Production and operations management are concerned with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from other functions such as personnel, marketing, finance, etc., by its primary concern for conversion by using physical resources.‟
Following are the activities which are listed under production and operations management functions:
- Location of facilities
- Plant layouts and material handling
- Product design
- Process design
- Production and planning control
- Quality control
- Materials management
1. Location of facilities
Location of facilities for operations is a long-term capacity decision which involves a long term commitment about the geographically static factors that affect a business organization. It is an important strategic level decision-making for an organization.
The selection of location is a key-decision as large investment is made in building plant and machinery. An improper location of plant may lead to the waste of all the investments made in the plant and machinery equipment. Hence, location of plant should be based on the company‟s expansion plan and policy, diversification plan for the products, changing sources of raw materials and many other factors. The purpose of the location study is to find the optimal location that will result in the greatest advantage to the organization.
2. Plant layout and material handling
Plant layout refers to the physical arrangement of facilities. It is the configuration of departments, work centres and equipment in the conversion process. The overall objective of the plant layout is to design a physical arrangement that meets the required output quality and quantity most economically.
According to James Moore, “Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipments and all other supporting services along with the design of best structure to contain all these facilities”.
Material Handling‟ refers to the „moving of materials from the store room to the machine and from one machine to the next during the process of manufacture‟. It is also defined as the „art and science of moving, packing and storing of products in any form‟. It is a specialized activity for a modern manufacturing concern, with 50 to 75% of the cost of production. This cost can be reduced by proper section, operation and maintenance of material handling devices. Material handling devices increases the output, improves quality, speeds up the deliveries and decreases the cost of production. Hence, material handling is a prime consideration in the designing new plant and several existing plants.
4. Product design
Product design deals with conversion of ideas into reality. Every business organization has to design, develop and introduce new products as a survival and growth strategy. Developing the new products and launching them in the market is the biggest challenge faced by the organizations. The entire process of need identification to physical manufactures of product involves three functions: marketing, product development, and manufacturing. Product development translates the needs of customers given by marketing into technical specifications and designing the various features into the product to these specifications. Manufacturing has the responsibility of selecting the processes by which the product can be manufactured. Product design and development provides link between marketing, customer needs and expectations and the activities required to manufacture the product.
5. Process design
Process design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods. These decisions encompass the selection of a process, choice of technology, process flow analysis and layout of the facilities. Hence, the important decisions in process design are to analyze the work flow for converting raw material into finished product and to select the workstation for each included in the workflow.
6. Production planning and control
Production planning and control can be defined as the process of planning the production in advance, setting the exact route of each item, fixing the starting and finishing dates for each item, to give production orders to shops and to follow up the progress of products according to orders.
The principle of production planning and control lies in the statement „First Plan Your Work and then Work on Your Plan‟. Main functions of production planning and control includes planning, routing, scheduling, dispatching and follow-up.
Planning is deciding in advance what to do, how to do it, when to do it and who has to do it. Planning bridges the gap from where we are, to where we want to go. It makes it possible for things to occur which would not otherwise happen.
Routing may be defined as the selection of path which each part of the product will follow, which being transformed from raw material to finished products. Routing determines the most advantageous path to be followed from department to department and machine to machine till raw material gets its final shape.
Scheduling determines the programme for the operations. Scheduling may be defined as „the fixation of time and date for each operation‟ as well as it determines the sequence of operations to be followed.
Dispatching is concerned with the starting the processes. It gives necessary authority so as to start a particular work, which has already been planned under
„Routing‟ and „Scheduling‟. Therefore, dispatching is „release of orders and instruction for the starting of production for any item in acceptance with the route sheet and schedule charts‟.
The function of follow-up is to report daily the progress of work in each shop in a prescribed Performa and to investigate the causes of deviations from the planned performance.
7. Quality control
Quality Control (QC) may be defined as „a system that is used to maintain a desired level of quality in a product or service‟. It is a systematic control of various factors that affect the quality of the product. Quality control aims at prevention of defects at the source, relies on effective feedback system and corrective action procedure.
Quality control can also be defined as „that industrial management technique by means of which product of uniform acceptable quality is manufactured‟. It is the entire collection of activities which ensures that the operation will produce the optimum quality products at minimum cost.
The main objectives of quality control are:
- To improve the company‟s income by making the production more acceptable to the customers i.e. by providing long life, greater usefulness, maintainability,
- To reduce companies cost through reduction of losses due to
- To achieve inter changeability of manufacture in large scale
- To produce optimal quality at reduced
- To ensure satisfaction of customers with productions or services or high quality level, to build customer goodwill, confidence and reputation of
- To make inspection prompt to ensure quality
- To check the variation during
8. Materials management
Materials management is that aspect of management function which is primarily concerned with the acquisition, control and use of materials needed and flow of goods and services connected with the production process having some predetermined objectives in view.
The main objectives of materials management are:
- To minimize material
- To purchase, receive, transport and store materials efficiently and to reduce the related
- To cut down costs through simplification, standardisation, value analysis, import substitution,
- To trace new sources of supply and to develop cordial relations with them in order to ensure continuous supply at reasonable
- To reduce investment tied in the inventories for use in other productive purposes and to develop high inventory turnover