Operations Management UNIT-1

Lets start boiling water on our gas stove and getting our notes within minutes😌

Okay!!

To get completely into the syllabus of this subject Operations Management, lovably called as just OM, please come here 👉💌

We will discuss lot many things in this unit such as Overview of production and operation management, transformation/ manufacturing/ production process, production analysis, planning and control.

Let's move to our first heading😌👇

Production and Operation management

Production management can be defined as a division of management which concerns itself with the production task.

Or in simple terms, production management is a managerial department in any company which looks after the production activities of that company or firm.

"Production management is the process which converts input into output (can include finished, semifinished goods as well as services) with proper planning, controlling, scheduling and as well as with the minimum possible cost."

°°°°°°°°°°°°°°°°

The system which looks after the conversion or production process, upgrades it as well as repairs it is basically known as operations management.

To understand it more, let's focus on the word "operation", operation stands for different kind of activities performed in any sector to produce a particular good or service or to sell any particular good or service.

Hence, "the management system which operates, improves and upgrades the conversion process for better output is known as operations management".

NOTE : This management system is gaining popularity in every sector because it upgrades the transformation process and produces the best possible results with minimum possible cost and maximum possible profits.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Nature of production and operations management

Operations management is a broad and wholistic term which sometimes involves production management in itself.

1.Transformational process

As transforming the raw material or input is the main task of production and operation management.

2. Offers value addition

The output produced always holds the value more than the input used.

3. System itself

Because production and operations management is itself a comprehensive logical process which involves many management activities.

4. Exists for certain objectives

like cost minimization, profit maximization, etc.

5. Not a sole function

As it is carried out in the whole organisation.

6. Increases productivity

7. Facilitates specialisation

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Scope of production and operations management

The industrial evolution has made the production process more complex, facing bigger problems than earlier and these problems require constant attention to generate a proper solution.

Hence, the scope of production and operations management is increaseing day by day in the industrial sector.

It has scope in :

1. Activities connected to the design of production system for example, designing of tools and machines, plant layout, plant location, research and development activities, etc.

2. Activities related to analysis and control of production system for example, planning of production, volume of output to be generated, determination of production cost, controlling the production cost, controlling work in progress, etc.

3. Activities related to quality control for example auditing, supervising, etc.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Objectives of production management

Ultimate objective is to produce goods and services of :

•Right quality

•Right quantity

•At right time

•At pre-established cost.

Intermediate objective is effective utilisation of :

•Manpower

•Machine

•Material

•Manufacturing services

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Functions of Production management

1. Production planning

This function function involves:

•Routing which is mapping of all the tasks.

•Scheduling which is deciding when to do what task.

•Preparation of work orders which is deciding the sequence of tasks.

2. Production control

This function basically deals with:

●Keeping cost of production at bare minimum. ●Producing quantity as required.

●Satisfaction level of the customer should be priority.

3. Quality control of the production

4. Purchasing of raw materials and equipments

5. Plant engineering

6. Industrial engineering

7. Method analysis

As a number of alternative methods are available for manufacturing any product, so choosing the best method with high productivity and minimum cost of production is known as method analysis.

8. Inventory control, plant layout, material handling, work measurement, etc

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Factors affecting operations management

1. Global competition

2. Quality of production

3. Customer service

4. Cost challenges

5. Changes and advancement in technology

6. Increase in the market share of service industry

7. Shortage of raw materials

8. Problems of social responsibility

Like customer attitude, government rules and regulations as well as self interest.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Importance of production and operation management

1. To organisation

•Effective utilisation of scarce resources

•Lowers the level of work in progress inventory

•Better utilisation of capital

•Finding hidden capacity

2. To consumer

•Offers better quality products

•Lowers the general price level

3. To investors and suppliers

•Provides more security, higher credibility

•Offers better returns and timely payments

4. To employees, community and nation

•Offers job security, higher job satisfaction •Provides economic and social stability •Contributes to higher GDP and growth rate

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Problems and challenges in production and operation management

1. Problem of plant location and plant layout

2. Problem of product designing

3. Problem of quality control, inventory control and production control as well as cost control and improvement.

4. Managing social responsibility

5. Going hand in hand with globalisation and changing technology

6. Dealing with knowledge management

The concept of globalisation, social responsibility and technology are all the parts of knowledge management. These three constituents provide wide range of choices and diversity in terms of technology, consumer attitude, production process, etc which requires higher level of accountability and responsibility in order to manage all these core resources effectively and efficiently. And the management of all these three constitutents is known as knowledge management.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Production manager

"A person provided with a position of manager in the companies offering products and services is referred to as production or operations manager."

The production or operations manager is responsible for looking over and managing the various aspects of operations and productions as well as to make every possible effort to increase the efficiency of machines and manpower involved in the production of goods.

It is very essential to have wide ranging business and interpersonal skills for a production manager to make the organisation successful, such as, intelligence, flexibility, imagination, enthusiasm and preserverance, sympathy, resourcefulness, communication ability, self control, etc.

Production manager is responsible for production planning, production control, quality control, purchasing of raw materials and equipments, inventory control, work study, cost control, etc.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

So before moving on to our next heading,

Let me tell you that we have only a few headings left to complete this unit which are:

The transformation process

Manufacturing process

Production planning and control

The last topic plant layout and location are the topics of semester 1 which were in subject Business Organisation so, I have already taught them out! you can go to the video mentioned below👇

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

The transformation process

"Transformation process refers to a process which transform the resources into some kind of goods or services providing utility to the customers."

Here, every production system can be referred to as transformation process system.

Resources means the five Ms which are men, materials, machine, methods and money.

A production system or a transformation process is applicable for both the production of goods and production of services.

Hence, this concept of production system is very helpful in understanding the productions and operations management and that is the only reason why we are studying this topic.

Transformation process consist of the following stages or phases:

1. Inputs

These are the various items or resources which are used for creating goods and services.

These inputs are transformed into an output for the purpose of adding value into the output which is desired by the customers

Some of the inputs are:

•Mapping, planning, forecasting and identification of what to do.

•Manpower

•Money

•Machine

•Material

•Technology

•Time

•Organization

•Government interactions

2. Transformation or conversion process

This refers to the process which converts the inputs into outputs.

It involves:

•Product mix which determines the type of product to be made and quantity of that product
•Plant, its location and layout
•Materials handling equipments
•Labour cost
•Production cost
•Material cost etc

3. Output

Output refers to the final result of the production process.

Some of the outputs can also be used as basic inputs for other transformation processes like flour to Bakery for preparing bread.

The ultimate goal of business is to provide goods and services.

4. Feedback analysis

It is important that actual output is in line with planned production which means that the output produced should be very much close to the output planned for production.

However, generally we see deviations, but the management should also take feedbacks for ensuring that proper actions are taken.

5. Control

In case of high levels of deviation which can be negative or positive as well , some of the control measures are needed to be applied.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Manufacturing process

"When different kind of things are produced either for the use of any industry or for the sale to the customers with the help of various machine, tools and labours, it is regarded as manufacturing process."

Particularly this term, manufacturing process involves all variety of human activities required when the raw material is converted into finished product at a huge level.

Objectives of manufacturing or production process

To make a high quality product
To increase productivity
To eliminate areas of weakness
To improve employees safety
To innovate and bring new ideas

Types of manufacturing process

Broadly there are two types of manufacturing process

1. Continuous production system

Mass production
Assembly lines
Continuous flow

Synthetic production
Analytic production

2. Intermittent production system

Job-based/job shop production
Batch production
Project

Continuous production system

This production system is specialised form of manufacturing which produces similar kind of products in huge quantity which keeps the machine and equipments completely engaged.

This production process is usually used for the products or goods which have high market demands and are usually produced in very large quantity.

Advantages

Low unit cost because of bulk purchasing of materials, etc.
Lower operator skills easy to use machines reduce the cost of skilled labour.
Simpler managerial control as the process involves the repetetion of same activities.

Disadvantage

Balancing the line as it is a continuous process, problem at any stage will cause problem in all the upcoming stages.
High set up cost
Low worker morale because same kind of work has to be repeated.

Types of continuous production system

1. Mass production

It can be explained as large scale production or manufacturing of standardize goods or components.

This process is appropriate for the manufacturing units like automobile, electronics, tyre industry, electrical industry, etc.

Higher the volume of mass production lower the direct labour cost.

2. Assembly line production system

It combines two or more components to produce a single finished good.

As too many processes are taking place under this production system, hence, assembly line balancing is considered to be the best managerial step taken for better production.

Assembly line balancing is referred to as a proper arrangement of activities that ensures the smooth flow of production from one work station to another.

It's main objective is reduce the total number of workstations to their minimum and to increase the production level at its maximum.

3. Continuous flow

This production method takes place on a continuous basis in a standardized and uniform sequential order.

It is of two type:

•Analytical process which involves breaking down the raw material into various products, for example, using crude oil to produce gas, petrol, kerosene, diesel oil, etc.

•Synthetic process which involves the synthesis of a new product by mixing two or more basic materials, for example, making a soap.

Intermittent production system

Intermittent production system is an extremely flexible production process which is designed to produce a wide range of product as per customers' demand.

This production system does not follow continuous manufactoring for storage purposes. It is generally order based.

Flexibility is the keyword which can describe this production system as even the basic product design keeps on changing from time to time as per the customers' demand.

Advantages

Variety at low cost
High capacity utilization
Staff advantages with high job morale

Disadvantages

More costly for higher volumes
Complex operations for planning and control

Types of intermittent production system

1. Job-based/Job shop production

This production system refers to the handling of the entire task either by a single employee or by a group of employees, for example, hairdresser tailoring ,ship building, etc.

2. Batch production

This production involves producing several items of same type as per the order or requirement of the customer, for example, electronics, drugs and pharmaceutical manufacturer, etc.

3. Project

This technology of production basically deals with the customised production which are specifically made to fullfil the order or specific demand of a customer, for example, construction company, etc.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Production analysis, planning and control

Production is a process by which goods and services are created which fullfils customer utility.

And hence, production is also a value addition process so controlling the production process, analysing it and planning for a better production process is also a very important concern for the management.

Production analysis can be defined as analysing the types of raw material, volume of raw material to be used, amount of output to be produced, through which method, using which machinery and many more important aspects of production.

Production Planning can be defined as making the road map of how to produce , when to do which activity and how much output is to be attained.

Production control can be referred to as continuous cross examination of all the activities going on in the production process to ensure that production is taking place as per the analysis and planning.

Objectives of production planning and control

Good quality of final product
Quantum of inputs (which basically means right mix of the inputs to be used in the production process)
Proper coordination
Better control
To facilitate uninterrupted production
Efficient utilisation of the capacity (in terms of men, machine, material, etc)
Timely delivery of the output

Stages/Phases of production planning and control

1. Planning phase

○Pre planning

It involves demand forecasting, product designing, planning plant location and loyout, etc.

○Active planning

It involves routing, scheduling, tools planning, machine planning, etc.

2. Action phase

The planning done in first phase has to be transformed into practical shape which is done in action phase.

This involves dispatching which refers to transition from the planning towards the action phase.

3. Control phase

○Progress reporting

It involves the data processing and information processing to report how much and what work, in which way has been done.

○Corrective actions

This stage deals with making provisions against unpredicted events as well as figuring out the solution for any unwanted happening or misconduct in the production.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Functions of production planning

1. Routing

In general terms, this means giving the sequence to all the tasks which will be performed in the production process

It involves determination of :

what to make and what to buy
materials requirement
sequence of manufacturing activities
lot sizes
production cost

2. Scheduling

In general terms, this means deciding the sequence of the tasks with respect to time (which means that at which time a particular activity has to be performed during the production process).

Forward scheduling is used to find out the time at which the production will be completed

Backward scheduling is used to find out the time at which the production will be started so as production can be done before the deadline

Scheduling today involves forward schedule for a particular day.

3. Loading

In general terms, this function is performed for allotment of tasks to their respective machines.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Functions of production control

1. Dispatching

In general terms, dispatching means the actual granting of permission to proceed according to the plan made.

2. Expediting/ Follow-up / Progressing

In general terms, this function involves the cross check of all the activities by the managers.

3. Inspection

In general terms, this function refers to the examination of product for its quality and other aspects. Inspection can be done before production starts, during the production as well as after the production.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Factors determining production planning and control

Use of Technology (For example, using biometrics for attendance).
Seasonal variations for seasonal industry(such as, beverages consumption goes down in winter).
Change in fashion or trend
Vertical or horizontal integration
After sale services
Loss on account of unpredictable factors
Design changes
Rejection and replacement of the product at the time of final inspection.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Importance of production planning and control

It increases productivity
Removea the unnecessary hurdles
Netter quality of output is produced
Provides higher customer satisfaction
Cost saving
Increases production capacity
Optimum utilisation of resources
Minimum overtime
Better and cordial imdustrial relations
Higher profitability

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

Limitations of production planning and control

Based on assumptions
Time consuming process
Highly affected by external environmental factors
Costly process

The better the learnings the better the earnings😎

To get in depth knowledge of these topics you can also look into it 👉👻

Thank you for reading🙏😊

Stay tuned and remember that you are "EXAMBLASTERS" powered by ●EASY NOTES●