1. MANAGEMENT 2. INTRODUCTION It is defined as planning , implementation andcontrol of industrial production process to ensuresmooth and efficient operation. productionmanagement techniques are used in bothmanufacturing and service industries. Simply, production management is a process ofplanning, organizing, directing and controllingthe activities of the production function. 3. Production Management Operation Management1. Its concerned withmanufacturing1. It is concerned with services2. Out put is tangible 2. Output is intangible3. Job use less labour and moreequipment3. Job use more labour andless equipment4. There is no customerparticipation4. Frequent customer participation 4. HISTORY For over 2 centuries operations and productionmanagement has been recognised as an importantfactor in a countrys economic growth. The traditional view of manufacturing managementbegan in 18thcentury when Adam Smith recognisedthe economic benefits of specialisation of labour.He recommended breaking of jobs down intosubtasks and recognises workers to specialisedtasks in which they would become highly skilled andefficient. 5. In the early 20thcentury, F.W. Taylor developedscientific management. From then till 1930, many techniques were developedprevailing the traditional view. Production management becomes the acceptableterm from 1930s to 1950s. As F.W. Taylors worksbecome more widely known, managers developedtechniques that focussed on economic efficiency inmanufacturing. 6. Workers were studied in great detail to eliminatewasteful efforts and achieve greater efficiency. At thesame time, psychologists, socialists and other socialscientists began to study people and humanbehaviour in the working environment. In addition, economists, mathematicians, andcomputer socialists contributed more sophisticatedanalytical newer approaches. 7. With the 1970s emerges 2 distinct changes in ourviews. The most obvious of these reflected in the new nameoperations management was a shift in the service &manufacturing sectors of the economy. As service sector became more prominent, the changefrom production to operations emphasized thebroadening of our field to service organizations. The second, more suitable change was the beginningof an emphasis on synthesis, rather than justanalysis, in management practices. 8. CONCEPT OF PRODUCTION Production is defined as the step-by-stepconversion of one form of material into anotherform through chemical or mechanical process tocreate or enhance the utility of the product to theuser. Thus production is a value addition process. At eachstage of processing, there will be value addition. Edwood Buffa defines production as a process bywhich goods and services are created. 9. Example For Production Manufacturing custom-made productsLike- 1.Boilers with a specific capacity2.Constructing flats3. Structural fabrication works for selectedcustomers, etc. manufacturing standardized productsLike- 1.Car2.Bus3.Motor cycle4.Television, etc. 10. PRODUCTION SYSTEM The production system of an organization is that part,which produces products of an organization. It is that activity whereby Resources, flowing within adefined system, are combined & transformed in acontrolled manner to add value in accordance withthe policies communicated by management. 11. Characteristics Of Production System 1. Production is an organized activity, so everyproduction system has an objective. 2. The system transforms the various Inputs to usefulOutputs. 3. It doesnt operate in Isolation from the otherorganization system. 4. There exists a feedback about the activities,which is essential to control and improve systemperformance. 12. CLASSIFICATION Production systems can be classified as:1. Job Shop Production2. Batch Production3. Mass Production4. Continuous Production 13. JOB SHOP PRODUCTION Job shop production are characterised bymanufacturing of one or few quantity of productsdesigned and produced as per the specification ofcustomers within prefixed time and cost. The distinguishing feature of this is low volume &high variety of products. A job shop comprises of general purpose machinesarranged into different departments. Each job demands unique technologicalrequirements, demands processing on machines in acertain sequence. 14. Characteristics 1. High variety of products and low volume. 2. Use of general purpose machines and facilities. 3. Highly skilled operators who can take up each jobas a challenge because of uniqueness. 4. Large inventory of materials, tools, parts. 5. Detailed planning is essential for sequencing therequirements of each product, capacities for eachwork centre and order priorities. 15. ADVANTAGES 1. Because of general purpose machines and facilitiesvariety of products can be produced. 2. Operators will become more skilled & competent,as each job gives them learning opportunities. 3. Full potential of operators can be utilised. 4. Opportunity exists for creative methods &Innovative ideas. 16. LIMITATIONS 1. Higher cost due to frequent set up changes. 2. Higher level of inventory at all levels and hencehigher inventory cost. 3. Production planning is complicated. 4. Larger space requirements. 17. BATCH PRODUCTION Batch production is defined as a form ofmanufacturing in which the job passes throughthe functional departments in lots or batches andeach lot may have a different routing. It is characterised by the manufacture of limitednumber of products produced at regular intervalsand stocked awaiting sales. 18. CHARACTERISTICS 1. There is shorter production runs. 2. Plant and machinery are flexible. 3. Manufacturing lead time & cost are lower ascompared to job shop production. 19. ADVANTAGES 1. Better utilisation of plant and machinery. 2. Promotes functional specialisation. 3. Cost per unit is lower as compared to job shopproduction. 4. Lower investment in plant and machinery. 5. Flexibility to accommodate and process number ofproducts. 6. Job satisfaction exists for operators. 20. LIMITATIONS 1. Material handling is complex because of irregularand longer flows. 2. Production planning and control is complex. 3. Work in process inventory is higher compared tocontinuous production. 4. Higher set up costs due to frequent changes in setup. 21. MASS PRODUCTION Manufacture of discrete parts or assembliesusing a continuous process are called massproduction . This production system is justified by very largevolume of production. The machines are arranged in a line or productlayout. Product and process standardisation existsand all outputs follow the same path. 22. CHARACTERISTICS1. Standardisation of product and process sequence.2. Large volume of products.3. Shorter cycle time of production.4. Lower in process inventory.5. Perfectly balanced production lines.6. Production planning and control is easy.7. Material handling can be completely automatic. 23. ADVANTAGES 1. Higher rate of production with reduced cycle time. 2. Higher capacity utilisation due to line balancing. 3. Less skilled operators are required. 4. Low process inventory. 5. Manufacturing cost per unit is low. 24. LIMITATIONS 1. Breakdown of one machine will stop an entireproduction line. 2. Line layout needs major change with the changesin the product design. 3. High investment in production facilities. 4. The cycle time is determined by the slowestoperation. 25. CONTINUOUS PRODUCTION Production facilities are arranged as per the sequenceof production operations from the first operationsto the finished product. The items are made to flow through the sequence ofoperations through material handling devices such asconveyors, transfer devices, etc. 26. CHARACTERISTICS 1. Dedicated plant and equipment with zeroflexibility. 2. Material handling is fully automated. 3. Process follows a predetermined sequence ofoperations. 4. Component materials cant be readily Identifiedwith final product. 5. Planning and scheduling is a routine action. 27. ADVANTAGES 1. Standardisation of product and process sequence. 2. Higher rate of production with reduced cycle time. 3. Higher capacity utilisation due to line balancing. 4. Manpower is not required for material handling as itis completely automatic. 5. Person with limited skills can be used on theproduction line. 6. Unit cost is lower due to high volume ofproduction. 28. LIMITATIONS 1. Process number of products doesnt exist. 2. Very high investment for setting flow lines. 3. Product differentiation is limited. 29. OBJECTIVES OF PRODUCTION MANAGEMENT The objective of the production management is toproduce goods services of right quality andquantity at the right time and rightmanufacturing cost.RIGHT QUALITY:The quality of product is established based upon thecustomers needs. The right quality is not necessarilybest quality. It is determined by the cost of theproduct and the technical characteristics as suited tothe specific requirements.i.e. 30. 2. RIGHT QUANTITYThe manufacturing organization should producethe products in right number. If they are producedin excess of demand the capital will block up in theform of inventory and if the quantity is produced inshort of demand, leads to shortage of products. 3. RIGHT TIMETimeliness of delivery is one of the importantparameter to judge the effectiveness of productiondepartment. So, the production department has to makethe optimal utilization of input resources to achieve itsobjective. 31. 4. RIGHT MANUFACTURING COSTManufacturing costs are established before theproduct is actually manufactured. All attempts should be made to produce theproducts at pre-established cost, so as to reducethe variation between actual and the standard(pre-established) cost. 32. DIFFRENCE BETWEENPRODUCTION & PRODUCTIVITY Production is number of goods made. Productivity is the number of goods produceddivided by employees.ProductivityUnits producedInput used= Example:Business A produced 40 chairs with 5 employees Production: 40 chairs Productivity: 40chairs/5 employees= 8 33. SCOPE OF PRODUCTION MANAGEMENT Production management concern with theconversion of inputs into outputs, usingphysical resources, so as to provide the desiredutilities to the customer while meeting theother organizational objectives of effectiveness,efficiency and adoptability. It distinguishes itself from other functions such aspersonnel, marketing, finance, etc., by its primaryconcern for conversion by using physicalresources. 34. Following are the activities which are listed underproduction management functions: 1. Location of facilities 2. Plant layouts 3. Product design 4. Process design 5. Production and planning control 6. Quality control 7. Materials management 8. Maintenance management. 35. LOCATION OF FACILITIES Location of facilities for operations is a long-termcapacity decision which involves a long termcommitment about the geographically static factorsthat affect a business organization. It is an importantstrategic level decision-making for an organization. The selection of location is a key-decision as largeinvestment is made in building plant and machinery. 36. An improper location of plant may lead to waste of allthe investments made in plant and machineryequipments. Hence, location of plant should be based on thecompanys expansion plan and policy, diversificationplan for the products, changing sources of rawmaterials and many other factors. The purpose of the location study is to find theoptimal location that will results in the greatestadvantage to the organization. 37. PLANT LAYOUT Plant layout refers to the physical arrangement offacilities. It is the configuration of departments,workcentres and equipment in the conversion process. The overall objective of the plant layout is to design aphysical arrangement that meets the required outputquality and quantity most economically. 38. OBJECTIVES OF PLANT LAYOUT1. Integrate the production centres2. Reduce material handling3. Effective utilization of available space4. Worker convenience and job satisfaction5. Flexibility6. Quick disposal of work7. Smooth flow of operation8. Avoids industrial accidents 39. TYPES OF PLANT LAYOUT1. Process layout or functional layout: Similar machine grouped together Used in job and batch production and non-repetitive typeof work. This type of layout makes production planning and control more difficult. For example,all lathes grouped together in turning section.2. Product layout or line layout: Machines and auxiliary services arranged in line according to sequenceof operation to be performed on the work. Raw material enters in line at one end,operations are carried out insuccession In a smooth flow and the finished product is delivered at the other endof the line Used in mass production and repetitive work. 40. 3. Mixed Or Combined Layout: Combination of process and line layout is commonlyused in industry. Combined layout incorporates the benefits of processand product layout.4. Static Or Fixed Position Layout: It is adopted when work piece is very big or too heavyto move from one position to other and isconsequently fixed in one place. Used in custom ordered type production e.g. in construction work , ship building , air craft,pressure vessel, locomotives , etc. 41. IMPORTANCE OF PLANT LAYOUT1. Determine the arrangement of facilities and services inthe plant2. Outlines the relationship between production centresand service departments.3. Outlines the nature of the flow in the plant and affectsthe distance travelled by materials and personnel.4. Determines the type of handling systems and machineutilization.5. Specifies the location , accessibility , and size of stores.6. Affects the amount of work in process and work awaitingfurther processing. 42. PRODUCT DESIGN Product design deals with conversion of ideas intoreality. Every business organization have to design,develop and introduce new products as a survival andgrowth strategy. Developing the new products and launching them inthe market is the biggest challenge faced by theorganizations. The entire process of need identification to physicalmanufactures of product involves three functions:marketing, product development, manufacturing. 43. Product development translates the needs ofcustomers given by marketing into technicalspecifications and designing the various features intothe product to these specifications. Manufacturing has the responsibility of selecting theprocesses by which the product can be manufactured. Product design and developmentprovides linkbetween marketing, customer needs and expectationsand the activities required to manufacture theproduct. 44. PROCESS DESIGN Process design is a macroscopic decision-making of anoverall process route for converting the raw materialinto finished goods. These decisions encompass the selection of a process,choice of technology, process flow analysis and layoutof the facilities. Hence, the important decisions in process design areto analyzed the workflow for converting raw materialinto finished product and to select the workstation foreach included in the workflow. 45. PRODUCTION PLANNING ANDCONTROL The principle of production planning and control liesin the statement First Plan Your Work and then Workon Your Plan. Main functions of production planning and controlincludes planning, routing, scheduling, dispatchingand follow-up. 46. Planning is deciding in advance what to do,how to do it, when to do it and who is to do it. Routing may be defined as the selection ofpath which each part of the product willfollow,which being transformed from rawmaterial to finished products. Routingdetermines the most advantageous path to befollowed. Scheduling may be defined asthe fixation of timeand date for each operation as well as itdetermines the sequence of operations to befollowed. 47. Dispatching is concerned with the starting theprocesses. It gives necessary authority so as tostart a particular work, which has already beenplanned under Routing and Scheduling. The function of follow-up is to report daily theprogress of work in each shop in a prescribedproforma and to investigate the causes ofdeviations from the planned performance. 48. QUALITY CONTROL Quality Control (QC) may be defined as a system thatis used to maintain a desired level of quality in aproduct or service. Quality control can also be defined as that industrialmanagement technique by means of which product ofuniform acceptable quality is manufactured. It is theentire collection of activities which ensures that theoperation will produce the optimum quality productsat minimum cost. 49. The main objectives of quality control are: 1. To reduce companies cost through reduction oflosses due to defects. 2. To achieve interchangeability of manufacture inlarge scale production. 3. To produce optimal quality at reduced price. 4.To ensure satisfaction of customers withproductions or services or high quality level, to buildcustomer goodwill, confidence and reputation ofmanufacturer. 5. To make inspection prompt to ensure qualitycontrol. 6. To check the variation during manufacturing. 50. MATERIALS MANAGEMENT Materials management is that aspect of managementfunction which is primarily concerned with theacquisition, control and use of materials needed andflow of goods and services connected with theproduction process having some predeterminedobjectives in view. 51. The main objectives of materials management are: 1. To minimize material cost. 2.To purchase, receive, transport and store materialsefficiently and to reduce the related cost. 3. To cut down costs through simplification,standardization, value analysis, import substitution,etc. 4. To trace new sources of supply and to developcordial relations with them in order to ensurecontinuous supply at reasonable rates. 5. To reduce investment tied in the inventories for usein other productive purposes and to develop highinventory turnover ratios. 52. MAINTENANCE MANAGEMENT In modern industry, equipment and machinery are avery important part of the total productive effort.Therefore, their idleness or downtime becomes arevery expensive. Hence, it is very important that theplant machinery should be properly maintained. 53. The main objectives of maintenance management are: 1. To achieve minimum breakdown and to keep theplant in good working condition at the lowest possiblecost. 2. To keep the machines and other facilities in such acondition that permits them to be used at theiroptimal capacity without interruption. 3. To ensure the availability of the machines, buildingsand services required by other sections of the factoryfor the performance of their functions at optimalreturn on investment. 54. MANAGING GLOBAL OPERATIONS The term globalization describes businessesdeployment of facilities and operations around theworld. It can also be defined as worldwide drive toward aglobalized economic system dominated bysupranational corporate trade and bankinginstitutions that are not accountable to democraticprocesses or national governments. 55. There are four developments, which have spurred thetrend toward globalization: 1. Improved transportation and communicationtechnologies; 2. Opened financial systems; 3. Increased demand for imports; and 4. Reduced import quotas and other trade barriers. 56. Managing global operations would focus on thefollowing key issues:1.To acquire and properly utilize the following conceptsand those related to global operations,supply chain,logistics, etc.2. To associate global historical events to key drivers inglobal operations from different perspectives.3. To develop criteria for conceptualization andevaluation of different global operations.4. To associate success and failure cases of globaloperations to political, social, economical andtechnological environments.5. To envision trends in global operations. 57. BREAK EVEN ANALYSIS Break even analysis is the study of cost-volume-profitrelationship Break even point is the point where the gains equal thelosses The point defines when an investment will generate apositive return The point where sales or revenues equal expenses The point where total costs equal total revenues There is no profit made or loss incurred at the break evenpoint It is the lower limit of the profit when prices are set andmargins are determined Also known as point of zero profit 58. Break even analysis can be carried out in two ways:1. Algebraic method2. Graphical method 59. 1. ALGEBRAIC METHOD BEP is the ratio of Fixed cost to the Contribution perunitBEP =(Fixed cost)/(Contribution per unit)where,Contribution = Selling cost Variable cost,Fixed cost = Contribution - Profit 60. 2.GRAPHICAL METHOD The point of intersection of the total cost line and theincome line is called as the break even point Right of the BEP shows the profit potential while tothe left represents the loss potentials BEP is also called NO PROFIT NO LOSS POINT 61. Limitations of B-E Chart Analysis In practice all the costs are not always either fixed costsor a variable costs.there are some semi variableoverhead costs. In the long run all costs are variable,so the break evenanalysis holds good only for short run requirements. It is suitable only when the firm produces one type ofproduct. 62. Relation of Production withFinance The relationship is integral. Production department is involved and concernedwith the making of the product or development of theservice. It is the heart of the business as they need to providesomething that consumer wants. Production department deals with the making anddevelopment of product to make the consumer want itor feel that they need it in their life. 63. The finance department deals with the all kind ofmonetary transfer that the business is involvedwith,and of course the production department is oneof the biggest areas of loss. The production department needs to go about creatingthe product and in near enough every business ,thereis the cost to creating the product of service hence thefinance department will deal with how much of thefirm's funds or assets are being lost to this and willdecide whether the efficiency of the business issufficient. The cost per unit will be monitored by the financedepartment and this is and incredible importantconcepts that overlaps between the two firms. 64. Relation of Production andMarketing Both are important parts of total business systemaimed at providing consumer with need satisfyinggoods and services together They provides five basic economic utilities-form ,task,possession,time and place utilities that are needed toprovide consumers satisfaction. Here utility means the power to satisfy human needs. 65. 1. FORM UTILITY: This associated primarily with production,thephysical and chemical changes that make productmore valuable and satisfy consumer needs. Marketing thinking guides production side ofbusiness. Marketing decisions focus on the customers andinclude decisions about what goods and services toproduce. Marketing is concerned with what customers wantand it should guide what is produced and offered. 66. 2. TASK UTILITY: It is provided when some one provide services toother or produces in tangible goods that are servicesto clients .this is associated with production.3. TIME UTILITY: It means having the product available when thecustomers wants it . this is also provide it bymarketing only.4. PLACE UTILITY: It means having the product available where thecustomer wants it exists when a product is readilyaccessible to potential customers . this is alsoprovided by marketing only. 67. WHAT IS KAIZEN? Simply kaizen means continuous improvement. It is daily process, the purpose of which goes beyondsimple productivity improvement. It is also process that, when done correctly, humanizesthe workplace ,eliminates the overly hard work, andteaches the people how to perform experiments ontheir work by using scientific method and how toeliminate business waste. 68. Improvements in Production If we increases the output and reduces the input thenwe can increase the production efficiency.Efficiency= General ways of increase output are :1. Process improvement2. Regulate work flow3. Use more modern equipments4. Train and motivate employees 69. General ways of decreases input are:1. Improve quality2. Minimize waste3. Reduce the cost of labour4. Reduce cost of supply 70. Roll of Technology in Production: It is now quite difficult to imagine world without moderninvention. Technology makes way for fast & efficient operations inmanufacturing companies, as well as facilitates cost cuttingmeasures. Technology brought significant changes to traditionalproduction system that have been so beneficial to allindustrial players, including suppliers and customers. A pharmaceutical company,for example employeesadvanced machinery in capsulising & wrapping medicine. 71. Traditionally, the making of medicine was manuallydone. How ever, to prevent contamination & mitigate errorsfrom human intervention, pharmaceutical companieshave employed robots & computerized machines. It results in mass production of medicine at fasterspeed & lower cost. So advanced technology plays major roll inproduction. it will improve production rate and alsoproduct quality. 72. Innovation in Production: Innovation is the act of introducing something new. itis associated with generation of new idea. In contrast, innovation refers to taking those newideas and actually implementing them in marketplace. Developers create an invention designed to satisfy anexisting market need. Developers assess the feasibility of the innovation interms of both sales and production potential. 73. After this step,developers conduct research in order tomanufacture the product successfully and to ensurethat the product will satisfy market demand. Finally, the new product is launched and its success isgauged. if needed , the products marketing plan canbe modified or the product itself improved. Innovation is important part of production to satisfyconsumer demand and is needed to be in acompetition with others. 74. THANK YOU