Inroduction in Production and Operation Management

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INRODUCTION IN PRODUCTION AND OPERATIONS MANAGEMENT Production and Operations Management has been recognized as an important factor in a country’s economic growth. The traditional view of manufacturing management is the concept of Production Management with the focus on economic efficiency in manufacturing. Later the new name Operations Management was identified, as service sector became more prominent. Rapid changes in technology has posed numerous opportunities and challenges which have result
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  INRODUCTION IN PRODUCTION AND OPERATIONS MANAGEMENT Production and Operations Management has been recognized as an important factor in a country’s economic growth. The traditional view of manufacturing management is the concept of   Production Management   with the focus on economic efficiency in manufacturing. Later the newname Operations Management   was identified, as service sector became more prominent. Rapidchanges in technology has posed numerous opportunities and challenges which have resulted inenhancement of manufacturing capabilities through new materials, facilities, techniquesand procedures.Hence, managing a service/production system has become a major challenge in the globalcompetitive environment. Production and Operations Management leads the way for the organizationsto achieve its goals with minimum effort. Learning Objectives: After completing this chapter you should be able to:1. Define production and operation management.2. Identify major historical developments in operations management.3. Identify the different concepts in production and operation management.4. Classify the different system in production and operation management.5. Describe the differences between service and manufacturing operation.6. Define the different objectives in production and operation management. Introduction Production/operations management is the process, which combines and transforms variousresources used in the production/operations subsystem of the organization into value addedproduct/services in a controlled manner as per the policies of the organization. Therefore, it is that partof an organization, which is concerned with the transformation of a range of inputs into the required(products/services) having the requisite quality level.The set of interrelated management activities, which are involved in manufacturing certainproducts, is called as production management . If the same concept is extended to servicesmanagement, then the corresponding set of management activities is called as operations   management .  Production Management It is the Planning, implementation, and control of industrial production processes to ensuresmooth and efficient operation. Production management techniques are used in both manufacturingandservice industries. Production management responsibilities include the traditional “five M's”: men and women, machines, methods, materials, and money. Managers are expected to maintain an efficientproduction process with a workforce that can readily adapt to new equipment and schedules. They mayuseindustrial engineeringmethods, such astime-and-motionstudies, to design efficient work methods. They are responsible for managing both physical (raw) materials and information materials(paperwork or electronic documentation). Of their duties involving money,inventorycontrol is the mostimportant. This involves tracking all component parts, work in process, finished goods, packagingmaterials, and general supplies. The production cycle requires that sales, financial, engineering, andplanning departments exchange information — such as sales forecasts, inventory levels, and budgets — until detailed production orders are dispatched by a production-control division. Managers must alsomonitor operations to ensure that planned output levels, cost levels, and quality objectives are met. Operations Management It is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’ s goods and services. It involves managing people, equipment,technology, information and many other resources. The operations management is the centralcore function in every company. Without operations, there would be no goods or services tosell. Historical Evolution in Production and Operations Management For over two century’s operations and production management has been recognized as an importantfactor in a country’s economic growth.  The traditional view of manufacturing management began in eighteenth century when Adam Smith recognized the economic benefits of specialization of labor. He recommended breaking of jobs downinto subtasks and recognizes workers to specialized tasks in which they would   become highly skilled andefficient. In the early twentieth century, F.W. Taylor implemented   Smith’ s theories and developedscientific management. From then till 1930, many techniques   were developed prevailing the traditionalview. Brief information about the contributions to   manufacturing management is shown in Table 1.1. TABLE 1.1 Historical summary of operations management Date Contribution Contributor 1776 Specialization of labor in manufacturing Adam Smith1799 Interchangeable parts, cost accounting Eli Whitney and others1832 Division of labor in skill; assignment of jobs by skill; basics of time instudyCharles Babbage1900 Scientific management time study and work study developeddividing; planning and doing of workMotion in study of jobsFrederick W. TaylorFrank B. Gilbreth  1901 Scheduling techniques for employees , machines jobs inmanufacturingHenry L. Gantt1915 Economic lot sizes for inventory control F. W. Harris1927 Human relations; the Hawthorne studies Elton Mayor1931 Statistical inference applied to product quality: quality control charts W. A. Shewart1935 Statistical sampling applied to quality control: inspection samplingplansH. F. Dodge & H. G.Roming1940 Operations research applications in World War II PM Blacker and others1946 Digital Computer John Mauchlly and J.PEckert1947 Linear programming G.B. Dantzig, Williams&others1950 Mathematical programming, on-linear and stochastic processes A. Charnes, W.W.Cooper& others1951 Commercial digital computer: large-scale computationsavailableSperry Univac1960 Organizational behavior: continued study of peopleat workL. Cummings, L. Porter1970 Integrating operations into overall strategy and policy, andComputer applications to manufacturing, Schedulingand control, Material requirement planning (MRP)W. Skinner J. Orlickyand G. Wright1980 Quality and productivity applications from Japan:robotics, CAD-CAMW.E. Deming and J.Juran Production management becomes the acceptable term from 1930s to 1950s. As F.W. Taylor’s works become more widely known, managers developed techniques that focused on economic efficiency inmanufacturing. Workers were studied in great detail to eliminate wasteful efforts and achieve greaterefficiency. At the same time, psychologists, socialists and other social scientists began to study peopleand human behavior in the working environment. In addition, economists, mathematicians, andcomputer socialists contributed newer, more sophisticated analytical approaches.With the 1970s emerge two distinct changes in our views. The most obvious of these, reflectedin the new name operations management was a shift in the service and manufacturing sectors of the economy. As service sector became more prominent, the change from ‘production’   to ‘operations’ emphasized the broadening of our field to service organizations. The second, more suitable change wasthe beginning of an emphasis on synthesis, rather than just analysis, in management practices. Production Management Production function is that part of an organization, which is concerned with the transformation of arange of inputs into the required outputs (products) having the requisite quality level.Production is defined as “the step -by-step conversion of one form of material into another form throughchemical or mechanical process to create or enhance the utility of  the product to the user.”  Thusproduction is a value addition process. At each stage of    processing, there will be value addition.    Edwood Buffa defines production as ‘ a process by which goods and services are created  ’. Someexamples of production are: manufacturing custom-made products like, boilers with a specific capacity,constructing flats, some structural fabrication works for selected customers, etc., and manufacturingstandardized products like, car, bus, motor cycle, radio, television, etc. 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 a defined system, are combined and transformed ina controlled manner to add value in accordance with the policies communicated by management.A simplified production system is shown above.The production system has the following characteristics:1. Production is an organized activity, so every production system has an objective.2. The system transforms the various inputs to useful outputs.3. It does not operate in isolation from the other organization system.4. There exists a feedback about the activities, which is essential to control and improve systemperformance. Inputs:    Men    Materials    Machines    Information    CapitalTransformation Process    Product design    Process Planning    Production Control    MaintenanceOutputs:    Products    ServicesContinuous:    Inventory    Quality    Cost
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