PRODUCTION AND OPERATIONS MANAGEMENT

1.1	INTRO DUCTIO N

Production/operations management is the process, which combines and transforms various resources used in the production/operations subsystem of the organization into value added product/services in a controlled manner as per the policies of the organization. Therefore, it is that part of an organization, which is concerned with the transformation of a range of inputs into the required (products/services) having the requisite quality level.

The set of interrelated management activities, which are involved in manufacturing certain products, is called as production management. If the same concept is extended to services management, then the corresponding set of management activities is called as operations management.

1.2	HISTORICAL EVOLUTION OF PRODUCTION AND OPERATIONS MANAGEMENT

For over two centuries operations and production management has been recognised as an important factor in a country’s economic growth.

The traditional view of manufacturing management began in eighteenth century when Adam Smith recognised the economic benefits of specialisation of labour. He recommended breaking of jobs down into subtasks and recognises workers to specialised tasks in which they would become highly skilled and efficient. In the early twentieth century, F.W. Taylor implemented Smith’s theories and developed scientific management. From then till 1930, many techniques were developed prevailing the traditional view. Brief information about the contributions to manufacturing management is shown in the Table 1.1.

TABLE 1.1 Historical summary of operations management

Date	Contribution	Contributor
1776	Specialization of labour in manufacturing	Adam Smith
1799	Interchangeable parts, cost accounting	Eli Whitney and others
1832	Division of labour by skill; assignment of jobs by skill; basics of time study	Charles Babbage
1900	Scientific management time study and work study developed; dividing planning and doing of work	Frederick W. Taylor
1900	Motion of study of jobs	Frank B. Gilbreth
1901	Scheduling techniques for employees, machines jobs in manufacturing	Henry L. Gantt
1915	Economic lot sizes for inventory control	F.W. Harris
1927	Human relations; the Hawthorne studies	Elton Mayo
1931	Statistical inference applied to product quality: quality control charts	W.A. Shewart
1935	Statistical sampling applied to quality control: inspection sampling plans	H.F. Dodge & H.G. Roming
1940	Operations research applications in World War II	P.M. Blacker and others.
1946	Digital computer	John Mauchlly and J.P. Eckert
1947	Linear programming	G.B. Dantzig, Williams & others
1950	Mathematical programming, on-linear and stochastic processes	A. Charnes, W.W. Cooper & others
1951	Commercial digital computer: large-scale computations available.	Sperry Univac
1960	Organizational behaviour: continued study of people at work	L. Cummings, L. Porter
1970	Integrating operations into overall strategy and policy, Computer applications to manufacturing, Scheduling and control, Material requirement planning (MRP)	W. Skinner J. Orlicky and G. Wright
1980	Quality and productivity applications from Japan: robotics, CAD-CAM	W.E. Deming and J. Juran.

Production management becomes the acceptable term from 1930s to 1950s. As F.W. Taylor’s works become more widely known, managers developed techniques that focussed on economic efficiency in manufacturing. Workers were studied in great detail to eliminate wasteful efforts and achieve greater efficiency. At the same time, psychologists, socialists and

other social scientists began to study people and human behaviour in the working environment. In addition, economists, mathematicians, and computer socialists contributed newer, more sophisticated analytical approaches.

With the 1970s emerges two distinct changes in our views. The most obvious of these, reflected in the new name operations management was a shift in the service and manufacturing sectors of the economy. As service sector became more prominent, the change from ‘production’ to ‘operations’ emphasized the broadening of our field to service organizations. The second, more suitable change was the beginning of an emphasis on synthesis, rather than just analysis, in management practices.

1.3	CONCEPT OF PRODUCTION

Production function is that part of an organization, which is concerned with the transformation of a range of inputs into the required outputs (products) having the requisite quality level.

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.” Thus production is a value addition process. At each stage of processing, there will be value addition.

Edwood Buffa defines production as ‘a process by which goods and services are created’.
Some examples of production are: manufacturing custom-made products like, boilers with a
specific capacity, constructing flats, some structural fabrication works for selected customers,
etc., and manufacturing standardized products like, car, bus, motor cycle, radio, television, etc.

Fig. 1.1 Schematic production system

1.4	PRODUCTION SYSTEM

The production system of an organization is that part, 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 above.

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.