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Introduction to Production Management
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71 Terms
This combines and transforms various resources used in the production/operations subsystem of the organization into value added products/services in a controlled manner as per the policies of the organization.
Production/Operations Management
What is the main purpose of Production/Operations Management?
To transform resources into value-added products or services in a controlled and organized manner.
What are the major areas under the scope of Production/Operations Management?
Location of facilities
Maintenance management
Material management
Quality control
Production planning and control
Process design
Product design
Plant and layout material handling
This is a set of interrelated management activities involved in manufacturing products.
Production Management
What are the objectives of production management?
To produce goods or services of the right quality and quantity at the right time and right manufacturing cost. (QQTC)
Right quality
Right quantity
Right time
Right cost
The quality of the product is based on:
customer needs
cost of the product
Manufacturing costs should be established __ (before/after) production.
Before
Part of an organization concerned with transforming inputs into outputs (products) with the required quality level
Production function
It is the step-by-step conversion of one form of material into another through chemical or mechanical processes.
Production
What does production do to a product?
creates or enhances its utility
The process by which goods and services are created.
Production
What are the inputs in a production process?
men
materials
machines
information
capital
What are the transformation processes in a production process?
product design
process planning
production control
maintenance
What are the outputs in a production process?
products
services
What are the continuous aspects of a production process?
inventory
quality
cost
It is the term commonly used for services management.
Operations management
Two categories of operations.
Manufacturing
Service
What is the output of manufacturing vs service?
manufacturing: tangible
service: intangible
How is manufacturing output consumed?
Over time
How is a service consumed?
immediately
What is the nature of work in manufacturing vs service? (Which has more/less labor/equipment?)
Manufacturing: Less labor, more equipment
Service: More labor, less equipment
How much customer contact is typical in manufacturing vs services?
Manufacturing: Little
Services: Direct
What is the level of customer participation in manufacturing vs service?
Manufacturing: Generally none during production
Service: Frequent
How is performance measured in manufacturing vs service?
Manufacturing: Sophisticated methods
Service: Elementary methods
It is the process of planning, organizing, staffing, directing, and controlling resources to achieve organizational goals.
Management
Why is an organization considered a system?
All components should work together.
They should achieve a common goal.
It provides the organization’s basic sense of direction for its activities.
Goal
It is the basis of the organization, representing the reason for its existence.
Mission
It answers “What business are we in?”
Mission statement
What are the characteristics of a mission statement?
Broad, unique aim that distinguishes the org from others
Guides strategy formulation and decision-making
It is the means, plans, or programs for achieving the organizational objectives.
Strategy
It helps implements the organization’s mission.
Strategy
These are the specific methods and actions used to accomplish the strategies; “How to?”
Tactics
It is the actual doing of the strategy and tactics.
Operations
An organization devoted to producing goods and providing services.
Business organization
What are the basic functions of a business?
Production/operations
Marketing
Finance
Organization
What level of management is a supervisor vs manager?
Supervisor: Lower-level
Manager: Middle-level
What is the main role of a supervisor vs manager?
Supervisor: Oversees employees and regulates their work
Manager: Manages org resources
Who does a manager vs supervisor report to?
Supervisor: Manager
Manager: Board of directors
What is the main task of a supervisor vs manager?
Supervisor: To supervise people at work.
Manager: To manage the 5 M’s (men, money, materials, methods, machinery)
What are the 5 M’s of management?
Men
Money
Materials
Methods
Machinery
What does a supervisor vs manager look after?
Supervisor: Individual employees/a team
Manager: An entire unit/department
What is the focus of a supervisor vs manager?
Supervisor: People and their actions
Manager: People and things
Process of assigning resources in an economic way among different projects or business units.
resource allocation
What are the two basic questions in a Basic Allocation Decision?
Which activities/projects to fund
How munch funding to allocate
What is the goal of the Basic Allocation Decision?
To obtain the maximum from available resources while minimizing resource loss
A priority ranking of items excluded from the original plan, indicating what should be funded if additional funds become available.
contingency mechanism
An index that measures output relative to the input used to produce them
Productivity
What is the basic formula for productivity?
Productivity = Output/Input
A productivity measure based on a single input.
Partial productivity
A productivity measure based on a more than one inputs.
multi-factor productivity
A productivity measure based on all inputs.
Total productivity
What are the 3 types of productivity measures based on inputs?
partial
multifactor
total
Why are productivity measures useful?
track performance over time
judge performance of an industry
show how effectively an org uses resources
What are the factors that affect productivity?
Methods
Management
Capital
Quality
Technology
How to improve productivity?
Develop productivity measures for all operations.
Look at the system as a whole and identify critical operations.
Ask workers at all organizational levels for ideas on improving productivity.
Set reasonable improvement goals.
Management should clearly support and encourage productivity improvement.
Measure and publicize improvements.
Do not confuse productivity/effectiveness with efficiency.
Differentiate efficiency vs effectiveness.
Effectiveness means doing the right things—achieving the organization’s goals and desired results. Efficiency means doing things right—using the least amount of time, money, materials, and effort to achieve those goals.
Labor productivity formula
Output/Labor
Machine productivity formula
Output/Machine
Capital productivity formula
Output/capital
Energy productivity formula
Output/Energy
Multifactor productivity formula
Total Productivity formula.
A point of congestion in a production system that slows down or stops production.
bottleneck
When does a bottleneck in production occur?
When a resource has a less capacity than what is needed to meet demand
What are the effects of a bottleneck on production efficiency?
The stages before the bottleneck must slow down production.
The stages after the bottleneck must function below their capacity.
How to solve bottleneck problems?
Adjust the production level in the sequence where the bottleneck is happening
This determines the effective capacity of the overall production process.
Bottleneck
It measures how effectively an organization meets customer needs compared with competitors offering similar goods/services.
competitiveness
How do organizations compete?
Price
Quality
Product Differentiation – design, cost, quality, ease of use, convenience, warranty
Flexibility
Time
Special attributes or abilities possessed by an organization that give the org a competitive edge
Distinctive competitiveness