Introduction - Meaning & Definition – Classification - Objectives and Scope of Production and operation Management -Automation: Introduction – Meaning and Definition – Need – Types - Advantages and Disadvantages.

1. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 1
ACHARYA INSTITUTE OF GRADUATE STUDIES
(NAAC Re-Accredited and Affiliated to Bengaluru City University)
Soldevanahalli, Bengaluru-560107
DEPARTMENT OF COMMERCE
FACULTY NAME: LAKSHMI V
CLASS: III BBA AVIATION Semester: 2021-22 (ODD)
PRODUCTION AND OPERATIONS MANAGEMENT
LECTURE NOTES
UNIT-1 INTRODUCTION TO PRODUCTIONS AND OPERATIONS MANAGEMENT
Production and Operation Management (POM) is defined as the design, operation, and
improvement of the transformation process, which converts the various inputs into the
desired output of products and services.
The term Production and operation management is being increasingly replaced by simply
operation management, as the production function relating to the manufacturing organization
has become a part of operation. Operation management is a broad term which includes
manufacturing as well s service organizations. Operation management also highlights the
increasing importance of the service industry in the overall business environment. There is a
growing need for the application of the principles of operations management in the service
industry.
Meaning & Definition of Production Management
Production management is a branch of management which is related to the production
function. Production may be referred to as the process concerned with the conversion of
inputs into outputs with the help of certain processes while management is the process of
exploitation of these factors of production in order to achieve the desired results.
According to Elwood S. Buffa, “Production management deals with decision making related
to production process so that the resulting goods or services are produced according to
specification in amounts and by the scheduled demanded, and at a minimum cost”.
Meaning & Definition of Operation Management
Operation management is understood as the process whereby resources or inputs are
converted into more useful products. It is used for a system where inputs are transferred into
intangible services.

2. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 2
APICS, The Association for Operations Management also defines operation management as
“the field of study that focuses on the effectively planning, scheduling, use, and control of a
manufacturing or service organization through the study of concepts from design engineering,
industrial engineering, Management information system, quality management, production
management, inv
entory management, accounting, and other functions as they affect the organization”.
Difference between PM and OM
Production Management Operation Management
1. It involves tangible products. It involves intangible services.
2. It is used in a narrow sense. It is used in a broad sense.
3. It is applied to manufacturing organization, It is applied to non-
such as industry. Manufacturing organization
Eg : Jindal Aluminum Industry such as banking and insurance.
4. It will have closing stock at the end of an There is nothing like closing
Accounting year. stock.
5. Demand for the product is regular. Demand for services fluctuates.
Objectives of Production and Operation Management
1. RIGHT QUALITY:
The quality of product is established based upon the customer’s 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

3. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 3
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.
Scope of Production and Operation Management
Production Management is a vast concept it involves a huge chain. Production starts with
input and ends with output i.e finished product. Following are the scope of production
management
1. Location of Facilities
The selection of location is a key decision as large investment is made in building, land, and
machinery.
2.Plant Layout & material handling
Plant layout refers to the physical arrangement of facilities. Material handling refers to the
moving of material from the storeroom to the machine & from machine to the next during the
process of manufacturing.
3.Product Design
Product design deals with the conversion of the ideas about the product into the reality.
4.Process Design
It is the decision making on overall process route for converting the raw material into the
finished goods.
5.Production Planning & Controlling ( P.P.C)
P.P .C can be defined as the process of planning the production in advance, setting the exact
route of each item, fixing the starting & finishing dates for each item to give production
orders to shops & to follow up the progress of products according to the orders.
6.Quality Control
Quality control may be defined as a system that is used to maintain a desired level of quality
in a product & service.

4. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 4
.
7.Material Handling
Material management is that aspect of management function which is primarily concern with
the acquisition control & use of the needed material.
8.Maintenance Management
Maintenance deal with taking care of factory layout, types of machinery. This is essential for
equipment & machinery which are a very important part of the total production process.
Types of POM
Production systems can be classified as
1. Job-shop
2. Batch
3. Mass
4. Continuous production systems.
1. Mass production: In this system the flow of production system is straight line. All
the facilities are arranged as per the sequence of operations. The output of one
operation becomes the input for the next operation. Raw materials fed initially are
very important since all the operation depends upon it. The maintenance procedure
and systems must be very good so as to prevent break downs.

5. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 5
2. Batch production: In this system a batch consisting of a certain quantity is made on a
machine. The same machine may be used for another production. In this system a
variety of products are manufactured and it is not possible to maintain a separate
assembly line for each product.
3. Job shop production: Here the unit accepts customers orders and executes them. It
does not have its own product mix. Each order may be unique. Different plans and
tools may be needed to execute the job. Jobs have to be undertaken on a priority basis
so as to dispatch the goods on time.
4. Continues production: Under this the process of production is ongoing. The
products are produced continuously according to the demand.
Objectives of Operation management:
1. Quality management: It is the important aspect. The success or failure of any
enterprise depends on the quality of the products. The quality standards are prescribes
in terms of size, color, shape, tastes. Quality control is maintained by testing the
actual product with pre-determined standards.
2. Maintenance and replacement: This is concerned with framing policies with respect
to maintenance schedule repair and replacement decisions etc. The plant and
equipment should be periodically checked so as to avoid sudden break down.
3. Production planning: It takes a given product or line of products and organizes in
advance the manpower, material, machines, and money required for a predetermined
output with reference to a given period of time.
4. Production control: It ensures that product activities are carried out as per pre
determined standards and product schedules. Product control is a part of product
planning.

6. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 6
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’.
A simplified production system is shown below:
The production system has the following characteristics:
1. Production is an organized activity, so every production system has an objective.
2. The system transforms the various inputs to useful outputs.
3. It does not operate in isolation from the other organization system.
4. There exists a feedback about the activities, which is essential to control and improve
system Performance.

7. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 7
Automation:
Meaning: It refers to the phenomenon where a job is performed without the help of any
human interference. Automation means performing a particular task with the help of
machines. It is a set of technologies that results in operation of machines and systems without
significant human intervention and achieves performance superior to manual operation.
Definition: “A system of doing work where material handling, production process and
production designs are integrated through mechanization of thoughts and efforts to achieve a
self-regulating and controlling system.”
Need of Automation:
1. These systems can provide manufacturers with low per-unit production costs,
improved product quality and quicker production rates.
2. Because some of the machines tend to be standard robots that are available at
competitive rates, initial investment is not high.
3. These robots can be reprogrammed to other products and operations, thereby the
dependence on stable product demands.
Types of Automation:
1. Fixed Automation: Particularly appropriates for line and continuous flow process
choices, fixed automation produces one type of part or products in a fixed sequence of
simple operation.
Eg: Light bulbs, Chemical processing plants and Oil refineries.
2. Flexible Automation: Flexible automation can be changed easily to handle various
products. The ability to re-program machines is useful for both low-customization and
high customization process.
Eg: Garments, Printing, Toys industries.
3. Programmable Automation: In this, the production equipment is designed with the
capability to change the sequence of operations to accommodate different product
configurations. The operation sequence is controlled by a program, which is a set of
instructions coded so that the system can read and interpret them.
Eg: Controlled machine tools, Robots.
Advantages of Automation:
1. Increased output and enhanced productivity: Automation results in enhanced
productivity and production because it increases the speed of production, eliminates
production bottlenecks and reduces idle time of machines.

8. Unit-1 Introduction Productions and Operations management
Prof. Lakshmi V MBA, M.Com, M.Phil., UGC-NET-JRF(Ph.D.) 8
2. Improved and uniformed quality: The quality of the product improves since the
entire production process is controlled by machines. There will also be uniformity in
the quality of the products.
3. Reduced cost: The total cost per unit of output reduces after the introduction of
automation.
4. Reduction in the number of accidents: Once automation is introduced the quantum
of manpower comes down and thus the number of accidents caused by human error or
otherwise gets reduced.
5. Better production control: Automation leads to better production control. Greater
control can be exercised over the speed and slow of operation.
6. Dangerous and unpleasant task: These tasks can be handled by robots. There by the
risk of human life can be eliminated.
Disadvantages of Automation:
1. Heavy capital investment: Automation involves higher capital outlay. Associated
with this would be cost of capital depreciation power consumption. Automation may
be luxury for small industries.
2. Displacement of labour: Automation results in the replacement of workers. The
trade union strongly opposes the introduction of automation for this reason.
3. No opportunity for employee suggestion: Since man power is replaced by machine,
valuable suggestions from employees are lost. This is an irreparable loss to the
management.
4. Loss of trust: The reliability of the automation is central to the human operator
developing trust in the system and the willingness of the human to use the automation.
Automated system may not be fully utilized or not at all if the level of mistrust
resulting from poor reliability is high.
5. Problem for developing country: Automation is a luxury for many developing
countries. They cannot afford to invest huge amount of capital required by fully
automated plants. This is because developing countries face problem of scarcity of
foreign exchange, shortage of highly skilled personnel, shortage of capital, etc.