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Production and Operations

Management (POM):

An Introduction

1

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Introduction

Historical Milestones in POM Factors Affecting POM Today

Different Ways of Studying POM

Wrap-Up: What World-Class Producers Do

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Production and operationsmanagement (POM) is themanagement of anorganizations productionsystem.

A production system takes

inputs and converts theminto outputs.

The conversion process is thepredominant activity of a

production system.The primary concern of anoperations manager is theactivities of the conversion

process. Manufacturing PatioFurniture b Dr. Stra .m 4

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Operations management decisions, processes and issues thatinvolve the creation of tangible goods are called productionmanagement or manufacturing,

Those involving the creation of intangible services are calledservice operations management

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Involves transforming rawmaterials and component parts

into finished or semi-finishedgoods with the aid of capital,labour and technology

The Making of The FiberglassChair.mp4

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Marketing

MISEngineering

HRM

QA

Accounting

Sales

Finance

OM

ORGANIZATIONAL MODEL

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Facilities

Production &

Inventory ontrol

Quality Assurance& Control

Procurement

Engineering Design

Industrial Engineering

Process Engineering

Operations

Disbursements

& Credits

Funds Management

Capital Requirements

Finance/Accounting

Sales Promotion

Advertising

Sales

Market Research

Marketing

Manufacturing Organization

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The Industrial Revolution

Post-Civil War Period

Scientific Management

Human Relations and Behaviorism

Operations Research

The Service Revolution

ASAmbienti.com - Mobili dipinti - Italian ArtFurniture - ITALIAN FURNITURE PAINT.mp4

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The industrial revolution developed in England in the1700s.

The steam engine, invented by James Watt in 1764,

largely replaced human and water power forfactories.

Adam Smiths The Wealth of Nations in 1776 touted theeconomic benefits of the specialization of labor.

Thus the late-1700s factories had not only machinepower but also ways of planning and controlling thetasks of workers.

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The industrial revolution spread from England toother European countries and to the United Sates.

In 1790 an American, Eli Whitney, developed theconcept of interchangeable parts.

The first great industry in the U.S. was the textileindustry.

In the 1800s the development of the gasolineengine and electricity further advanced therevolution.

By the mid-1800s, the old cottage system ofproduction had been replaced by the factorysystem.

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During the post-Civil War period greatexpansion of production capacity occurred.

By post-Civil War the following

developments set the stage for the greatproduction explosion of the 20th century:

Increased capital and production capacity

The expanded urban workforce

New western U.S. Markets

An effective national transportation system

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Frederick Taylor is known as the father ofscientific management. His shop systememployed these steps: Each workers skill, strength, and learning ability

were determined. Stopwatch studies were conducted to precisely set

standard output per worker on each task. Material specifications, work methods, and routing

sequences were used to organize the shop.

Supervisors were carefully selected and trained. Incentive pay systems were initiated.

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In the 1920s, ford motor companysoperation embodied the key elements ofscientific management:

Standardized product designs Mass production

Low manufacturing costs

Mechanized assembly lines

Specialization of labor

Interchangeable parts

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In the 1927-1932 period, researchers in theHawthorne Studies realized that humanfactors were affecting production.

Researchers and managers alike wererecognizing that psychological andsociological factors affected production.

From the work of behavioralists came a

gradual change in the way managersthought about and treated workers.

Taylorisme(II).mp4

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During World War II, enormous quantities ofresources (personnel, supplies, equipment, ) hadto be deployed.

Military operations research (OR) teams were

formed to deal with the complexity of thedeployment.

After the war, operations researchers found theirway back to universities, industry, government, and

consulting firms. OR helps operations managers make decisions when

problems are complex and wrong decisions arecostly.

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The creation of services organizationsaccelerated sharply after World War II.

Today, more than two-thirds of the workforce

is employed in services. About two-thirds of GDP is from services.

There is a huge trade surplus in services.

Investment per office worker now exceeds the

investment per factory worker. Thus there is a growing need for service

operations management.

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Global Competition

Quality, Customer Service, and CostChallenges

Computers and Advanced ProductionTechnology

Growth of U.S. Service Sector

Scarcity of Production Resources Issues of Social Responsibility

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Production as a System Production as an Organization Function

Decision Making in POM

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Inputs Outputs

Conversion

Subsystem

Production System

Control

Subsystem

Operations as a System

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External

Legal, Economic, Social, Technological Market

Competition, Customer Desires, Product Info.

Primary Resources

Materials, Personnel, Capital, Utilities

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Physical (Manufacturing)

Locational Services (Transportation)

Exchange Services (Retailing) Storage Services (Warehousing)

Other Private Services (Insurance)

Government Services (Federal, State,Local)

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Direct

Products

Services

Indirect Waste

Pollution

Technological Advances

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Companies cannot compete using marketing,finance, accounting, and engineering alone.

We focus on POM as we think of global

competitiveness, because that is where the vastmajority of a firms workers, capital assets, andexpenses reside.

To succeed, a firm must have a strongoperations function teaming with the otherorganization functions.

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Strategic Decisions

Operating Decisions

Control Decisions

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These decisions are of strategic importance andhave long-term significance for theorganization.

Examples include deciding: The design for a new products production process

Where to locate a new factory

Whether to launch a new-product development plan

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These decisions are necessary if the ongoingproduction of goods and services is to satisfymarket demands and provide profits.

Examples include deciding: How much finished-goods inventory to carry

The amount of overtime to use next week

The details for purchasing raw material next month

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These decisions concern the day-to-dayactivities of workers, quality of products andservices, production and overhead costs, and

machine maintenance. Examples include deciding:

Labor cost standards for a new product

Frequency of preventive maintenance

New quality control acceptance criteria

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Information about the outputs, the conversions,and the inputs is fed back to management.

This information is matched with

managements expectations When there is a difference, management must

take corrective action to maintain control ofthe system

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POM important in any organization

Global competition forces rapid evolution ofPOM

Decision based framework focus of course Strategic, Operating, and Control

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Purchasing planner/buyer

Production (or operations) supervisor

Production (or operations)

scheduler/controller Production (or operations) analyst

Inventory analyst

Quality specialist Furniture Manufacturing Process.mp4

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