Unit 1 Production & Operations MGMT

8/7/2019 Unit 1 Production & Operations MGMT

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Production & Operations

Management

Lecture byT.V.SIDDHARTHA

BE, MBA, PGDM, MSc (Psychology)

[email protected]


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Unit-1

Introduction to Production & Operations

Management


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1.1. Operations Management

Definitions:

An operations system is defined as one in which several

activities are performed to transform a set of inputs intouseful output using a transformation process

Operations Management is a systematic transformation

process that converts some inputs into output that areuseful, and could fetch revenue to the operations system


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Operations as a transformation process

INPUT

Material

Machines

Men

Management

money

TRANSFORMATION

PROCESS

OUTPUT

Goods

Services

Feedback & Requirements

Suppliers Customers

TRANSFORMATION

PROCESS


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Operations as technical core Operations

Marketing

Finance andaccounting

Human resources

Outside suppliers


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Operations Management relation to

other fields

Accounting

Information

Technology

Management

As an auditor you must

understand the fundamentals

of operations management.

IT is a tool, and theres no

better place to apply it than inoperations.

We use so many things you

learn in an operations class

scheduling, lean production,

theory of constraints, andtons of quality tools.


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Operations Management relation to other

fields (cont.)

Economics

Marketing

Finance

Its all about processes. I live

by flowcharts and Pareto

analysis.

How can you do a good jobmarketing a product if youre

unsure of its quality or delivery

status?

Most of our capital budgeting

requests are from operations,

and most of our cost savings,

too.


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POM functions

1. Production planning (Before the start of manufacturing)

2. Production control (During the manufacturing)

3. Quality control (ISO, 6 sigma, CMMI ..etc)

4. Industrial engineering (Machinary design ..etc)

5. Purchasing (Buying of raw material and machines)

6. Plant engineering

7. Manufacturing

8. Method analysis

9. Inventory control (Stock management)

10. Plant layout

11. Work measurement


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1.3. Historical development of

POMEra Events/Concepts Dates OriginatorIndustrial

Revolution

Steam engine 1769 James Watt

Division of labor 1776 Adam Smith

Interchangeable parts 1790 Eli Whitney

Scientific

Management

Principles of scientificmanagement

1911 Frederick W. Taylor

Time and motion studies 1911Frank and Lillian

Gilbreth

Activity scheduling chart 1912 Henry Gantt

Moving assembly line 1913Henry Ford


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Historical development of POM (cont.)

Era Events/Concepts Dates Originator

Human

Relations

Hawthorne studies 1930 Elton Mayo

Motivation theories

1940s Abraham Maslow

1950s Frederick Herzberg

1960s Douglas McGregor

Operations

Research

Linear programming 1947 George Dantzig

Digital computer 1951 Remington Rand

Simulation, waiting

line theory, decision

theory, PERT/CPM

1950sOperations research

groups

MRP, EDI, EFT, CIM1960s,

1970s

Joseph Orlicky, IBM

and others


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Era Events/Concepts Dates Originator

Quality

Revolution

JIT (just-in-time) 1970s Taiichi Ohno (Toyota)

TQM (total quality

management)1980s

W. Edwards Deming,

Joseph Juran

Strategy andoperations

1980s Wickham Skinner,Robert Hayes

Business process

reengineering1990s

Michael Hammer,

James Champy

Six Sigma 1990s GE, Motorola


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Era Events/Concepts Dates OriginatorInternet

Revolution

Internet, WWW, ERP,

supply chain management

1990s ARPANET, Tim

Berners-Lee SAP,

i2 Technologies,

ORACLE

E-commerce 2000s Amazon, Yahoo,

eBay, Google, and

others

Globalization WTO, European Union,

and other tradeagreements, global supply

chains, outsourcing, BPO,

Services Science

1990s

2000s

Numerous countries

and companies


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1.4. POM todays and tomorrows

scenario

MARKET PLACE

CHALLENGES

Market fragmentation

Vocal customers

Customer supplier

relationship

Disruptivetechnologies

PRODUCTION

CHALLENGES

Process design and

improvements

Human resources

scarcity

Declining / Increasingraw material prices


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POM todays and tomorrows scenario

(cont.)

TECHNOLOGICALCHALLENGES

Technology changes

GEOGRAPHICAL

CHALLENGES

China

Japan

India

SOCIETALCHALLENGES

The Environment

Intellectual property


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1.5. Product design

Definition

A product is a bundle of physical services and symbolic

particulars expected to yield customer satisfaction

Typology of Products:

Goods Services

Contracts


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The Product Design Process Step 1 - Idea Development

- Someone thinks of a need and a product/service design to satisfy it

e.g. customers, marketing, engineering, competitors,

benchmarking, reverse engineering

Step 2 - Product Screening

- Every business needs a formal/structured evaluation process

e.g. fit with facility and labor skills, size of market, contribution

margin,

break-even analysis, return on sales

Step 3 Preliminary Design and Testing

- Technical specifications are developed, prototypes built, testingstarts

Step 4 Final Design

- Final design based on test results, facility, equipment, material, &

labor

skills defined, suppliers identified


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Concepts involved in Product design

1. Reverse Engineering

(process of carefully dismantling the existing product)

Ex: Camera Reel Digital Cam

Audio Cassette CD

Walkman I Pod etc2. Research & development

(India produces up to 10000 Doctorates per anum0

3. Manufacturability

4. Standardization

5. Robust design6. Concurrent Engineering

7. CAD (Computer Aided design)

8. Product Life Cycle


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2007 Wiley

Product Life Cycle

Product life cycle seriesof changing productdemand

Consider productlife cycle stages

Introduction

Growth

Maturity

Decline Facility & process

investment depends onlife cycle


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1.6. Process design

Process design consists of several steps involved in the

production process

Factors affecting Process Design decisions

Nature of product / service demand Degree of vertical integration (Forward & Backward

integration)

Product/ Service and volume flexibility

Degree of automation Level of Product/Service quality

Degree of customer contact


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Typology of the Processes

Processes by Market

Orientation

Make to Stock (MTS)

Ex: (Shirts, jeans ..etc)

Assemble to Order (ATO)

Ex: (Computers ..etc)

Make to Order (MTO)

Ex: (Private Jets ..etc)

Engineer to Order (ETO)

Ex: (Specific Industrial equipment

..etc)

Processes as Production

System

Project

Job Shop

Batch Production

Assembly Line

Continuous Flow

Cell Manufacturing

Flexible manufacturing

Systems


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Process Improvement stages

1. Determine strategic dimensions

2. Identify the inputs, outputs, and customers of the

process

3. Identify the performance measures4. Document the process

5. Process improvement

6. Process Re-Engineering


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1.7. Manufacturing Process

Technology Production process planning

Manufacturing concept planning

Factory layout planning and analysis

work flow simulation.

walk-path assembly planning

plant design optimization

Mixed model line balancing. Workloads on multiple stations.

Process simulation tools e.g. die press lines, manufacturing lines

Ergonomic simulation and assessment of production assembly tasks

Resource planning

Computer Aided Design (CAD) Computer-aided manufacturing (CAM)

Numerical control CNC

Direct Numerical Control (DNC)

Tooling/equipment/fixtures development

Tooling and Robot work-cell setup and offline programming (OLP)


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1.7. Manufacturing Process

Technology (cont.) Generation of shop floor work instructions

Time and cost estimates

ABC - Manufacturing activity-based costing

Production, costs, and pricing

Quality Computer-aided quality assurance (CAQ)

FMEA Failure mode and effects analysis SPC Statistical process control

Computer aided inspection with coordinate-measuring machine (CMM)

Tolerance stack-up analysis using PMI models.

Success Measurements

Overall Equipment Effectiveness (OEE),

Communication with other systems Enterprise resource planning (ERP)

Manufacturing Operations Management (MOM)

Product Data Management (PDM)

SCADA (Supervisory Control and Data Acquisition) real time processmonitoring and control

Human-machine interface (HMI) (orman-machine interface (MMI))

Distributed control system (DCS)


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Manufacturing Process Technology


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1.8. Value Analysis

Value analysis is an approach to improving the value

of a product or process by understanding its

constituent components and their associated costs. It

then seeks to find improvements to the components by

either reducing their cost or increasing the value of the

functions.

Value is the ratio of Function and Cost

Value = Function

Cost

Where Function is expressed as units of performance

Cost is expressed as monetary unit


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Concepts of Value analysis

Value: the ratio between a function for customersatisfaction and the cost of that function.

Function: the effect produced by a product or by one of

its elements, in order to satisfy customer needs.

Value analysis: methodology to increase the value of anobject the object to be analysed could be an existing ora new product or process, and it is usually accomplished

by a team following a work plan.

Need: something that is necessary or desired by thecustomer


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Procedure ofValue analysis

1. Identify each of the functions of a product or service listthem down

2. Rearrange the functions on the basis of theirimportance

3. Identify each of the components in the product orservice list them down

4. Relate the functions of components to the functions ofproduct or service

5. Identify the cost of each component6. Compare the weights of the functions and weights of

costs of each component

7. Identify those components where the ratio ofFunction/Cost is low


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Guidelines to students

Take help of the dictionary to understand the terminology

used in this study material

Elaborate the answers with examples discussed in the

class room Refer the following books for in-depth understanding of

the subject

POM by Upendra Kachru (Excel Books)

POM by Panneeselavam (PHI)

Documents

Unit 1 Production & Operations MGMT