Production and Operations Management PDF

LESSON I: PRODUCTION AND OPERATIONS MANAGEMENT  2 PRODUCTION IN OPERATIONS MANAGEMENT Production and operations management is the process of turning an organization's resources into goods and services. Production management re...

LESSON I: PRODUCTION AND OPERATIONS MANAGEMENT  2 PRODUCTION IN OPERATIONS MANAGEMENT Production and operations management is the process of turning an organization's resources into goods and services. Production management relates to the activities around creating products.  3 OPERATIONS MANAGEMENT Operations management has to do with the production and delivery of products and services. PRODUCTION / OPERATIONS MANAGEMENT 4 IS DEFINED AS THE PROCESS WHICH TRANSFORMS THE INPUTS/RESOURCES OF AN ORGANIZATION INTO FINAL GOODS (OR SERVICES) THROUGH A SET OF DEFINED, CONTROLLED AND REPEATABLE POLICIES. BY POLICIES, WE REFER TO THE RULES THAT ADD VALUE TO THE FINAL OUTPUT. What does operations management cover? 5 Think of everything it takes to get your product or service into a customer's hands. Without effective planning, you’re likely to waste time, effort, and money. That's where operations management comes in. With a strong operations foundation, you ensure: On-time deliveries: Operations management streamlines production schedules to meet customer deadlines. Optimized resources: Efficient supply chain and inventory management means you always have what you need without unnecessary waste. Consistent quality: Good and reliable quality control processes guarantee your products or services always meet customer expectations. Seamless workflow: Operations management maximizes efficiency across departments. Increased productivity: Get more done with the same resources through process improvements.  6 FOUR TYPES OF PRODUCTION: Unit or Job type of production Batch type or Production Mass Production or flow production Continuous production or process production JOB PRODUCTION IS A PRODUCTION METHOD 7 WHERE ONLY ONE PRODUCT IS COMPLETED AT A TIME. EACH ORDER IS UNIQUE AND MEETS THE SPECIFIC REQUIREMENTS OF THE CUSTOMER. IT IS OFTEN CALLED JOBBING OR ONE- OFF PRODUCTION.  8 PAINTER BAKER TAILOR  9 BATCH TYPE OF PRODUCTION is a method whereby a group of identical products are produced simultaneously (rather than one at a time). It is up to the manufacturer to decide how big the batch will be, and how often these batches will be made. Each batch goes through the separate stages of the manufacturing process together.  CLOTHING SOAP 10 PRODUCTION PRODUCTION  11 MASS/FLOW PRODUCTION is a manufacturing process where goods are produced in large quantities using standardized designs, machinery, and assembly line techniques.  CARS 12 COCA-COLA CANNED GOODS  13 CONTINUOUS PRODUCTS - is traditionally used for manufacturing high-volume products which don't require customization, such as paper and pulp manufacturing, petrochemicals, or oil and gas refineries, and/or for products that are consumed on a continual basis such as electricity production or water treatment plants. 14 ORGANIZATIONAL MODEL Finance Sales HRM OM QA Marketing MIS Accounting Engineering HISTORICAL EVOLUTION OF PRODUCT MANAGEMENT-  THE INDUSTRIAL REVOLUTION The industrial revolution developed in England in the 1700s. The steam engine, invented by James Watt in 1764, largely replaced human and water power for factories. Adam Smith’s The Wealth of Nations in 1776 touted the economic benefits of the specialization of labor. Thus the late-1700s factories had not only machine power but also ways of planning and controlling the tasks of workers. THE INDUSTRIAL REVOLUTION The industrial revolution spread from England to other European countries and to the United Sates. In 1790 an American, Eli Whitney, developed the concept of interchangeable parts. The first great industry in the US was the textile industry. In the 1800s the development of the gasoline engine and electricity further advanced the revolution. By the mid-1800s, the old cottage system of production had been replaced by the factory system.  POST-CIVIL WAR PERIOD During the post-Civil War period great expansion of production capacity occurred. By post-Civil War the following developments set the stage for the great production explosion of the 20th century: increased capital and production capacity the expanded urban workforce new Western US markets an effective national transportation system  SCIENTIFIC MANAGEMENT Frederick Taylor is known as the father of scientific management. His shop system employed these steps: Each worker’s skill, strength, and learning ability were determined. Stopwatch studies were conducted to precisely set standard output per worker on each task. Material specifications, work methods, and routing sequences were used to organize the shop. Supervisors were carefully selected and trained. Incentive pay systems were initiated.  SCIENTIFIC MANAGEMENT In the 1920s, Ford Motor Company’s operation embodied the key elements of scientific management: standardized product designs mass production low manufacturing costs mechanized assembly lines specialization of labor interchangeable parts  HUMAN RELATIONS AND BEHAVIORALISM In the 1927-1932 period, researchers in the Hawthorne Studies realized that human factors were affecting production. Researchers and managers alike were recognizing that psychological and sociological factors affected production. From the work of behavioralists came a gradual change in the way managers thought about and treated workers.  OPERATIONS RESEARCH During World War II, enormous quantities of resources (personnel, supplies, equipment, …) had to be deployed. Military operations research (OR) teams were formed to deal with the complexity of the deployment. After the war, operations researchers found their way back to universities, industry, government, and consulting firms. OR helps operations managers make decisions when problems are complex and wrong decisions are costly.  THE SERVICE REVOLUTION The creation of services organizations accelerated sharply after World War II. Today, more than two-thirds of the US workforce is employed in services. About two-thirds of the US GDP is from services. There is a huge trade surplus in services. Investment per office worker now exceeds the investment per factory worker. Thus there is a growing need for service operations management.  THE COMPUTER REVOLUTION Explosive growth of computer and communication technologies Easy access to information and the availability of more information Advances in software applications such as Enterprise Resource Planning (ERP) software Widespread use of email More and more firms becoming involved in E-Business using the Internet Result: faster, better decisions over greater distances  27 FACTORS AFFECTING OPERATIONS MANAGEMENT O GLOBAL COMPETITION O QUALITY, CUSTOMER SERVICE AND COST CHALLENGES O RAPID EXPANSION OF ADVANCED TECHNOLOGIES O GROWTH OF SERVICE SECTOR O SOCIAL RESPONSIBILITY ISSUES O SCARCITY OF CAPITAL, MATERIALS  28 CONCEPTS OF PRODUCTION- PRODUCTION IS A PROCESS OF COMBINING VARIOUS MATERIAL INPUTS AND IMMATERIAL INPUTS (PLANS, KNOW-HOW) IN ORDER TO MAKE SOMETHING FOR CONSUMPTION (OUTPUT). IT IS THE ACT OF CREATING AN OUTPUT, A GOOD OR SERVICE WHICH HAS VALUE AND CONTRIBUTES TO THE UTILITY OF INDIVIDUALS. MARKET PRODUCTION PUBLIC PRODUCTION.  29 PRODUCTION SYSTEM- PRODUCTION SYSTEM IS A COMPUTER PROGRAM TYPICALLY USED TO PROVIDE SOME FORM OF ARTIFICIAL INTELLIGENCE, WHICH CONSISTS PRIMARILY OF A SET OF RULES ABOUT BEHAVIOR BUT IT ALSO INCLUDES THE MECHANISM NECESSARY TO FOLLOW THOSE RULES AS THE SYSTEM RESPONDS TO STATES OF THE WORLD.  30 PRODUCTION MANAGEMENT PRODUCTION MANAGEMENT IS DEFINED AS THE PLANNING AND CONTROL OF ALL ACTIVITIES NECESSARY TO PRODUCE A SET OF PRODUCTS. FOR A TYPICAL METALWORKING JOB SHOP TYPE OF COMPANY, PRODUCTION MANAGEMENT THUS COMPRISES IMPORTANT FUNCTIONS SUCH AS: PRODUCT DEVELOPMENT AND TECHNOLOGICAL PLANNING. OPERATIONS MANAGEMENT IS AN AREA OF MANAGEMENT CONCERNED WITH DESIGNING AND CONTROLLING THE PROCESS OF PRODUCTION AND REDESIGNING BUSINESS OPERATIONS IN THE PRODUCTION OF GOODS OR SERVICES.  31 OPERATING SYSTEM AN OPERATING SYSTEM IS A SOFTWARE WHICH PERFORMS ALL THE BASIC TASKS LIKE FILE MANAGEMENT, MEMORY MANAGEMENT, PROCESS MANAGEMENT, HANDLING INPUT AND OUTPUT, AND CONTROLLING PERIPHERAL DEVICES SUCH AS DISK DRIVES AND PRINTERS. AN OPERATING SYSTEM HAS THREE MAIN FUNCTIONS: (1) MANAGE THE COMPUTER'S RESOURCES, SUCH AS THE CENTRAL PROCESSING UNIT, MEMORY, DISK DRIVES, AND PRINTERS, (2) ESTABLISH A USER INTERFACE, AND (3) EXECUTE AND PROVIDE SERVICES FOR APPLICATIONS SOFTWARE.  32 MANAGING GLOBAL OPERATIONS THERE ARE MANY REASONS WHY COMPANIES GO GLOBAL IN THEIR OPERATIONS: GROWTH (FINDING NEW, UNTAPPED MARKETS FOR THE COMPANY EXISTING PRODUCTS), EFFICIENCY (LOOKING FOR ECONOMIES OF SCALE OR ECONOMIES OF SCOPE, USING LOWER COST RESOURCES), AND KNOWLEDGE (GETTING SKILLED LABOR AND TALENT IN OTHER COUNTRIES, ACQUIRING NEEDED BY THE ORGANIZATION. THANK YOU FOR LISTENING 