1) Difference Between Production and

Operations Management?

The primary objective of production and operations management is to

effectively manage and utilize those resources of the firm that are essential for
the production of goods and services. Production management refers to
the management of activities related to the production of goods.

On the other hand, operations management is a step ahead of production

management, or it can be said that the production management is a part of the
operations management. Operations Management, as the name suggests is the
administration of business operations, by the managers of the organization.

The difference between production and operations management is very thin

and blurred, which is simplified in this article in a detailed manner.

Content: Production Management Vs Operations Management

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion
Comparison Chart
BASIS FOR
PRODUCTION MANAGEMENT OPERATIONS MANAGEMENT
COMPARISON

Meaning Production Management connotes the Operations Management refers to the

administration of the range of activities part of management concerned with the
belonging to the creation of products. production and delivery of goods and
services.

Decision Making Related to the aspects of production. Related to the regular business activities.

Found in Enterprises where production is Banks, Hospitals, Companies including

undertaken. production companies, Agencies etc.

Objectives To produce right quality goods in right To utilize resources, to the extent
quantity at right time and at least cost. possible so as to satisfy customer wants.

Definition of Production Management

When the principles of management are applied to the production function of

the organisation, it is known as production management. It is a process of
planning, scheduling, supervising and controlling the activities involved in the
production of goods and services, i.e. the transformation of various resources
into the value-added product, in an efficient manner.

In this process, the decision regarding the quality, quantity, price, packaging,
design, etc. are taken by the production manager, so as to ensure that the
output produced confirms the specifications.
 Areas of Production Management
Definition of Operations Management

Operations Management implies the management of day to day business

activities, so as to ensure smoothness and effectiveness of operations in the
organization. It involves administration of production, manufacturing and
provision of services in an organisation.

Operations Management is that branch of management, that deals with

designing, implementing and controlling the production process, i.e.
converting inputs into the output, using resources, in order to provide desired
goods and services to customers while adhering to the policies stated by the
management of the organisation.

Operations Management is all about the optimum utilization of company’s

resources, i.e. the resources must be utilized as much as possible, by
minimizing the loss, wastage and underutilization.

Key Differences Between Production and Operation Management

The difference between production and operation management, are presented

hereunder:
 1. Production Management can be defined as the administration of the set
of activities concerning the creation of goods or transformation of raw
material into finished goods. Conversely, Operations Management is
used to mean that branch of management which deals with the
administration both production of goods and provision of services to the
customers.
2. In production management, the manager has to make decisions
regarding the design, quality, quantity and cost of the product
manufactured by the department. On the contrary, the scope of
operations management is larger in comparison to the production
management wherein the operations manager looks after the product
design, quality, quantity, process design, location, manpower required,
storing, maintenance, logistics, inventory management, waste
management, etc.
3. Production Management can only be found in the firms where
production of goods is undertaken. Unlike, one can find operations
management in every organization, i.e. manufacturing concerns,
service-oriented firms, banks, hospitals, agencies, etc.
4. The basic objective of production management is to provide the right
quality goods in the right quantity at right time and best price. In
contrast, operations management aims at making the best possible use
of organization’s resources, in order to fulfil the customer’s wants.
Conclusion

Production and Operations Management are so closely intertwined, that it is

quite difficult to differentiate the two. Production management covers
administer all the activities which are involved in the process of production.
On the other hand, operations management entails all the activities involved
in the production of goods and delivery of services such as material
management, quality management, maintenance management, process
management, process design, product design and so on.
what are the factors which can help competitiveness of
manufacturing operation?
Competitive Priorities Operations managers must work
closely with marketing in order to understand the competitive situation in the
company’s market before they can determine which competitive priorities are
important. There are four broad categories of competitive priorities:
1. Cost:
Competing based on cost means offering a product at a low price relative to the
prices of competing products. The need for this type of competition emerges from the
business strategy. The role of the operations strategy is to develop a plan for the use
of resources to support this type of competition. Let’s look at some specific
characteristics of the operations function we might find in a company competing on
cost.
 To develop this competitive priority, the operations function must focus
primarily on cutting costs in the system, such as costs of labor, materials, and
facilities. Companies that compete based on cost study their operations system
carefully to eliminate all waste. They might offer extra training to employees to
maximize their productivity and minimize scrap. Also, they might invest in
automation in order to increase productivity. Generally, companies that
compete based on cost offer a narrow range of products and product features,
allow for little customization, and have an operations process that is designed
to be as efficient as possible. One company that successfully competes on cost
is Southwest Airlines. Southwest’s entire operations function is designed to
support this strategy. Facilities are streamlined: only one type of aircraft is
used, and flight routes are generally short. This serves to minimize costs of
scheduling crew changes, maintenance, inventories of parts, and many
administrative costs. Unnecessary costs are completely eliminated: there are no
meals, printed boarding passes, or seat assignments. Employees are trained to
perform many functions and use a team approach to maximize customer
service. Because of this strategy, Southwest has been a model for the airline
industry for a number of years. DEVELOPING AN OPERATIONS
STRATEGY 29 B

2. Quality
Many companies claim that quality is their top priority, and many
customers say that they look for quality in the products they buy. Yet
quality has a subjective meaning; it depends on who is defining it. For
example, to one person quality could mean that the product lasts a long
time, such as a Volvo, a car known for its longevity. To another person
quality might mean high performance, such as a BMW. When companies
focus on quality as a competitive priority, they are focusing on the
dimensions of quality that are considered important by their customers.
Quality as a competitive priority has two dimensions. The
first is high performance design. This means that the operations function
will be designed to focus on aspects of quality such as superior features,
close tolerances, high durability, and excellent customer service. The
second dimension is product and service consistency, which measures
how often the product or service meets the exact design specifications. A
good example of product consistency is McDonald’s, where we know we
can get the same product every time at any location. Companies that
compete on quality must deliver not only high-performance design but
product and service consistency as well.
To see why product and process quality are both important,
let’s say that your favorite fast-food restaurant has designed a new
 sandwich called the “Big Yuck.” The restaurant could design a process
that produces a perfect “Big Yuck” every single time. But if customers
find the “Big Yuck” unappealing, they will not buy it. The same would be
true if the restaurant designed a sandwich called the “Super Delicious” to
meet the desires of its customers. Even if the “Super Delicious” was
exactly what the customers wanted, if the process did not produce the
sandwich the way it was designed, often making it soggy and cold
instead, customers would not buy it. Remember that the product needs to
be designed to meet customer wants and needs, and the process needs to
be designed to produce the exact product that was intended, consistently
without error.
3. Time
Time or speed is one of the most important competitive
priorities today. Companies in all industries are competing to deliver
high-quality products in as short a time as possible. Companies like
Federal Express, LensCrafters, UPS, and Dell Computer compete based
on time. Today’s customers don’t want to wait, and companies that can
meet their need for fast service are becoming leaders in their industries.
Making time a competitive priority means competing based on all time-
related issues, such as rapid delivery and on-time delivery. Rapid delivery
refers to how quickly an order is received; on-time delivery refers to the
number of times deliveries are made on time. When time is a competitive
priority, the job of the operations function is to critically analyze the
system and combine or eliminate processes in order to save time. Often
companies use technology to speed up processes, rely on a flexible
workforce to meet peak demand periods, and eliminate unnecessary steps
in the production process.
Ex: Federal Express, the world’s largest provider of expedited delivery
services, is an example of a company that competes based on time. To support this
strategy, the operation function had to be designed to promote speed. For example,
bar code technology is used to speed up processing and handling, and the company
uses its own fleet of airplanes. Federal Express also relies on a very flexible parttime
workforce, such as college students who are willing to work a few hours at night. This
allows Federal Express to cover workforce requirements during peak periods without
having to schedule full-time workers.

4. Flexibility
As a company’s environment changes rapidly, including customer needs
and expectations, the ability to readily accommodate these changes can be a
winning strategy. This is flexibility. There are two dimensions of flexibility.
One is the ability to offer a wide variety of products or services and customize
 them to the unique needs of clients. This is called product flexibility. A flexible
system can quickly add new products that may be important to customers or
easily drop a product that is not doing well.
You can see the meaning of flexibility when you compare
ordering a suit from a custom tailor to buying it off the rack at a retailer.
Another example : would be going to a fine restaurant and asking to have a
meal made just for you, versus going to a fastfood restaurant and being limited
to items on the menu. The custom tailor and the fine restaurant are examples of
companies that are flexible and will accommodate customer wishes.
Companies that compete based on flexibility often
cannot compete based on speed, because it generally requires more time to
produce a customized product. Also, flexible companies typically do not
compete based on cost, because it may take more resources to customize the
product. However, flexible companies often offer greater customer service and
can meet unique customer requirements. To carry out this strategy, flexible
companies tend to have more general-purpose equipment that can be used to
make many different kinds of products. Also, workers in flexible companies
tend to have higher skill levels and can often perform many different tasks in
order to meet customer needs.

2) What is forecasting? Explain the uses of forecasting management ?

Forecasting is determining what is going to happen in the future by

analyzing what happened in the past and what is going on now. It is a
planning tool that helps business people in their attempts to cope with the
uncertainty of what will might and might not occur. Forecasting relies on
past and current data and analysis of trends.

USES:

Demand forecasting helps companies prepare beyond the

current period. This allows the company to be more efficient in how it
allocates its resources -- which is important for any company, but
especially so for small businesses. Companies use demand forecasting
to get a leg up on the competition, and the process also allows a
company to assess its own performance.

What is Production Forecasting? Definition

Meaning of Production Forecasting
Production forecasting means to estimate the future demand for goods and services. It
also estimates the resources which are required to produce those goods and services.
These resources include human resources, financial and material resources. So,
production forecasting means to estimate the 6M's of management.
The production manager first estimates the future market or demand for the companies
goods and services. Then he estimates the Men (human resources), Money (financial
resources), Materials, Machines and Methods, which will be required to produce those
goods and services.
Production forecasting estimates the future technological developments. It estimates
the customers needs and preferences along with competitors' strategy in the future. So,
production forecasting is an estimation of a wide range of future events, which affect
the production of the organization.

PRODUCT DESIGN

Most of us might think that the design of a product is not that

interesting. After all, it probably involves materials, measurements, dimensions, and
blueprints. When we think of design we usually think of car design or computer
design and envision engineers working on diagrams. However product design is much
more than that. Product design brings together marketing analysts, art directors, sales
forecasters, engineers, finance experts, and other members of a company to think and
plan strategically. It is exciting and creative, and it can spell success or disaster for a
company. Product design is the process of defining all the features and characteristics
of just about anything you can think of, from Starbuck’s cafe latte or Jimmy Dean’s
sausage to GM’s Saturn or HP’s Desk Jet printer. Product design also includes the
design of services, such as those provided by Salazar’s Beauty Salon, La-Petite
Academy Day Care Center , or Federal Express. Consumers respond to a product’s
appearance, color , texture, performance. All of its features, summed up, are the
product’s design. Someone came up with the idea of what this product will look like,
taste like, or feel like so that it will appeal to you. This is the purpose of product
design. Product design defines a product’s characteristics, such as its appearance, the
materials it is made of, its dimensions and tolerances, and its performance standards.

HOW IS PRODUCT DESIGN FUNCTION DIFFERENT FROM PRODUCT

DESIGN?
Product Development in most cases leads to the final Design;
Most would assume that when a Designer Designs a Toaster on paper or the
computer screen that’s the final product - however it’s not. This is where
Product Development comes into play. When you start making prototypes of
the Toaster you learn what looks pretty in a sketch or computer rendering does
not always function in realty. Automotive Designers also learn this allot times
with door and trunk lid ideas- they learn what looks cool is not always
 structurally safe. So back to the Toaster - you design this great looking modern
Chrome beast then you make a prototype from your computer renderings and
find out it will not toast Texas Toast or Bagels because the openings are way
too small and you have to change some proportions while trying to maintain
the original conceptual look. Charles and Ray Eames would make loads of
prototypes for just one chair; now in their case ones of their production chairs
because of all the prototyping has over 40 different configurations - along with
a wide range of material use for that one single chair. Thus in short Product
Development is the Prototyping & Engineering of the Conceptual Designed
Product.

EXPLAIN THE PRODUCT LIFE CYCLE? HOW WOULD BE THE

MANUFACTURING STRATEGIES BE DIFFERENT FOR EACH STAGE
OF THE PRODUCT LIFE CYCLE?

The product life cycle describes the period of time over

which an item is developed, brought to market and eventually removed from
the market. The cycle is broken into four stages: introduction, growth, maturity
and decline. The idea of the product life cycle is used in marketing to decide
when it is appropriate to advertise, reduce prices, explore new markets or create
new packaging.
First, a product idea is implemented during the introduction phase, and the idea
undergoes research and development. If the idea is determined to be feasible and
potentially profitable, the product is produced, marketed and rolled out in the growth
phase. Assuming the product becomes successful, its production will grow until the
product becomes widely available and matures in the mature stage. Eventually,
demand for the product declines and it becomes obsolete, resulting in the decline
stage.

At the beginning of a product's life, it may have a little to no competition in the

marketplace, until competitors start to emulate its success. As the product becomes
more successful, it faces increasing numbers of competitors and may lose market
share, eventually declining.

The stage of a product's life cycle impacts the way in which it is marketed to
consumers. For example, a brand-new product needs to be explained to consumers,
while a product that is further along in its life cycle needs to be differentiated from its
competitors.
Introduction Stage

This is the initial stage of product in the market. Product is introduced in the market
and there is huge amount of investment by companies.

Situation of Product

1. Slow growth/ slow sales

2. Low profit or no profit
3. Cost still high
4. No competition as competitors are relaxed that product may not survive
Organizational Strategies

1. Pricing strategy (skimming or penetration)

2. Focus on most ready buyer

6)
FACTORS INFLUENCING PLANT
LOCATION
Factors affecting Facility location decision in Operations Management

Facility location is the process of determining a geographic site for a firm’s

operations. Managers of both service and manufacturing organizations must weigh
many factors when assessing the desirability of a particular site, including proximity
to customers and suppliers, labor costs, and transportation costs.

Location conditions are complex and each comprises a different Characteristic of a

tangible (i.e. Freight rates, production costs) and non-tangible (i.e. reliability,
frequency security, quality) nature.

Location conditions are hard to measure. Tangible cost based factors such as wages
and products costs can be quantified precisely into what makes locations better to
compare. On the other hand non-tangible features, which refer to such characteristics
as reliability, availability and security, can only be measured along an ordinal or even
nominal scale. Other non-tangible features like the percentage of employees that are
unionized can be measured as well. To sum this up non-tangible features are very
important for business location decisions.
 It is appropriate to divide the factors, which influence the plant location or facility
location on the basis of the nature of the organization as
1. General locational factors, which include controllable and uncontrollable factors
for all type of organizations.
2. Specific locational factors specifically required for manufacturing and service
organizations.
Location factors can be further divided into two categories: Dominant factors are
those derived from competitive priorities (cost, quality, time, and flexibility) and have
a particularly strong impact on sales or costs. Secondary factors also are important,
but management may downplay or even ignore some of them if other factors are more
important.

General Locational Factors

Following are the general factors required for location of plant in case of all types of
organisations.
CONTROLLABLE FACTORS
1. Proximity to markets.
2. Supply of materials
3. Transportation facilities
4. Infrastructure availability
5. Labour and wages

What are the advantages and disadvantages of

building factory in villages?
As we all know that every coin has two sides, so it is when it comes to the proposed fa
ctory built near mycommunity. From the point of view,
I think advantages include totally three: one is to boost regioneconomic growth; the ot
her one is that it can offer people more job opportunities and raise their livingstandard;
finally, it's good for those stay-at-
home children and the old. However, speaking of thediadvantages, environment pollut
ion would be the biggest one and social problems might be caused aswell.
First of all, industry is like a chain which could make a series of industrial effects. If o
ne factory werebeing built near my community, then it would bring more investiments
. At the same time, people couldbegin to open shops, restaurants, dormitories and ente
rtain facilities to serve the factory workers, thus, itcould stimulate the economy of my
community and the original agriculture-
based industrial structurecould be changed a lot. In reture, prospering our economy.
On the other side, in order to run a factory,an amount of work force is needed desperat
ely.
That's to say, one factory offers a lot of job positions, people in my community could
go apply the job, it could not onlyelevate their living level but also helps government s
olve some social problems.
What's more, in the community where I lived, there are so many parents went to big ci
ties because of theundeveloped economy, leaving their poor children and their old par
ents at home. While if a new factorycould be built, it might help to draw them back,ba
ck to their family. Therefore, those stay-at-
homechildren and the old could be taken care of more attentive.
Nevertheless, there would be certainly be negtive effects as well. The most serious on
e must beenvironment pollution,particularly in regards to pulluting the water and maki
ng noises. That definitelywould lower the quality of life. Maybe it would cause a fight
between residents and the factory officials.
Eventually, comparing those advantages and disadvantages, we can see it clearly that t
he formeroutweighs the latter. That means, if we take the proper precautions, such as i
mposing strictenvironmental standards, the whole area stands to benefit.

No.7 Qn
what are the different types of layouts used in
manufacturing?
Keeping in view the type of industry and volume of
production, the type of layout to be selected is to be
decided from the following:
1. Product or Line Layout

2. Process or Functional Layout.

ADVERTISEMENTS:

3. Fixed Position Layout.

4. Combination type of Layout.

1. Product or Line Layout:
If all the processing equipment and machines are arranged
according to the sequence of operations of the product, the layout is
called product type of layout. In this type of layout, only one
product of one type of products is produced in an operating area.
This product must be standardized and produced in large quantities
in order to justify the product layout.

The raw material is supplied at one end of the line and goes from
one operation to the next quite rapidly with a minimum work in
process, storage and material handling. Fig. 8.3 shows product
layout for two types of products A and B.

Advantages offered by Product Layout:

(i) Lowers total material handling cost.

(ii) There is less work in processes.

(iii) Better utilization of men and machines,

(iv) Less floor area is occupied by material in transit and for

temporary storages.

(v) Greater simplicity of production control.

(vi) Total production time is also minimized.

Limitations of Product Layout:

(i) No flexibility which is generally required is obtained in this
layout.

(ii) The manufacturing cost increases with a fall in volume of

production.

(iii) If one or two lines are running light, there is a considerable

machine idleness.

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(iv) A single machine break down may shut down the whole
production line.

(v) Specialized and strict supervision is essential.

2. Process or Functional Layout:

The process layout is particularly useful where low volume of
production is needed. If the products are not standardized, the
process layout is more low desirable, because it has creator process
flexibility than other. In this type of layout, the machines and not
arranged according to the sequence of operations but are arranged
according to the nature or type of the operations. This layout is
commonly suitable for non repetitive jobs.

Same type of operation facilities are grouped together such as lathes

will be placed at one place, all the drill machines are at another
place and so on. See Fig. 8.4 for process layout. Therefore, the
process carried out in that area is according to the machine
available in that area.

Advantages of Process Layout:

(i) There will be less duplication of machines. Thus, total
investment in equipment purchase will be reduced.

(ii) It offers better and more efficient supervision through

specialization at various levels.

(iii) There is a greater flexibility in equipment and man power thus

load distribution is easily controlled.

(iv) Better utilization of equipment available is possible.

(v) Break down of equipment can be easily handled by transferring

work to another machine/work station.

(vi) There will be better control of complicated or precision

processes, especially where much inspection is required.

Limitations of Process Layout:

(i) There are long material flow lines and hence the expensive
handling is required.
(ii) Total production cycle time is more owing to long distances and
waiting at various points.

(iii) Since more work is in queue and waiting for further operation
hence bottle necks occur.

(iv) Generally, more floor area is required.

(v) Since work does not flow through definite lines, counting and
scheduling is more tedious.

(vi) Specialization creates monotony and there will be difficult for

the laid workers to find job in other industries.

3. Fixed Position Layout:

This type of layout is the least important for today’s manufacturing
industries. In this type of layout the major component remain in a
fixed location, other materials, parts, tools, machinery, man power
and other supporting equipment’s are brought to this location.

The major component or body of the product remain in a fixed

position because it is too heavy or too big and as such it is
economical and convenient to bring the necessary tools and
equipment’s to work place along with the man power. This type of
layout is used in the manufacture of boilers, hydraulic and steam
turbines and ships etc.

Advantages Offered by Fixed Position Layout:

(i) Material movement is reduced

(ii) Capital investment is minimized.

(iii) The task is usually done by gang of operators, hence continuity
of operations is ensured

(iv) Production centers are independent of each other. Hence,

effective planning and loading can be made. Thus total production
cost will be reduced.

(v) It offers greater flexibility and allows change in product design,

product mix and production volume.

Limitations of Fixed Position Layout:

(i) Highly skilled man power is required.

(ii) Movement of machines equipment’s to production centre may

be time consuming.

(iii) Complicated fixtures may be required for positioning of jobs

and tools. This may increase the cost of production.

4. Combination Type of Layout:

Now a days in pure state any one form of layouts discussed above is
rarely found. Therefore, generally the layouts used in industries are
the compromise of the above mentioned layouts. Every layout has
got certain advantages and limitations. Therefore, industries would
to like use any type of layout as such.

Flexibility is a very important factory, so layout should be such

which can be molded according to the requirements of industry,
without much investment. If the good features of all types of layouts
are connected, a compromise solution can be obtained which will be
more economical and flexible.
Top 10 Factors influencing design of plant
layout

Nature of the product: The nature of the product to be manufactured

has a significant influence on plant layout. Small and light products
can be moved from one machine to another with minimum effort and
time and therefore line layout would be more suitable. Stationary
layout would be suitable for heavy and bulky products. In case of
production of large variety of non-standardized products, process
layout is ideal.
2. Production volume: Line layout should be preferred if standardized
commodities are manufactured on a large scale. Functional layout is
suitable if production is based on customers orders. It is better suited
for low volume job production.
3. Location of the site: The topology and size of the site influences the
choice of a particular layout. The idea is to maximize the utilization
of space. Layout should also suit the factory building. The positioning
of elevators, stairways, parking lots and storage points also influence
the layout.
4. Type of machines: Stationary layout is preferable if machines are
heavy and emit more noise. Such heavy machinery can be fitted on
the floor. Adequate space should be provided for the location of
machines and also there should be sufficient space between them to
avoid accidents.
5. Climate: Temperature, illumination, ventilation should be
considered while deciding on the type of layout. The above factors
should be considered in order to improve the health and welfare of
employees.
6. Service facilities: The layout should provide for the comforts and
welfare of the employees. It should have adequate provision for rest
rooms, drinking water, lavatory. There should be sufficient space for
free movement of workers.
7. Safety of employees: While deciding on a particular type of layout,
the safety of employees should be given importance. The layout
should provide for obstruction free floors, non-slippery floors,
protection against dangerous fumes, excess heat, strong odors Etc.
8. Type of production: Layout plans differ according to the type of
production. In case of job orders, production of non-standardized
products are undertaken, and therefore functional or process outlet
is suitable. Line layout would be suitable when there is mass
production of standardized goods.
9. Type of process: In the case of intermittent type of production (bi-
cycle manufacturing, electronics), functional layout is suitable. For
synthetic type of Production (cement and automobile industries),
line layout is preferable.
10. Management policies: Policies of the management relating to type
of product, quality, scale of production, level of plant integration,
type of production, possibility of future expansion etc., influence the
type of layout to be adopted.

No.8 Qn material handling