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An operation may be defined as the process of changing inputs
into
outputs thereby adding value to some entity. Right quality,
right quantity,right time and right price are the four basic
requirements of thecustomers and as such they determine the extent
of customersatisfaction. And if these can be provided at a minimum
cost, then thevalue of goods produced or services rendered
increases. Thus theobjectives of production management are to
produce goods andservices of the right quality, in the right
quantities, according to the timeschedule and a minimum
cost.Objectives of production management may be amplified as
under:
y Producing the right kind of goods and services that satisfy
customers
needs (effectiveness objective).y Maximizing output of goods and
services with minimum resource inputs
(efficiency objective).
y Ensuring that goods and services produced conform to pre-set
quality
specifications (quality objective).
y Minimizing throughput-time- the time that elapses in the
conversion
process- by reducing delays, waiting time and idle time (lead
time
objective).
y Maximizing utilization of manpower, machines, etc. (Capacity
utilization
objective).
y Minimizing cost of producing goods or rendering a service
(Cost
objective).
Key elements of Operations Management
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Product selection and design: The right kind of products and
gooddesigns of the products are crucial for the success of an
organizing. Awrong selection of the product and/or poor design of
the products canrender the companys operation ineffective and
non-competitive.Products/services, therefore, must be chosen after
detailed evaluation of
the product/services alternatives in conformity with the
organizationsobjectives. Techniques like value engineering may be
employed increating alternate designs, which are free from
unnecessary featuresand meet the intended functions at the lowest
cost.Process selection and planning: Selection of the optimal
conversionsystem is as important as choice of products/services and
their design.Process selection decisions include decisions
concerning choice oftechnology, Equipment, machines, material
handling systems,mechanization and automation. Process planning
involves detailing ofprocesses if resource conversion required and
their sequence.
Facilities (Plant) location: Plant location decisions are
strategic decisionsand once plant is set up at a location, it is
comparatively immobile andcan be shifted later only at a
considerable cost and interruption ofproduction. Although problem
of location choice does not fall withinpreview the production
function and it occurs infrequently, yet it is ofcrucial importance
because of its major effect on the performance ofevery department
including production. Therefore, it is important tochoose the right
location, which will minimize total delivered customercost
(Production and distribution cost). Locational decisions
involve
evaluation of locational alternatives against multiplicity of
relevant factorsconsidering their relative importance to the
organization and selectingthose, which are operationally
advantageous to the organization.Facilities (Plant) layout and
materials handling: Plant layout is concernedwith relative location
of one department (Work center) with another inorder to facilitate
material flow and processing of a product in the mostefficient
manner through the shortest possible time. A good layoutreduces
material handling cost, eliminates delays and congestion,improves
co-ordination, provide good housekeeping etc. while a poorlayout
results in congestion, waste, frustration, inefficiency and loss
of
profit.
Capacity Planning: Capacity planning concerns determination
andacquisition of productive resource to ensure that their
availabilitymatches the demand. Capacity decisions have a direct
influence onperformance of production system in respect of both
resourceproductivity and customer service (i.e. delivery
performance). Excesscapacity results in low resource productivity
while inadequate capacity
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leads to poor customer service. Capacity planning decisions can
beshort-term decisions. Long-term capacity planning decisions
concernexpansion/contraction of major facilities required in the
conversionprocess, economics of multiple shift operation,
development of vendorsfor major components etc. Short-term capacity
planning decisions
concern issues like overtime working, sub-contracting, shift
adjustmentsetc. Break-even analysis is a valuable tool for capacity
planning.
Production Planning and Control (PPC): Production planning is
thesystem for specifying the production procedure to obtain the
desiredoutput in a given time at optimum cost in conformance with
specifiedstandard of quality, and control is essential to ensure
that manufacturingtakes place in the manner stated in the plan.
Inventory control: Inventory control deals with determination of
optimal
inventory levels of raw materials, components, parts, tools;
finishedgoods, spares and supplies to ensure their availability
with minimumcapital lock up. Material requirement planning (MRP)
and just in time(JIT) are the latest techniques that can help the
firm to reduce inventory.
Quality assurance and control: Quality is an important aspect
ofproduction system and it must ensure that services and
productsproduced by the company conform to the declared quality
standards atthe minimum cost A total quality assurance system
includes suchaspects as setting standards of quality, inspection of
purchased and
sub-contracted parts, control of quality during manufacture
andinspection of finished product including performance testing
etc.
Work-study and job design: Work-study, also called time and
motionstudy, is concerned with improvement of productivity in the
existing jobsand the maximization of productivity in the design of
new jobs.
Two principal component of work-study are: Method study and
Workmeasurement
Method study has been defined as the systematic recording and
critical
examination of the existing and proposed ways of doing work, as
ameans of developing and applying easier and more effective
methodsand reducing costs. Method study when applied to production
methodsyields one or more of the following benefits:
y Improved work environment
y Improved facility layout
y Better utilization of facilities
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y Greater safety
y Lesser materials handling
y Smooth production flow
y Lower work-in-process
y Higher earnings for the workmenMaintenance and replacement:
Maintenance and replacement involveselection of optimal maintenance
Preventive and/or breakdown) policy toensure higher equipment
availability at minimum maintenance and repaircost. Preventive
maintenance, which includes preventive inspection,planned
lubrication, periodic cleaning and upkeep, planned replacementof
parts, condition monitoring of the equipment and machines, etc.
ismost appropriate for critical machines.Cost reduction and cost
control: Effective production management mustensure minimum cost of
production and in this context cost reduction
and cost control acquires significant importance. There are
largenumber of tools and techniques available that can help to make
a heavydent on the production cost.
