventory theory for personal purchases job design improves home chores flexible spending accounts analyzed as inventory models

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POM Models
Verbal Models- Express in words the relationship among variable a motorist asks you to give directions for the nearest fast food station. Schematic Pictorial relationship map Iconic Physical replica of process eg arch model of new building Mathematical functional relationship among variables
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Productivity & Wastivity

Effectiveness of PM is measured by efficiency through which the i/p are converted into o/p
Productivity output / input Standard / Actual

Wastivity
1/Productivity Amt of waste generated in the system. If we could measure waste, then it becomes a tool for measuring the efficiency of the i/p call wastivity
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Example of waste
Idling of resources material waiting in the form of inventory in store, job order waiting to be processed Production of Defective good and services

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Productivity problem
In a manf unit the standard time allowed for the production of a unit is 5 hrs. If in a particular month 126 units are produced by employing 4 persons and the allowable delays are found to be 44 man hours, find the productivity and wastivity
Earned Standard Hrs 630 hrs Std time 5hrs, prod 126 unit = 5x126=630hrs Available Man hr = 756 hrs Manpower emp 4 person, Monthly working hr 4x25x8 =800 hrs Allowed delay Actual Man hr 800-44 = 756 Productivity ESH/AWH = 630/756x100=83.3% Wastivity 100-83.3 16.6%
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ERGONOMICS
British term systematic study of how people physically interact with the working environment, as well as their equipment, facilities, and pdt. Alternative name is human factor, becoz people differ in size, age, there are significant design question that must be decided Eg- AT&T Henry Dreyfuss designers created one of the first single unit mouth and ear telephone that was used by both adult and kids Ergonomics starts with physical efficiency, issue of safety and comfort
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2 topic
Types of production systems and layouts Capacity requirements planning Facilities, location and influencing factors; evaluation of alternatives JIT, FMS, and Group Technology

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Plant Layout & Location

Factory Place in which the factors of production land, labour, capital and enterprises are brought together for creation of good and service. The term plant layout is used with factory layout

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Optimal Criteria for Selecting Plant location

Criteria is to achieve max ROI return on investment over long run
ROI depends on Profit Margin and Investment Turnover ROI (Average) = IT x PM IT =~ long run investment PM= ~ long run profit margin IT = SR / TA SR = Sales Revenue TA Total Assests PM = P / SR P = ~long run profit SR Sales Rev ROI = (SR / TA) x (P / SR) = P / TA P = SR TC were TC is Total Cost SR depends upon the market and not location hence ROI is directly proportional to TC/TA

THUS, to MAX ROR, the location must be chosen so as to minimise the TA (land, building, equipment, material, cash) and TC (cost of material, transp cost, labour cost, conversion cost)
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Types of Production System (PS)

2 types = Continuous and Intermittent PS CPS Continuous physical flow of material. Standard pdts are manuf which are large in dd. Standardized I/p and sequence of operations, machine tools and equipment are used. Less supervision, Possibility of Rigid Quality Control CPS are of two types- Mass production and Process production
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Mass and Process

Mass One type of product or max 2 or 3 type of pdt are manf in large quantities and much emphasis is not given to consumer order. Process This system is used for manf those items whose demand is continuous or high. Here single Raw material can be transformed into different kinds of pdt a different stage of the production. (oil refinery to kerosene, gasoline

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Intermittent PS
Good are manf specifically to fulfill order by customers rather than producing against stock. Eg switch gear Two types Job and Batch production Job production of a single complete unit by one operator or a group operators eg bridge construction whole project considered as one operation. Require skilled labour Batch Items are processed in lots. Printing press
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Plant capacity
Capacity may be defined as the max or limiting capability of a production unit to produce ina specified period. This is expressed in terms of o/p per unit of time. Measure of capacity different org used different measure of capacity. Steel plant-tons, beer cans produced, auto plant auto parts

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Capacity Planning
Designed capacity i.e maximum capacity that a producing unit can produce under ideal condition. Whenever the existing dd changes or addition of new product has been made, then reassessment of capacity at various stage of production, depending upon the process details (i.e identifying ways of meeting desired capacity through better utilization, higher efficiency, overtime, adding machinery or shifts
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LAYOUT TYPES
LINE LAYOUT all equipment reqd for one part or pdt are grouped together in one department in sequence of the operation performed higher rate of o/p as no interruption, high division of work, less inspection, lower material handling cost, better machine utilization S, U, L shape Process / FUNCTIONAL LAYOUT The product is fabricated by moving it from one dept to another dept acc to sequence of operation to be performed ( high degree of pdt can be manf, flexibility to change, mach breakdown do
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FMS- Flexible Manf System

The age of mass prod is gone and era of flexible prod is being started as competitive world is there pdt introduced, phase out results to lower order quantities.
Rapid intro of new pdt Quick modification in pdt Consistently Q Control Ability to produce variety of pdt Increase productivity Saves labour cost Shorter preparation time for new pdt.
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