Elements Of Production And Operations Management Management

Essay add: 28-10-2015, 16:31   /   Views: 1 324

With a view to producing goods and services of right quality in right quantity at right time and at minimum cost, the Production and Operation Managers may have one or more of the following objectives for framing their managing strategy and policies:-

Efficiency to maximize the output for given input.

Productivity to maximize the production in relation to specified resources whether computed singly or in combination of such resources. For example, Labour Productivity may be maximized either by increasing production with the same labour or maintaining the same level of production with reduced labour.

Cost Reduction to reduce the cost of production which is directly related to the competitive strength of the company in market.

Quality to be a distinctive feature of a product for its uniqueness or general purpose utilisation with added reliability.

Quality to be a distinctive feature of a product for its uniqueness or general purpose utilisation with added reliability.

Reduction in Processing Time to reduce the throughput time for processing or the lead time between placement of order by a customer and actual delivery of goods or services.

Elements of Production and Operations Management

The business of conversion process may be divided into three prominent phases namely planning, organizing and controlling. These phases are not compartmentalised but are overlapping onto each other. Each of these phases involves several actions which are depicted in the model at Fig.1.1 and discussed in varying detail in subsequent chapters.

The managerial activities in any business unit are commonly termed as planning, organizing, staffing, decision making, motivating, leading, directing, coordinating, communicating, controlling and so on. Several authors and management thinkers have grouped these activities is different ways and produced different set of lists. Harold Koontz and team detailed these as planning, organizing, staffing, leading and controlling. Some argued that organizing and staffing cold be just one function. Others feel directing is more appropriate a term than leading in business situations and the former should include the latter. Another school thinks coordinating and communicating should be considered as different functions. Indeed these groupings may be varied according the predominance of activities in different types of organizations.

Planning in any business is the most crucial activity. When it is related to productions and operations of goods and services, it has to be elaborate and in great details. It should be based on best planning premises and all possible tolls and techniques should be applied to work out the best plan. All aspects of production and operations must be covered in the planning. When planning is carried out meticulously, the implementation or conduct of operations and control of activities becomes easier. Therefore various related aspects of planning are organized in different chapters.


Planning involves commitment of resources. Once committed the resources loose the flexibility of their redeployment and the navigational management becomes restricted. If planning based on incorrect premises or inadequate data has been followed up with development of infrastructure, procurement and installation of machinery contracting for services to build up the production system for proposed goods and services, there may be very few options to undo those commitments. The enterprise may run into a serious problem.

Objective of Planning

Planning should result into the following:-

Identification of Product to be offered its design and distinctive features from the products already existing in the market.

Selection of the Process and Technology to be used for production.

Location and Layout of Plant and facilities where goods and services should be produced.

Material Handling Equipment (MHE) to be used.

Capacity of the Plan to be installed.

Forecasting of demand or sales.

Production planning to include procurement of material, sequencing of machine operations, scheduling of activities and outline organization/control systems.

Logistics Details along with warehousing and distribution system.

Basic Stage of Planning

The entrepreneur plans to achieve the objectives of planning through two distinct stages:

Strategic Planning to identify the purpose of business, product and process design, selection of plant and its layout.

Detailed Planning for the use of the conversion process.

Strategic Planning

Strategic planning is thinking thorough the current mission of the organization and environmental conditions facing it and then setting forth a guide for future decisions and results. The strategic planning involves systematic assessment of environment, mission, and position of the proposed enterprise, which should result into several strategic options. Various factors to be considered during the strategic planning are shown in Fig.1.2 Strategic Planning for Operations.

After several viable options have been identified, their critical analysis should be carried out to identify the best strategic plan which will form the basis for issue of policy for further detailed planning.

An analytical model of the corporate planning process is shown in Fig.1.3. as this plan is reiterative, its sequences or cycles are to be repeated several times till a final feasible plan is identified.

The strategic planning will result into identification of products or product groups, processing technologies, capacity, locations and layouts of facilities and creation of infrastructure.

Detailed Planning for Operations

Planning for operations involves going into more details. These will include forecasting of demand, matching the demand with the capacity available, identifying additional capacity or running existing capacity to the extent it is required to meet the demand. An aggregate planning for production over next one to two years is also carried out. That helps in planning for procurement of raw material or industrial goods, details of organizations to be raised and scheduling and sequencing of activities which will result into the final product.

Total quality control (TQC)

The underlying principle of TQC is to produce high quality goods in the first place rather than rejecting defective products later in the inspection. It involves following:

Top management involvement.

Quality Control Training for everyone.

Robust product/service for everyone.

High quality raw materials from suppliers.

Control in production.

Quality Control is distribution, installation and use.

Deming's 14 Points

W. Edwards Deming (Father of Quality Control in Japan) emphasized that high quality means lower costs and professed the following points to managers.


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