Production / Operations Management is defined as the process which transforms the

inputs/resources of an organization into final goods (or services) through a set of defined,
controlled and repeatable policies. By policies, we refer to the rules that add value to the final
output. The value added can be in different dimensions, but the industrial set-up is mostly
concerned with the duo of quality and throughput.

Difference between Production and Operations Management

Production and operations management are more similar than different: if manufacturing
products is a prime concern then it is called production management, whereas management of
services is somewhat broader in scope and called operations management (because
manufacturing services sounds absurd, right?).

The line between products-based and services-based organizations is blurring rapidly as

well— car manufactures need to service their cars and the retailers manufacture their own
brand labels.

Production and Operations Management

Introduction : The very essence of any business is to cater needs of customer by providing
services and goods, and in process create value for customers and solve their problems.
Production and operations management talks about applying business organization and
management concepts in creation of goods and services.

Production : Production is a scientific process which involves transformation of raw material

(input) into desired product or service (output) by adding economic value. Production can
broadly categorize into following based on technique:

Production through separation: It involves desired output is achieved through separation or

extraction from raw materials. A classic example of separation or extraction is Oil into
various fuel products.

Production by modification or improvement: It involves change in chemical and mechanical

parameters of the raw material without altering physical attributes of the raw material.
Annealing process (heating at high temperatures and then cooling), is example of production
by modification or improvement.

Production by assembly: Car production and computer are example of production by

assembly.
Importance of Production Function and Production Management

Successful organizations have well defined and efficient line function and support function.
Production comes under the category of line function which directly affects customer
experience and there by future of organization itself.

Aim of production function is to add value to product or service which will create a strong
and long lasting customer relationship or association. And this can be achieved by healthy
and productive association between Marketing and Production people. Marketing function
people are frontline representative of the company and provide insights to real product needs
of customers.

An effective planning and control on production parameters to achieve or create value for
customers is called production management.

Operations Management

As to deliver value for customers in products and services, it is essential for the company to
do the following:

1) Identify the customer needs and convert that into a specific product or service
(numbers of products required for specific period of time)
2) Based on product requirement do back-ward working to identify raw material
requirements
3) Engage internal and external vendors to create supply chain for raw material and
finished goods between vendor → production facility → customers.

Operations management captures above identified 3 points.

Production Management v/s Operations Management

A high level comparison which distinct production and operations management can be done
on following characteristics:

 Output: Production management deals with manufacturing of products like

(computer, car, etc) while operations management cover both products and
services.
 Usage of Output: Products like computer/car are utilized over a period of time
whereas services need to be consumed immediately
 Classification of work: To produce products like computer/car more of capital
equipment and less labour are required while services require more labour and
lesser capital equipment.
 Customer Contact: There is no participation of customer during production
whereas for services a constant contact with customer is required.

Production management and operations management both are very essential in meeting
objective of an organization.
SYSTEM APPROACH:- A line of thought in the management field which stresses the
interactive nature and interdependence of external and internal factors in an organization. A
systems approach is commonly used to evaluate market elements which affect the
profitability of a business.
Systems theory is one of the most prominent theories in management today. In this lesson,
you will learn about the theory and its key components. You will also be given an
opportunity to reinforce your knowledge with a short quiz.

What is Systems Theory? Systems theory treats an organization as a system. A system can
be either closed or open, but most approaches treat an organization as an open system. An
open system interacts with its environment by way of inputs, throughputs, and outputs.

Key Concepts of Systems Theory

In order to understand the theory, you must first get a firm understanding of a system. A
system is any set of distinct parts that interact to form a complex whole. Think of the
universe. Its parts are as small as a subatomic particle and as large as galactic clusters. Each
part is distinct but interacts to form the universe. An organization is also a system with parts
such as employees, assets, products, resources, and information that form a complex system.

As we noted in our definition, systems can be open or closed. A closed system is not affected
by its environment. For example, a chuck of iron ore is not substantially affected by its
environment. An open system is a system that is affected by its environment. A simple
example is a living organism, such as an animal. Most theorists treat an organization as an
open system. An open system consists of three essential elements. An organization receives
resources such as equipment, natural resources, and the work of employees, referred to as
inputs. The inputs are transformed, called throughputs, and then yield products or services
called outputs. Outputs are released into the environment.

Feedback loops are also an important feature of open systems. They provide information to
the organization by connecting the outputs to the inputs. A negative feedback loop indicates
a problem that should be corrected. For example, the failure of product design indicated by
the need to recall the product.

A positive feedback loop can identify outputs that have worked well. For example, a
successful marketing campaign that yields high sales. Thus, feedback loops are a means of
confirming success or signaling that corrections to the system need to be made.

WIKI: Systems theory is the interdisciplinary study of systems. A system is a cohesive

conglomeration of interrelated and interdependent parts that is either natural or man-made.
Every system is delineated by its spatial and temporal boundaries, surrounded and influenced
by its environment, described by its structure and purpose or nature and expressed in its
functioning. In terms of its effects, a system can be more than the sum of its parts if it
expresses synergy or emergent behavior. Changing one part of the system usually affects
other parts and the whole system, with predictable patterns of behavior. For systems that are
self-learning and self-adapting, the positive growth and adaptation depend upon how well the
system is adjusted with its environment. Some systems function mainly to support other
systems by aiding in the maintenance of the other system to prevent failure. The goal of
systems theory is systematically discovering a system's dynamics, constraints, conditions and
elucidating principles (purpose, measure, methods, tools, etc.) that can be discerned and
applied to systems at every level of nesting, and in every field for achieving optimized
equifinality.

General systems theory is about broadly applicable concepts and principles, as opposed to
concepts and principles applicable to one domain of knowledge. It distinguishes dynamic or
active systems from static or passive systems. Active systems are activity structures or
components that interact in behaviours and processes. Passive systems are structures and
components that are being processed. E.g. a program is passive when it is a disc file and
active when it runs in memory. The field is related to systems thinking and systems
engineering.

Key concepts

 System: An organized entity made up of interrelated and interdependent parts.

 Boundaries: Barriers that define a system and distinguish it from other systems in
the environment.
 Homeostasis: The tendency of a system to be resilient towards external factors and
maintain its key characteristics.
 Adaptation: The tendency of a self-adapting system to make the internal changes
needed to protect itself and keep fulfilling its purpose.
 Reciprocal Transactions: Circular or cyclical interactions that systems engage in
such that they influence one another.
 Feedback Loop: The process by which systems self-correct based on reactions
from other systems in the environment.
 Throughput: Rate of energy transfer between the system and its environment
during the time it is functioning.
 Microsystem: The system closest to the client.
 Mesosystem: Relationships among the systems in an environment.
 Exosystem: A relationship between two systems that has an indirect effect on a
third system.
 Macrosystem: A larger system that influences clients, such as policies,
administration of entitlement programs, and culture.
 Chronosystem: A system composed of significant life events that can affect
adaptation

Difference Between Goods and Services

In economics, goods and services are often pronounced in the same breath. These are offered
by the companies to the customers to provide utility and satisfy their wants. At present, the
success of the business lies in the combination of best quality of goods and customer oriented
services. ‘Goods’ are the physical objects while ‘Services’ is an activity of performing work
for others. Goods implies the tangible commodity or product, which can be delivered to the
customer. It involves the transfer of ownership and possession from seller to the buyer. On
the other hand, services alludes to the intangible activities which are separately identifiable
and provides satisfaction of wants.
One of the main difference between goods and services is that the former is produced and the
latter is performed. To know more differences on the two, take a read of the article presented
to you.

Comparison Chart

Basis for
Goods Services
Comparison
Goods are the material items that can Services are amenities, facilities,
Meaning be seen, touched or felt and are ready benefits or help provided by other
for sale to the customers. people.
Nature Tangible Intangible
Transfer of
Yes No
ownership
Evaluation Very simple and easy Complicated
Services cannot be returned back
Return Goods can be returned.
once they are provided.
Yes, goods can be separated from the No, services cannot be separated
Separable
seller. from the service provider.
Variability Identical Diversified
Goods can be stored for use in future or
Storage Services cannot be stored.
multiple use.
Production and There is a time lag between production Production and Consumption of
Consumption and consumption of goods. goods occurs simultaneously.

Definition of Goods

Goods refer to the tangible consumable products, articles, commodities that are offered by the
companies to the customers in exchange for money. They are the items that have physical
characteristics, i.e. shape, appearance, size, weight, etc. It is capable of satisfying human
wants by providing them utility. Some items are made for one-time use by the consumer
while some can repeatedly be used.

Goods are the products which are traded on the market. There is a time gap in the production,
distribution, and consumption of goods. When the buyer purchases goods and pays the price,
the ownership is passed from seller to buyer.

Products are manufactured in batches, which produces identical units. In this way, a
particular product offered by the company will have the same specifications and
characteristics all over the market. Example: Books, pen, bottles, bags, etc.

Definition of Services

Services are the intangible economic product that is provided by a person on the other
person‘s demand. It is an activity carried out for someone else.

They can only be delivered at a particular moment, and hence they are perishable in nature.
They lack physical identity. Services cannot be distinguished from the service provider. The
point of sale is the basis for consumption of services. Services cannot be owned but can only
be utilized. You can understand this by an example: If you buy a ticket for watching a movie
at the multiplex, it doesn‘t mean that you purchased the multiplex, but you have paid the
price of availing services.

Service receiver should fully participate when the service is provided. Evaluation of services
is a relatively tough task because different service providers offer the same services but
charges a different amount. It may be due to the method they provide services is different or
the parameters they consider in valuing their services vary. Example: Postal services,
banking, insurance, transport, communication, etc.

Key Differences Between Goods and Services

The basic differences between goods and services are mentioned below:

1. Goods are the material items that the customers are ready to purchase for a price.
Services are the amenities, benefits or facilities provided by the other persons.
2. Goods are tangible items i.e. they can be seen or touched whereas services are
intangible items.
3. When the buyer purchases the goods by paying the consideration, the ownership of
goods moves from the seller to the buyer. Conversely, the ownership of services is
non-transferable.
4. The evaluation of services is difficult because every service provider has a different
approach of carrying out services, so it is hard to judge whose services are better than
the other as compared to goods.
5. Goods can be returned to or exchanged with the seller, but it is not possible to return
or exchange services, once they are provided.
6. Goods can be distinguished from the seller. On the other hand, services and service
provider are inseparable.
7. A particular product will remain same regarding physical characteristics and
specifications, but services can never remain same.
8. Goods can be stored for future use, but services are time bound, i.e. if not availed in
the given time, then it cannot be stored.
9. First of all the goods are produced, then they are traded and finally consumed,
whereas services are produced and consumed at the same time.

7 differences between goods and services

1) Ownership is not transferred

2) Intangibility
3) Involvement of customer
4) Quality
5) Evaluation of services is tougher
6) Inventories are absent
7) Time is very important in services
Difference Between Production and Operations Management

The primary objective of production and operations management is to effectively manage and
utilize those resources of the firm that are essential for the production of goods and services.
Production management refers to the management of activities related to the production of
goods.

On the other hand, operations management is a step ahead of production management, or it

can be said that the production management is a part of the operations management.
Operations Management, as the name suggests is the administration of business operations,
by the managers of the organization.

The difference between production and operations management is very thin and blurred,
which is simplified in this article in a detailed manner.

Comparison Chart

Basis for
Production Management Operations Management
Comparison
Production Management connotes Operations Management refers to the
the administration of the range of part of management concerned with
Meaning
activities belonging to the creation of
the production and delivery of goods
products. and services.
Decision Related to the regular business
Related to the aspects of production.
Making activities.
Banks, Hospitals, Companies
Enterprises where production is
Found in including production companies,
undertaken.
Agencies etc.
To produce right quality goods in To utilize resources, to the extent
Objectives right quantity at right time and at possible so as to satisfy customer
least cost. wants.

Definition of Production Management

When the principles of management are applied to the production function of the
organisation, it is known as production management. It is a process of planning, scheduling,
supervising and controlling the activities involved in the production of goods and services,
i.e. the transformation of various resources into the value-added product, in an efficient
manner.

In this process, the decision regarding the quality, quantity, price, packaging, design, etc. are
taken by the production manager, so as to ensure that the output produced confirms the
specifications.
Areas of Production Management

Definition of Operations Management

Operations Management implies the management of day to day business activities, so as to

ensure smoothness and effectiveness of operations in the organization. It involves
administration of production, manufacturing and provision of services in an organisation.

Operations Management is that branch of management, that deals with designing,

implementing and controlling the production process, i.e. converting inputs into the output,
using resources, in order to provide desired goods and services to customers while adhering
to the policies stated by the management of the organisation.

Operations Management is all about the optimum utilization of company‘s resources, i.e. the
resources must be utilized as much as possible, by minimizing the loss, wastage and
underutilization.

Key Differences Between Production and Operation Management

The difference between production and operation management, are presented hereunder:

1. Production Management can be defined as the administration of the set of activities

concerning the creation of goods or transformation of raw material into finished
goods. Conversely, Operations Management is used to mean that branch of
 management which deals with the administration both production of goods and
provision of services to the customers.
2. In production management, the manager has to make decisions regarding the design,
quality, quantity and cost of the product manufactured by the department. On the
contrary, the scope of operations management is larger in comparison to the
production management wherein the operations manager looks after the product
design, quality, quantity, process design, location, manpower required, storing,
maintenance, logistics, inventory management, waste management, etc.
3. Production Management can only be found in the firms where production of goods is
undertaken. Unlike, one can find operations management in every organization, i.e.
manufacturing concerns, service-oriented firms, banks, hospitals, agencies, etc.
4. The basic objective of production management is to provide the right quality goods in
the right quantity at right time and best price. In contrast, operations management
aims at making the best possible use of organization‘s resources, in order to fulfil the
customer‘s wants.

Conclusion : Production and Operations Management are so closely intertwined, that it is

quite difficult to differentiate the two. Production management covers administer all the
activities which are involved in the process of production. On the other hand, operations
management entails all the activities involved in the production of goods and delivery of
services such as material management, quality management, maintenance management,
process management, process design, product design and so on.

Production And Operations Management

Production and operations management is an umbrella term which surrounds a spectrum of

ideas within the managerial circles. The core of any business is to provide the requirements of
the customer by providing apt services and goods and also create value for customers and
help in solving the problems of the customers.

Production and operations management is about implementing business organizational and

management concepts in the creation of goods and services.

Definition: Production and operations management is defined as the process which revamps
the inputs and resources of an organization into final products through a set of defined and
controlled rules that adds value to the final output of an organization.

In short, we can say that the Production and Operations Management (POM) is all about the
metamorphosis of the production and operational inputs into the final outputs when shared
can meet the requirements of the customers.

Production

Production is termed as a scientific process that includes the complete change of raw
materials (input) into the coveted product or services (output) by adding the value. The
production process can be categorized into the following technique:

Production through separation process: The desired output is achieved through the separation
or the extraction process from the raw materials. The primary example of this technique can
be the separation of oil into its various fuel products.
Production using the modification process: This process involves the change in chemical and
mechanical parameters of the raw material without changing the physical characteristics of
the raw material.

Production through Congregation process: The process of getting the final output by
assembling or congregating things together is termed as production through congregation
process. The best example is of the car and computer assembly.

Operations Management

To deliver the appropriate product to the customers, the following essentials are needed to
keep in mind for any organization:

1. Make the product or services after identifying the customers‘ needs.

2. Based on product needs, do reverse working to check the available raw materials.

3. Employ internal and external vendors to create a supply chain for raw materials.

What is the difference between Production and Operation Management?

Both the processes are more similar than different. When the manufacturing product process
is a prime interest, then it is called production management, whereas administration of the
services while manufacturing the product is called operation management.

Following are the high-level comparison between the Production and Operations
Management:

1. Output:- Production Management handles manufacturing of products while the

operations management covers both products and services.

2. Usage of Output:-The use of products like computers, cars, etc. can be made over a
period whereas the services need to be consumed immediately.

3. Categorization of work :-To outturn products like cars or computers more capital and
fewer labor services are required while in the operations department, more workers and less
money is needed.

4. Customer communication:-There is no participation of clients during the production

phase, whereas for services the client communication is a must.

Hence, we can say that production and operations management work hand-in-hand and are
very significant for meeting the needs and necessities of an organization.

INPUT OUTPUT PROFIT (BUSINESS) MODEL

INPUT OUTPUT TRANSFORMATION MODEL

Operations management transforms inputs (labor, capital, equipment, land, buildings,

materials and information) into outputs (goods and services) that provide added value to
customers. [link] summarizes the transformation process. The arrow labeled ―Transformation
System‖ is the critical element in the model that will determine how well the organization
produces goods and services that meet customer needs. It does not matter whether the
organization is a for-profit company, a non-profit organization (religious organizations,
hospitals, etc.), or a government agency; all organizations must strive to maximize the quality
of their transformation processes to meet customer needs.

A flowchart composed of the environment, the inputs, the transformation system, the
monitoring and control, and the outputs.

Product Development Process - Developing New Market Offerings

Companies first find the target market than segment and then customers. After these
companies go about developing products, which may be product modification or it may be a
completely new product. Product offerings are increasing every year as consumers are
looking for more and more variety of products. Companies which are unable to churn out
new products fall back on competition and suffer the consequences. Companies face danger
not just from competitors but consumer needs, technology, and product life cycle. New
product development has its share of challenges. Research shows that 95 percent of new
products fail in USA and in Europe failure rate is 90 percent.

Organizational set up has to be conducive to support new product development. Foremost

companies must allocate funds for research and development, the conventional way is the
percent of sales technique. Others chose to allow employees dedicate a certain amount of
work time on new product development. Companies next have to organize the process of
development. This can be done by product managers with new product development
experience or by cross functional team with members chosen from various departments
having the knack of developing new products.

Nowadays, companies are following stage process for product development.

1. The 1st stage is idea generation that is the search for new products. Companies pay a
particular focus on customer needs and demands to decide on the new product. Idea
generation can also be done by studying competitor‘s product. Companies try to learn
why competitor‘s product ticks with consumer or what more customers want from
that product. Companies also look at top management for idea generation. For
example, Steve Jobs of Apple is known to participate actively in an idea generation.
Research groups comprising of scientist, patent holders, colleges and universities also
serve as the base for idea generation.
2. The 2nd stage is idea screening. Not all new ideas proposed can be converted into
products. Companies list ideas into three categories promising ideas, marginal ideas
and rejects. Promising ideas are further process by screening committee to be ready
for the next stage. Screening should avoid the error where good ideas are dropped due
to bias towards the idea generator. Another commonly occurring error is
encouragement to a commercially unviable idea. Therefore, extra precautions are
necessary during the screening process.
3. The 3rd stage begins when ideas move into the development process. Here a product
idea is converted into several product concepts. Out of several product concepts, the
one which looks fit is then placed against competitors to finalize marketing and
positioning strategy. Product concept is introduced to a focus group of customer in a
form of proto-type to understand their reaction.
4. The 4th stage involves developing of marketing strategy for new product. The
marketing strategy involves evaluation of market size, product demand, growth
potential, profit estimate in first few years. Further marketing strategy plan is
developed with the launch of product, selection of distribution channel and budgetary
requirements for the 1st year.
5. The 5th stage involves the development of the business model around the new
product. Business models start with estimation of sales, frequency of purchase, and
nature of business. Next estimation of cost and expense involve in production and
distribution of new product. In that basis profit estimations are reached. Discounted
cash flow and other methods are used to understand feasibility of new product.
6. The 6th stage involves the actual production of new product. Here more than one
possible product are created, from proto-type to finalized products are produced.
Decisions are taken from operation point of view whether is technically and
commercially feasible to continue production. If analysis is showing cost not within
the estimate then project is abandoned.
7. The 7th stage involves market testing of new product. The new product is ready
with brand name, packaging, price to capture space in consumer‘s mind.
8. The 8th stage involves launching of product across target market backed by a proper
marketing and strategy plan. This stage is called commercialization phase.

Introduction of new product is part of survival technique for any firm. And with very high
failure rate companies have to follow a scientific process to create new market offerings.
 Operation Management: New Product Development

New product and service development, and process selection:

Why the emphasis on new goods and services: Organizations today are under more
pressure than ever before to develop new goods and services and the processes necessary to
produce and deliver them. Two of the major causes for this increased emphasis on developing
new products are (a) increased competition and (b) advances in the technology.
a) Increased competition: The reasons for this increase in foreign competition are many,
including
• Advances in IT
• A trend to lower trade barriers and the creation of trade organization.
• The faster speed at which goods can be transported.
b) Advances in technology: Rapid advances in technology are causing many products to
become obsolete more quickly. Computers are good example of products that have been
significantly impacted by advances in technology.
The benefits of introducing new product faster:

1. Greater Market Share: That firm with the ability to bring new products to market
quickly has several advantages over their slower competitors.
2. Price premiums: When a firm is the first to bring a new product to market, it has
little or no competition, and can therefore charge premium prices.
3. Quick reaction to competition: To bring new products to market quickly is also in a
much better position to respond quickly to a competitor‘s surprise announcement of
the introduction of a new product.
4. Set industry standards: For revolutionary products, the first firm into the market
often has the luxury of setting the standards for that industry.

Categories of New Products

New products can be grouped according to the degree of innovation associated with them in
comparison to existing products. Within this framework, we define 3 broad categories of new
products

a. Incremental or derivative products are those products that have least amount of
innovation and are typically hybrids or enhancements of existing products. These
products are often cost-reduced versions of existing products or simply similar
products with added features or functions.

Companies usually can bring incremental products to market quickly. However, this does not
occur automatically. A minor design change in a product sometimes can significantly impact
a firm‘s production process. Decision on proceeding with such changes in a product therefore
must be made with careful considerations.

b. Next generation or platform products are the middle of these three categories of new
products which often represent new ‗system‘ solutions for the customer. They provide
broad base for a product family that can be leveraged over several years and,
therefore, require significantly more resources than do derivative or incremental
products. Pentium, Pentium II, Pentium III, and Pentium 4 microprocessors an
excellent example of products that fall into this category.
 c. Breakthrough or Radical Products are those products that are defined as new
products. The development of these products typically requires substantial product
design and process change. When successfully introduced, this type of product often
creates an entirely new product category, which becomes a new core business for the
firm. In so doing, it creates an opportunity for it to be the first to enter an entirely new
market.

The New Product Development (NPD) Process

With the trend toward shorter product life cycles, the successful company must be able to

a. Continuously generate new product ideas

b. Convert these ideas into reliable functional designs that are user-friendly
c. Ensure that these designs are readily producible, and
d. Select the proper processes that are most compatible with the needs of the customer.

Designing new products and delivering them to the market quickly are the challenges
facing manufacturers in every industry. As a result, the more successful firms are focusing
their resources on reducing the new product development process to a fraction of what it once
was.

The trend toward shorter product development times

The NPD process includes most of the functions within an organization which play the most
prominent roles, like;
• Marketing (which identifies the target market and forecasts demand for the product);
• Research and development (which develops the technology and subsequently designs the
product); and
• Operations (which involves supplier selection and designing the manufacturing process).
In order to shorten the NPD process, many of these activities are now done in parallel or
concurrently. This coordinated effort from all of the functional areas is known as concurrent
engineering / concurrent design/ simultaneous engineering.
 Steps of New Product Development process

1. Idea Generation: The NPD process begins with an idea for a new product, which can
come from one of several sources. Most often it comes from marketing, which
developed the idea through its transaction with customers and is often referred to as
the voice of the customer (customer feedback used in quality functional development
process to determine product specification).

When a new product is identified in this manner, it is often called market pull, which refers to
the primary force driving its development. In other words, the customer’s identified need for
the product in the market is ‘pulling’ it from the firm.
The other major method for generating new products is called technology push. It is
developed by the company’s R&D function and ‘pushed’ through the company to the market
place.

2. Concept development: Once a new product idea has been generated, it needs to be
further developed and tested. This includes an initial design of the product (which is
conducted by R&D) along with a detailed analysis of the market and the customers‘
requirements (which is conducted by marketing). Businesses today recognize the need
to involve their customers in all aspects of the design, production, and delivery of the
goods and services that they offer. There are many approaches for obtaining
information from customers, such as surveys and focus groups etc.
3. Quality function development: The QFD process is a rigorous method and begins with
the studying and listening to customers to determine the characteristics of a superior
product. This approach, which uses inter - functional teams from marketing, design
engineering, and manufacturing, has been created by Toyota for the costs on its cars
by more than 60 percent by significantly shortening design times.

4. Design for manufacturability (DFM): In translating the functional product design into
a manufacturable product, designers must consider many aspects

• They can use a variety of methods and alternative materials to make a product
• Material choices can be ferrous (iron and steel), aluminum, copper, brass, magnesium,
zinc, tin, nickel, titanium, or several other metals.
• The non-metals include plastic, wood, leather, rubber, carbon, ceramics, glass, gypsum,
concrete, as well as several others
• Further, all of these materials can be formed, cut, and shaped in many ways. There are
extrusions, stampings, rolling, powder-metal, forgings, castings, injection molding along with
a very large selection of machining processes.
• The output of the product design activity is the product‘s specifications. These
specifications provide the basis for production related decisions such as the purchase of
materials, selection of equipment, assignment of workers, and the size and layout of the
production facility.
• Product specifications, while commonly thought of as blueprints or engineering
drawings, often take other forms ranging from precise quantitative and qualitative statements
to rather fluid guidelines
• While designing for manufacturability, we must still remember to design for the
consumer. A basic rule in design is to –
• Be obvious. Design a product so that a user can look at it, and figure out how to use it
– quickly, and without an instruction manual.
Process selection in manufacturing
Types of processes:
Manufacturing operations are categorized into 3 broad types of process structures, each
category depending to a large extent on the volume of item (s) to be produced. These 3
categories are often referred to as project processes, intermittent processes, and line-flow
processes.

1. Project process: A project-oriented process usually involves the manufacture of a

single, one-of-a-kind product. Examples here include the production of a movie etc.
2. Intermittent process: Intermittent – type processes can be further subdivided into job
shop and batch processes.

a. Job-shop, where a specific quantity of a product is produced only once. Example,

numbered prints from a printing, programs for concerts.

b. Batch process: A batch process produces the same item again and again, usually in
specific lot sizes. McDonald‘s is a good example of a batch process where
hamburgers are cooked throughout the day in lot sizes of 12.

3. Line-flow process: As with intermittent processes, line –flow processes also are
frequently subdivided into two processes;

a. Assembly line processes manufacture individual, discrete products, like, cars,

electronic products, kitchen appliances etc.
b. Continuous processes are exactly what their name implies –continuous producing
product that are not discrete, like,

Line-flows are characterized by high fixed costs and low variable costs, and are
often viewed as the most efficient of the 3 types of processes. Moreover, it is inflexible.
Career opportunities for operation management organisational positions

Here we discuss various career options for those with an MBA in Operations Management, as
well as salary details for some of the careers. Students can also get an overview of the MBA
program and common courses.

Operations management looks at the planning, organizing, and supervising of various

production and manufacturing services of an organization. The goal is to turn inputs into
outputs in an efficient way. A graduate of an MBA in Operational Management program has
many career options at their disposal. Some of the most common include operations
management, supply chain management, logistics planning, inventory control management,
and business consultation.

Supply Chain Manager

Individuals working in managing supply chains may be called purchasing agents, buyers, or
purchasing managers. Their job entails buying services and goods for the company or
organization that employs them. It's their job to find the best products for the lowest price.
They must be knowledgeable about various suppliers, both domestic and foreign, and the
factors that may affect supply. They usually are experienced in a particular type of
merchandise and know how to analyze the buying preferences of customers.

The U.S. Bureau of Labor Statistics (BLS) predicts that purchasing managers will see slow
growth of 1% from 2014-2024, although some sectors may see faster growth in jobs.
Purchasing managers made a median yearly wage of $111,590 in 2016.

Logistics Manager : A logistics manager works with the departments of purchasing,

marketing, and manufacturing to implement and manage supply chains, both export and
import, that are cost-effective. They are responsible for developing strategies for distribution
and creating and maintaining contacts with logistics intermediaries. They make sure that
goods coming into the country from foreign markets meet U.S. and international export and
import laws. Logistics managers made a median salary of $62,828, based on March 2017 data
from PayScale.com.

Consultant : A consultant may work with a company to improve various aspects of its
operations associated with logistics and supply chain management. He or she may bring into
play information technologies and use strategic planning to recommend operational changes.
A consultant may work on global optimization of a supply chain, selecting software and
strategic sourcing. They may also assist clients in implementing a knowledge base along with
logistical processes and tools to increase the client's profitability. Business consultants had a
median income of $71,254, according to March 2017 data from PayScale.com.

Inventory Control Manager : It's the job of an inventory control manager to create, perfect,
and put in place plans that minimize costs associated with inventory but meet customer
service expectations. They oversee the systems used for inventory management as well as any
actual, physical inventory processes. They are responsible for inventory quality and the flow
of inventory through the system. PayScale.com reported that inventory control managers
earned a median salary of $55,093 per year in March 2017.