1

Introduction:
Operation is that part of as organization, which is concerned with the transformation of a range
of inputs into the required output (services) having the requisite quality level. Management is the
process, which combines and transforms various resources used in the operations subsystem of
the organization into value added
services in a controlled manner as per the policies of the organization. The set of interrelated
management activities, which are involved in manufacturing certain products, is called as
production management. If the same concept is extended to services management, then the
corresponding set of management activities is called as operations management.
PRODUCTION:
Production function is the part of an organisation, which is concerned with the transformation
of a range of inputs into the required outputs (products) having the requisite quality level.
Production is defined as the step-by-step conversion of one form of material into another form
through chemical or mechanical process to create or enhance the utility of the product to
theuser.
Thus production is a value addition process. At each stage of processing, there will be value
addition.
It implies the creation of goods and services to satisfy the human wants
According to Card Heyel Production is the process of transforming raw material
and component parts in to finished product for sale.
PRODUCTON MANAGEMENT:
It is concerned with planning, organizing, directing and controlling of production system so as
to produce goods of desired quality at minimum cost and the right time. It deals with decision
making concerning production processes.
According to E.L.F.Brech, Production Management then becomes the process of
effectively planning, and regulating the operations of that an enterprise which is responsible for
all actual transformation of materials into finished products
OPERATION MANAGEMENT:
It involves the three functions of getting inputs, conversion and outputs. Inputs consist of
people, material and equipment. The conversion activity consists of design fabrication, assembly
and storage. The output comprises goods and services
Operation management means the conversion of inputs into outputs involves design and
development of products and sevices, facilities location, capital equipment, facilities layout,
work design and measurement, production forecasting, production planning and scheduling,
material management, inventory management and quality control.
Objectives of Production and operation management:
The objective of the production management is to produce goods and services of Right Quality
and Quantity at the Right time and Right manufacturing cost.
1. Right Quality: The quality of product is established based upon the customers need. The right
quality is not necessarily being the best quality. It is determined by the cost of the product and
the technical characteristics as suited to the specific requirements.
2. Right Quantity: The manufacturing organisation should produce the products in right
number. If they are produced in excess of demand the capital will block up in the form of
inventory and if the quantity is produced in short of demand, leads to shortage of products.
3. Right Time: Timeliness of delivery is one of the important parameter to judge the
effectiveness of production department. So, the production department has to make the optimal
utilization of input resources to achieve its objective.
4. Right Manufacturing Cost: Manufacturing costs are established before the product is
actually manufactured. Hence, all attempts should be made to produce the products at pre-
established cost, so as to reduce the variation between actual and the standard (pre-established)
cost.
It aims at manufacturing high quality products at minimum cost.
It eliminates duplication of work and overlapping efforts, leading to increased efficiency.
It increases productivity.
It leads to higher efficiency which, in turn, increases profit.
It minimizes the cost of production which generates more revenue to the company.
It facilitates for product planning and development which results in the development to new
product.
Objectives of Operations Management
Objectives of operations management can be categorised into customer service and resource
utilisation.
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CUSTOMER SERVICE
The first objective of operating systems is the customer serivce to the satisfaction of customer
wants. Therefore, customer service is a key objective of operations management. The operating
system must provide something to a specification which can satisfy the customer in terms of cost
and timing. Thus, primary objective can be satisfied by providing the right thing at a right price
at the right time.
These aspects of customer servicespecification, cost and timingare described for four
functions in Table 1.2. They are the principal sources of customer satisfaction and must, therefore,
be the principal dimension of the customer service objective for operations managers.

Generally an organization will aim reliably and consistently to achieve certain standards and
operations manager will be influential in attempting to achieve these standards. Hence, this
objective will influence the operations managers decisions to achieve the required customer
service.
RESOURCE UTILISATION
Another major objective of operating systems is to utilise resources for the satisfaction of
customer wants effectively, i.e., customer service must be provided with the achievement of effective
operations through efficient use of resources. Inefficient use of resources or inadequate
customer service leads to commercial failure of an operating system.
Operations management is concerned essentially with the utilisation of resources, i.e., obtaining
maximum effect from resources or minimising their loss, under utilisation or waste. The extent
of the utilisation of the resources potential might be expressed in terms of the proportion of
available time used or occupied, space utilisation, levels of activity, etc. Each measure indicates
the extent to which the potential or capacity of such resources is utilised. This is referred as the
objective of resource utilisation.
Operations management is also concerned with the achievement of both satisfactory customer
service and resource utilisation. An improvement in one will often give rise to deterioration in the
other. Often both cannot be maximised, and hence a satisfactory performance must be achieved
on both objectives. All the activities of operations management must be tackled with these two
objectives in mind, and many of the problems will be faced by operations managers because of
this conflict. Hence, operations managers must attempt to balance these basic objectives.
Table 1.3 summarises the twin objectives of operations management. The type of balance
established both between and within these basic objectives will be influenced by market
considerations, competitions, the strengths and weaknesses of the organization, etc. Hence, the
operations managers should make a contribution when these objectives are set.

Importance of Operation management

The core objective of all organisations is to efficiently produce goods or services.
Operations management is the strategy used to achieve this objective. Operations
management, therefore, is at the heart of the success of all organisations.Production
involves the skilful bringing together of a number of resources, such as finance,
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equipment, management, technology and people, to create fi nished goods and services
through a series of operations. The nature and type of operations vary considerably
from one type of goods or services to another. However, how the operations
management function is carried out will directly affect an organisations
competitive position, because it will: establish the level of quality of the goods or
services infl uence the overall cost of production, given that the operations function is
responsible for the largest part of an organisations capital and human expenses
determine whether suffi cient products are available to satisfy consumer demand. The
operations management function has a considerable infl uence on the quality, cost and
availability of an organisations goods or services. These, in turn, have a direct bearing
on whether the organisation achieves its other main objectives specifi cally, to
increase profi tability, to increase market share, to provide a reasonable return for
investors or to contribute to the wellbeing of the community.

WHY STUDY OPERATIONS MANAGEMENT?

You may be wondering why you need to study operations management. Actually, there
are a number of very good reasons. One is that operations management activities are at
the core of all business organizations, regardless of what business they are in. Because
a large percentage of a companys expenses occur in the operations area, such as
purchasing materials and workforce salaries, more efficient operationseven a small
reduction in operations costscan result in large increases in profit. Second, a large
number of all jobs are in operations managementsuch areas as purchasing, quality
assurance,production planning and control, scheduling, logistics, inventory
management, and many more (see for example, Operations Management Job Ads on
the next page.) Third, activities in all of the other areas of business organizations, such
as finance, accounting, human resources, management information systems (MIS), and
marketing are all interrelated with operations management activities. So it is essential
for people who work in these areas to have a basic understanding of operations
management.

THE SCOPE OF OPERATIONS MANAGEMENT

We have already noted that the operations manager is responsible for the creation of
goods and services. This encompasses acquisition of resources and the conversion
of raw material into outputs using one or more transformation processes. This involves
designing, planning, executing, and controlling the elements that make up the process.
A primary function of an operations manager is to guide the system by decision
making. Certain decisions affect the design of the system, and others affect the
operation
(planning, execution, control) of the system. Design decisions are usually strategic and
long term (15 years ahead), whereas planning decisions are tactical and medium term
(112 months ahead), and execution and control decisions are short-term (112 weeks
ahead).
System design involves decisions that relate to system capacity, the geographic
location
of facilities, arrangement of departments and placement of equipment within physical
structures, product and service planning, and acquisition of equipment. System
operation involves management of personnel, inventory planning and control,
production
planning, scheduling, project management, and quality assurance. In many instances,
the
operations manager is more involved in day-to-day operating decisions than with
decisions relating to system design. However, the operations manager has a vital stake
in
system design because system design essentially determines many of the parameters
of
system operation. For example, costs, space, capacities, and quality are directly
affected
by design decisions. Even though the operations manager is not solely responsible for
making all design decisions, he or she can provide those decision makers with a wide
range of information that will have a bearing on their decisions. Table 13 provides
additional
details on the nature and scope of operations decisions,
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SCOPE OF OPERATIONS MANAGEMENT

Production and operations management concern 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:
1. Location of facilities
2. Plant layouts and material handling
3. Product design
4. Process design
5. Production and planning control
6. Quality control
7. Materials management
8. Maintenance management.
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. It deals with the questions such as
where our main operations should be based?
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 waste of all the investments made in plant
and machinery equipments. Hence, location of plant should be based on the companys 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 results
in the greatest advantage to the organization.
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 specialised
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
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decreases the cost of production. Hence, material handling is a prime consideration in the
designing new plant and several existing plants.
PRODUCT DESIGN
Product design deals with conversion of ideas into reality. Every business organization have 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, 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.
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 analyse the workflow for converting raw material into finished product
and to select the workstation for each included in the workflow.
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 is 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
proforma and to investigate the causes of deviations from the planned performance.
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
feed back 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:
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_ To improve the companies income by making the production more acceptable to the
customers i.e., by providing long life, greater usefulness, maintainability, etc.
_ To reduce companies cost through reduction of losses due to defects.

_ To achieve interchangeability of manufacture in large scale production.

_ To produce optimal quality at reduced price.

_ To ensure satisfaction of customers with productions or services or high quality level, to

build customer goodwill, confidence and reputation of manufacturer.

_ To make inspection prompt to ensure quality control.

_ To check the variation during manufacturing.

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 minimise material cost.

_ To purchase, receive, transport and store materials efficiently and to reduce the related cost.

_ To cut down costs through simplification, standardisation, value analysis, import substitution, etc.

_ To trace new sources of supply and to develop cordial relations with them in order to

ensure continuous supply at reasonable rates.

_ To reduce investment tied in the inventories for use in other productive purposes and to

develop high inventory turnover ratios.

MAINTENANCE MANAGEMENT
In modern industry, equipment and machinery are a very important part of the total productive
effort. Therefore, their idleness or downtime becomes are very expensive. Hence, it is very
important that the plant machinery should be properly maintained.
The main objectives of maintenance management are:
1. To achieve minimum breakdown and to keep the plant in good working condition at the
lowest possible cost.
2. To keep the machines and other facilities in such a condition that permits them to be used
at their optimal capacity without interruption.
3. To ensure the availability of the machines, buildings and services required by other sections
of the factory for the performance of their functions at optimal return on investment.
SCOPE OF OPERATIONS MANAGEMENT
Operations Management concern 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:
1. Product planning and development
Product planning deals with determination of product for manufacturing
purpose. What to produce?
What quality to produce?
How much to produce?
When to produce?
This product planning is done by the production management is concerned with marketing
management. Product development deals with designing a new product. Every product design
determinates a success or failure. Hence much care should be strength in product designing.
Before designing the product standardization is considered.
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2. Plant Location:
Plant location deals with determination of suitable area for locating the plant. In order to
increase the efficiency of the production department the plan should be located in a suitable
place. The
following are influence the choices of suitable location:
a) Availability of raw materials.
b) Availability of labour.
c) Availability of power.
d) Availability of market
e) Availability of water
f) Availability of Infra structural. [e.g. Transport, Insurance, Telephone, Postal services.]
g) Availability of Govt, rules and regulation.
3. Plant Layout:
i. Process layout
ii. Product layout
iii. Fixed layout
iv. Combination layout.
4. Plant Maintenance:
It refers to the process of up keeping the machine and equipments in good operating conditions.
Type of Plant Maintenance:
i. Routine Maintenance
ii. Breakdown Maintenance
iii. Preventive Maintenance
iv. Productive Maintenances
v. Predictive Maintenance
vi. Maintenance provision.
5. Production planning and controlling (PPC)
Production Planning and Controlling is consists of Planning, Routine, Scheduling, Dispatching
and Follow-up function of the process of production. This function are organized in such a way
there the performance of machine, movement of materials and operative of labours are direct to
the product.
These are the function are mainly used to reduce the cost of production..
Production planning:
It is a process of determining a future production of a particular product.
Routing:
It is a process of determining a best and cheapest route for the production, Route means
arrangement of different machine involved in the production.
Scheduling:
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These processes are finalizing starting time and completing time for each route.
Dispatching:
It is the process of authorizing the workers to start plan. It refers to the process of issuing
necessary job order, tool order, move order, work order, inspection order expect to the work
Follow-up:
It is the process of verifying whether the works going on as per the plan, if not taking necessary
action to correcting.
6. Work Study:
It is the productive technique used to investigate all factors, affecting the efficiency economic of
human works and to find out bare and needs for improvement.
Work study divided in to two ways
1. Method study
2. Time Study
Method study
It is the process of identity the best way of doing the work.
Time Study:
It is the process of fix the standard time for each element of the job.
7. Production System:
It refers the arrangement of various production and operations. Production of a product, requires
number of activities, these activities are to be done in a systematic way. If these system is not
identify correctly the production, will be affected.
1. Continuous production system
2. Intermittent production system.
8. Dependent Services:
a) Product Standardization
It is the process of fixing standard characteristics for a product.
b) Product Simplication
It is the process of making the product less complicated and simple.
c) Product specialization
It is the process of become a specialist in production of one particular
item.
d) Inspection and Quality control
It is a technique of established to control the quality several of the product. Inspection is a
process of checking whether the product? Processed in specified quality characters.
e) Inventory control
It is a process of determining, What to stock?
How to stock?
How much to stock?
f) Product Diversification
It is the process of producing different types of products by the same company.
g) Research and Development
Research and Development is normally deals with introduction of new product, modification of
new product, simplification of new product, develop model for new product.
h) Employee amenities
The production manager has to take care of the welfare of his worker to provide necessary
facilities to the worker.
INTERFACE ( Relationship) With Other Functions
Organizations are formed to pursue goals that are achieved more efficiently and
effectively
by the concerted efforts of a group of people than by individuals working alone.
Organizations are devoted to producing goods and/or providing services. They may be
forprofit
(i.e., business) or nonprofit organizations. Their goals, products, and services may be
similar or quite different. Nonetheless, their functions and the way they operate are
similar.
A typical organization has three basic functions: operations, finance, and marketing
(see Figure 11). These three functions, and other supporting functions, perform
different
but related activities necessary for the operation of the organization. The functions must
interact to achieve the goals and objectives of the organization, and each makes an
important contribution. For instance, unless operations and marketing work together,
marketing may promote goods or services that operations cannot profitably deliver, or
operations may turn out goods or services for which there is no demand. Similarly,
unless
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finance and operations work closely, funds for materials, expansion, and new equipment
may not be available when needed.
Lets take a closer look at these functions.

Finance
The finance function performs activities related to securing resources at favourable
prices
and allocating those resources throughout the organization. Finance and operations
management personnel cooperate by exchanging information and expertise in such
activities as:
1. Provision of funds. The necessary funding of operations and the amount and timing of
funding can be important and even critical when funds are tight. Careful planning can
help avoid cash-flow problems. Most for-profit firms obtain the majority of their funds
through the revenues generated by sales of goods and services.
2. Economic analysis of investment proposals. Evaluation of alternative investments in
plant and equipment requires inputs from both operations and finance people.
Marketing
Marketings focus is on selling and/or promoting the goods or services of an
organization.
Marketing is also responsible for assessing customer wants and needs, and for
communicating
those needs and feedback to operations people and to product design people
(usually engineers in manufacturing companies). That is, operations needs information
about demand so that it can plan accordingly (e.g., purchase materials or schedule
work),
while product design people need information that relates to improving current products
and services, and designing new ones. Marketing, design, and production must work
closely together to successfully implement design changes and to develop and produce
new products. Marketing can provide valuable insight on what competitors are doing.
One important piece of information marketing needs from operations is the
manufacturing
or service lead time in order to give customers realistic estimates of how long it will
take to fill their orders.
Thus, marketing, operations, and finance must interface on product and process design,
forecasting, setting realistic schedules, and quality and quantity decisions.
There are a host of other supporting functions that interface with operations
Accounting supplies information to management on costs of labour, materials, and
overhead, and may provide reports on items such as scrap, downtime, and inventories.
Accounting includes accounts payables and accounts receivables. Accountants gather
the
information needed for financial statements as well.
Management information systems (MIS) is concerned with providing management with
the information it needs to effectively manage. This occurs mainly through designing
systems
(hardware and software) to capture relevant information and preparing reports.
Purchasing has responsibility for procurement of materials, supplies, equipment, and
services. Close contact with operations is necessary to ensure correct quantities and
timing
of purchases. The purchasing department is often called on to evaluate vendors for
quality, delivery time reliability, service, price, and flexibility. Purchasing may also be
involved in arranging incoming transportation, receiving, and inspecting the purchased
goods.
The personnel or human resources department is concerned with recruitment and
training of personnel, labour relations, contract negotiations, wage and salary
administration,
and ensuring the health and safety of employees.
Product design in manufacturing companies usually is done by engineers, but in other
companies it could be done by architects, scientists, chemists, and chefs. Designers
create
goods and services from information given to them on markets by marketing and
provide
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product specifications to operations to make the products.

Maintenance is responsible for general upkeep and repair of equipment, buildings
and grounds, heating and air-conditioning; removing toxic wastes; parking; and perhaps
security.
Manufacturing engineering is responsible for design or purchase of the machines and
equipment needed in the production process. Also called process engineers, they are
mainly trained as mechanical engineers, but other fields like electrical and chemical
may
also be needed.
Logistics involves the transportation of raw material to the plant, storage, and shipping
of goods to warehouses, retail outlets, or final customers.
Many of these interfaces are elaborated on in later chapters.

FUNCTIONS OF PRODUCTION MANAGEMENT DEPARTMENT

The functions of Production Management depend upon the size of the firm. In small firms the
production Manager may have to look after production planning and control along with
Personnel,
Marketing, Finance and Purchase functions. In medium sized firms, there may be separate
managers for
Personnel, marketing and Finance functions. But the production planning and control and
Purchase and
stores may be under the control of Production management department. In large sized firms the
activities of Production Management is confined to the management of production activities
only.
Managing operations can be enclosed in a frame of general management function as shown in
Fig. 1.3. Operation managers are concerned with planning, organizing, and controlling the activities
which affect human behaviour through models.
PLANNING
Activities that establishes a course of action and guide future decision-making is planning.
The operations manager defines the objectives for the operations subsystem of the organization,
and the policies, and procedures for achieving the objectives. This stage includes clarifying the
role and focus of operations in the organizations overall strategy. It also involves product
planning, facility designing and using the conversion process.
ORGANIZING
Activities that establishes a structure of tasks and authority. Operation managers establish a
structure of roles and the flow of information within the operations subsystem. They determine
the activities required to achieve the goals and assign authority and responsibility for carrying
them out.
CONTROLLING
Activities that assure the actual performance in accordance with planned performance. To
ensure that the plans for the operations subsystems are accomplished, the operations manager
must exercise control by measuring actual outputs and comparing them to planned operations
management. Controlling costs, quality, and schedules are the important functions here.
BEHAVIOUR
Operation managers are concerned with how their efforts to plan, organize, and control affect
human behaviour. They also want to know how the behaviour of subordinates can affect
managements planning, organizing, and controlling actions. Their interest lies in decision-making
behaviour.
MODELS
As operation managers plan, organise, and control the conversion process, they encounter many
problems and must make many decisions. They can simplify their difficulties using models like
aggregate planning models for examining how best to use existing capacity in short-term,
break even analysis to identify break even volumes, linear programming and computer
simulation for capacity utilisation, decision tree analysis for long-term capacity problem of
facility expansion, simple median model for determining best locations of facilities etc.
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FUNCTIONS OF PRODUCTION MANAGEMENT DEPARTMENT

The functions of Production Management depend upon the size of the firm. In small firms the
production Manager may have to look after production planning and control along with
Personnel,
Marketing, Finance and Purchase functions. In medium sized firms, there may be separate
managers for
Personnel, marketing and Finance functions. But the production planning and control and
Purchase and
stores may be under the control of Production management department. In large sized firms the
activities of Production Management is confined to the management of production activities
only. As
such, there are no hard and fast rule or guidelines to specify the function of Production
Management, but in the
academic interest we can mention some of the functions, which are looked after by the
Production
Management department. They are:
(i) Materials: The selection of materials for the product. Production manager must have sound
Knowledge of materials and their properties, so that he can select appropriate materials for his
product.
Research on materials is necessary to find alternatives to satisfy the changing needs of the design
in
the product and availability of material resumes.
(ii) Methods: Finding the best method for the process, to search for the methods to suit the
available
resources, identifying the sequence of process are some of the activities of Production
Management.
(iii) Machines and Equipment: Selection of suitable machinery for the process desired,
designing
the maintenance policy and design of layout of machines are taken care of by the
ProductionManagement department.
(iv) Estimating: To fix up the Production targets and delivery dates and to keep the production
costs
at minimum, production management department does a thorough estimation of Production times
and
production costs. In competitive situation this will help the management to decide what should
be
done in arresting the costs at desired level.
(v) Loading and Scheduling: The Production Management department has to draw the time
table for
various production activities, specifying when to start and when to finish the process required. It
also
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has to draw the timings of materials movement and plan the activities of manpower. The
scheduling is
to be done keeping in mind the loads on hand and capacities of facilities available.
(vi) Routing: This is the most important function of Production Management department. The
Routing
consists of fixing the flow lines for various raw materials, components etc., from the stores to the
packing
of finished product, so that all concerned knows what exactly is happening on the shop floor.
(vii) Dispatching: The Production Management department has to prepare various documents
such as
Job Cards, Route sheets, Move Cards, Inspection Cards for each and every component of the
product.
These are prepared in a set of five copies. These documents are to be released from Production
Management department to give green signal for starting the production. The activities of the
shop
floor will follow the instructions given in these documents. Activity of releasing the document is
known as dispatching.
(viii) Expediting or Follow up: Once the documents are dispatched, the management wants to
know
whether the activities are being carried out as per the plans or not. Expediting engineers go round
the
production floor along with the plans, compare the actual with the plan and feed back the
progress of
the work to the management. This will help the management to evaluate the plans.
(ix) Inspection: Here inspection is generally concerned with the inspection activities during
production,
but a separate quality control department does the quality inspection, which is not under the
control of
Production Management. This is true because, if the quality inspection is given to production
Management, then there is a chance of qualifying the defective products also. For example
Teaching and
examining of students is given to the same person, then there is a possibility of passing all the
students
in the first grade. To avoid this situation an external person does correction of answer scripts, so
that the
quality of answers are correctly judged.
(x) Evaluation: The Production department must evaluate itself and its contribution in fulfilling
the
corporate objectives and the departmental objectives. This is necessary for setting up the
standards for
future. What ever may be the size of the firm; Production management department alone must do
Routing, Scheduling, Loading, Dispatching and expediting. This is because this department
knows very
well regarding materials, Methods, and available resources etc.
If the firms are small, all the above-mentioned functions (i to x) are to be carried out by
Production
Management Department. In medium sized firms in addition to Routing, Scheduling and
Loading,
Dispatching and expediting, some more functions like Methods, Machines may be under the
control of
Production Management Department. In large firms, there will be Separate departments for
Methods,
Machines, Materials and others but routing, loading and scheduling are the sole functions of
Production
Management. All the above ten functions are categorized in three stage, that is Preplanning,
Planning and control stages .

THE OPERATIONS MANAGERS JOB

The operations manager is the key figure in the system: he or she has the ultimate
responsibility for the creation of goods or provision of services.
The kinds of jobs that operations managers oversee vary tremendously from
organization
to organization largely because of the different products or services involved. Thus,
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managing a banking operation obviously requires a different kind of expertise than

managing
a steelmaking operation. However, in a very important respect, the jobs are the
same: They are both essentially managerial. In every case, the operations manager
must
coordinate the use of resources through the management processes of planning,
organizing,
directing, and controlling.
Examples of the responsibilities of operations managers according to these
classifications
are given in Table 14. Note that operations managers require both technical and
behavioural competence.

Production of Goods versus Services

Production of goods results in a tangible output, such as an automobile, a clock radio, a
golf ball, a refrigeratoranything that we can see or touch. It may take place in a
factory,
but can occur elsewhere. Service, on the other hand, generally implies an act. A
physicians
examination, TV and auto repair, lawn care, and projecting a film in a theatre are
examples of services. The majority of service jobs fall into these categories:
Government services (federal, provincial, municipal).
Wholesale/retail (clothing, food, appliances, stationery, toys, etc.).
Financial services (banking, stock brokerage, insurance, etc.).
Health care (doctors, dentists, hospitals, etc.).
Professional services (lawyers, accountants, architects)
Personal services (laundry, dry cleaning, hair/beauty, gardening, etc.).
Business services (data processing, e-business, advertising, employment agencies,
etc.).
Education (schools, colleges, universities, etc.).
Hotels and restaurants
Recreation
Transportation and warehousing
 14

Utilities
Manufacturing and service are often similar in terms of what is done but different in
terms of how it is done. For example, both involve design and operation decisions.
Manufacturers
must decide what size factory is needed. Service organizations (e.g., hospitals)
must decide what size building is needed. Both must make decisions on location,
scheduling
and control of operations, and allocation of scarce resources.
Manufacturing and service organizations differ chiefly because manufacturing is
goods-oriented and service is act-oriented. The differences involve the following:
1. Customer contact, use of inventories, and demand variability
2. Uniformity of input
3. Labour content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Quality assurance
Let us consider each of these differences.
1. Often, by its nature, service involves a much higher degree of customer contact than
manufacturing. The performance of a service often occurs at the point of consumption.
For example, repairing a leaky roof must take place where the roof is, and surgery
requires the presence of the patient. On the other hand, manufacturing allows a
separation
between production and consumption, so that manufacturing may occur away from the
consumer. This permits a fair degree of latitude in selecting work methods, assigning
jobs, scheduling work, and exercising control over operations. In addition,
productoriented
operations can build up inventories of finished goods (e.g., cars, refrigerators),
enabling them to absorb some of the shocks caused by variable demand. Service
operations, however, cannot build up inventories and are much more sensitive to
demand
variabilitybanks and supermarkets alternate between lines of customers waiting for
service and idle tellers or cashiers waiting for customers.
2. Service operations are subject to greater variability of inputs than typical
manufacturing
operations. Each patient, each lawn, and each auto repair presents a specific problem
that often must be diagnosed before it can be remedied. Manufacturing operations
often have the ability to carefully control the amount of variability of inputs.
3. Services often require a higher labour content whereas manufacturing can be more
capital-intensive (i.e., mechanized).
4. Because high mechanization generates products with low variability, manufacturing
tends to be smooth and efficient; service activities sometimes appear to be slow and
awkward, and output is more variable. Automated services are an exception to this.
5. Measurement of productivity (i.e., output per unit time) is more straightforward in
manufacturing due to the high degree of uniformity of most manufactured items. In
service
operations, variations in demand intensity and in requirements from job to job make
productivity measurement considerably more difficult. For example, compare the
productivity
of two doctors. One may have a large number of routine cases while the other
does not, so their productivity appears to differ unless a very careful analysis is made.
6. Quality assurance is more challenging in services when production and consumption
occur at the same time. In manufacturing, errors can be corrected before the customer
receives the output.
Although it is convenient to think in terms of systems devoted exclusively to goods or
services, most real systems are a blend of both. For instance, maintenance and repair of
equipment are services performed by virtually every manufacturing firm. Similarly, most
service organizations typically sell goods that complement their services. Thus, a
lawncare
firm usually sells goods such as weed killers, fertilizers, and grass seed. Hospitals
dispense drugs along with health services. Restaurants sell food. Movie theatres sell
popcorn, candy, and beverages.
The service sector and the manufacturing sector are both important to the economy.
The service sector has been growing and now accounts for more than 70 percent of jobs
in Canada. See Figure 15.