PRODUCTION & OPERATION MANAGEMENT 2ND SEM MBA
1. Production Management
Concept: Production Management focuses on efficiently transforming raw materials into finished products.
Key Points:
- Objective: Optimize production processes.
- Functions: Planning, scheduling, quality control, and inventory management.
Diagram:
- Production Process Flowchart:
- Shows the sequence from raw materials to distribution:
- Raw Materials → Production Planning → Manufacturing → Quality Control → Finished Goods → Distribution
- Shows the sequence from raw materials to distribution:
2. Operations Management
Concept: Operations Management oversees the entire process of producing and delivering products and services.
Key Points:
- Objective: Enhance overall operational efficiency.
- Functions: Process design, supply chain management, logistics, and customer service.
Diagram:
- Operations Management Process Flow:
- Illustrates the flow from input through process design, execution, and customer service:
- Input → Process Design → Operation Execution → Output → Customer Service
- Illustrates the flow from input through process design, execution, and customer service:
3. Forecasting in Production & Operations Management
Concept: Forecasting predicts future demand to guide production planning and inventory management.
Key Points:
- Objective: Ensure production meets future demand.
- Types:
- Qualitative (e.g., Delphi Method, Market Surveys)
- Quantitative (e.g., Time Series Analysis, Causal Models)
Chart:
- Types of Forecasting Chart:
- A pie or bar chart showing the distribution of forecasting methods (Qualitative vs. Quantitative).
4. Product, Process, and Production Design
Concepts:
- Product Design: Focuses on creating the product features and specifications.
- Process Design: Involves planning the production processes.
- Production Design: Integrates product and process designs for effective manufacturing.
Key Points:
- Product Design: Customer-focused features.
- Process Design: Efficient production methods.
- Production Design: Combining both for optimized production.
Diagram:
- Design Integration Flowchart:
- Shows how product design, process design, and production design interconnect:
- Product Design → Process Design → Production Design → Manufacturing
- Shows how product design, process design, and production design interconnect:
5. Factors Affecting Location
Concept: Choosing a facility location that optimizes production efficiency and cost.
Key Points:
- Factors: Proximity to materials, labor costs, transportation, and regulations.
Chart:
- Factors Affecting Location Bar Chart:
- A bar chart depicting the importance of various factors (e.g., Proximity to Materials, Labor Costs).
6. Production Planning
Concept: Production Planning ensures production processes align with demand forecasts and resource availability.
Key Points:
- Elements: Demand forecasting, capacity planning, scheduling, and inventory management.
Diagram:
- Production Planning Flowchart:
- Visualizes the process from demand forecasting to inventory management:
- Demand Forecasting → Capacity Planning → Scheduling → Inventory Management
- Visualizes the process from demand forecasting to inventory management:
7. Method Study and Work Measurement
Concepts:
- Method Study: Analyzing work methods to improve efficiency.
- Work Measurement: Determining time standards for tasks.
Key Points:
- Method Study: Focuses on process improvement.
- Work Measurement: Helps set performance standards.
Diagram:
- Method Study and Work Measurement Flowchart:
- Illustrates steps in analyzing and measuring work processes:
- Method Study → Process Improvement → Work Measurement → Time Standards
- Illustrates steps in analyzing and measuring work processes:
8. Inventory Management
Concept: Managing stock levels to balance production needs and customer demand.
Key Points:
- Objective: Efficiently manage inventory to minimize costs and meet demand.
Chart:
- Inventory Management Pie Chart:
- A pie chart showing the distribution of inventory types (e.g., Raw Materials, Work-in-Progress, Finished Goods).
9. ABC Classification of Items
Concept: Classifying inventory based on value and importance to prioritize management efforts.
Key Points:
- Categories:
- A Items: High value, low quantity.
- B Items: Moderate value.
- C Items: Low value, high quantity.
Chart:
- ABC Classification Chart:
- A bar chart or pie chart showing the distribution of items across A, B, and C categories.
10. Total Quality Management (TQM)
Concept: A comprehensive approach to improving quality across all organizational processes.
Key Points:
- Stages: Management commitment, employee involvement, continuous improvement, and performance measurement.
Diagram:
- TQM Implementation Stages Flowchart:
- Visualizes the steps in implementing TQM:
- Management Commitment → Employee Training → Continuous Improvement → Performance Measurement
- Visualizes the steps in implementing TQM:
1. Difference between Production and Operations Management
Production Management:
- Concept: Focuses on the production of goods and services and involves the transformation of raw materials into finished products.
- Role: Ensures efficient and effective production processes, resource utilization, and quality control.
- Nature: Primarily concerned with manufacturing and production processes.
- Scope: Includes planning, organizing, directing, and controlling production activities.
Operations Management:
- Concept: Encompasses a broader scope, including the management of all operations within an organization, both in manufacturing and services.
- Role: Involves managing the entire process that converts inputs into outputs, including supply chain, logistics, and customer service.
- Nature: Integrates various functions like production, marketing, and finance to deliver quality goods and services.
- Scope: Covers strategic planning, design of operations, and overall management of business processes.
2. Forecasting as a Planning Tool
Forecasting: The process of predicting future events to aid in planning and decision-making.
- Types of Forecasting:
- Qualitative: Uses expert opinions and market research (e.g., Delphi method, market surveys).
- Quantitative: Uses statistical methods and historical data (e.g., time series analysis, causal models).
3. Product Design, Process Design & Production Design
- Product Design: The process of creating a new product to be sold by a business. Importance: Determines the product’s features, quality, and customer satisfaction.
- Process Design: Involves planning the processes that transform inputs into finished goods and services. Importance: Ensures efficiency and cost-effectiveness.
- Production Design: Combines elements of both product and process design to create a streamlined production system. Importance: Enhances overall production efficiency and product quality.
- Differences: Product design focuses on the product itself, process design on the production methods, and production design on integrating both to optimize manufacturing.
4. Factors Affecting Location in Production and Operations Management
- Factors:
- Proximity to raw materials and markets
- Labor availability and costs
- Transportation and infrastructure
- Government policies and regulations
- Utilities and environmental considerations
- Facility Location: The strategic decision of choosing a geographical site for a company’s operations to optimize costs and efficiency.
5. Production Planning
- Production Planning: The process of organizing the production schedule to ensure efficient production.
- Elements:
- Demand forecasting
- Capacity planning
- Scheduling
- Inventory management
- Quality control
6. Importance of Work Study and Supervision
- Work Study: Systematic examination of work processes to improve efficiency.
- Supervision: Effective supervision ensures that the improvements suggested by work studies are implemented correctly. Example: A work study might suggest a new layout for a production line, but without proper supervision, the changes might not be executed effectively.
7. Method Study and Work Measurement
- Method Study: Analyzing work methods to improve efficiency and eliminate waste. Objectives: Simplification of tasks, improvement of processes.
- Work Measurement: Determining the time required to perform a job. Objectives: Setting standards, planning workloads.
8. Inventory and Inventory Management
- Inventory: The stock of materials, components, and finished products.
- Uses: Ensures smooth production processes and meets customer demand.
- Inventory Management: Necessary to balance carrying costs and order costs, avoid stockouts, and ensure efficient resource use.
9. ABC Classification of Items
- ABC Classification: Categorizes inventory items based on their importance.
- A Items: High value, low quantity.
- B Items: Moderate value, moderate quantity.
- C Items: Low value, high quantity.
- ABC Distribution Curve: Plots items based on their cumulative value and quantity.
- Merits: Focuses on critical items, improves inventory control.
- Demerits: Might overlook low-value items that are still important.
10. Total Quality Management (TQM)
- TQM: A comprehensive approach to improving product quality and customer satisfaction.
- Stages of Implementation:
- Commitment from top management
- Employee training and involvement
- Continuous improvement processes
- Performance measurement and feedback
Short Notes
1. Concept of Quality Circle
A quality circle is a group of workers who voluntarily meet to discuss and solve work-related problems, aiming to improve the overall quality of their work environment and output.
2. Value Analysis & Types
Value analysis is the systematic approach to improving the value of a product by examining its function. Types include functional, cost, and worth analysis.
3. Supplier/Vendor Evaluation and Process
This involves assessing suppliers based on criteria like quality, cost, reliability, and service. The process includes initial screening, performance monitoring, and regular reviews.
4. Inspection and Quality Control
Inspection involves checking products for defects. Quality control is the broader process of ensuring that products meet specified standards through systematic planning, control, and improvement processes.
5. Different Types of Incentives
Incentives can be financial (bonuses, raises) or non-financial (recognition, career development opportunities) and are used to motivate employees to improve performance and productivity.