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1. Production and Operation Management (BBA ) Unit 1. ‌Introduction‌ ‌to‌ ‌Production‌ ‌and‌ ‌Operations‌ ‌Management‌                              Halaswamy D PhD Assistant Professor School of Business & Management

2. Module sub topics Introduction, Historical Development, Concept of Production Production System, Classification of Production System, Production Management. Objectives of Production Management Concept of Operations. Distinction between Manufacturing Operations and Service Operations. Operations Management, A Framework for Managing Operations. Objectives of Operations Management, Managing Global Operations, Scope of Production and Operations Management

3. Organizational Model Marketing MIS Engineering HRM QA Accounting Sales Finance OM

4. Historical Milestones in OM The Industrial Revolution Post-Civil War Period Scientific Management Human Relations and Behaviorism Operations Research The Service Revolution

5. 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. 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 By the mid-1800s, the old cottage system of production had been replaced by the factory system.

6. The Industrial Revolution… Post Civil War 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

7. 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.

8. 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

9. 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.

10. 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.

11. 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.

12. 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

13. CONCEPT OF PRODUCTION & OPERATIONS

14. Production / Operations is any process or procedure developed to transform a set of input elements like men, materials, capital, information and energy into a specified set of output elements like finished products and services in proper quantity and quality, thus achieving the objectives of an enterprise. The essence of production or operations is to create goods and services. Production  /  Operations Management  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 .

15. OBJECTIVES OF PRODUCTION & OPERATIONS MANAGEMENT To produce the goods and services as per the quality demanded by the customers and pre established standards in most economic manner. To sustain as well as to increase the level of customer satisfaction. To make improvement in existing goods and services by regular innovations. To produce the goods as per market demand.

16. To ensure uninterrupted supply of goods and services in right quantity at right time and at right place. To keep proper maintenance of plant and machinery To maintain inventory at such levels that there may not be the blockage of working capital due to excessive stock and the production may not hamper due to unavailability of stock

17. Production  is the effective management of resources in producing goods and services.

18. The relationship of the various elements of operations management, from control and inputs to resources and strategy.

19. ‌Production‌ ‌System Production System refers to that set-up of the organization, which is engaged in producing products. It is an activity in which resources are put together and converted into a product. This process enables adding value to that product. Further, the process takes place as per the policies of the management.

20. Production System

21. The major determinants that aid the selection of a production system are: Volume : It indicates the average quantity of goods for production. Variety : It is the product variants, alternatives and range for production. Flow : It indicates the nature and intensity of the production process.

22. 1.Intermittent production Production process takes place at irregular intervals to produce a number of different products with the help of one production line.  The production process begins and stops at irregular intervals. Production is carried out based on the customer orders, i.e.  Make-to-order . Consequently, the producer can customize their products as per the orders received. Each time the jobs and route are  changed  depending on the order received. Therefore, the producer needs to install general-purpose production equipment. Manufacturers use this system to produce low-volume, high-variety products.

23. Features of Intermittent Production Order-based production of goods. Production on a smaller scale. Flexibility in production. Production of a greater variety of products.

24. 1(a) Job Shop Production Job-shop production  or  Unit Production  facilitates the manufacturing of customized products. Production of one or a few products takes place. Based on the  user specifications  and within a stipulated period and cost. Manufacturing of one or a few products within a predetermined time and cost. only one product is completed at a time .

25. Production takes place as per the specifications of the customer. Products in job shop production are high in variety and low in volume . Aim to meet the requirement of the specific order. Each task has a different set of technical requirements because of personalization. For this reason,  the jobs and demand are both unpredictable . Examples : Boutique, Automobile service center, Hairdresser, Aircraft, Gold Jewellery and Tailor.

26. Characteristics of Job Shop Production Multiple varieties of products and low volume Machines and facilities are general purposes Operators are highly skilled and can perform each job in an effective manner. They take each job as a challenge due to its uniqueness. There is a huge stock of materials, tools, equipment, and parts. In-depth planning is important to determine the need of each product, and capacities for each work center, and to order priorities.

27. Advantages A wide variety of products can be offered to customers. The workers are more skilled in comparison to other systems. Ease in management due to limited resources and workers. Flexibility in process and creative methods to generate unique output. Disadvantages The cost of production is high due to small-scale production. The higher lead time of the system. Under-utilization of equipment. Requirement of highly skilled labours .

28. 1 (b) Batch Production This production system is more than a unit production but less than mass production.  Production happens in lots and batches at regular intervals. Manufacturing products in small, discrete batches. Often used in the food and beverage industry, where products are made in large quantities and then packaged and sold in smaller batches. The batch contains a limited number of similar products manufactured simultaneously.

29. The job passes through functional departments, in lots. These lots are nothing but batches and each lot has a different routing. It involves manufacturing a confined number of products. They are similar and produced in large volumes. These products are produced at periodic intervals and stocked awaiting sales of the batches.  The product is disintegrated in the form of Jobs. Further, the whole batch passes through these jobs one at a time. The production of the next batch begins post-completion of the ongoing batch. Examples : Production of tyres and tubes, ready-made garments, pharmaceuticals, and cosmetics. Medicines, Shoes and Bags

30. Characteristics of Batch Production The production runs are shorter Flexible plant and machinery Plant and machinery set up are used to the product in the lot. After that, the setup undergoes a change so as to process the next batch. Lower lead time ( amount of time that passes from the start of a process until its conclusion ) and cost.

31. Advantages Usage general-purpose machines. Risk can be substituted among Batches. Better resource utilization. Per-unit cost is lesser in comparison to unit production. Disadvantages It requires specific fixtures. High cost in sourcing materials. High work-in-progress inventory. More lead time due to changes in set-up.

32. 2. Continuous Production production occurs continuously with a  consistent supply  of materials. the products are constantly in motion, without interruption it is very efficient, and there is no need to set up and break down production equipment for each batch of products. Unlike intermittent production, there are  no frequent halts . The production is carried out on a large scale. The companies maintain the inventory as per demand forecasts. production can be carried out more quickly and with less waste of resources and time. It involves the production of large quantities of products, whose demand is high.  Identical goods  are produced due to product standardization and bulk production.

33. Features of Continuous Production Complete utilization of equipment and raw materials. Production at large scale. Per-unit cost is less due to bulk production. Less lead time as the set-up is required only at the beginning. Highly automated and capital-intensive system.

34. 2 (a) Mass Production Companies use it for carrying out production in very large quantities. It involves the manufacturing of discrete parts, popularly known as Assemblies. Here, the companies adopt a Make-to-stock business strategy. The flow of this production system is constant and continuous. And, the facility arrangement is in line or per product layout. Example :  Soaps, Pens and Toothpaste. auto parts and industrial products

35. When manufacturing of discrete parts and assemblies takes place by way of a continuous process, it is mass production. As the name signifies, the production involves a large volume so as to meet demand. In this, the arrangement of the machine is in a line. There is the standardization of products and processes. Further, the outputs go through the same path. Also, the materials are purchased in bulk. It requires well-researched production planning.

36. Characteristics of Mass Production Standardization of sequence of product and process Special purpose machines dedicated to higher production capacities and output rates Product volume is large Cycle time of production is shorter Lower in process inventory Balanced production lines The continuous flow of material components and parts. Also, it does not have any backtracking. Easy production planning and control Automatic material handling

37. Advantages The cycle time is comparatively less. Automation of material handling. Low work in progress. The cost of production is low. Disadvantages Default at one place may stop the entire production. Line layout needs changes with the change in product design. High capital investments.

38. 2(b) Flow Production The flow of production is uniform and standardized.  All the processes are arranged sequentially, and all the products pass through them. This production system is rigid. Companies stock the products and use them to fulfill the quick demand of the market. Examples: Chemical Plants, TV and Engines. Cement factory, sugar factory, chemical processing, computer keyboards, and oil refinery

39. The need for the product forms the basis of plant design. There is no flexibility regarding the use of resources to produce similar products. Due to this characteristic, when there is a decrease in demand, the resources cannot be used to produce other products. Therefore, it is discarded. So we can say that the plant design is specific to that product only.

40. Characteristics of Flow Production Conversion process whereby successive units of output undergo the same operation sequence. Use of specialized equipment positioned along the production line

41. Advantages Less amount of wastage Semi-skilled can also be employed Higher profit margins The process flow is constant Disadvantages Less flexible to increase or decrease the number of processes. Restrictions on product differentiation. Incapable of fulfilling individual demand.

42. Mass Production Vs Flow Production The difference between Mass and Flow Production is the type of product and its relation to the plant. In Mass Production identical products are produced in large numbers. In flow production, the plant and equipment is designed for a specified product.

43. Difference Between Intermittent and Continuous Production System 1. Layout Type : In the case of job and batch production process layout is appropriate. Whereas for mass or flow production system product layout is best. 2. Product type and design : In the case of job and batch systems, a wide range of products are produced but in small quantities. Hence, product design changes as per the specifications of the product. In contrast, for a continuous production system, either a few or one product is produced in bulk. And the design of the product is standardized, in which changes do not occur at frequent intervals.

44. 3. Machine set up time : Machine set up time is high in the continuous production system as compared to the intermittent system of production. This is due to the frequent changes in the specification of products and design. 4. Order size : Order size is small in the intermittent products. Whereas the same is large in continuous production. 5. Machine Investment : High in case of intermittent production and low for continuous production.

45. 6. Material Handling cost : High in the intermittent production system. However, material handling cost is low in the case of continuous production 7. Production capacity : In an intermittent production system, the production capacity is not fully utilized . But, in the continuous production system, it is completely utilized.

46. Production Management The set of interrelated management activities, which are involved in manufacturing certain products The process that oversees turning production inputs, such as raw materials, resources and costs, into production outputs, which are whatever products or goods a company produces. “Production management deals with decision-making related to production processes so that the resulting goods or service is produced according to specification, in the amount and by the schedule demanded and at minimum cost.” It involves phases that include planning, scheduling, control and maintenance in service of producing quality and quantity on time and within the budget.

47. Objectives of Production Management Cost Efficiency: Production management aims to minimize production costs by optimizing the use of resources such as raw materials, labor, and equipment. It involves implementing strategies to reduce waste, improve productivity, and streamline processes, ultimately leading to cost savings.

48. 2. Quality Assurance: To ensure that products or services meet or exceed customer expectations in terms of quality. Establishing quality control measures, implementing quality assurance systems, and continuously monitoring and improving product quality throughout the production process.

49. 3. Timely Delivery: To ensure that products or services are delivered to customers within the agreed-upon timelines. It involves effective planning and scheduling of production activities, managing inventory levels, and coordinating with other departments such as procurement, logistics, and sales to meet customer deadlines.

50. 4. Optimal Resource Utilization: Efficient use of resources is a key objective of production management. It involves allocating resources effectively, optimizing production capacities, minimizing idle time, and maximizing output while minimizing costs. This objective helps in improving overall operational efficiency and profitability.

51. 5. Flexibility and Adaptability: Production management aims to build flexibility and adaptability into the production process to respond quickly to changing market conditions, customer demands, and unforeseen disruptions. This objective of production management involves implementing agile production systems, adopting advanced manufacturing technologies, and developing contingency plans to manage risks effectively.

52. 6. Continuous Improvement: Production management emphasizes the pursuit of continuous improvement in all aspects of the production process. It involves identifying areas for improvement, implementing process optimization techniques, fostering a culture of innovation and learning, and regularly monitoring performance metrics to drive ongoing enhancements in productivity, quality, and efficiency.

53. 7. Efficient production planning: Effective planning and scheduling of production activities, including determining production quantities, sequencing operations, and allocating resources. This helps in achieving smooth operations, minimizing bottlenecks, and maintaining an efficient flow of work.

54. 8. Meeting customer demands: The ultimate goal of production management is to satisfy customer needs and requirements by delivering products or services on time, in the desired quantity, and of the expected quality. It involves understanding customer demands, forecasting future requirements, and aligning production accordingly.

55. Overall, the objective of production management is to……. ensure that the production process is optimized to achieve……. the desired output, meet customer demands, minimize costs, maintain quality, and drive continuous improvement.

56. Responsibilities of a Production Manager Planning of geographical location of factory Purchasing production equipment Layout of equipment Process Design Establishment of work standards Capacity planning Production planning and scheduling Production control Inventory management Supply chain management Quality control Industrial relations (b/w management & worker) Equipment Maintenance Health and safety Staff selection and training Budgeting and capital planning

57. ‌A‌ ‌Framework‌ ‌for‌ ‌Managing‌ ‌Operations

58. Managing global operations The term ‘globalization’ describes businesses’ deployment of facilities and operations around the world. Globalization can be defined as a process in which geographic distance becomes a factor of diminishing importance in the establishment and maintenance of cross border economic, political and socio-cultural relations. It can also be defined as worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments.

59. There are four developments, which have spurred the trend toward globalization. These are : 1. Improved transportation and communication technologies; 2. Opened financial systems; 3. Increased demand for imports; and 4. Reduced import quotas and other trade barriers . When a firm sets up facilities abroad it involve some added complexities in its operation. Global markets impose new standards on quality and time. Managers should not think about domestic markets first and then global markets later, rather it could be think globally and act locally. Must have a good understanding of their competitors. Challenges include other languages and customs, different management style, unfamiliar laws and regulations, and different costs.

60. Managing global operations Managing global operations would focus on the following key issues: To acquire and properly utilize the concepts and those related to global operations, supply chain, logistics, etc. To associate global historical events to key drivers in global operations from different perspectives. To develop criteria for conceptualization and evaluation of different global operations.

61. To associate success and failure cases of global operations to political, social, economical and technological environments. To envision trends in global operations. To develop an understanding of the world vision regardless of their country of origin, residence or studies in a respectful way of perspectives of people from different races, studies, preferences, religion, politic affiliation, place of origin, etc.

62. ‌Scope‌ ‌of‌ ‌Production‌ ‌and‌ ‌Operations‌ ‌Management