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Production System Showing Interactions with other Sub

systems

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Production System:

• System can be defined as a purposeful means for accomplishing an objective.

• A system is always interacted with other system and influenced by other system or environment.

• Production system is a sub system of organizational system.

• To reach the organizational goal all the organizational sub systems are interrelated and interdependent with other sub system

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Production and Operation system and Environment:

POM System

Finance

Accounting

HRM

Purchasing

R & D

Engineering

Marketing

Legal

Technica

l

Political

Demographic

Scio E

conomic

Competition

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Internal Components Interacting with POM

• Finance– Finance is the primary function of organization.– It is closely connected with POM– It provide adequate financial support to the POM.

• Marketing– Marketing is the core functional area of organization.– It discover and develop new products or services

as per the demand and desired of customers, potential customers.

– And it has responsibility to retain the customer and make them brand loyal.

Finance and Marketing are very closely related to POM

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Cond….• Engineering: Technically support to the

production process.• R & D : It discover or innovate the new product and

process. • Purchasing: Provide the qualitative materials in reliable

time and quantity.• HRM: HRM provide the skillful and motivated

manpower.• Accounting: Look over the over all record of the

accounting data and provide past data for production planning and scheduling.

All the production function are interacted to each other to meet the organizational goal.

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External components interacting with POM• External components are uncontrolled and

unplanned.• It creates both Opportunities and Threats• External Components are:

– Socio Economical:– Political:– Legal:– Technical:– Demographic:– Competition:

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Socio Economical:• Social dimensions:• Global economic conditions.• WTO and its effects.• Total size the national budget.• Inflation rate• Bank rate

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Political:• Economy system• Leading parties with in the country and their

economic ethics.• Upcoming assembly and potential leaders:

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Legal:• Existing acts related to the concerned business.• Company acts, Tax acts, and other acts.• Potential changes in the exiting acts and

restrictions.• Import and export policies of the government.

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Demographic:• Size of the demography as per the

organization’s target market.• Dimension of the demography.• Social and cultural ethics of the demography.

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Competitors:• SWOT analysis of the competitors.• Competitive products in terms of quality, price

and other natures.

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Technical:• Pace of the technology.• Existing technology • Dimension of technology in global marketplace• R & D cost for new invention• Technology transfer

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Demographic:• Size of the demography as per the

organization’s target market.• Dimension of the demography.• Social and cultural ethics of the demography.

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• As a organizational system, POM is closely connected with the both internal and external environment.

• Environmental components are interacted with each other to achieve the desired organizational goal

• The POM manager should be serious for satisfy the customers and stakeholders.

• For this s/he can grab the opportunities and avoid the threats from the external as well as internal environment.

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•Any Confusions ????