MANAGEMENT SCIENCE

BBA IV SEMESTER

R.ANITA, STJPGC

Slide 1

Unit I OPERATIONS MANAGEMENT

Meaning
Definition
Nature
Scope
Objectives
Interaction of OM with other areas
Plant location
Factors determining plant location

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Slide 2

UNIT I
Introduction to Operations Management

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Slide 3

OPERATIONS MANAGEMENT

Aswathappa K. and Sridhara Bhat,Production and Operations

Management,
Operations Management by Sridhar Bhat/Aswathappa

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Slide 4

INTRODUCTION
Operations

Management - ways of
achieving the most effective and efficient
use of organisations resources
All operations: add value thereby
enhancing its usefulness.
DIMENSIONS OF COMPETITIVENESS:
Quality, cost, time, delivery, dependability,
flexibility & service, speed of response
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Slide 5

PRODUCTION & PRODUCTIVITY

Production: conversion process of input to output

Productivity : how efficiently we convert input to
desirable outputs - efficiency

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Slide 6

PRODUCTION VS MANUFACTURING
Production: Process by which, raw materials and
other inputs are converted into finished products.
[ Creation of both tangible goods as well as intangible
services]
Manufacturing: Process of producing only tangible
goods

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Slide 7

How Operations Management

evolved?

Earlier Production management: management of

production resources or its production system which
converts inputs into tangible outputs needed by the
customers of the organization.
Changed to Production and operations
Management as many business organizations
produce both goods and services as their output
Ex: Of Services performed: educational , medical,
transport

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Slide 8

Now Operations Management: It is the function of

planning, directing and controlling the processes that
transform inputs into finished goods and / or services

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Slide 9

PRODUCTION MANAGEMENT

Production management deals with decision making

related to production process so that the resulting
goods or services are produced according to
specifications in amounts and by the schedules
demanded and at a minimum cost
E.S.Buffa
Refers to application of mgt principles to production
function in a factory.

Verma & agarwal pg: 3

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Slide 10

PRODUCTION MANAGEMENT

It refers to the application of management principles

to the production function in a factory

OPERATIONS MANAGEMENT:
It is the process in which resources/inputs are converted
into more useful products

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Slide 11

DEFINITION

It is concerned with creating, operating and

controlling a transformation system which
takes inputs of a variety of resources and
produces outputs of goods and services which
are needed by customers
- Naylor, 1996

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Slide 12

DIFFERENCE BETWEEN
PRODUCTION & OPERATION MGT
PRODUCTION MGT
1. Used frequently for
tangible goods

OPERATION MGT
1. Used where various
inputs are
transformed into
intangible services

Production management precedes operations mgt is the

Historical growth of the subject

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Slide 13

Evolution

Its roots have originated from the concept of division

of labour which was proposed by ADAM SMITH in
1776

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Slide 14

EVOLUTION OF PRODUCTION
FUNCTION
Six historical development
1. The industrial revolution
2. Scientific Management
3. Human relations movement
4. Operations research
5. Computers &Advanced production technology
6. Service revolution

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Slide 15

1.The industrial revolution - 1700

Prior to 1700s cottage system,

1770 early 1800s series of events in England industrial
revolution
Two major development m/c power, factory system
Inventions (8 6 in England) spinning/weaving
European and US
Gasoline engine and electricity 1800s
Prod. Capacities expanded, demand for capital , labour
Management was missing
Replacement of craft production, steam engine, division of
labour

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Slide 16

2.Scientific Management- 1900

Philosophy propounded by business leaders,

consultant, educators and researchers
F.W.Taylor
:time study, method ,P & C
Frank B.Gilbreth
: motion study, methods
Lillian M.Gilbreth
:fatigue studies, human factor
Henry L.Gantt
:charts, incentive pay sys
Carl G.Barth
: Mathematical analysis
Harrington Emerson : principle of efficiency
Morris L.Cooke
:application to edu and govt.

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Slide 17

Scientific Management Contd

Principles of SM: task based on his skill, ability to

learn, std. output time,
routing, sequencing, materials specifications
Modern Management:

Management
Industrial engineering
Personnel management
Operations scheduling and control

Moving assembly line - Henry Ford 1911( production

time for car), work study and work measurement

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Slide 18

3. THE HUMAN RELATIONS

MOVEMENT- 1920 - 1960

The way Managers interact with their employees

Social and psychological factors motivation and
productivity
Hawthrone, illinios plant of western electric company
(1927 1932)
Elton mayo, Works & writings Chester Bernard,
Abraham Maslow, Fedrick Herzberg, Douglas
McGregor, Peter Drucker Understanding of workers
and their attitudes
Non-monetary factors

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Slide 19

4.OPERATIONS RESEARCH

Use of mathematical techniques to solve management

problems
World war II, Great Britain
Achieve significant technological and tactical
breakthroughs
Problem solving
Decision making
Model construction

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Slide 20

5.Computers and advanced production

technology- 1970s

1954 first computer was put to use

Clerical duties payrolls, billings , inventory
Decision support system, expert systems and artificial
intelligence
Significant improvement in production systems i.e
quality of products and services, reduction in labour
costs and wastage, increase in efficiency
MRP system, robots

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Slide 21

6. The service revolution

Startling developments mushrooming of services

Challenges evolve strategies
Design engineers, computer operators and production
planners
Customization & product variety
Productivity, quality and competitiveness
Process technology small batches of many different
products as per the requirements of customers
custom design.

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Slide 22

Historical Development of OM

Industrial revolution
Late 1700s
Scientific management
Early 1900s
Human relations/Human Resources
1930s Management science
Mid-1900s
Computer age
1970s
Environmental Issues
1970s

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Wiley 2007

23

Slide 23

Historical Development of OM

Just-in-Time Systems (JIT)

1980s

Total quality management (TQM)

1980s

Reengineering

1990s

Global competition

1980s

Flexibility

1990s

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Wiley 2007

24

Slide 24

Historical Development of OM

Time-Based Competition

1990s

Supply chain Management

1990s

Electronic Commerce

2000s

Outsourcing and
flattening of the world

2000s

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Wiley 2007

25

Slide 25

NATURE OF PRODUCTION

Nature of production:
Production as a system
Production as a conversion/transformation process
Production as a means of creating utility
Production as an organisational function
Decision making in production

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Slide 26

A PRODUCTION SYSTEM MODEL

INPUTS

CONVERSION
SUB-SYSTEM

OUTPUTS

Physical
Environment:
S,T,E,P/L
Market:
Competition,
prod info, customer desires

Primary resources:
M aterial & Supplies, Per, Money

(Manufacturing, Mining)

Locational S(T)
Exchange S(W/R)
Storage S(WH)
Other private S
(I,FIN,U,RE,H,BS &PS)
Govt. S

Goods
Or
services
FEEDBACK INFORMATION

Local, state, central

Capital Assets, Utilities

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Control sub-system

Quantity, cost and quality

Slide 27

Production as system

System whole which cannot be taken apart

3 systems
Production system :set of input into set of desired output
Conversion sub-system: sub- system Input into output
Control sub-systems: sub-system a portion of output
monitored for feedback signals to provide corrective action
if required.

Input : materials, personnel, capital, utilities and

information
Output : desired products and services

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Slide 28

EX: PRODUCTION SYSTEM:

EDUCATIONAL INSTITUTION

Inputs: Students, teachers, books, rooms

Conversion: Learning, communication
Output: Qualified graduates

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Slide 29

Production as an organization function

Core/heart of production system conversion subsystem

(workers, machines,material used )
Department and personnel play a central role in
achieving the objectives of the organisation

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Slide 30

Decision-making in production

Strategic decisions:
Relating to products, processes and manufacturing facilities
Major/strategic importance , long-term significance

Operating decision:
Planning production to meet demand
Provides reasonable Profits

Control Decisions:
Planning and controlling operations
Day to day activities workers, quality of products &
services, production and overhead costs and maintenance

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Slide 31

OBJECTIVES OF OM

To improve productivity (Q,C,D,F)

Efficiency of operational subsystems
Effectiveness to meet delivery
Capacity/material utilisation
Flexibility in meeting customers demands
Satisfy customer demand world class product
quality

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Slide 32

Objectives contd.

Manufacturing costs
Manufacturing schedule: time (operating cycle time,
inventory turnover rate, repair and maintenance time,)
Manufacturing services: installation of power, water
supply, material handling
Machinery and equipment: acquisition, utilisation,
replacement
Materials: units, value, space
Manpower : employee turnover rates, safety
measurements, industrial relation, absenteeism

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Slide 33

SCOPE OF OM

Includes two types of activities:

Relating to production system , designing

Analysis & control of activities

Mainly involves/encompasses two decisions:

1. Long term/strategic decision
2. Short term/operational decisions

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Slide 34

1. STRATEGIC DECISIONS

Product:
Product design and selection (value engineering for best
cost effective design)

Process:
Process selection and planning ( technology, machines &
equipment optimum automation & mechanisation)

Manufacturing facilities:
Facilities locations (cut down prod. & dist. Cost)
Facility layout and material handling (arrangement of
machines/facilities smooth, handling is min.)
Capacity Planning (level of output over a period of time
tools (LPP,Decision trees, marginal costing, learning
curves.)

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Slide 35

STAGES OF PRODUCT SELECTION

new/ diversification
Idea generation: organised, unorganised
[ Organised: consumers, consultants,bankers, patent offices,
foreign sources
Unorganised: salesman, wife of chairman, parties]
II.
Screening process: (critical evaluation suitable/viable)
III.
Business analysis: Financial analysis BEP, cash flow
analysis, risk analysis.
IV.
Product development all attributes
V.
Process development design& testing
VI.
Test marketed & commercialized and finally national
launch
I.

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Slide 36

PRODUCT DESIGN

1.
2.

Product: satisfy a felt need

Needs identification
Advance product planning:

feasibility, market analysis, alternatives,clarifying operational

requirement, estimating logistics ,establishing design criteria
length, wt.
Sales projection, economic analysis costs (production,
overheads, profitability)

Detailed engineering design

Analysis, experimentation, data collection

Design function, relaibilitymaintainability, safety, producibility

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Slide 37

Research & Development (R&D)

Organized efforts to increase scientific

knowledge or product innovation & may involve:
Basic Research advances knowledge about a
subject without near-term expectations of
commercial applications.
Applied Research achieves commercial
applications.
Development converts results of applied research
into commercial applications.

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Slide 38

Production process design and development:

Materials acquisition, production, warehousing,
transportation and distribution
Controls, information and human resources

Product evaluation and improvement:

Field performance, failure data, technical breakthrough in
materials and equipment
Formal research monitor, analyse and redesign

Product use and support:

Educate users application, warranty, repair services,
replacement, upgrade

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Slide 39

PROCESS PLANNING

Process design:
Overall sequences of operations req. to achieve the
product specifications (nature of product,materials,
quantities, existing physical layout)

Operations design:
Design of individual manufacturing operation
Man-machine relationship
How much machine time and man each unit

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Slide 40

2. OPERATIONAL DECISIONS

Production planning (setting goals & allocating

resources varied production operations @optimum)
Production control( activities are carried on in-line
with predetermined stds & schedules)
Inventory control (MM,WIP,FP,Suppliers,tools)
Quality control(Statistical techniques, success
ability to maintain quality standards specifications,
conform to the set std.)
Method study (time study, motion study,stds methods)

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Slide 41

Operational decisions contd

Maintenance & replacement:

Cost reduction & control- value engineering ,
budgetary control)

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Slide 42

IMPORTANCE OF PRODUCTION
FUNCTION

Makes significant contribution to societys well being.

Standard of living of people depend on production of goods
and services
To achieve competitive advantage

Shorter new product lead time

More inventory turns
Shorter manufacturing lead time
Higher quality
Greater flexibility
Better customer service
Reduced wastage

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Slide 43

CHARACTERISICTS OF MODERN
PRODUCTION AND OPERATIONS
FUNCTION

Manufacturing as competitive advantage

TQM, Time based competition , BPR,JIT,FMS,CIM Techniques
employed
Price (low cost), quality (high, consistent), time (rapid, on time
delivery), flexibility (variety, volume) ,service (superior) , location
(convenience)

Services orientation
interaction, small volumes, local market, presence of professionals

Disappearance of smokestacks (Alvin Toffler)

Environment friendly , aesthetically designed an built ( L & T,
ABB)

Small has become beautiful

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Slide 44

ROLE OF OM

Formulating and implementing business strategies is

crucial
Traditionally design based on marketing dept
Now, Operations function to gain competitive edge

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Slide 45

INTERFACE OF PRODUCTION SYSTEM WITH

OTHER FUNCTIONAL AREAS

A SYSTEM IS A COLLECTION OF OBJECTS

RELATED BY REGULAR INTERACTION AND
INTERDEPENDENCE.
Makes us to understand the subsystems
Each business unit production/operations, finance,
Marketing, MIS, R& D, Materials Management
Each functional area pursuing its purpose must mesh
its activities with the activity of other departments.

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Slide 46

The business firm a system view

fin

an
ce

personnel
Production/
operations

distribution

ark

g
n
i
et

engineering

purchasing

accounting
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Slide 47

FRAMEWORK OF MANAGING
OPERATIONS

Planning policies, procedures, programs, process,

product
Organising authority & responsibility, flow of
information, roles
Controlling- actual with planned- cost, quality
schedules
Behaviour- efforts
models

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Slide 48

A Framework for Manufacturing

Strategy
Customer Needs

Strategic Vision

New and Current

Products
Performance Priorities
and Requirements

Quality, Dependability,
Speed, Flexibility, and Price

Enterprise Capabilities
Operations & Supplier Capabilities
Technology

Systems

People

R&D

CIM

JIT

TQM

Distribution

Support Platforms
Financial Management

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Human Resource Management

Information Management

Slide 49

Operation strategy

Long range decisions about products, processes and

facilities

Positioning the production system

Focus of factories or service facilities
Product/service design and development
Technology selection and process development
Allocation of resources to alternatives
Facility planning
Capacity
Location
layout

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Slide 50

PRODUCTION PLANNING AND

CONTROL
Production planning/operations planning
Overall manufacturing/operations system to produce
a product
Various activities involved:
Designing a product
Determining the equipment/capacity req., sequence
/nature of operations(time,quantity & quality)
Designing the layout of physical facilities & material
handling system
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Chapter 15. production/operations P & C

Slide 51

Factors determining production

planning procedures

Product idea ---- design of product---- entire

production/operating system
Volume of production (amount & intensity)
Nature of production processes
Nature of operations
Manufacturing to order may or may not be Repeated
at regular interval
Stock and sell repetitive batch or mass production
Stock and sell continuous process

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Slide 52

PRODUCTION PLANNING SYSTEM

PRODUCT
PLANNING SYSTEM
Market requirements
Product specifications
Product idea
Product research
Product development
Final product design

PROCESS
PLANNING SYSTEM
Process R & D/ Work station
selection
Process Design/work flow analysis
Operation design
(operation content ,
Operation method)

DIAGRAM IN ASWATHAPA Pg: 235

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Slide 53

Objective of production planning

To provide a physical system together with a set of

operating guidelines for
efficient conversion of raw material, human skills and
other inputs into finished products

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Slide 54

PRODUCTION CONTROL SYSTEM

Consists of group of procedural elements operates

as whole to fulfil the 4 functions:

Means of setting the system in motion

Methods to determine lead time for production
Methods to control and monitor production operation
Techniques for measuring and recording data
An information system for display, recording and retrieval
as well as processing and flow of data.

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Slide 55

PRODUCTION CONTROL

Importance /function of production control

Provide for the production at req. Q & Q at req. Time
Co-ordinate, monitor & feedback to manufacturing mgt,
Results of the production activities, analyzing and
interpreting their significance and taking corrective action
if necessary
Provide for optimum utilisation of all resoruces
Achieve the broad objectives of low cost production and
reliable customer service.

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Slide 56

BENEFITS OF PRODUCTION
CONTROL

Improvements in profits through

Maintenance of balance inventory

Balanced & stabilised production
Maximum utilisation of resources
Minimum investment in inventory
Reduction in indirect costs, setup costs, scrap and rework ,
inventory costs

Competitive advantage

Reliable delivery
Shortened delivery schedules
Lower production costs and greater pricing flexibility
Orderly planning and marketing of new or improved products

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Slide 57

ELEMENTS OF PRODUCTION
CONTROL

Control of

Planning (sales forecast,product/process engineering)

materials (inventory, issue,movement)
Tooling (availability, issue)
Manufacturing capacity (schedules, availability)
Activities (release of order and information)
quantity
Material handling
Due dates
Information

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Slide 58

FACTORS DETERMINING PRODUCTION

CONTROL PROCEDURES

Nature of production:
intermittent, continuous or composite

Complexity of operations
Magnitude of operations

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Pg: 237

Slide 59

COMMON TYPES OF
PRODUCTION SYSTEM

Product focused production system

Continuous/line flow production (follow along direct linear paths,
throu production department without stopping)

Process-focused production system

Intermittent production system or job shops or batch production
system (grouped according to the type of process)

Group- technology(GT)/cellular manufacturing system(CM)

In families or groups GT(hybrid of product & process)
Subset of GT - CM

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Slide 60

PRODUCTION PLANNING/OPERATIONS
PLANNING & CONTROL
Planning production before actual production
activities start and exercising control activities to
ensure Q,Q,DS,C
OBJECTIVES:
Quality, customer satisfaction, utilisation, cycle time,
inventory, flexibility, co-ordinate, plant capacity,
remove bottlenecks, effective cost reduction & cost
control, production schedules, effective results at
least cost, routes
Ultimate - profits

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Slide 61

THREE STAGES IN PRODUCTION

PLANNING & CONTROL FUNCTIONS

Planning - choose
Operations - execution
Control - maintain

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Slide 62

SCOPE OF PRODUCTION
PLANNING & CONTROL

Materials
Machines and equipments
Methods
Manpower
Routing - flow
Estimating operation times
Loading and scheduling allocation .required delivery date
Dispatching release of orders
Expediting follow-up
Inspection maintenance of quality
Evaluating - improve
Cost control

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Slide 63

PRODUCTION PLANNING AND

CONTROL MAIN FUNCTIONS
Production planning

Estimating
Routing
Scheduling
loading

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Production control

Dispatching
Expediting
Inspection
Evaluating & corrective action

Slide 64

ESTIMATING

Deciding the quantity of products to be produced

and cost involved in it on the bases of sales forecast

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Slide 65

ROUTING

Process of determining the sequence of operations

to be performed in the production process- what,
where and how the work has to be done?

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Slide 66

scheduling

Fixing priorities for each job and determining the

starting time and finishing time for each operation,
the starting dates and finishing dates for each part,
sub-assembly and final assembly.

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Slide 67

loading

Deciding which jobs to be assigned to which work centre or

machine
Process of converting operation schedules into practice.
Machine loading: process of assigning specific jobs to
machines,men or work centres based on relative priorities and
capacity utilisation.
Machine loading chart Gantt chart prepared showing
the planned utilisation of men and machines by allocating the
jobs to machines or workers as per priority sequencing
established at the time of scheduling.

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Slide 68

DISPATCHING

As setting production activities in motion through the

release of orders and instructions in accordance with
the previously planned time schedules and routing.

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Slide 69

Expediting/follow-up/progressing

Ensures that the work is carried out as per the plan

and delivery schedules are met.

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Slide 70

PPC function is concerned with

What to, how to , where to , when to , who will and

how much to produce

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Slide 71

PRINCPLES OF PPC

Type of production
No.of parts
Complexity varies with the assemblies
Time
Size of the plant
Management by exception
Cost control by-product
Highest efficiency

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Slide 72

PHASES IN PRODUCTION PLANNING &

CONTROL

Planning phase
Preplanning : product planning & development, demand
forecasting, resource, facilitates, plant
Active: quantity,product-mix,routing, scheduling, material
planning, process, capacity planning and tool planning.

Action phase: execution/implementation

Control phase:

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Slide 73

BENEFITS OF PPC

Heart/nerve centre of the production /operations mgt.

function
Coordinates all phases
Higher quality, better utilization of resources, reduced
inventories, reduced manufacturing cycle time, faster
delivery, better customer service, lower production
cost and lower capital investment and higher
customer satisfaction
Improves sales turnover, market share and
profitability and provides competitive advantage

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Slide 74

LIMITATIONS OF PPC

Based on certain assumption or forecasts of

customers demand, plant capacity, availability of
materials , power etc..
If plans are rigid may resist changes in production
levels
Production planning process is time consuming
Extremely difficult when the environmental factors
change very rapidly

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Slide 75

MEASURING EFFECTIVENESS OF
PPC

Delivery
Inventory levels
Production /operation mgt

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Slide 76

REQUIRMENTS OF EFFECTIVE
PRODUCTION PLANNING AND
CONTROL SYSTEM

Sound organisational structure

Information feedback system reliable &up-to-date
Standardisation
Trained personnel
Flexibility
Appropriate policies
Accurate assessment of lead times
Adequate plant capacity

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Slide 77

PROCESS TECHNLOGY

Refers to equipment, people and systems used to

produce a firms products and services
Key process technology decisions relate to:

Organising the process flows

Choosing the appropriate product- process mix
Adapting the process to meet strategic requirements
Evaluating automation and high-technology requirements

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Pg: 63 Aswathappa

Slide 78

FIVE TYPES OF PROCESS

TECHNOLOGIES

Intermittent
1. Job shop
2. Batch technology

Continuous :
Assembly line
Continuous flow technology

Project technology

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Slide 79

1.JOB SHOP

PG: 51

Suitable for a variety of custom-designed products in small

volumes
No. of machine centres with different activity
Manufacturing of small batches of different products each of
which is custom designed and hence which requires its own
unique set of processing steps or routing through the
production process.
High skilled workers
Flexible layout
Closed job shop & open job shop
Does not have its own standard product customer order

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Slide 80

1. JOB SHOP

Each product uses only a small portion of the shops

human resources and general purpose equipment
Elaborate job-tracking and control systems
Must time is spent waiting - access to equipment

EX: printing press

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Slide 81

2. BATCH TECHNOLOGY

Ex: paints
clothes

Suitable for a variety of products in varying volumes

Wide range of products in a batch, several are
produced repeatedly and that too in large volumes
No product is sufficiently dominant to warrant
dedicated equipment and process.
Flexible for the low-volume/high-variety products
High volume products some batches for stocking
rather than for customer order
medium size enterprises

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Slide 82

3. ASSEMBLY LINE/LINE

EX: TV Sets
Air conditioners

Suitable for a narrow range of standardised products

in high volumes
Product designs are relatively stable
Specialised equipment
Human skills
Management systems developed and dedicated to
limited range of products and volumes
Less cost per unit
Minimum material handling/resetting of machines

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Slide 83

4. Continuous flow technology

Suitable for producing a continuous flow of products

Materials and products produced in continuous,
endless flows
Highly standardised
Manufacturing procedures, sequence of product
build-up, material & equipment standardised
High volume, around the clock operation with capital
intensive and specialised automation.
Ex: chemical plants
Oil refineries

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Slide 84

5. PROJECT TECHNOLOGY

Suitable for producing products that are tailor made

to the unique requirements of each customer.
One -of a kind products
Not standardised
Conversion process flexible in its equipment
capabilities, human skills and procedures
requires team-work, problem solving and coordinated
design
PERT/CPM

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Ex: construction company

Slide 85

INTERMITTENT & CONTINOUS FLOW

PROCESS OF MANUFACTURING
intermittent
1.
2.
3.
4.

5.

Plant layout
Machine
Labour
No. of products
& their designs

1.

Machines setup

5.

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2.
3.
4.

Process
General purpose
High skilled
Wide range
small quantities,
design changes
Frequent changes

continous
1.
2.
3.
4.

5.

Product
Spl. Purpose
Unskilled
Few std.
products ,
design large
quantities
Remains
unchanged
longer period
Slide 86

INTERMITTENT & CONTINOUS FLOW

PROCESS OF MANUFACTURING
intermittent
6.
7.
8.
9.

Nature & size

of order
Investments
m/cs & equip
Investment in
inventories
Material
handling
equipments,
costs

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6.
7.

8.
9.

continous

Unrepeated small
size
Less

6.

High,slow
operating cycle
Varied routes
&mech. Not
feasible, more

8.

7.

9.

Std. products
for stock
Fairly high
Fast operating
cycle, less
Mech,
automated,
fixed routes,
less
Slide 87

INTERMITTENT & CONTINOUS FLOW

PROCESS OF MANUFACTURING
intermittent
10.

11.

12.

Plant
maintenance
services
Balancing in
production
capacity
PPC

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continous

10.

No danger of
stoppage

10.

Sound avoid
interruptions

11.

Imbalance

11.

Perfect balance
smooth

12.
12.

Functions
relatively
complicated

Slide 88

PRODUCT LIFE CYCLE

Direct bearing on the companys survival

Applies to generic category not to specific brands
Consists of aggregate demand over an extended
period of time for all brands in generic

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Slide 89

TYPICAL LIFE OF A PRODUCT

CATEGORY
DEMAND AND SALES VOLUME
(Rupees)

maturity
Sales volume decline
growth

introduction

loss

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profit

TIME IN YEAR
Pg 49

Slide 90

CHARACTERISTICS OF STAGES IN LIFE CYCLE

growth maturity
introduction
Characteristics innovators Mass
Mass
of customers
Market
Market

Loyal
customers

competition

Little
If any

decreasing

sales

Low
Rapid
levels then growth
rising

Slow, no
annual
growth

Declining

profits

none

Declining
annually

Low/none

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increasing intense

Strong,
then at a
peak

decline

Slide 91

CONCLUSION OF PLC

Helps in formulating marketing strategies

Operations, marketing & engineering functions intensity
Know profit & sales volume
Reflects quality, features or characteristics
Advertising, promotion, distribution
Overcome in a short span challenges
Forecasting planning & control
Shortened product life cycles: electronics, computers and
consumer goods (product development high, production
system- changes, operations strategies CAD/CAM new
product deigns into production quickly)

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Slide 92

Inter Relationship between product life

cycle and process life cycle

Product life cycle starts from the stage of start up and

ends in the stage of decline.
Manufacturing processes undergo change from job
shop production
Through-put volume, rates of process innovation and
degree of automation

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Slide 93

Manufacturing cost/unit

Inter Relationship between product life

cycle and process life cycle

Continuous flow
Job shop

Assembly line
batch

Time
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Slide 94

A- commercial printer, B- Heavy machinery, C- automobile assembly, D- sugar mill

PROCESS PRODUCT MATRIX

Product life cycle stage

Process life Low

cycle
volume &
stages
low std
Job shop

void

Assembly
line

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Maturity, Commodity
few major ,high
products, vol,high std
high vol

Batch

continuous

Rapid
growth,low
vol,multiple
products

C
void

D
Slide 95

CONCLUSION OF Interrelationship
of PLC & process life cycle

Manufacturing org change their production

operations ( competitive adv)
Changes in product, market requirements and
competitions: the equipment, processes, procedures,
human resources change
Manufacturing flexibility, quality to dependable
delivery and competitive cost
production processing org: batch size & product
variety, capital requirements and economic analysis.

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Slide 96

HENCE,
PRODUCTION MANAGEMENT

Production management deals with decision making

related to production process so that the resulting
goods or services are produced according to
specifications in amounts and by the schedules
demanded and at a minimum cost
E.S.Buffa
Refers to application of mgt principles to production
function in a factory.

Verma & agarwal pg: 3

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Slide 97

DEFINITION

It is concerned with creating, operating and

controlling a transformation system which
takes inputs of a variety of resources and
produces outputs of goods and services which
are needed by customers
- Naylor, 1996

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Slide 98

DIFFERENCE BETWEEN
PRODUCTION & OPERATION MGT
PRODUCTION MGT
1. Used frequently for
tangible goods

OPERATION MGT
1. Used where various
inputs are
transformed into
intangible services

Production management precedes operations mgt is the

Historical growth of the subject

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Slide 99

ASSIGNMENT

Meaning of production management and operations

management
Types of production systems with suitable examples
What is production planning and various steps in
production planning and control?
Role of OM
What is interrelationship between product life cucle
and process life cycle?

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Slide 100

END OF UNIT I

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Slide 101

EXTRA INFORMATION

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Slide 102

Framework of managing operations

Planning
Organizing
controlling

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Models
&
behaviour

Slide 103

ROLE / FUNCTIONS /
RESPONSIBILITIES OF
OPERATIONS MGR

Production planning
Production control
Quality control
Method analysis
Inventory control
Plant layout and material handing
Work measurement
Other functions: cost control, std.,storage, price
analysis

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Slide 104

CAD/CAM
Technology which utilizes the computer
system in operations management

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Slide 105

CAD Computer aided design

Helps in simplifying the task of designing even

complicated products and components.
design cycle time is reduced
New customer orders are met in lesser time/cost

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Slide 106

CAM Computer aided manufacturing

Technology by which the manufacturing or

conversion or production activity is controlled by the
computer.
Increases productivity

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Slide 107

END OF THE UNIT I

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Slide 108