PRODUCTION AND OPERATIONS MANAGEMENT

Chapter 1
INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEEMNT
The Production Function-nature and scope, interface with other functional areas like Marketing, Finance, Personnel, Materials.

INTRODUCTION
Production/operations management is the process, which combines and transforms various resources used in the production/operations subsystem of the organization into value added product/services in a controlled manner as per the policies of the organization. Therefore, it is that part of an organization, which is concerned with the transformation of a range of inputs into the required (products/services) having the requisite quality level. 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.

HISTORICAL EVOLUTION OF PRODUCTION AND OPERATIONS MANAGEMENT

For over two centuries operations and production management has been recognized as an important factor in a countrys economic growth. The traditional view of manufacturing management began in eighteenth century when Adam Smith recognized the economic benefits of specialization of labour. He recommended breaking of jobs down into subtasks and recognizes workers to specialized tasks in which they would become highly skilled and efficient. In the early twentieth century, F.W. Taylor implemented Smiths theories and developed scientific management. From then till 1930, many techniques were developed prevailing the traditional view. Brief information about the contributions to manufacturing management is shown in the Table 1.1.

HISTORICAL EVOLUTION continue

Production management becomes the acceptable term from 1930s to 1950s. As F.W. Taylors works become more widely known, managers developed techniques that focused on economic efficiency in manufacturing. Workers were studied in great detail to eliminate wasteful efforts and achieve greater efficiency. At the same time, psychologists, socialists and other social scientists began to study people and human behavior in the working environment. In addition, economists, mathematicians, and computer socialists contributed newer, more sophisticated analytical approaches. With the 1970s emerges two distinct changes in our views. The most obvious of these, reflected in the new name operations management was a shift in the service and manufacturing sectors of the economy. As service sector became more prominent, the change from production to operations emphasized the broadening of our field to service organizations. The second, more suitable change was the beginning of an emphasis on synthesis, rather than just analysis, in management practices.

CONCEPT OF PRODUCTION
Production function is that part of an organization, 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 the user. Thus production is a value addition process. At each stage of processing, there will be value addition. Edwood Buffa defines production as a process by which goods and services are created. Some examples of production are: manufacturing custom-made products like, boilers with a specific capacity, constructing flats, some structural fabrication works for selected customers,etc., and manufacturing standardized products like, car, bus, motor cycle, radio, television, etc.

A Production System Model

PRODUCTION MANAGEMENT
Production management is a process of planning, organizing, directing and controlling the activities of the production function. It combines and transforms various resources used in the production subsystem of the organization into value added product in a controlled manner as per the policies of the organization. E.S. Buffa defines production management as, 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.

PRODUCTION MANAGEMENT cont.

The Subject of Production Management is studied under different Headings-such as Production Planning and control, Production and Inventory control, production and operations control and many more. What ever may be the title of the subject, the contents of the subject are more or less one and the same. Before we discuss about production management, let us discuss about product, production and management. This will give us a rough idea about production Management and with what a production manager has to deal with.

PRODUCT
Though many authors define the product with Consumer orientation, it is better for us to deal with different angles, because it will be helpful for us to understand the subject of production and Operation Management. (i) For a Consumer: The product is a combination of or optimal mix of potential utilities. This is because every consumer expects some use or uses from the product. Hence he/she always identifies the product in terms of the uses. Say for example-Soap can be identified by complexion, cleanliness of body, freshness, fragrance or health.... etc. Because of this, many producers advertise that they are selling health, or they are selling Cine star Complexion or they are selling freshness and so on. (ii) For a Production Manager: Product is the combination of various surfaces and processes (or operations). This is because the production Manager is solely responsible for producing the product. He has to think of the various surfaces by which the product is made of, so that he can plan for processes by which a particular surface can be made and plan for required capacity of the facility by which the surface is produced. While planning he has to see that the required surface is produced by the best and cheapest method (optimally), so as to make the product to face competition in the market. (iii) For a Financial Manager: For him the product is a mix of various cost elements as he is responsible for the profitability of the product. (iv) For a Personnel Manager: For him the product is a mix of various skills, as he is the person who selects and trains the personnel to meet the demand of the skill to produce the product.

DEFINITION OF PRODUCTION MANAGEMENT

It may be defined as: (i) The performance of the management activities with regards to selecting, designing, operating, Controlling and updating production system. (ii) It is the processes of effectively planning, coordinating and controlling the production, that is the operations of that part of an enterprise, it means to say that production and operations Management is responsible for the actual transformation of raw materials into finished products. (iii) Production management is a function of Management, related to planning, coordinating and controlling the resources required for production to produce specified product by specified methods, by optimal utilization of resources. (iv) Production management is defined as management function which plans, organizes, coordinates, directs and controls the material supply and Processing activities of an enterprise, so that specified products are produced by specified methods to meet an approved sales programme. These activities are being carried out in such a manner that Labour, Plant and Capital available are used to the best advantage of the organization.

Objectives of Production Management

The objective of the production management is to produce goods 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 needs. The right quality is not necessarily 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 organization 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.

OPERATING SYSTEM
Operating system converts inputs in order to provide outputs which are required by a customer. It converts physical resources into outputs, the function of which is to satisfy customer wants i.e.,to provide some utility for the customer. In some of the organization the product is a physical good (hotels) while in others it is a service (hospitals). Bus and taxi services, tailors, hospital and builders are the examples of an operating system. Everett E. Adam & Ronald J. Ebert define operating system as, An operating system ( function) of an organization is the part of an organization that produces the organizations physical goods and services. Ray Wild defines operating system as, An operating system is a configuration of resources combined for the provision of goods or services.

Concept of Operations
An operation is defined in terms of the mission it serves for the organization, technology it employs and the human and managerial processes it involves. operations in an organization can be categorized into manufacturing operations and service operations. Manufacturing operations is a conversion process that includes manufacturing yields a tangible output: a product, whereas, a conversion process that includes service yields an intangible output: a deed, a performance, an effort. Operations management is the management of processes or systems that create goods and/or provide services. It encompasses forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities, buying material and equipment and maintaining them, and more.

WHY STUDY OPERATIONS

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. Beyond all of this is the reality that operations management is about management, and all managers need to possess the knowledge and skills in the content areas you will learn about here. Among them are productivity, strategy, forecasting, quality, inventory control, and scheduling. Also, you will learn how to use a range of quantitative tools that enhance managerial decision making.

Operations
The operations function performs all the activities directly related to producing goods or providing services. Hence, it exists both in fabrication and assembly operations, which are goods-oriented, and in areas such as health care, transportation, restaurant, and retailing, which are primarily service-oriented (see Table 11).

Operations
The operations function is the core of most organizations; it is responsible for the creation of an organizations goods or services. Inputs are used to obtain finished goods or services using one or more transformation processes (e.g., storing, transporting, cutting). To ensure that the desired outputs are obtained, measurements are taken at various points in the transformation process (feedback) and then compared with previously established standards to determine whether corrective action is needed (control). Figure 12 shows the conversion process. Table 12 provides two examples of inputs, transformation processes, and outputs. It is important to note that goods and services often occur jointly. For example, having the oil changed in your car is a service, but the new oil is a good. Similarly, house painting is a service, but the paint is a good. The goodsservice package is a continuum. It can range from primarily goods, with little service, to primarily service, with few goods (see Figure 13).

Operations
The essence of the operations function is to add value during the transformation process: Value-added is the term used to describe the difference between the cost of inputs and the value or price of outputs. In nonprofit organizations, the value of outputs (e.g., highway construction, police, and fire protection) is their value to society; the greater the value added, the greater the efficiency of these operations. In forprofit organizations, the value of outputs is measured by the prices that customers are willing to pay for those goods or services. Firms use the money generated by value-added for research and development, investment in new facilities and equipment, paying workers, and profits. Consequently, the greater the value-added, the greater the amount of funds available for these purposes.

Finance
The finance function performs activities related to securing resources at favorable 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.

Other Functions
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.

Other Functions 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 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.

Distinction between Manufacturing Operations and Service Operations

Following characteristics can be considered for distinguishing manufacturing operations with service operations: 1. Tangible/Intangible nature of output 2. Consumption of output 3. Nature of work (job) 4. Degree of customer contact 5. Customer participation in conversion 6. Measurement of performance. Manufacturing is characterized by tangible outputs (products), outputs that customers consume overtime, jobs that use less labour and more equipment, little customer contact, no customer participation in the conversion process (in production), and sophisticated methods for measuring production activities and resource consumption as product are made. Service is characterized by intangible outputs, outputs that customers consumes immediately, jobs that use more labour and less equipment, direct consumer contact, frequent customer participation in the conversion process, and elementary methods for measuring conversion activities and resource consumption. Some services are equipment based namely rail-road services, telephone services and some are people based namely tax consultant services, hair styling.

A Framework for Managing Operations

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 behavior 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.

A Framework for Managing Operations

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 behavior. They also want to know how the behavior of subordinates can affect managements planning, organizing, and controlling actions. Their interest lies in decision-making behavior. MODELS : As operation managers plan, organize, 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 utilization, decision tree analysis for long-term capacity problem of facility expansion, simple median model for determining best locations of facilities etc.

Objectives of Operations Management

Objectives of operations management can be categorized into customer service and resource utilization. CUSTOMER SERVICE : The first objective of operating systems is the customer service 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 utilize 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 utilization of resources, i.e., obtaining maximum effect from resources or minimizing their loss, under utilization or waste. The extent of the utilization of the resources potential might be expressed in terms of the proportion of available time used or occupied, space utilization, levels of activity, etc. Each measure indicates the extent to which the potential or capacity of such resources is utilized. This is referred as the objective of resource utilization.

RESOURCE UTILISATION continued

Operations management is also concerned with the achievement of both satisfactory customer service and resource utilization. An improvement in one will often give rise to deterioration in the other. Often both cannot be maximized, 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 summarizes 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.

MANAGING GLOBAL OPERATIONS

The term globalization describes businesses deployment of facilities and operations around the world. Globalization can be defined as a process in which geographic distance becomes a factor of diminishing importance in the establishment and maintenance of cross border economic, political and socio-cultural relations. It can also be defined as worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments. There are four developments, which have spurred the trend toward globalization. These are: 1. Improved transportation and communication technologies; 2. Opened financial systems; 3. Increased demand for imports; and 4. Reduced import quotas and other trade barriers.

MANAGING GLOBAL OPERATIONS

When a firm sets up facilities abroad it involve some added complexities in its operation. Global markets impose new standards on quality and time. Managers should not think about domestic markets first and then global markets later, rather it could be think globally and act locally. Also, they must have a good understanding of their competitors. Some other important challenges of managing multinational operations include other languages and customs, different management style, unfamiliar laws and regulations, and different costs.

MANAGING GLOBAL OPERATIONS

Managing global operations would focus on the following key issues: To acquire and properly utilize the following concepts and those related to global operations, supply chain, logistics, etc. To associate global historical events to key drivers in global operations from different perspectives. To develop criteria for conceptualization and evaluation of different global operations. To associate success and failure cases of global operations to political, social, economical and technological environments. To envision trends in global operations. To develop an understanding of the world vision regardless of their country of origin, residence or studies in a respectful way of perspectives of people from different races, studies, preferences, religion, politic affiliation, place of origin, etc.

SCOPE OF PRODUCTION AND 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 centers 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 specialized 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 decreases the cost of production. Hence, material handling is a prime consideration in the designing new plant and several existing plants.

PRODUCT DESIGN & PROCESS 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 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 analyze 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, Dispatching & Follow-up

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 Performa 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: 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 minimize material cost. To purchase, receive, transport and store materials efficiently and to reduce the related cost. To cut down costs through simplification, standardization, 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.

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:

FUNCTIONS OF PRODUCTION MANAGEMENT DEPARTMENT

(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 Production Management 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.

FUNCTIONS OF PRODUCTION MANAGEMENT DEPARTMENT

(v) Loading and Scheduling: The Production Management department has to draw the timetable for various production activities, specifying when to start and when to finish the process required. It also 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) Despatching: 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.

FUNCTIONS OF PRODUCTION MANAGEMENT DEPARTMENT

(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.

FUNCTIONS OF PRODUCTION MANAGEMENT DEPARTMENT

(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 as shown in figure.1.1.

PLACE OF PRODUCTION MANAGEMENT DEPARTMENT IN THE ORGANISATION

Production is the center of all actitivities of an organization. This is to say all the activities of an organization, such as: Finance, Personnel, Marketing...etc., are exists in an organization because of production activity. Hence the position of Production Management in an organization is very important. Whether it should be a line function or Staff function, more or less depends upon the corporate management policy. In small organization, Production Management is whole and sole of it. In large industries, generally it is advisable to have Production as line function, because, the decision taken by the line manager and the advices given by the Staff personnel will be based on the Production activities. The Production Manager, directly report to General Manager, who in turn report to the Board. The figure 1.2 shows a typical organization structure showing the position of Production Management. Figure 1.3 shows an organization chart for Production and Operations Management department.