Production

Management

Introduction
Product
For a Consumer : combination of or optimal mix of
potential utilities.
For a Production Manager : combination of various
surfaces and processes.
For a Financial Manager : mix of various cost elements.
For a Personnel Manager : product is a mix of various
skills.

Introduction
Product:
Often standardized in large volumes.
Plant and machinery have a finite capacity.
Involve fixed costs, variable costs and materials
costs.

Product is
manufacturing.

store

of

values

added

during

Productivity can be measured with certain degree of

accuracy as costs are measurable.

Introduction
Service:
Produced and consumed in the presence of the customer.
Cannot store the service physically.
Capacity must be sufficiently or consciously managed to
accommodate a highly variable demand.
Cannot be easily standardized.
Uncertainty with respect to capacity and costs.
Calculation of cost and productivity is difficult.

Introduction
Project:
Does not produce standardized products.
Plant, Machinery, Men and Materials are often
brought to project site and the project is completed.
Costs can be calculated and allocated to the project
with considerable accuracy
Productivity can be measured.

Introduction.
Production
`production' has been associated only with a factory
like situation where goods are produced in the physical
sense. Factory has been defined as any premises
in which persons are employed for the purpose of
making, altering, repairing, ornamenting, finishing,
cleaning, washing, breaking. demolishing or adopting
for sale, any article".
Thus production is a "process through which goods
and services are created."

Introduction..
In other words production is :
Making of both products and services
Includes both manufacturing and service
organisations
Brings together people, machines any
Goods or services are made to satisfy the wants of
the people
The process of changing inputs into outputs and
thereby adding value to some entity; this constitutes

Introduction
Types of production
Production by Disintegration: By separating the
contents of input the desired products are produced.
e.g. crude oil
Production by Integration: Various Components
of the products are assembled together to get the
desired product. e.g. chair
Production by Service: Properties of materials are
improved without any physical change. The example
for this is Heat Treatment of metals.

Management
Management can be explained as an art or science, (in
fact it is a combination of art and science) of getting
things done by the people, by planning, coordinating,
organizing, directing and controlling the activities to
meet specified goals, with in the frame work of agreed
policies.

Operations Management
Conversion of inputs into outputs, using physical
resources, so as to provide the desired utility/utilities of
form, place, possession or state or a combination
there-of to the customer while meeting the other
organizational objectives of effectiveness, efficiency
and adaptability.
Its primary concern is conversion by using physical
resources which distinguishes it from other functions.

Value Added Process

There are four major ways:
Alter: change in the form or state of the inputs which
could be physical as in manufacturing, or sensual or
psychological such as the feeling of comfort or satisfaction
after getting cured from an illness.

Transport: The entity gets value added through

transport because it may have more value if located
somewhere other than where it currently is. Entity may
include people, goods or even garbage.

Value Added Process

Store: The value is enhanced if the entity is kept in
a protected environment for some period of time, such
as potatoes in cold storage or food grains in
warehouses.
Inspect: The value of an entity may be enriched
through an inspection as we better understand its
properties and can therefore take more informed
decisions regarding their purchase, use, repair etc.

Production Management
Production management is defined as management
function which plans, organizes, coordinates, directs
and controls the material supply and Processing
activities of an enterprise, so that specified products
are produced by specified methods to meet an
approved sales programme. These activities are being
carried out in such a manner that Labour, Plant and
Capital available are used to the best advantage of the
organization.
or
The performance of the management activities with

Production Management.
It is the processes of effectively planning, coordinating and
controlling the production, that is the operations of that part of an
enterprise, it means to say that production and operations
Management is responsible for the actual transformation of raw
materials into finished products.
or
Production management is a function of Management, related to
planning, coordinating and controlling the resources required for
production to produce specified product by specified methods, by
optimal utilization of resources.

Objectives
to produce the desired product or specified product
by specified methods so that the optimal utilization of
available resources is met with.

to produce the desired product, which has

marketability at the cheapest price by proper planning,
the manpower, material and processes
deliver right goods of right quantity at right place
and at right price.

Criteria of Performance
Effectiveness : optimality in the fulfillment of multiple
objectives with a possible prioritization within the
objectives. Refers to doing right things that is seven
rights, they are:
Right operation
Right Quality
Right Time
Right Price

Right Quantity

Right Supplier

Right Place

Criteria of Performance
Efficiency : productive utilization of resources
Customer satisfaction : must necessarily satisfy many
more customers
In short effectiveness and efficiency is measured by:

Cost
Quality
Dependability
Reliability

Benefits of Efficient Production

Management
Consumer : better quality products at right place, at right price,
at right time, in desired quantity and of desired quality.
Investors : Increased security for their investments, adequate
market returns, creditability and good image in the society.
Employee : adequate Wages, Job security, improved working
conditions and increased Personal and Job satisfaction.
Suppliers : confidence in management
Community & Nation : economic and social stability because of
increased productivity and healthy industrial atmosphere.

Functions of Production
Management
Materials: The selection of materials for the product
based on knowledge of materials and their properties.
Research on materials is necessary to find alternatives
to satisfy the changing needs of the design in the
product and availability of material.
Methods: Finding the best method for the process, to
search for the methods to suit the available resources,
identifying the sequence of process.

Machines and Equipment: Selection of suitable

machinery for the process desired, designing the
maintenance policy and design of layout of machines.

Functions of Production
Management
Estimating: To fix up the production targets and
delivery dates and to keep the production costs at
minimum.
Loading and Scheduling: Drawing the time table for
various production activities i.e. specifying when to
start and when to finish the process required. It also
has to draw the timings of materials movement and
plan the activities of manpower. The scheduling is to be
done keeping in mind the loads on hand and capacities
of facilities available.
Routing: The Routing consists of fixing the flow lines

Functions of Production
Management
Dispatching : The Production Management department has
to prepare various documents such as Job Cards, Route
sheets, Move Cards, Inspection Cards for each and every
component of the product. These are prepared in a set of five
copies. The activities of the shop floor will follow the
instructions given in these documents. Activity of releasing
the document is known as dispatching.

Expediting or Follow up : involves comparing actual

production process with planned and to get feedback on work
progress. This helps the management to evaluate the plans.

Functions of Production
Management
Inspection : inspection is generally concerned with
the inspection activities during production, but a
separate quality control department does the quality
inspection.
Evaluation : it involves evaluating the work done by
the department and its contribution in fulfilling the
departmental and corporate objectives. This is
necessary for setting up the standards for future.

Production
Function

Types of Production Systems

The organization of manufacturing systems, planning
and control of production greatly depends on three
main factors:
Type of production i.e., quantities of finished
products and regularity of manufacture e.g. whether
Job production or Batch Production or Continuous
Production.
Size of the Plant i.e., Small Industry, Medium sized
Industry or Large Industry.

Types of Production Systems

In general there are three classifications in types of
Production System.
Job Production: products are manufactured to meet
the requirements of a specific order. The quality
involved is small and the manufacturing of the product
will take place as per the specifications given by the
customer. Example Tailor shop. This system may be
further classified as.

Job produced only once: the order is prepared as per

specifications of the customer and the firm generally plan
for material, process and manpower only after receiving

Types of Production Systems

The job produced at irregular intervals: Though the order
is repetitive yet the timings of order is not fixed therefore
the planning for materials, process and manpower will
start only after taking the order from the customer.
The jobs produced periodically at regular intervals: In
this system, the orders for the same type of product is
placed at regular intervals. Therefore the firm can plan for
materials, process and manpower. If the volume of the
order is considerably large and the number of regularly
visiting customers are large in number, the Job Production
system slowly transform into Batch Production system.

Types of Production Systems

Batch Production: Batch Production is the

manufacture of number of identical products to meet
the specific order. Example Readymade dress
production.This system also can be classified under
three categories.
Batch produced only once: It is similar to job production
with only exception about the size of the order. The firm
has to plan for the resources after taking the order from
the customer.
Batch produced at irregular intervals as per customer
order or when the need arises: As the frequency is
irregular, the firm can maintain a file of its detailed plans

Types of Production Systems

Batch Produced periodically at known Intervals: Here the
firm either receives order from the customer at regular
intervals or it may produce the product to satisfy the
demand. In such situation the firm can plan its production
well in advance. As the frequency of regular orders goes
on increasing the Batch Production system becomes Mass
Production System. Here also, incase the demand for a
particular product ceases, the plant and machinery can
be used for producing other products with slight
modification in layout or in machinery and equipment.

Types of Production Systems

Continuous Production: Continuous Production

system is the specialized manufacture of identical
products on which the machinery and equipment is
fully engaged. The continuous production is normally
associated with large quantities and with high rate of
demand. Hence the advantage of automatic production
is taken. Example industrial product & oil refinery.
This system is classified as
Mass Production: same type of product is produced to
meet the demand of an assembly line or the market. This
system needs good planning for material, process,
maintenance of machines and instruction to operators.

Types of Production Systems

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. If the demand falls or ceases, the
machinery and equipment, after slight modification be
used for manufacturing products of similar nature. In flow
production, the plant and equipment is designed for a
specified product. Hence if the demand falls for the
product or ceases, the plant cannot be used for
manufacturing other products. It is to be scraped.

Particulars
Type of
plant layout

Intermittent production system (job

and batch production)
Process layout is most suitable

Type of
machine

As it necessitate frequent changes in

the machine set-up required by the
specification of each order, general
purpose machines are more suitable.
Also they have good flexibility. In batch
production special purpose machines
automatic
and
semi-automatic
machines are used

Type of
labour

Pre-supposed frequent changes in

product design and machine setups
require highly skilled labour. Repair
and maintenance of machines are to
be done by these labourers.

Continuous production system (mass

and flow production)
Product layout designed according to a
process separate line for each product
is considered.
As production flow is permanently in
the form of product line, automatic or
special purpose machines are used. In
flow production specialized machines
are used.

The manufacturing activity becomes a

routine function and as the machines
are designed to suit the process
required for product and automatic in
nature. Unskillful or semi-skilled labour
is required. A specialized team of plant
maintenance
staff looks
after the
Characteristics of Intermittent and Continuous
Manufacturing
System
repair and maintenance of machines

Intermittent production system (job

and batch production)

Continuous production system (mass

and flow production)

Number of
products &
product
design

Wide
range
of
products
are
manufactured in small quantities. The
product design changes from lot to lot
as per the product specification. Each
lot produced in small size.

Few/one standard products/product is

manufactured in large quantities.
Usually the product line is designed to
one or two products of standard
specification.

Changes in
machine
set- up

The machines are to set according to

the requirements of each order,
frequent changes in machine setup is a
common phenomenon.

The set up of machines remains

unchanged for a longer period. The
standard products are manufactured in
a continuous flow.

Particulars

Nature and
size of
orders

Generally the size of orders is small Generally the production is carried on

and they are not repeated. The orders for
stock.
The
production
of
are for non standardised products. The standardised products is the nature of
order may involve the production of this type of production. Products are
single product or products in limited produced in anticipation of demand.
lot. Usually the production is done The size of the order is large. Same
according to first-in-first-out principle. type of product is produced in every
First orders are received and then they cycle to satisfy the demand.
are translated
into production.
Characteristics
of Intermittent
and Continuous Manufacturing System

Intermittent production system (job

and batch production)

Continuous production system (mass

and flow production)

Investment
on
machines &
equipment

As the machines are arranged in

process layout and general purpose
machines
are
required
for
Job
production,
the
investment
is
comparatively
less.
For
batch
production as automatic and semiautomatic machines are involved the
investment will be higher than job
production.

The machines are arranged according

to process layout and because of this
duplication of machines is fairly high.
The machines are fully automatic, the
cost is higher than intermittent
production.

Investment
on
inventories

Since operating cycle takes more time

and it is necessary to have standard
materials for long period hence
inventory
cost
per
product
is
considerably large.

Bulk purchase of materials is done at

periodic intervals. Due to continuous
process, less in process inventory
exists hence material cost per product
is less.

Material
handling
cost

Material handling per product is Due to mechanised material handling,

costlier because of long distance material handling cost per product is
handling (manual) and backtracking.
less.

Particulars

Characteristics of Intermittent and Continuous Manufacturing System

Plant
maintenanc

Separate department desirable

Essential
to
department to

have
dedicated
avoid stoppage of

Particulars

Intermittent production system (job

and batch production)

Continuous production system (mass

and flow production)

Balancing
of
production
capacity

Due to different products and different The chances of imbalance in plant

types of machines with different capacity is very much less.
capacity
blocks,
possibility
of
imbalance in plant capacity occurs.

Production
planning &
control

The functions of routing, scheduling

and
loading
becomes
relatively
complicated due to odd size of order,
non-repetitive nature of the order,
different
delivery
dates,
etc.,
production planning and control is
complicated.

The function of routing, scheduling and

loading are carried on smoothly due to
standardised products, rated capacity.
Here production planning and control
is simpler.

Characteristics of Intermittent and Continuous Manufacturing System

Production and Operations System

Production Cycle
The production cycle starts from Market Research.
Market research reveals consumer preferences and
needs. The marketing department will transfer this
information to the design department. The design
department basing on the information received from
marketing department designs the product to fulfill
consumer needs and supplies design specifications and
drawings to production department. The production
department verifies whether the product can be
manufactured with the technology and skill available in
the firm. If yes it will give the acceptance. Otherwise
the Production Manager, Design engineer and

Production Cycle
Once this is done the design department conduct the
market survey and analyze the demand and submits its
sales programme to the top management. The top
management after going through the proposals
sanctions the budget and gives green signal for
production. Production department produces a trial run
and sales department release the product in the test
markets to get consumer acceptance sells the
products. Meanwhile, the production department
prepares the detailed production plans and production
scheduling. After getting the acceptance from the

Production Cycle

Questions???