Ops Mang Class1

7/31/2019 Ops Mang Class1

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PRODUCTION AND

OPERATIONS

MANAGEMENT

@ Manipal University


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Unit 1 :: PRODUCTION

MANAGEMENTProduction is the process by which raw materials

and other inputs are converted into finished

products. This could be manufacturing of

tangible goods or rendering intangible services

which is referred as production.


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Production Management

Need ??

PM is required for transforming raw materials and

partly, fabricated materials into finished products.

Mean ??

PM does not imply management of productive process

alone, but it covers all there activities which go into

the making of production.


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To make production a concrete reality, one ,must pay heed to the

factors of production like land, labour, capital and organization, or to

speak in the language of business (5Ms), materials, men, money,

machines and methods.

Production management requires work of planning and control

pertaining to each of these factors of production.


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Production can be studied in 3 angles

System

OrganizationalFunction

Decision Makingin Production


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Production system model comprises:

i. Production system,

ii. Conversion sub-system and

iii. Control sub-system.


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Production as Organisational function

The conversion sub-system is the core ofproduction system and is also considered as the

heart of production function.

Every organisation has a production function /

department regardless of the purpose/business it is

involved.

This production function / department plays the

key role in meeting the business objectives of theorganisation.


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Decision Making in Production.

Operation managers are required to make a series ofdecisions in the production function.

The decisions made by operation managers about theactivities of production systems tend to fall into threegeneral categories, viz.,i. Strategic decisions

ii. Operating decisions

iii. Control decisions


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Work Of Production Manager ? Production planning

Production control Inventory control

Maintenance

Replacement Cost control

Work System Design


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Functions of production management

To identify the new product.

To design the new product.

Process design and planning.

Design of layout.

Design of material handling system.

Capacity planning.

To forecast the demand.

To find out the requirements of Various FOP.

To plan the production activities.


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To select and implement a method to produce

a product.

Production control. Inventory control.

To carry out the maintenance activities as per

schedule.

Replacement.

Cost control.

Work system design.

To arrange for various service such asmaintenance, material handling, storekeeping,

inspection and quality control.

To utilize effectively the FOP.


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Importance of Production

FunctionProduction function can offer competitive

advantage to a firm in the following areas:

Shorter new-product-lead time

More inventory turns Shorter manufacturing lead time

Higher quality

Greater flexibility Better customer service

Reduced wastage


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Production Management and

Operations Management Production management refers to the application of

management principles to the production function ina factory. In other words, production managementinvolves application of planning, organising,directing and controlling to the production process.

Operations management is the process in whichresources/inputs are converted into more usefulproducts

Production management and operations managementare differentiated based on tangibility's of finishedgoods/services


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Characteristics of Modern Production

and Operations Function

1. Manufacturing as Competitive Advantage

2. Services Orientation

3. Disappearance of Smokestacks4. Small has Become Beautiful


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Recent Trends in Production/Operations

management

1.Global Market Place

2. Production/Operations Strategy

3. Total Quality Management (TQM)

4. Flexibility

5. Time Reduction

6. Technology7. Worker Involvement

8. Re-engineering

9. Environmental Issues

10. Corporate Downsizing (or Right Sizing)

11. Supply-Chain Management12. Lean Production


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Integrated Production Management

Indian industries spends billions of dollars on

warehousing, inventory control, physical distribution,

production management etc.

In 1980s, problems like:Labor shortage, increased global competition, shortage

& rising cost of energy, need for increased

productivity, increased cost of carrying inventories,

increased attention to quality & reindustrialization

influences the need for improved management.


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According to the need of improved managementof materials in the factory & warehouse,production management is included inMaterial Management.

MATERIAL MANAGEMENT: it is procuring,storing, handling, controlling, packaging,

inspecting & transporting materials as well asproviding customer service.

In general: it can be defined as providing safelythe right amount of the right material at theright place, at the right time, and at the rightcost without damage.


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Today we have factories with segregatedtechnology. We need technologicallyintegrated factories. It will become a reality inindividual companies only if strategicmanufacturing plans are developed & suchplans include material handling strategies.

Attempts by industries to implement automationin manufacturing have tended to createislands of automation, rather than automatedsystems.

Robots, flexible manufacturing systems,numerically controlled machine centres etc. aregood examples.


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System Productivity

Rapid technological advancement, futuristic

manufacturing equipment & processes,

networked systems tend to become more &

more complex.

This has necessitated the organisation to have

effective and efficient systems and procedures.


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Key aspects of System Productivity

Analytical Supply Chain Management

Solutions

Scientific ABC analysis

Dynamic control of Inventory

Dynamic scheduling-fulfillment-based

planning through ERP Broad based Outsourcing


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CAPITAL PRODUCTIVITY

Capital:- It refers to financial wealth, especially that

used to start or maintain a business, sometimes

referred to as Cash flow.

Capital deployed in plant, machinery, buildings,distribution system etc.& it need to be productive.

Reasons for low productivity:

Demand fluctuations Uncertainties of production owing to breakdowns

Inventories


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Various Methods Of Capital

Productivity

Outsourcing

Methods of Improvement

Balancing of workstations Rationalization of packaging methods

Quality circles


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LABOR PRODUCTIVITYProductivity: proper utilization of available

resources to achieve the best results withminimum cost.

Frederick W. Taylor in his "Task Study" said,

"Human work Can be made infinitely moreproductive not by 'working harder' but by"working smarter'.

How to increase labor productivity:-

Balancing operations in assembly line

Reallocation of workers

Setting up productivity norms and evaluationof Production Operations


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Labour productivity is equal to the ratio between a

volume measure of output (gross domestic product or

gross value added) and a measure of input use (the

total number of hours worked or total employment).

labour productivity = volume measure of output /

measure of input use


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Factors effecting the Labor

productivity(1) physical-organic, location, and technological

factors;

(2) cultural belief-value and individual attitudinal,

motivational and behavioural factors;(3) international influencese.g. levels of innovativeness

and efficiency on the part of the owners and managers of

inward investing foreign companies;

(4) managerial-organizational and wider economic and

political-legal environments;


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(5) levels of flexibility in internal labour markets

and the organization of work activitiese.g.

the presence or absence of traditional craftdemarcation lines and barriers to occupational

entry; and

(6) individual rewards and payment systems, andthe effectiveness of personnel managers and

others in recruiting, training, communicating

with, and performance-motivating employees

on the basis of pay and other incentives.


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Training

In practical terms, Training would mean

imparting competencies to do a particular act

in a particular manner.

Training helps

Improve Productivity

Reduce CostMake Production Competitive


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Computer Integrated

Manufacturing (CIM)

Integration occurs when a broad range of

manufacturing & supporting activities are

linked.

Activities include engineering design, production

planning, shop control, order processing,

material control, distribution etc.

Information flow across all functions takes place

with the help of computers.


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CIM helps in avoiding accumulation of materialsresulting in better throughput & betterutilization of space. Identifying shortages,ensuring faster deliveries becomes easy withCIM.

Transmission, processing, distribution &feedback happen with CIM resulting rapidproduction & reduced indirect costs.


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Split- Case Order Fulfillment

Methods & Mechanization

Split-case order: Fulfillment of orders which

need different merchandise in different

quantities requires that cases will have to be

split, and pieces picked, repacked in cartons &ship to the customer.

Mechanization: it helps in improving

identification, pick-up & repacking thematerials in addition to relieving monotony of

the workers.


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ORDER PICKING METHODS

Items should be picked & packed in a logical manner &assigned to personnel as per customerrequirements, so that their productivity ismaximized.

Accuracy of fulfillment of order is ensured by 2 basic

factors:1. Order Extent- It is defined as the number of order to

be picked simultaneously by a picker in anassignment.

Discrete order: Single order is selected at a time. Batch order: the merchandise requirements of many

orders are put together & selected for pick up in thegeographical area which is covered in a single pass.


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Coverage extent: the physical area to be traversed by the picker inselecting merchandise for an assignment within the pickingzone. The zones are identified within the picking area.

Tour picking: the entire picking area is considered for picking

merchandise.SORTING- It is done for the purpose of easing the operation of

matching orders, merchandise & the customers for whom theyare done. Sort immediate or by merging a number of order &batches are made to consolidate the priorities for execution.

This method is called Merge & Sort.ROUTING: when orders are routed among the zones where picks

are required, we call them Routing the picks. When orders are

routed from zone to zone, in a particular order, whether any

picks are there or not, we call them Chaining.When multiple zones are covered simultaneously in different

zones we call themparallel routing.


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ORDER PACKING METHODS

When split-case is executed it becomes

necessary that the merchandise is repacked for

shipment to meet the requirements of the

customers.

In first method, they are picked & packed. This

method is used where customer use the

merchandize directly.


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CLASSIFICATION SCHEMES

Discrete Order Picking or Batch Order Picking

Z one picking or T our picking

BS Batch order picking-sort immediate

BM Batch order picking- sort immediate

ZR Zone picking with routing

ZC Zone picking with chaining

ZP Zone picking in parallel.

For example: BSDZCA- batch order picking, sort

immediate discrete order picking, zone picking with

chaining and Assemble.


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CHOICE OF OPTIMAL

FULFILLMENT STRATEGIESGeneral order characteristics:

Number of line-items

Quality of pieces per line- item

General order categories:

1. Wholesale distribution

2. Retail distribution

3. Direct marketing

4. Consumer DistributionThe performance measures to be satisfied by the choice

of strategy are to minimize the costs involved &maximize desirable characteristics.


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Communication of Picking Directives

For efficient process of order picking by personnel, weneed accurate, timely & sufficient information.

Various Techniques:-

1. Reports- Customers order either in the printed

format generated by the customer or converted to oneby the marketing deptt., pick lists, packing slips,

stock location reports, delivery notes.

Labels: These labels are bar coded for item sorting &order verification.

Radio frequency Terminals: coding & bar coding for

identifying orders for routing & sorting.


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2. Display Light- These computer activated

lights are used to direct order selectors to items

& locations to pick order or batch

requirements. They call for the attention of thepersonnel & alert them.


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Order Picking & Packing

EconomicsThe main cost factors can be divided into two

categories: Capital Costs & Operating Costs.

Capital costs- it includes facilities, material handlingsystems, weighing systems, supporting & facilitiesgoods which are used over a long time.

Operating Costs- include labor, consumable supplies,insurance, utilities, taxes etc.

Incidental costs- those associated with damages,resolution of errors, return handling, inventoryshrinkage etc.


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Space & Storage Equipment

Costs

Split case picking & packing functions & the

space required for them can be broadly

categorized as-

1. On line storage

2. Replenishment aisles

3. Picking aisles

4. Packing work space

5. Material handling space


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Storage Density Vs. Velocity

Storage Density refers to quantity of material or

number of items that can be stored in a unit of

volume, say 10 cubic meter.

Velocity refers to the speed with which materials

are moved to the next point in the supply

chain.

The major costs that are necessary to be incurred

for an on-line storage system are space &

equipment costs.


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Capital Costs for on-line storage

Mechanization Costs

Picking and Packing costs

Order assembly and packing system costs.

Ops Mang Class1

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