Programme 1 -

Concepts of Production
Management

Prof. B.V.N Sachendra

Xavier Vignana Jyothi Institute of Management
 Significance of Production
Management

 Recent times proved to be more

challenging
Outdated Technology

Underdeveloped Infrastructure

Inappropriate Payment Systems

Ineffective Scheduling and control

In India, because of L,P and G
 Foreign competitors are threatening our
industries
 In addition, society is becoming more
educated and affluent
 Production managers have to modify their
methodologies regularly
 PM Defined
PM is management of direct resources
that are required to produce the goods and
services provided by an organization.
Production Management is the planning,
direction and control of the transformation
process of a system so that the system
adds value to the product in a manner that
is both effective and efficient.
Origins of Production Management
Industrial
Engineering

Business Operations Management

Manufacturing Theories Research Science

Production
Management

Service P/OM
Operations or
Management POM
 Overview of Production
Management Model
Input: resources
raw materials
Output
machines
Transformation
personnel
Process Products
capital
land/buildings
utilities
information
etc.

Control
The Production Management System
The Production Management System

Inputs
• Workers
• Managers
• Equipment
• Facilities
• Materials
• Services
• Land
• Energy
The Production Management System

Inputs
• Workers Operations and
• Managers processes
• Equipment
• Facilities 1 3
• Materials 5
• Services
• Land 2 4
• Energy
The Production Management System

Inputs
• Workers Operations and
• Managers processes
• Equipment Outputs
• Facilities 1 3 • Products
• Materials 5
• Services
• Land 2 4
• Energy
The Production Management System
External environment

Customer or client
participation

Inputs
• Workers Operations and
• Managers processes
• Equipment Outputs
• Facilities 1 3 • Products
• Materials 5
• Services
• Land 2 4
• Energy
The Production Management System
External environment

Customer or client
participation

Inputs
• Workers Operations and
• Managers processes
• Equipment Outputs
• Facilities 1 3 • Goods
• Materials 5
• Services
• Land 2 4
• Energy

Information on
performance
Production Management as a Function

Viewed as an internal function from

the external environment by other
organizational functions.
Production Management As a Function
Production Management As a Function
Skill Areas
• Quantitative
methods
• Organizational
Behaviour
• General Management
• Information systems
• Economics
• International
business
• Business ethics
and law
Evolution of Production Management

Is it from 1770s?
 Milestones

1. Scientific Management
2. Moving Assembly Line
3. Hawthorne Studies
4. Operations Research
5. Production Management
1. Scientific Management
According to this concept,
Scientific rules govern the
productivity rate of a worker.

It is the function of the management

to study these laws in their
operations
 Approach

2. Each worker was placed in a suitable

job by his skill, strength and learning
ability.

2. Standard output per worker was set.

3. Work methods and work flows were

standardized.
4. Supervision was improved through
better recruitment and training.

5. Incentive pay systems were introduced

to motivate workers.
2. Moving Assembly Line
Introduced by Henry Ford in 1917.

Hallmarks:
Standardized product designs
Mechanized assembly lines
Specialized labor
Interchangeable parts
Each worker performs the same
unit of work as the chassis moves
mechanically.

Assembling time was brought

down from 12.5 hours to 93
minutes
 Hawthorne Studies
Mathematical tools were dominating till
1920s
Research team from Harvard headed by
Elton Mayo conducted studies in
Western Electric plant at Hawthorne.
Study was on the relationship between
light intensity and worker productivity
Results were confusing
 Operations Research
Outbreak of World War II
Many European countries and US
introduced OR teams into their military
branches
These teams formulated complex
mathematical tools to solve more
complex problems in a simple way.
After WW, OR was applied in industry.
Many universities included OR in their
curriculum
 Production Management
A functional area that enhances
productivity and ensures quality.
Uses sophisticated tools like
CAD
CAM
FMS
AI
Reprogrammable Machines
Advantages of PM

1. Lesser variable costs (office,

clerical, maintenance, etc.
2. High flexibility
3. Fast Delivery
4. Good Quality
5. Avoids repetitive, hazardous, and
unpleasant works.
 Types of Production Systems

1. Product-focussed Production System

2. Process-focussed Production System

3. Group Technology / Cellular
Manufacturing
Product-focussed Production System
Organized according to the type of
product / service.
All the operations are grouped into one
department.

Also known as line flow production

system or continuous production
system.
 In this type of process design, products
or services tend to flow along direct
linear paths without backtracking or
sidetracking.
 The production system being followed
by AGI Glaspac for manufacture of the
three colours of glasses is majorly
Product focussed.

 Services delivered by waiters in

catering system make use of this.
Advantages
Reduced unit costs
High volumes of production
Low Labor skill requirements
Reduced worker training
Reduced supervision
Ease of planning and control
Disadvantages
High investments
Low flexibility
Applicable in food, brewing, chemicals,
petroleum refining, petrochemicals,
plastics, container glass, paper and
cement industries.
Services can also use this system.
Ex: Cafeterias and car washing facilities
Process-focussed Production System

All the operations are grouped

according to the type of processes -----
all production processes that have
similar technological processes are
grouped together.

Products do not follow continuous or

linear routes.
 This system is also referred to as
intermittent production system.
 One can see this type of a system when
we go to a workshop where all lathes
are grouped together and so on.
 This system is generally used to
produce small quantities (or batches) of
different items on relatively general
purpose machinery.
 Processing equipment and personnel
are located according to the functions
and products flow through the facilities
on regular paths.
 This system allows both side-tracking
and back-tracking in the product flow
rate.
Highly irregular, stop and go, zigzag
routes with side tracking and back
tracking
Same dept may have to handle several
different tasks simultaneously

If the capacity is insufficient, jobs have

to wait.
Advantages
Enhanced flexibility
Less initial investment
Use of general purpose equipment

Disadvantages
Greater employee skill
More employee training
More complex PPC
Used in hospitals, automobile repair
shops and so on.
 Group Technology Cellular Layout

 First studied and implemented in USSR in

1940s.
 Each product manufactured is given a
unique code.
 Code is usually multi-digital, each digit
representing a physical characteristic of the
part.
 Products with similar characteristics can be
grouped into families.
Product focussed and process focussed
production systems represent two types
of traditional approaches for organising
production activities. But, many
organisations use blends and hybrids of
these two approaches.
 Process Mapping
 The study of the flow of processes.
 Identification of waste.
 Consideration of whether the process can
be rearranged in a more efficient sequence.
 Consideration of whether everything that is
being done at each stage is really
necessary.
 Analysing what would happen if superfluous
tasks are removed.
 Homework
 Do process mapping for your own
organisation / department / work place and
be prepared to make a presentation next
week at 3pm.