Bba 113 Notes on Production and Operations Management

BYJAMES BASUTA

basuta.james@cavendish.ac.ugFaculty of Business and Management

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Upon completion of this topic you should be able to: Discuss the various roles production management may

play in supporting the strategic plan of an enterprise Identify situations in which repetitive production and

batch production would be appropriate

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Production can simply be defined as the activity of transforming raw materials or components into finished products

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Therefore production management is the process of the effective planning and control of the operations of that section of an enterprise devoted to transforming materials into finished products.

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This is concerned with guiding investment decisions. Decisions made today provide guidelines for future

production operations.

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The following points need to be considered in developing a strategy:

Should resources be placed in production rather than in other areas of a business?

Decide capacity needed to meet agreed production and corporate objectives and when production should commence;

Decide where plant should be located and the type of technology to use.

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Before production commences, forecasting and planning are needed and the actual procedure adopted depends upon a number of items, e.g. whether a standard range of goods is required or whether designing is to follow special orders from customers.

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Production policy therefore must be known and then the processes of manufacture, machine requirements, factory layout, storage and handling systems, skills required in the workforce and the method of training can be determined.

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This policy is largely determined by the nature of work being carried out.

Factors to consider are the following: Amount of repetition Range of products Quality

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This is a dominating factor and there are three reasonably definite types:

Job production (Unit production) This occurs when a customer requires a single product

made to his specifications, e.g. a car or a suit

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Demand can be only broadly forecasted and generally production schedules can be only prepared when the customer’s order arrives.

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There must be a wider variety of machines and equipment available to do all types of work and labour must have varied skills which may not be too easy to achieve

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Batch production This occurs where a quantity of products or

components are made at the same time. There is repetition but not continuous. Production often is for stock, but if a batch is required

to fulfil a special order the items are usually completed in one run.

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Flow production This occurs where there is a continuous production of

products of a more or less identical nature.

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There is very little waiting between the execution of one operation and another and each machine is continually used for one product and these are often specialised single purpose machines.

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There can also be greater expenditure on equipment because of the high rate of breakdown.

It is vital that maintenance be planned to prevent breakdowns, as the breakdown of one machine can stop the production line

However, for this type of production to occur, there must be continuous demand for products.

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This will vary greatly from job production on the one hand to flow production on the other.

Some organisations are widely diversified and produce a large mixture of products

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The material used must be appropriate and strict observance of uniformity of quality can mean high purchase and inspection costs.

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A number of factors may be considered here: Selection of site Selection of type of building Layout

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This may be dependent upon: Availability of land Land of right nature and price must be available. There must be provision for expansion. Availability of labour Availability of labour of the right type is a strong

locational factor

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Availability of raw material This is closely linked up with transport facilities, with

regard to obtaining the raw material and later in disposing of the product.

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Proximity to sea, river, road or rail is usually important and essential; for example, the disposal of waste from electricity power stations usually necessitates a site near a river or sea.

Climate For some industries climate may be an important

consideration in the choice of a site

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Local regulations or by-laws These may be an important consideration as they may

place restrictions on the industry Social facilities Availability of cultural and recreational activities, for

example, and the suitability of housing accommodation may be important

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Single-storey buildings These can make better use of natural lighting. Heavy machinery can be placed with fewer restrictions

compared with multi-storey buildings. Transport and movement of materials is quicker and

easier and there is a lower cost of building and maintenance.

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Multi-storey buildings These buildings make better use of scarce land. Gravity can be used for moving materials and there is

economy of cabling and heating. Whatever type of building is considered, Factory Act

regulations must be noted, especially regarding heating, lighting, ventilation and safety.

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There are two main types of layout that can be adopted: Product layout Where machines are laid out in accordance with

sequences of operations to be carried out on the product.

Material should move from stores through the factory to distribution areas with a minimum of movement

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Design changes will greatly increase the costs of production as plant layout and re-tooling are very costly, for example, in the car industry.

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Process layout Here machines are grouped in sections, which depend

upon the type of operation performed, e.g. welding. These specialised sections are more suitable for job

and batch production and are adaptable, but involve greater materials handling.

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