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Production: Basic activity for all industrial unitProduction:- process by which raw material & otherinputs are converted into finished productsProduction = ManufacturingProduction refers process of producing onlytangible goodsMfg. refers process of producing both tangible &intangible G&S ( Goods & services)
Operations mgmt.:-A system where inputs aretransferred into intangible services. It is of Recentorigin.
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Production and operations management(POM) is the management of an organizationsproduction system.
A production system takes inputs and converts
them into outputs. The conversion process is the predominant
activity of a production system.
The primary concern of an operations manageris the activities of the conversion process.
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Production management is the process ofplanning, organizing, directing andcontrolling the activities of the production
function. Production function is theconversion of raw- materials into finishedproducts.
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Production management is concerned with thoseprocesses which convert the inputs into outputs.The inputs are various resources like raw-
materials, men, machines, methods etc. and theoutputs are goods and services.
H.A. HARDING
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Production as a System
Production as an OrganizationFunction
Decision Making in POM
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Inputs Outputs
Conversion
Subsystem
Production System
Control
Subsystem
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External
Legal, Economic, Social, Technological
Market
Competition, Customer Desires, ProductInfo.
Primary Resources
Materials, Personnel, Capital, Utilities
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Physical (Manufacturing/ mining) Locational Services (Transportation)
Exchange Services (Retailing)
Storage Services (Warehousing) Other Private Services (Insurance,
Finance, Utilities, Real Estate, Health
etc.) Government Services (State, Local)
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Direct
Products
Services
IndirectWaste
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 strong
operations function teaming with the otherorganization functions.
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POM
Marketing
MISEngineering
HRM
QA
Accounting
SalesFinance
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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
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The industrial revolution developed in England
in the 1700s. The steam engine, invented by James Watt in
1764, largely replaced human and water power
for factories.Adam Smiths The Wealth of Nations in 1776
touted the economic benefits of thespecialization of labor.
Thus the late-1700s factories had not onlymachine power but also ways of planning andcontrolling the tasks of workers.
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The industrial revolution spread from England
to other European countries and to the UnitedSates.
In the 1800s the development of the gasolineengine and electricity further advanced the
revolution. By the mid-1800s, the old cottage system of
production had been replaced by the factorysystem.
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During the post-Civil War period great
expansion of production capacity occurred.
By post-Civil War the following developmentsset the stage for the great production explosion
of the 20th century: increased capital and production capacity
the expanded urban workforce
an effective transportation system
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Frederick Taylor is known as the father of scientificmanagement. His shop system employed these steps:
Each workers skill, strength, and learning abilitywere determined.
Stopwatch studies were conducted to precisely setstandard output per worker on each task.
Material specifications, work methods, and routingsequences were used to organize the shop.
Supervisors were carefully selected and trained.
Incentive pay systems were initiated.
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Human relations refers to the ways in whichmanagers interact with their employees
In the 1927-1932 period, researchers in theHawthorne Studies realized that human factorswere affecting production.
Researchers and managers alike were
recognizing that psychological and sociologicalfactors affected production.
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Quantitative decision making technique
Computers are used extensively
During World War, enormous quantities of
resources (personnel, supplies, equipment, ) hadto be deployed.
Military operations research (OR) teams wereformed to deal with the complexity of thedeployment.
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After the war, operations researchers found theirway back to universities, industry, government,and consulting firms.
OR helps operations managers make decisionswhen problems are complex and wrong decisionsare costly.
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The creation of services organizations acceleratedin 20th century.
About 49.9% GDP is from services in 2005
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 Cost Challenges
Computers and Advanced Production Technology
Growth of Service Sector Scarcity of Production Resources
Corporate Social Responsibility
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