INTRODUCTION TO

PRODUCTION &
OPERATIONS MANAGEMENT

Presented by
Muhammad Waqas Chughtai

©Prepared by Muhammad Waqas Chughtai

What Is Production & Operations
Management?
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 the user.
Production management deals with decision-
making related to production processes so that the
resulting goods or services are produced according
to specifications, in the amount and by the schedule
demanded and out of minimum cost

©Prepared by Muhammad Waqas Chughtai

What is Production System?
 The production system is ‘that part
of an organization, which produces
products of an organization.
 It is that activity whereby resources,
flowing within a defined system, are
combined and transformed in a controlled
manner to add value in accordance with
the policies communicated by
management’.

©Prepared by Muhammad Waqas Chughtai

 Production System OR
P&OM’s Transformation Process

©Prepared by Muhammad Waqas Chughtai

What Is Operation & Operations
Management?
Operation is called a functional activity.

Operations management (OM) is the

set of activities that create value in the
form of goods and services by
transforming inputs into outputs.

©Prepared by Muhammad Waqas Chughtai

What is Operations Management?

The business function responsible for

planning, coordinating, and controlling the
resources needed to produce a company’s
products and services

©Prepared by Muhammad Waqas Chughtai

Objectives of Operations Management
 CUSTOMER SERVICE: The first objective of operating
systems is to utilize resources for 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, providing the ‘right thing at a
right price at the right time’ can satisfy primary objective.
 RESOURCE UTILISATION: Another major objective of
operating systems is to utilize resources for the satisfaction of
customer wants effectively. 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.

©Prepared by Muhammad Waqas Chughtai

 Organizing to Produce Goods and
Services
 Essential functions:
1. Marketing – generates demand
2. Production/operations – creates the product
3. Finance/accounting – tracks how well the
organization is doing, pays bills, collects the
money
4. Human Resources – provides labor, wage and
salary administration and job evaluation

©Prepared by Muhammad Waqas Chughtai

Why Study P&OM?
 P&OM is one of four major functions of
any organization, we want to study how
people organize themselves for productive
enterprise.
 We want (and need) to know how goods
and services are produced.
 We want to understand what operations
managers do.
 P&OM is such a costly part of an
organization.

©Prepared by Muhammad Waqas Chughtai

What Operations Managers Do
 Basic Management Functions

 Planning
 Organizing
 Staffing
 Leading
 Controlling

©Prepared by Muhammad Waqas Chughtai

Responsibilities of Production & Operations
Management

 Planning  Organizing
Capacity Degree of centralization
Location Process selection
Products & services  Staffing
Make or buy Hiring/laying off
Layout Use of Overtime
Projects
 Directing
Scheduling Incentive plans
 Controlling/Improving Issuance of work orders
Inventory Job assignments
Quality

Costs

Productivity

©Prepared by Muhammad Waqas Chughtai

Key Decisions of Operations Managers

 What
What resources/what amounts
 When
Needed/scheduled/ordered
 Where
Work to be done
 How
Designed
 Who
To do the work

©Prepared by Muhammad Waqas Chughtai

What is the role of Production &
Operations Management?
 P&OM Transforms inputs to outputs
◦ Inputs are resources such as
 People, Material, and Money

◦ Outputs are goods and services

©Prepared by Muhammad Waqas Chughtai

P&OM’s Transformation Role
 To add value
◦ Increase product value at each stage

 Provide an efficient transformation

◦ Efficiency – perform activities well at lowest possible cost

©Prepared by Muhammad Waqas Chughtai

Business Information Flow

©Prepared by Muhammad Waqas Chughtai