Prodt& Opt Mgmt Ppt Presentation Transcript 1. Production And Operation Management MBA-II UNIT-1 PRODUCTION MANAGEMENT 2.

2. What Is Production Management? Production Management involves understanding o f the characteristics of various types of production systems, identification of the dynamics of the different phases of the management process, realizing the po tential of different analytical tools, learning the nuances of the implementatio n of these tools, visualizing the impact of various uncertain situations and dev eloping the ability to react under various scenarios to achieve consistently exc ellent business results. These organizations achieved superior quality, higher p roductivity, perfect delivery performance, overall customer satisfaction and ent erprise excellence all with lower cost. 3. Integrated Production Management Indian industries spends billions of dollars on warehousing, inventory control, physical distribution, production management etc. In 1980s, problems like: Labor shortage, increased global competition, sho rtage & rising cost of energy, need for increased productivity, increased cost o f carrying inventories, increased attention to quality & reindustrialization inf luences the need for improved management. 4. Integrated Production Management Continue According to the need of improved man agement of materials in the factory & warehouse, production management is includ ed in Material Management. MATERIAL MANAGEMENT: it is procuring, storing, handli ng, controlling, packaging, inspecting & transporting materials as well as provi ding customer service. In general: it can be defined as providing safely the rig ht amount of the right material at the right place, at the right time, and at th e right cost without damage. 5. Today PRODUCTION MANAGEMENT is much more than simply handling material. It in volves: Handling material Storing material Controlling material Traditionally Pr oduction Management has been manifested with references to manufacturing as value adding & Production Management as cost adding. In 1980s, Productivity , Quality an d Inventories represent three major targets of opportunity. 6. Design of Production Management System It includes layout design & structural design in facilities design. Facilities Design is related to Product design , P rocess design & Schedule design . Product designers specify what the end product is to be in terms of dimensions material composition, packaging. Process planne r determines how the product will be produced. Schedule designer (production pla nner) specifies the production quantities & schedules the production equipment. 7. Integrated Production System Today we have factories with segregated technolo gy. We need technologically integrated factories. It will become a reality in in dividual companies only if strategic manufacturing plans are developed & such pl ans include material handling strategies. Attempts by industries to implement au tomation in manufacturing have tended to create islands of automation, rather than automated systems. Robots, flexible manufacturing systems, numerically controll ed machine centres etc.are good examples. 8. INVENTORIES Inventory is a list for goods and materials , or those goods and materials themselves, held available in stock by a business . Inventory are held in order to manage and hide from the customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease the effect of imperfection s in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of materials. 9. The attention being paid to inventory management by Toyota Production System (Japan). Just-in-Time:- it refers to production of the necessary materials being performed JIT. Each process must accurately produce the required amount of prod uct within a carefully controlled period of time. Autonomation:- More than one d efects control. It is realized by quality control of the products & the autonomo us defects control established through quality circles. Kanban:- It is the infor mation system supporting JIT. The type & quantity of material required are enter ed on a material requisition form called a kanban. 10. Andon:- It is an electric board that is visible to every plant employee. It is used by employees to signal the need for assistance & prevent a stoppage of t he assembly line. Yo-I-Don:- it means ready, set, go. It provides one method of sm oothing the flow in a process. According to MONDEN-in its simplest terms, the Toy

ota production system might be interpreted as a special case of material require ments planning. 11. Material Control It is required to reduce in-process inventories. Material c ontrol includes not only traditional inventory control, but also the location of material in in-process storage, and its orientation. Previously noted, in batch manufacturing 95% of the manufacturing cycle spends as in-process inventory. Pr oper planning of the storage & control is the key to an effective manufacturing system. 12. Apple and Strahan note, parts that comprise these inventories are typically s tored in a manner that makes poor use of building space, provides limited access ibility to individual part numbers, and represents a low level of location contr ol. Factors governing in-process storage by Apple & Strahan : Inventory size and allocation Unit load design Inventory location Control of status, location, and quantity Storage mode. 13. System Productivity Productivity is not always enough, with rapid technologi cal advancement & futuristic manufacturing equipment & processes, networked syst ems tend to become more & more complex. And this has necessitated organizations to revisit their systems & procedures as to how effective & efficient they prove to be. 14. Certain Key Aspects of System Productivity Analytical Supply Chain Managemen t Solutions Scientific ABC analysis Dynamic control of Inventory Dynamic schedul ing-fulfillment-based planning through ERP Broad based Outsourcing 15. CAPITAL PRODUCTIVITY Capital:- It refers to financial wealth , especially th at used to start or maintain a business, sometimes referred to as Cash flow. Cap ital deployed in plant, machinery, buildings, distribution system etc.& it need to be productive. Reasons for low productivity: Demand fluctuations Uncertaintie s of production owing to breakdowns Inventories 16. Various Methods Of Capital Productivity: Outsourcing Methods of Improvement Balancing of workstations Rationalization of packaging methods Quality circles 17. LABOR PRODUCTIVITY Productivity: proper utilization of available resources t o achieve the best results with minimum cost. Labor productivity: It is defined by the OECD to be "the ratio of a volume measure of output to a volume meas ure of input. Output per worker corresponds to the "average product of labor " and can be contrasted with the marginal product of labor, which refers to the increase in output that results from a corresponding (marginal) increase in labor input. 18. LABOR PRODUCTIVITY continue. Frederick W. Taylor in his "Task Study&quot ; said, "Human work Can be made infinitely more productive not by 'working harder' but by "working smarter'. How to increase labor productivity:- Bala ncing operations in assembly line Reallocation of workers Setting up productivit y norms and evaluation of Production Operations 19. TRAINING The term training refers to the acquisition of knowledge, skills, a nd competencies as a result of the teaching of vocational or practical skills an d knowledge that relate to specific useful competencies. The dictionary meaning of Training is practical education in any profession or art. 20. TRAINING In practical terms, Training would mean imparting competencies to do a particular act in a particular manner. A life office would like to impart trai ning to its prospective clients and the existing clients in certain processes th at would ensure smooth relationship between the clients and the life office. 21. TRAINING continue.. So, we can say that Training will:- Improve Productivity Reduce Cost Make Production Competitive THANKS. 22. PRODUCTION AND OPERTAION MANAGEMNT UNIT-2 ADVANCED METHODOLOGIES OF PRODUCTI ON 23. Advanced methodologies of production Production Systems contain the machiner y, which are used to transform materials to the desired shapes, having the requi site properties induced into them for obtaining specific performance parameters. Production process includes obtaining raw materials, store them & move them fro m one stage of operation to the next, sometimes outside the plants. Tracking the m throughout the process is a stupendous task. 24. Optimization at every stage is necessary to derive competitive advantage. To

optimize, Advanced methodologies in aspect s like material handling, scheduling , Just In Time, Lean Manufacturing, packaging, logistics get the support of data base management systems, online transmission & processing of information that i nitiate & follow activities. 25. CAD-computer aided design CAD is the software aids in creating or modifying an existing design. Images of different components can be seen as assembled ,sectio n-view etc. with great accuracies. With it we can send drawings via internet or i ntranet to concerned person. Corrections & incorporations can be made very quick ly. 26. CAD-computer aided design With it, the efficiency of designers increases by nearly 5 times. The software can generate the volume, weights of components as a lso other engineering parameters like centre of gravity, deflections under estim ated loads & various other design parameters on complicated forms. This aids in reducing the time required to make a design or modify a product & thus concept m arket period gets drastically cut. 27. CIM, computer Integrated Manufacturing Integration occurs when a broad range of manufacturing & supporting activities are linked. Activities include enginee ring design, production planning, shop control, order processing, material contr ol, distribution etc. Information flow across all functions takes place with the help of computers. 28. CIM, computer Integrated Manufacturing CIM helps in avoiding accumulation of materials resulting in better throughput & better utilization of space. Identif ying shortages, ensuring faster deliveries becomes easy with CIM. Transmission, processing, distribution & feedback happen with CIM resulting rapid production & reduced indirect costs. 29. Split- Case Order Fulfillment Methods & Mechanization Split-case order: Fulf illment of orders which need different merchandise in different quantities requi res that cases will have to be split, and pieces picked, repacked in cartons & shi p to the customer. Mechanization: it helps in improving identification, pick-up & repacking the materials in addition to relieving monotony of the workers. 30. ORDER PICKING METHODS Items should be picked & packed in a logical manner & assigned to personnel as per customer requirements, so that their productivity i s maximized. Accuracy of fulfillment of order is ensured by 2 basic factors: Order Extent- It is defined as the number of order to be picked simultaneously by a p icker in an assignment. Discrete order: Single order is selected at a time. Batc h order: the merchandise requirements of many orders are put together & selected for pick up in the geographical area which is covered in a single pass. 31. ORDER PICKING METHODS Coverage extent: the physical area to be traversed by the picker in selecting merchandise for an assignment within the picking zone. T he zones are identified within the picking area. Tour picking: the entire pickin g area is considered for picking merchandise. SORTING- It is done for the purpos e of easing the operation of matching orders, merchandise & the customers for wh om they are done. Sort immediate or by merging a number of order & batches are m ade to consolidate the priorities for execution. This method is called Merge & S ort. 32. ROUTING: when orders are routed among the zones where picks are required, we call them Routing the picks. When orders are routed from zone to zone, in a par ticular order, whether any picks are there or not, we call them Chaining . When multiple zones are covered simultaneously in different zones we call them parall el routing. 33. ORDER PACKING METHODS When split-case is executed it becomes necessary that the merchandise is repacked for shipment to meet the requirements of the custome rs. In first method, they are picked & packed. This method is used where custome r use the merchandize directly. 34. CLASSIFICATION SCHEMES D iscrete Order Picking or B atch Order Picking Z one picking or T our picking BS B atch order picking-sort immediate BM Batch order picking- sort immediate ZR Zone picking with routing ZC Zone picking with chaini ng ZP Zone picking in parallel. For example: BSDZCA- batch order picking, sort i mmediate discrete order picking, zone picking with chaining and Assemble. 35. CHOICE OF OPTIMAL FULFILLMENT STRATEGIES General order characteristics: Numb

er of line-items Quality of pieces per line- item General order categories: Whol esale distribution Retail distribution Direct marketing Consumer Distribution Th e performance measures to be satisfied by the choice of strategy are to minimize the costs involved & maximize desirable characteristics. 36. Communication of Picking Directives For efficient process of order picking b y personnel, we need accurate, timely & sufficient information. Various Techniqu es:- 1. Reports- Customers order either in the printed format generated by the cu stomer or converted to one by the marketing deptt., pick lists, packing slips, s tock location reports, delivery notes. Labels: These labels are bar coded for it em sorting & order verification. Radio frequency Terminals: coding & bar coding for identifying orders for routing & sorting. 37. Communication of Picking Directives 2. Display Light- These computer activat ed lights are used to direct order selectors to items & locations to pick order or batch requirements. They call for the attention of the personnel & alert them . 38. Order Picking & Packing Economics The main cost factors can be divided into two categories: Capital Costs & Operating Costs. Capital costs- it includes faci lities, material handling systems, weighing systems, supporting & facilities goo ds which are used over a long time. Operating Costs- include labor, consumable s upplies, insurance, utilities, taxes etc. Incidental costs- those associated wit h damages, resolution of errors, return handling, inventory shrinkage etc. 39. Space & Storage Equipment Costs Split case picking & packing functions & the space required for them can be broadly categorized as- On line storage Replenis hment aisles Picking aisles Packing work space Material handling space 40. Storage Density Vs. Velocity Storage Density refers to quantity of material or number of items that can be stored in a unit of volume, say 10 cubic meter. V elocity refers to the speed with which materials are moved to the next point in the supply chain. The major costs that are necessary to be incurred for an on-li ne storage system are space & equipment costs. 41. Capital Costs for on-line storage Mechanization Costs Picking and Packing co sts Order assembly and packing system costs. THANKS. 42. PRODUCTION AND OPERATION MANAGEMENT UNIT-3 OPERATIONS MANAGEMENT 43. OPERATIONS MANAGEMENT Operations management is an area of business that is c oncerned with the production of goods and services, and involves the responsibil ity of ensuring that business operations are efficient and effective . It is the management of resources, the distribution of goods and services to customers, a nd the analysis of queue systems. APICS The Association for Operations Managemen t also defines operations management as "the field of study that focuses on the effectively planning, scheduling, use, and control of a manufacturing or se rvice organization through the study of concepts from design engineering , indus trial engineering , management information systems , quality management , produc tion management , inventory management , accounting , and other functions as the y affect the organization" 44. Management activities encompasses in Operation Management Plants- the factor y, the location where all the activities take place, machinery & heavy equipment s; People- direct or indirect workforce; Parts- the components, sub-assemblies o r even products. Processes- methodologies, technology, tooling, fixtures for est ablishing, maintaining & improving productivity; Planning & control- information management system which initiates, directs, monitors & collects feedback to ena ble efficient use of resources. 45. SCOPE OF OPERATIONS Operations research plays an increasingly important role in both the public and private sectors. Operations research addresses a wide va riety of issues in transportation, inventory planning, production planning, crew planning, communication network design and operation, computer operations, fina ncial assets and risk management, revenue management, market clearing and many o ther topics that aim to improve business productivity. 46. OPERATION STRATEGY OPERATIONS: It is one of the major functions of any busin ess organization Marketing discovers the destination for the product or service that is produced. The operations functions should be guided by strategies which are consistent with the organization strategy. COMPETETIVENESS is at the core of

all strategies. Different functional areas with their own capabilities & constr aints have to be integrated for the overall corporate strategies. Operation Stra tegy is formulated to leverage the advantages, absorb the consequences of the va riable nature of various functions & provide a dependable implementation program me. 47. Formulation of Strategy Formulation of Strategy depends on the assessments o f strengths, understanding of the weaknesses, the nature of external environment & the resilience of the internal environment. The policies derived from the ope rations strategy should be amenable to go along with other functions. ORGANIZATI ON STRATEGY should be such that the strategies of different functions are design ed to lend support to one another. 48. OPERATIONS STRATEGY takes under its umbrella the following: Quality Time Fle xibility 49. STRATEGIC MANAGEMENT PROCESS The organizational processes depend upon the: S tructure of the organization The hierarchical levels Decision arrival mechanism Communication systems Authorization processes Implementation procedures Feedback & monitoring devices To formulate and implement strategies. 50. Purpose of Strategies To leverage the companys advantages To prepare for the eventualities of uncertain external happenings To maximize the chances of succes s in the endeavors To ensure effective & efficient process To avoid loss The act ual activities which result in outcomes are called Operations. 51. The Operations Strategy would consider the following: Additional machinery o r sub-contracting Methods to improve productivity Revamping assembly lines Measu res to improve motivation Promoting existing employees or hire new ones Identify ing & developing new suppliers Look for opportunities to reduce costs 52. STRATEGIC DECISION MAKING Decision making is the crucial management function . Decisions commit the organization & its members to perform activities which ha ve financial repercussions & affect the functioning of others who are connected with those. Factors which form the basis of decision making: Environmental Scann ing Core Competencies 53. Environmental Scanning- Becoming aware about the threats & opportunities and their impact on the firm by a process of analysis. Core competencies- The uniqu e strengths on the basis of which the entrepreneur started the organization.Some additional strengths & competencies have been acquired to augment the existing business built. The developments and improvements both in knowledge and skills m ake the core strengths better. 54. CORE PROCESSES Core processes of an organization are determined by the core competencies. Four main core processes are: Customer relationship New product/ ser vice development Supplier relationship Order fulfillment 55. DIFFERENTIATION STRATEGIES Differentiation is a process by which a company d istinguishes itself from its competitors and their offerings. The difference sho uld be perceived by the customers as- important, distinctive, superior & afforda ble. Nonetheless, they have to make the companys offerings I.e. products & servic es profitable. 56. Tools for implementation of Operations Set of specialized techniques are kno wn as tools which can be standardized for ease of implementation and control. IM PLEMENTATION OF OPERATIONS: Implementation is the process of executing the plann ed operations.Estimating, routing, loading are the planning processes and dispat ching and progressing are processes which are conducted while the manufacturing is going on.We call the former PLANNING and the latter CONTROLING function. Put together they are considered IMPLEMENTATION. 57. Tools for implementation of Operations Tools for implementation: GANTT chart s are used to record progress comparing the actual against the planned activitie s and keep track of the flow of the material. Line Balancing & Line of Balance a re two more tools to ensure that machining centers are loaded uniformly. Simulat ion Models are used to predict utilization of Machines and Production levels. Mi crosoft Operations Manager 2005 is a useful tool in this regard. 58. INDUSTRY BEST PRACTICES Each industry would have developed over years or dec ades. Materials would have changed, processes would have changed. All products & services are meant to serve needs of the customers, are undergo continuous chan

ges both in shapes & features. Industry best practices open up the field for ben chmarking by companies which need to improve their performance. 59. Pragmatic Bench Marking It is a method of measuring a companys processes, met hods, procedures and in a way all functions in great detail. Benchmarking is use d to understand how these got into the system and what circumstances brought the m about. The metrics that could be used are- number of pieces per hour, cost per unit, number of breakdowns per week, customer alienation per week, return on in vestment, number of returns from customers in a month and inventory turnover. 60. Types Of Benchmarking Process benchmarking- Business Process Financial bench marking Performance benchmarking Product benchmarking Strategic benchmarking Fun ctional benchmarking