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PRODUCTION MANAGEMENT

“Production is the application to work “ - Peter F. Drucker

“Production is a process by which goods and services are created” - Elwood Buffa

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• To produce goods or services of;

right qualityright quantity pre-determined timePre-established cost

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Subordinate objectives

1. Machinery & Equipments

2. Materials

3. Manpower

4. Supporting Services

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Functions of P.M.

• Available capital

• Physical resources

Salable goods & services

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Scope of Prod. Mgmt.

• Strategic Level:– New product design & identification– Process design & planning– Facilities location & layout planning– Design & material handling system

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Capacity Planning:

– Production Planning

– Production Control

– Other activities

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Relationship with other functional areas:

• Marketing: Works as per predictions and

requirements forecasted by Marketing Department.

• Finance: Budget has to be provided to Finance department for

allocation of budget.

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Personnel:

Production department has to inform Personnel Department about the skill

required in employees to be employed for

production.Materials Management: Prod dept has to coordinate with MM for

procurement of material.

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Maintenance:

• Efficiently maintained equipment lead to quality products.P.P.C.:• PPC helps towards uninterrupted flow of material in production line.R & D:• R&D develops new products and improved designs.

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PRODUCTION SYSTEMS

A system is a logical arrangement of objectives, according to pre-designed plans.

They are the frameworks within whichproduction activities are carried out.

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PRODUCTION SYSTEMS

• 1111InputInput Receiving Oprns Storage Processing

Operations

Finished goods storage

Shipping OperationsOut put

Types of Prod. Systems

Prod. Systems Continuous Production Intermittent Production

Mass Process Assly. Line Job Prod. Batch Prod. Prod. Prod System Syst. Syst. System System

Analytical Prod Synthetic Prod System System

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Make-to-Stock Production

1. Fairly constant & predictable demand2. Products few & standardised3. Customers expect short delivery time4. High Shelf- Life

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Make – to - Order

- Manufacture according to specific specifications

- Lead time is long

- Non standard

- Several options available

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Assemble- to - Order

- Medium product range

- Medium lead time

- High price.

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COMPARISONS BETWEEN THE SYSTEMS:Particulars Make to Stock Make to Order Assemble to Order

• Range Low High Medium/High• Volume High Low Medium• Lead Time Low High Medium• Handling of Safety Stock Planning of Planning of

fluctuations of product excess capacity standard modulesin demand units & raw material & parts

stock• Customer Limited/distant High at Sales High at Sales producer & design

interface• Basis of End item forecasts Back logs & Backlogs & Planning Market intel. Trend analysis• Inventory High Low Criticals only• Category Standardised Special Prod Modular parts.

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Types of Production Systems

- Job Shop Production

- Batch Intermittent Production

- Continuous Production

- Cellular Production

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Comparison between various types of Production

Characteristics Job Order Batch Mass• Volume 1 or few Limited Large Qty• Variety Large Medium 1 or few• Layout Process/func. Proc/func. Product/line• Set up time High High & Freq Low• Man Cycle time Large Medium Low• Material Flow Discontinuous Disconti Uniform• Equip & Mac General General Special• Flexibility High High Very Low• P.P.C. Complex Complex Simple• Work-in-pro High Medium Low• Cost/unit High Medium Low• Skill (labour) High Skilled Semi• Investment Low Medium High

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Harrison T. Wenk III is 43, married and has two children, ages 10 and 14. He has a master’s degree in Education and teaches Junior High School music in a small town in Ohio. Harrison’s father passed away two months ago, leaving his only child an unusual business opportunity. According to his father’s will, Harrison has 12 months to become active in the family food-business, Kare-Full-Katering, Inc., or it will be sold to two key employees for a reasonable and fair price. If Harrison becomes involved, the two employees have the option to purchase a significant but less than majority interest in the firm.

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Harrison’s only involvement with the business, which his grandfather established, was as an hourly employee during high school and college summers. He is confident that he could perhaps learn and enjoy the marketing side of the business and that he could retain the long time head of accounting/finance. But, he would never really enjoy day to day operations. In fact, he doesn’t understand what operations management really involves..

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In two key employe 1991, Kare-Full- Katering Inc., had $3.75 million in sales in Central Ohio. Net profit after taxes was $105,000, the eleventh consecutive year of profitable operations and the seventh in the last twenty years. There are 210 employees in this labour-intense business. Institutional contracts account for over 70% of sales and include partial food services for three colleges, six commercial establishments, two long term care facilities and five grade schools. Some customer locations enjoy a permanent operations manager; others are served from the main kitchens of Kare-Full- Katering, inc. Harrison believes that if he becomes active in the business, one of thees, the vice president of operations, will leave the firm.

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Harrison has decided to complete the final two months of school this year and then spend the summer around Kare-Full Katering – as well as institutions with their own food services – to assess whether he wants to become involved in the business. He is particularly interested in finding out as much as possible about operations. Harrison believes he owes it to his wife and children to fairly evaluate this opportunity

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Case Study Unit I No. 1

1. To know about the firm, how much does Harrison need to know about operations? Why?

2. What problems do you expect Harrison to encounter this summer, in all the institutions?

3. If you were Harrison, what would you do? Why?

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The manager of a cola bottling plant came to work early on Friday, having been out of town on business throughout the week. Before others arrived, he checked the daily labour efficiency report for the bottling plant. Daily efficiency was 102% Monday, 94% Tuesday and 87% Wednesday. Going to the Assistant Manager’s desk, he found that on Thursday, employees worked 96 hours and bottled 1,025 cases. The standard for labour output is 12.5 cases per hour. What , if any, questions should the manager ask when employees arrive on Friday?He labour output standard for an insurance claims office is 150 claims processed per day. So far this week, 160, 125, 140 and 100 claims have been processed daily. The claims backlog is building up. Prepare a graph of daily efficiency. What does the graph indicate?

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Case Study Unit I No. 2

• Write a brief summary of the case. Identify the problems, solutions and optimum solutions in this case study.