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Production Systems

Introduction to
Production
Operation
Management
James Louie R. Meneses

Definition of POM
Production/operations management
is the process, which combines and transforms
various resources used in the
production/operations subsystem of the
organization into value added product/services
in a controlled manner as per the policies of the
organization

storical Evolution of PO
The traditional view of manufacturing
management began in eighteenth century
when Adam Smith recognised the economic
benefits of specialisation of labour. He
commended breaking of jobs down into
subtasks and recognises workers to specialised
tasks in which they would become highly skilled
and efficient. In the early twentieth century,
F.W. Taylor implemented Smiths theories and
developed scientific management.

storical Evolution of PO

Concept of Production
Production is defined as the step-bystep conversion of one form of material
into another form through chemical or
mechanical process to create or
enhance the utility of the product to the
user.

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 in a controlled
manner to add value in accordance with the policies
communicated by management.
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

sification of Production Sys


Production systems can be classified as
1. Job Shop
3. Batch Production
2. Mass Production
4. Continuous Production
systems

sification of Production Sys


Job Shop
Production
Job
shop production are characterised by manufacturing of one
or few quantity of products designed and produced as per the
specification of customers within prefixed time and cost. The
distinguishing feature of this is low volume and high variety of
products.
A job shop comprises of general purpose machines arranged
into different departments. Each job demands unique technological
requirements, demands processing on machines in a certain
Characteristics
sequence.
The Job-shop production system is followed when there is:
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 job as a challenge
because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of
each product, capacities for each work centre and order priorities.

sification of Production Sys

Advantages
Following are the advantages of job shop production:
1. Because of general purpose machines and facilities variety of
products can be produced.
2. Operators will become more skilled and competent, as each
job gives them learning opportunities.
3. Full potential of operators can be utilised.
4. Opportunity exists for creative methods and innovative ideas.
Limitations
Following are the limitations of job shop production:
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher
inventory cost.
3. Production planning is complicated.
4. Larger space requirements.

sification of Production Sys


Batch Production
Batch production is defined by American Production and
Inventory Control Society (APICS) as a form of
manufacturing in which the job passes through the functional
departments in lots or batches and each lot may have a
different routing. It is characterised by the manufacture of
limited number of products produced at regular intervals and
stocked awaiting sales.
Characteristics
Batch production system is used under the following
circumstances:
1. When there is shorter production runs.
2. When plant and machinery are flexible.
3. When plant and machinery set up is used for the
production of item in a batch and
change of set up is required for processing the next batch.

sification of Production Sys


Advantages
Following are the advantages of batch production:
1. Better utilisation of plant and machinery.
2. Promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of products.
6. Job satisfaction exists for operators.

Limitations
Following are the limitations of batch production:
1. Material handling is complex because of irregular and longer
flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to continuous
production.

sification of Production Sys


Batch Production

Manufacture of discrete parts or assemblies using a continuous


process are called mass production. This production system is
justified by very large volume of production. The machines are
arranged in a line or product layout. Product and process
standardisation exists and all outputs follow the same path.
Characteristics
Mass production is used under the following circumstances:
1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production
capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and
without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

sification of Production Sys


Advantages
Following are the advantages of batch production:
1. Better utilisation of plant and machinery.
2. Promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of
products.
6. Job satisfaction exists for operators.
Limitations
Following are the limitations of batch production:
1. Material handling is complex because of irregular and
longer flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to
continuous production.

sification of Production Sys


Mass Production
Manufacture of discrete parts or assemblies using a continuous
process are called mass production. This production system is
justified by very large volume of production. The machines are
arranged in a line or product layout. Product and process
standardisation exists and all outputs follow the same path.
Characteristics
Mass production is used under the following circumstances:
1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production
capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and
without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

sification of Production Sys


Advantages
Following are the advantages of mass production:
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.
Limitations
Following are the limitations of mass production:
1. Breakdown of one machine will stop an entire
production line.
2. Line layout needs major change with the changes in
the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.

sification of Production Sys


Continuous Production
Production facilities are arranged as per the sequence of
production operations from the first operations to the finished
product. The items are made to flow through the sequence of
operations
through material handling devices such as conveyors, transfer
devices, etc.
Characteristics
Continuous production is used under the following
circumstances:
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final
product.

sification of Production Sys


Advantages
Following are the advantages of continuous production:
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 it is
completely automatic.
5. Person with limited skills can be used on the production
line.
6. Unit cost is lower due to high volume of production.
Limitations
Following are the limitations of continuous production:
1. Flexibility to accommodate and process number of
products does not exist.
2. Very high investment for setting flow lines.

Production Management
Production management is a process of planning,
organizing, directing and controlling the activities of the
production function. It combines and transforms various
resources used in the production subsystem of the
organization into value added product in a controlled
manner as per the policies of the organization.
E.S. Buffa defines production management as,
Production management deals with decision making
related to production processes so that the resulting
goods or services are produced according to
specifications, in the amount and by the schedule
demanded and out of minimum cost.

Production Management
Objectives of Production
Management
The objective of the production management is to
produce goods services of right quality and quantity at
the right time and right manufacturing cost.

RIGHT QUALITY
RIGHT QUANTITY
RIGHT TIME
RIGHT MANUFACTURING COST

Operating System
Operating system converts inputs in order to provide
outputs which are required by a customer. It converts
physical resources into outputs, the function of which is to
satisfy customer wants i.e., to provide some utility for the
customer. In some of the organization the product is a
physical good (hotels) while in others it is a service
(hospitals). Bus and taxi services, tailors, hospital and
builders are the examples of an operating system.
Everett E. Adam & Ronald J. Ebert define operating
system as, An operating system ( function) of an
organization is the part of an organization that produces
the physical goods and services.
Ray Wild defines operating system as, An operating
system is a configuration of resources combined for
the provision of goods or services.

Operations Management
Managing operations can be enclosed in a frame of general
management function as shown . Operation managers are
concerned with planning, organizing, and controlling the
activities which affect human behaviour through models.

Operations Management
PLANNING
ORGANIZING
CONTROLLIN
G
BEHAVIOUR
MODELS

Operations Management
Objectives of Operations
Management
Objectives of operations management can be
categorised into customer service and resource
utilisation.

CUSTOMER SERVICE
RESOURCE
UTILIZATION