Lect 01(Rev6 Apr 11) Pom Production Function_sies

7/31/2019 Lect 01(Rev6 Apr 11) Pom Production Function_sies

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Production / Operations ManagementFunction-Overview

N.K.Agarwal


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Operation/production function essential to everybusiness

Operations create wealth in a global economy

Operation function responsible to make four keydecisions Process

Physical process/facility used, types of equipment andtechnology, layout of the facility etc.

Quality

Setting of quality standards for products as well asservice, continuous improvement in quality

Production Function


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Capacity

Providing the right quality at the right place at the righttime, capacity planning for long and short range, staffing

levels etc. Inventory

Decisions regarding what to order, how much to order,when to order, in order to manage raw materials , workin process and finished goods inventories

Production / Operations management involves Transforming a set of inputs through a process into a pre

determined set of outputs

Production Function


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Production / operations manager is the wealthcreator in the company

Operations managers make

Decisions regarding the operations function, Its interaction with other functions within the organisation

and the external environment, and

Plan and control the production process

In an efficient and effective manner

Production manager


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Major Decisions at Pizza USA

A Framework for OM Process

How to produce & deliver

Quality

Criteria, measurement & process for achieving

Capacity

Physical facilities & labor

Inventory

What, when & how much?


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Productive system

Means by which

Input resourcesAre transformed to create

Useful goods (products) & services

As outputs.


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Production process(Converter)

Material

Labour

Energy

Capital

Information

Products

Services

Information

Information Processor

(controller)

Conversionsub

system

Control (Feedback)

subsystem

Environment

Inputs Transformation Output

An Operating (Productive) System


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Products

Tangible things that can be carried away with the person

Services

Intangible and perishable and are consumed in the processof their production.

Products and services


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Defined as

Decision making in the operations function

Integration of these decisions with other functions

A transformation system that converts inputs into outputs

In an efficient and effective manner

Production / operation management

(POM)


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Basic Functional Groups

Basic functional groups in any organisation are:

Marketing

Creating demand and generating sales revenue

Finance

Acquisition and allocation of capital

Production

Production of goods and services (generating supply)


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R&D and Engineering To effect product development, production planning &

control and quality control

Purchasing Purchases, inventory control, traffic, receiving and

warehousing

Personnel Manpower planning, wages and salaries, labour relations,

employee services and personnel records


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Information system connects all systems

Through flow of information, that provide

Control,

Information, and

Feedback



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External environment

Suppliers

Government

Competitors

Customers

Society

Various functions interact with environment and management

Marketing in the form of orders

POM in the form of materials

Finance and accounting in the form of cash collections anddisbursement

Organisation & Environment


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Relation of Operations to its Environment

Operations transformation systemSuppliers

Human

Resources

Marketing

Accounting Finance MIS

Engineering

SOCIETY

GOVERNMENT

External

Environment

CUSTOMERS

COMPETITORS


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Manage-ment

System

Philo-sophyPolicy

ObjectivesOpportu-

nity

Informationsystem

General

information

Policy flow

Feedback

Personnel

R & D

Engineering

Purchasing

Control Inf

Performanceinformation

Business organisation

Marketing

system

Prod.Ops.Mgt.system

Fin & A/csystem

Orders & Inf

Raw matl

Collections

Disbursements

Finished goods

Advt,Promotion,Sales

Order flow

Material flow

Cash flow

Relationship between POM & Rest of organisation


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Production/operation management

POM system generally responsible for:

Designing total production facility

Provides production facilities-plants, equipment and

personnel.

Provides statistical quality control

Planning output levels

Planning inventory levels


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Marketing and POM Interfacing

Marketing system

Discovers and transmits the need of consumers to the totalorganisation including the POM system

Which supplies these needs. Translates the demand for future into units of production &

desired delivery schedules

Generates data regarding

Size of market Desired inventories

Quantity, location, timing

Packaging needs, etc.


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POM- Finance & Accounting interface

F&A function

Responsible for all cash flows between the organisation andexternal environment.

Interfaces from the inception of the idea of product throughits development stages till it is sold

Accumulation of cost data of a job, a time period or aprocess

Assignment of general costs to profit centers

Determination of profit/loss of profit centers

Determination of financial value of raw material & finishedgoods inventories


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Money

CASH FLOW Stock

Product

Process

Man-Job/ Materials /

Equipments

Labour

Materials

Depreciation

charge

Depreciation Reserve

Physical Plant

Working

Capital

Surplus & Reserves

Profits

Taxes

Money accounts

Production/Product

Cash Flow in an Organisation

Sales: product becomes

money

Identify the various functions associated?


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POM- Information Function

Information function

Incorporates policy information flow from management

Feedback information to management

Information from external environment, as well as

Internal systems within the organisation

Inventory control

Cost control

Reporting status on orders Production schedules

Quality control

Make or buy decision, etc.


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Boundaries of POM often overlaps with theboundaries of other areas

Each organisation decides it based on

Its current objectives, and

Constraints

From its own personnel, and

Facilities.

Organisational role of POM


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Contemporary themes important to

Operations Customer directed operations

Every operation should be externally directed to meetcustomer requirement

Customers desire for high quality at a reasonable price is avery strong motivator to reduce waste and improve efficiencyin all operations

Lean Operations Lean operations are associated with eliminating waste (non-

value-adding activities) in every part of the operation and thebusiness

Ex; order entry may involve several steps not reallyadding any value for the customer and can beredesigned to eliminate waste of time


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Operations Elimination of non value adding activities lead to reduction in

lead time, reduction in cost and reduction in inventory levels

Lean operations employ the concepts of Just-In-Time

production Integration of operations with other functions

Best operations are now resorting to increased integrationthrough use of cross-functional teams, information systems,management coordination, rotation of employees etc.

It helps in everybody pulling in the same direction

New product design and manufacturing is a classicalexample of integration using cross functional teams


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Environmental Concerns Every company sets up strong environmental goals to

reduce pollution

Operations have to make all efforts to minimise pollution

releases into the environment from all their operations Developing a better process with less pollution can also

reduce the cost of the product through less wasted material

Supply Chain Management It includes the integration of suppliers, producers and

customers Managing the supply chain requires all managers to consider

the entire flow of materials and information across the supplychain

From raw materials through production and distribution to

the final customers


Operations


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Supply chain management is improved by using leanoperations to speed up the flow of materials and reducewaste along the supply chain

It is also improved by fast and accurate informationprocessing between suppliers and customers

Use of internet, e-business

Globalisation of Operations

Strategies for operation should be formulated with global

effects in mind and not restricted to local/national levelsalone

Facility location should be considered in view of the globalimplications


Operations


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Technology considered should be the best available globally

McDonalds has restaurants in 121 different countries

Coke and Pepsi are manufactured throughout the world


Operations


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Operations function is essential to every business

Operations create wealth in a global economy and nocompany can prosper or survive without them

Operations management defined as decision makingin the operations function and integration of thesedecisions with other functions

Various contemporary issues discussed are

important and Operations function needs to beorganised keeping the same in view for success

Production / operation management

(POM)


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References

Production & Operations Management: Aswathappa / Bhat

Modern Production/Operations Management: Buffa / Sarin

Production/Operations Management : Levin / Mclaughlin /

Lamone / Kottas Operations Management: Schroeder


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Thank You


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ASSIGNMENT CHAPTER 1

DISCUSS THE VARIOUS FUNCTIONS IN THE EXTERNAL AS WELL ASINTERNAL ENVIRONMENT OF YOUR ORGANISATION THAT THEPRODUCTION FUNCTION IS CONCERNED WITH

DISCUSS THE FUNCTIONAL RELATIONSHIP OF PRODUCTION FUNCTION

WITH THE OTHER FUNCTIONS IN THE INTERNAL ENVIRONMENT OFYOUR RESPECTIVE ORGANISATIONS. HOW DO THEY SUPPORT EACHOTHER?ORIF YOU BELONG TO A SERVICE ORGANISATION OR ARE APROFESSIONAL HAVING YOUR OWN PRACTICE, HOW IS THISRELATIONSHIP WITH THE VARIOUS INTERNAL ENVIRONMENTALFUNCTIONS ?

Documents

Lect 01(Rev6 Apr 11) Pom Production Function_sies