Production and Operations Technology Lecture 01 PDF

ETAC – 3124 Production and Operations Technology Ms. Thushani Mallikarathne Lecturer (Probationary), Det. Of Mechanical & Manufacturing Technology, Faculty of Technology, Contact: thu...

ETAC – 3124 Production and Operations Technology Ms. Thushani Mallikarathne Lecturer (Probationary), Det. Of Mechanical & Manufacturing Technology, Faculty of Technology, Contact: [email protected] | 0712339770 Wayamba University of Sri Lanka  Learning Outcomes Aim: To provide the students with knowledge of operation management techniques On successful completion of the course, the students should be able to:  explain the role of operations management in the overall business strategy of a firm  explain application of operations management policies and techniques to the service sector as well as to the manufacturing firms  explain how to plan and carry out operations in an organization, perform basic forecasting, planning, and scheduling tasks 2  Lecture Panel Mr. Lakshitha Meragalge Ms.Kanchanamala Bandara Ms.Thushani Mallikarathne – CourseCoordinator 3  Activity 01 1. List five products that you find around or use 4  Activity 01 2. Select a product of your choice and explain how the product is manufactured Cake Manufacturing Process Flow 5  Activity 01 3. Identify inputs used in manufacturing the product 6 Bottle Manufacturing Process  Activity 01 4. Explain the transformation process Chocolate Manufacturing Process 7 Simple Illustration of a Production System Inputs Transformation Outputs Processes 8  Production and Operations management Vehicles Goods Books Food Production and Computers Operations Repairs Services Counseling Teaching Advertising 9  Production  Production implies the creation of goods and services to satisfy human needs.  It involves conversion of inputs (resources) into outputs (products).  It is a process by which, raw materials and other inputs are converted into finished products. Operations  The term “operations” refers to a function or system that transforms inputs into outputs of greater value.  Operations are often defined as a transformation or conversion process wherein inputs such as materials, machines, labour and capital are transformed into outputs (goods and services). 10  Production System Vs Operating System  In a productive system, if the outputs are strictly tangible goods, such a system is referred to as a “production system” and the transformation process is referred to as “production”.  Nowadays, the service system in which the output is predominantly a service or even a pure service, is also treated as a productive system and often referred to as an “operating system” instead of a “production system”. 11  Production and Operation Management  The management of the production system that transforms inputs into finished goods and services.  This view is also known as "systems concept of production".  A production system has the following elements or parts : (i) Inputs, (ii) Conversion process or transformation process, (iii) Outputs (iv) Transportation subsystem (v) Communication subsystem and (vi) Control or decision making subsystem. 12 Simple Overview of Operations Management The business function responsible for planning, coordinating, and controlling the resources needed to produce products and services for a company Inputs Transformation Outputs Processes Materials Goods Resources Adding Values Products 13 Transformation 14 Resourceful People 15 Goods and Services 16  Activity 02 Compare goods and services in terms of: ▪ Nature (e.g., tangible, lifetime) ▪ Connection to consumer ▪ Market options ▪ Response time ▪ Possibility to check quality 17 Characteristics of Goods and Services 18  Activity 03 - Real World Cases Case Direct Input Recourses Used Output Type of I/O What provided to customers 1. 2. 3. 4. 5. 6. 7. 19  Importance of P/O Management  Production is the core function of any business organization.  Production function creates goods and services and organizations exist primarily to produce goods and to provide services.  Without a production function, there would be no need for any other function such as marketing, finance, or human resource function.  Also, more than 50 percent of employees in a business organization have jobs in the area of production.  Moreover, the production function is responsible for a major portion of assets in most organizations.  Consumption of goods and services is an integral part of any society and the production function facilitates the creation of goods and services for the benefit of people in the society. 20  Objectives of P/O Management  Maximum customer satisfaction through quality, reliability, cost, and delivery time.  Minimum scrap/rework resulting in better product quality.  Minimum possible inventory levels (i.e.,optimum inventory levels).  Maximum utilization of all kinds of resources needed.  Minimum cash outflow.  Maximum employee satisfaction.  Higher operating efficiency.  Minimum production cycle time.  Maximum possible profit or return on investment.  Concern for the protection of the environment. 21  Responsibilities of P/O Mangers Responsibilities of Production/Operations Managers The following are the major responsibilities of production/operations managers : (i) Meeting requirements of quality demanded by customers. (ii) Establishing realistic delivery or completion dates. (iii) Producing the required volume of products to meet the demand. (iv) Selection and application of most economical methods or processes. (v) Controlling the cost of inputs and conversion process and thereby keeping the cost of outputs within the desired limits. 22  Activity 04 Assuming that you are about to set up production for soap preparation and answer below questions, 1. Explain the transformation that takes place involved in converting inputs into output. 2. List decisions you would make 23  1. Product and Service Design Decisions 2. Location you would 3. Capacity design make ? 4. Human resource and job design 5. Maintenance 6. Cost of the input and output 24  Decisions Making in P/O Management The production/operations managers manage all activities and they must co-ordinate the use of resources through the managerial process of planning, organizing, staffing, directing (or influencing), and controlling. The decisions that production/operations managers make may be classified into three general categories: (i) Strategic Decisions: Decisions about products, processes, and facilities. (ii) Operating Decisions: Decisions about planning production to meet demand. These decisions must help to resolve the issues concerned with planning production to meet customers’ demands for products and services and to achieve customer satisfaction at reasonable costs. (iii) Control Decisions: Decisions about controlling operations concerned with day-to-day activities of the workers, quality of products and services, production costs, overhead costs and maintenance of plant and equipment. Long term and Short term decisions ? 25 26  Activity 05 Identify the long-term intermediate-term and short-term decisions and list out them 27  Long-run decisions Long-run decisions related to the design of the production system are: (i) Selection and Design of Products: Product selections and designs with productive capability (i.e., reducibility of products) are interdependent. (ii) Selection of Equipment and Processes: Selection of the most economical equipment and processes among the various alternatives considered, the firm's capability to invest in capital assets and its basic approach to production must be considered. (iii) Production Design of Parts Processed: Production design aims at selection of equipment, processes, and tools for economic production which set limits on the cost of outputs. (iv) Job Design: It involves basic organization of work as well as matching workers to their jobs in order to reduce fatigue and improve productivity. (v) Location of the System: It is a trade-off decision since there is no one best location for a productive system to be located. The balance of cost factors determined by various considerations is critical. (vi) Facility Layout: This involves decisions related to design capacity, basic modes of production, shifts of working, use of overtime and subcontracting. (vii)Other factors involved are heating, lighting and other utility requirements, the allocation of storage space, washing space and the design of the building to house the layout. 28  Short-run decisions Short-Run Decisions Short-run decisions related to the operations and control of the system are : (i) Inventory and Production Control: Decisions made are concerned with allocation of productive capacity consistent with demand and inventory policy. Feasible schedules must be worked out and the load on machines and labour and the flow of production must be controlled. (ii) Maintenance and Reliability of the System: Decisions must be made regarding the maintenance effort, maintenance policy and practice recognising the fact that machine down-time may lead to idling of labour and production stoppage resulting in lost sales. (iii) Quality Control: Decisions must be made to set permissible levels of risk that bad parts are produced and shipped or the risk that good parts are scrapped due to sampling inspection. Inspection costs must be balanced with the probable losses due to passing defective materials or products. Decisions regarding controlling the quality of on-going processes must be taken. (iv) Labour Control: Labour is the major cost element in most products and services. Hence, work measurement and wage incentive systems must be developed to control labour costs and to increase labour productivity. (v) Cost Control and Improvement: Day-to-day decisions which involve the balance of labour, material and overhead costs must be made by production supervisors. 29 Thank You! 30