1.

OPERATIONS MANAGEMENT INTRODUCTION

Question 1: Define Production

Answer 1: Production is defined as “the step-by-step 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.” Thus production is a value addition process.

Question 2: What are the Objectives of Production Management?

Answer 2: The objective of the production management is to produce goods or services of Right
Quality, Right Quantity, Right Time and Right Manufacturing Cost

Question 3: What are the functions of Managing Operations?

Planning: Activities that establishes a course of action and guide future decision-making is
planning
Organizing: Activities that establishes a structure of tasks and authority
Controlling: Activities that assure the actual performance in accordance with planned
performance
Models: models like aggregate planning models, break even analysis, linear programming and
computer simulation, decision tree analysis

Question 4: Write down the scopes of production and operations management

1 Location of facilities 5 Production and planning control
2 Plant layouts and material handling 6 Quality control
3 Product design 7 Materials management
4 Process design 8 Maintenance management.

Scope of production

Question 5: Explain Operating System

Operations Management Introduction 1.1

Answer 5: Operating system converts inputs in order to provide outputs which are required by a
customer. In some of the organization the product is a physical good (hotels) while in others it is a
service (hospitals).

Productions Management Vs Operations Managemet

There are two points of distinction between production management and operations management.
First, the term production management is more used for a system where tangible goods are produced.
Whereas, operations management is more frequently used where various inputs are transformed into
intangible services. Viewed from this perspective, operations management will cover such service
organisations as banks, airlines, utilities, pollution control agencies, super bazaars, educational
institutions, libraries, consultancy firms and police departments, in addition, of course, to
manufacturing enterprises. The second distinction relates to the evolution of the subject. Operations
management is the term that is used nowadays. Production management precedes operations
management in the historical growth of the subject.

Characteristic of Modern Operations Function

The production management of today presents certain characteristics which make it look totally
different from what it was during the past. Specifically, today’s production system is characterised by
at least four features.
1. Manufacturing as Competitive advantage in the past production was considered to be like any
other function in the organisation. Wheft demand was high and production capacities were
inadequate, the concern was to somehow muster all inputs and use them to produce goods which
would be grabbed by -narket. But today’s scenario is contrasting. Plants have excess capacities,
competition is mounting and firms look and gain competitive advantage to survive and succeed.
Interestingly, aroduction system offers vast scope to gain competitive edge and firms intend to
exploit the potential. total Quality management (TQM), time-Based competition, Business process
re-engineering (BPRE), Just-in-time (JIT), Focused Factory, Flexible manufacturing systems (FMS),
computer integrated manufacturing (CIM), and the Virtual corporation are but only some
techniques which the companies are employing to gain competitive advantage.
2. Services Orientation as was stated earlier, service sector is gaining greater relevance these days.
The production system, therefore, needs to be organised keeping in mind the peculiar
requirements of the service component. The entire manufacturing needs to be geared to serve (i)
intangible and perishable nature of the services, (ii) constant interaction with clients or customers,
(iii) small volumes of production to serve local markets, and (iv) need to locate facilities to serve
local markets. There is increased presence of professionals on the production, instead of
technicians and engineers.
3. Disappearance of Smokestacks protective labour legislation, environmental movement and
gradual emergence of knowledge based organisations have brought total transformation in the
production system. Today’s factories are aesthetically designed and built, environment friendly -
in fact, they are homes away from homes. Going to factory everyday is no more excruciating
experience, it is like holidaying at a scenic spot. a visit to aBB, L & t or smith Kline and Beecham
should convince the reader about the transformation that has taken place in the wealth creation
system.

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4. Small has become beautiful it was e.F. schumacher who, in his famous book Small is Beautiful,
opposed giant organisations and increased specialisation. He advocated, instead, intermediate
technology based on smaller working units, community ownership, and regional workplaces
utilising local labour and resources. For him, small was beautiful. Businessmen, all over the
world, did not believe in schumacher’s philosophy. Inspired by economies of scale, industrialists
went in for huge organisations and mass production systems

Recent Trends in Production/Operations Management

1. Global Market Place: Globalisation of business has compelled many manufacturing firms to have
operations in many countries where they have certain economic advantage. this has resulted in a
steep increase in the level of competition among manufacturing firms throughout the world.
2. Production / Operations Strategy: More and more firms are recognising the importance of
production/ operations strategy for the overall success of their business and the necessity for
relating it to their overall business strategy.
3. Total Quality Management (TQM): TQM approach has been adopted by many firms to achieve
customer satisfaction by a never-ending quest for improving the quality of goods and services.
4. Flexibility: the ability to adapt quickly to changes in volume of demand, in the product mix
demanded, and in product design or in delivery schedules, has become a major competitive
strategy and a competitive advantage to the firms. This is sometimes called as agile
manufacturing.
5. Time Reduction: reduction of manufacturing cycle time and speed to market for a new product
provide competitive edge to a firm over other firms. When companies can provide products at the
same price and quality, quicker delivery (short lead times) provide one firm competitive edge
over the other.
6. Technology: advances in technology have led to a vast array of new products, new processes and
new materials and components. Automation, computerisation, information and communication
technologies have revolutionised the way companies operate. Technological changes in products
and processes can have great impact on competitiveness and quality, if the advanced technology
is carefully integrated into the existing system.
7. Worker Involvement: the recent trend is to assign responsibility for decision making and
problem solving to the lower levels in the organisation. This is known as employee involvement
and empowerment. Examples of worker involvement are quality circles and use of work teams or
quality improvement teams.
8. Re-engineering: this involves drastic measures or break-through improvements to improve the
performance of a firm. It involves the concept of clean-slate approach or starting from scratch in
redesigning the business processes.
9. Environmental Issues: today’s production managers are concerned more and more with
pollution control and waste disposal which are key issues in protection of environment and social
responsibility. There is increasing emphasis on reducing waste, recycling waste, using less-toxic
chemicals and using biodegradable materials for packaging.
10. Corporate downsizing (or Right Sizing): Downsizing or right sizing has been forced on firms to
shed their obesity. This has become necessary due to competition, lowering productivity, need for
improved profit and for higher dividend payment to shareholders.

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11. Supply-Chain Management: Management of supply-chain, from suppliers to final customers
reduces the cost of transportation, warehousing and distribution throughout the supply chain.
12. Lean Production: production systems have become lean production systems which use minimal
amounts of resources to produce a high volume of high quality goods with some variety. These
systems use flexible manufacturing systems and multi-skilled workforce to have advantages of
both mass production and job production (or craft production).

Operations Management Introduction 1.4