product production production management operation operation management production as a system production in organisation chapter 1 according to mba 2nd sem thakur publications all content chapter 1

1. Production
Management
-An
Introduction

2. Product
A product is anything that is capable of satisfying a need.
A product is a bundle of utilities consisting of various features and
accompanying services.
Nature:
Tangibility
Intangible attributes
Exchange value
Consumer satisfaction

3. Types of Products
Goods
Services
contracts

4. Production
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 is a process by which goods and services are created.
It is a process of creating utility in products or adding the value of
products.

5. Production Management
 Production is basically defined as conversion of Inputs into
output through transformation process . Input include 5 m’s
i.e. man , machinery , money , material, methods & output
is final goods.
 It is the set of inter-related management activities which are
involved in the manufacturing of certain products like car ,
bus.

6. Meaning
Production Management is the process of planning, organizing, directing
and controlling the activities of the production function. It is the
conversion of raw materials into finished products.
Production management is concerned with the decision making
regarding the production of goods and services at a minimum cost
according to the demands of the customers through the management
process of planning , organizing and controlling.

7. Definition
“Production management deals with decision-making related to
production processes so that the resulting goods or service is
produced according to specifications, in the amounts and by the
schedule demanded and at minimum cost.” E.S. Buffa
“Production management is concerned with those processes
which convert the inputs into the outputs. The inputs are various
resources like raw material, men, machines, methods, etc. and
the output are goods and services”. H.A. Harding

8. Objectives of Production Management
The objective of production management can be classified into two
categories: (i) Ultimate Objective, and (ii) Intermediate Objectives.
Ultimate Objectives : The ultimate objectives of the management is to
produce goods and services of right quality and quantity at the right time
at right cost. Therefore the ultimate objectives can be sub-classified as
follows:
To Produce Quality Product- Right Quality
Producing at Minimum Possible Cost- Right Manufacturing Cost
Right Quantity
Manufacturing Schedule-Right time

9. Contd..
Intermediate Objectives:-
The various inputs like men, machine, material, etc. are needed
for production process. The intermediate objective are fixed to
attain the optimum utilization of these various types of inputs. The
intermediate objective are as follows:
Optimum Use of Materials
Machinery and equipment
Manufacturing Services
Manpower

10. Operation
It is some configuration of resources combined for purpose of
production , transport, supply , service or storage.
In simple terms: operations describe what an organization does.
Operations management
It consists of tactics such as scheduling work, assigning resources
including people, equipment , managing inventories, assessing
quality standards . It is the process where by resources or inputs
are converted into more useful products

11. Production and operation management
It provides tools, technique, concepts, models, ideas to
design ,dimension , control, improve production system.

12. Nature of production and operations
management
Management function
Production as a system
Decision making in production
Production is the process
Service oriented.
Value added process.

13. Production as a System
• Production is the process by which raw material and other
inputs are converted into finished products.
• Production is a process by which goods and services are created.
• Assemblage or combination of two or more objects,
operations, activities united by some form of regular interaction
constitute a system.
• Production system is set of interrelated component or
subsystem which receives the input from the environment and
transform it into desirable output in controlled manner in
accordance with the policies communicated by the
management.

14. Types of Production Systems
Mass Production or Flow-line production system
Batch production system
Job shop
Projects (unit manufacture)

15. Scope of Production Management
Location Facilities
Plant Layout and Material Handling
Capacity Planning
Product design
Process Planning and design
Material Management
Maintenance Management
Production Planning and control
Quality Control
Method Study

16. Functions of Production Management
Production Planning
Production Control
Quality Control
Industrial Engineering
Purchasing
Plant Engineering
Manufacturing
Method analysis
Inventory Control
Plant Layout and Material Handling
Work Measurement

17. Importance of Production Management
It is the production management which makes possible the production
of the new product, use of new technology, improving the quality of
goods and controlling the cost of production.
To the Consumer
(i) They get good quality products.
(ii)Production management makes it possible to deliver the product in
time and at right place.
(iii)Consumer also get the goods at right price.

18. To the Employees
(i)They get the higher remuneration and better working conditions.
(ii)They get personal satisfaction through a sense of achievement
(iii)They get stable employment and job satisfaction
(iv)Job satisfaction improves their morale
To the suppliers: Suppliers of raw-materials and other physical assets
and manufacturing services are benefitted through a regular and timely
orders of supplying the items. They are also benefitted as they get
timely payment.

19. To the Community
(i) The scarce resources of society are used optimally
(ii)The society has not to face the scarcity of products
(iii)The unemployment decrease in the society
To the Investors
(i) Investors get higher rate of return on their investments due to
increased productivity and profitability
(ii)The market price of their investments increase which give them
capital appreciation also
(iii)The investors specially the shareholders feel secured due to good
management and high earning

20. To the Nation
(i)It helps in improving the GDP of the country
(ii)Per capita income of the country increases
(iii)Poverty and unemployment reduces

21. Problems of Production Management
Problem of the location of the plant
Problem of the plant layout
Problem of the product designing
Problem of inventory and production control
Problem of Quality control
Problem of labour control
Problem of cost control and improvement

22. Organization of Production Function
Organization function of the production management brings together
human and physical resources in an orderly manner. Organization
structure gives the detail of positional hierarchy duties and authorities
and responsibility.
The managing director or (CEO) is the overall head of the
organization that manages all the affairs of the organization. Each
functional head i.e. vice president look after the overall functions.
functions of CEO depends upon the size and type of the industry,
product management style. Accordingly, the sub functional areas are
decided and various positions are created in the structure.

23. Organization of Production Function
Managing Director or CEO
Vice President
Finance
Vice President
Manufacture
Vice President
Marketing
G.M. (Engg) G.M.(Material)
G.M.
(Manufacturing)
G.M. (Q.C.)
Manager
Maintenance
Manager Works Manager PPC Manager Ind.
Engg.
Supervisors Supervisors Supervisors
Worker Worker Worker Worker

24. Organization of Production
Function
Typically, the sub functional areas in production or
manufacturing include:
 Material management
 Engineering department
 Quality management
 Production

25. Decision Making in Production
Function
Operations managers are required to make a series of decisions in
the production function. They plan, organize, staff, direct and
control all the activities in the process of converting all the inputs
into finished products. At each level operating managers are
expected to make decision and implement them too.
1. Strategic decisions: related to products, processes and
manufacturing facilities.
2. Operating decisions: Relating to planning productions to meet
demand.
3. Control decisions: Relating to planning and controlling
operations.

26. Skills and knowledge needed to be a
successful operation manager
Knowledge of production process
Production principle
Analytical tools

27. Exercise
Skill Development
Visit a fast food restaurant like McDonalds or Dominos to
understand the concept of this chapter by getting the
information for the following questions.
 Identify the type of production system followed.
Check how production system is managed.
Find out utilization of the resources namely manpower, capacity
and material.
How the customer services are rendered[feedback system exist
or not].