1. THE PURPOSE
OF PRODUCTION AND OPERATIONS MANAGEMENT
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THE PURPOSE OF PRODUCTION AND OPERATIONS MANAGEMENT
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Production/operations
management represents one of the key functions
in any manufacturing/non-manufacturing
organization.
The main purpose of Production And
Operations Management is to plan, organize,
direct, and control the process of bringing
together people, equipment, and materials to
manufacture products or provide services.
It is important,
therefore, that your company's managers pay
serious attention to these activities and develop,
implement, and maintain the Production And
Operations Management Process.
Moreover,
to remain competitive you and your management
team must become fully familiar with the prevailing
World Class Manufacturing and Operational
Guidelines and implement these guidelines
within your organization.
The term
"Production Management" has been
associated with various product manufacturing
activities for many years. A broader term
"Production And Operations Management"
has been popularized in recent decades and covers
manufacturing and non-manufacturing activities
alike. Since each term addresses similar management
issues, both are used together or interchangeably
throughout this program.
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2.
THE WORLD CLASS MANUFACTURING AND OPERATIONAL
GUIDELINES
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THE WORLD CLASS MANUFACTURING AND OPERATIONAL
GUIDELINES
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The evolution and development of the
World Class Manufacturing and Operational
Guidelines took place in the Western World
and Japan during the last decades. This development
has been based on the traditional manufacturing
methodologies and techniques introduced during
the last century, and implemented throughout
the world.
The development
of the world class manufacturing and
operational guidelines has been particularly
influenced by four methodologies, as illustrated
below. Each of these methodologies will be discussed
in detail later.
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THE WORLD CLASS MANUFACTURING AND OPERATIONAL METHODOLOGIES
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Total
Quality
Management
(TQM)
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KAIZEN
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Just-In-Time
Methodology
(JIT)
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Supply
Chain
Management
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3.
STEPS IN THE PRODUCTION AND OPERATIONS MANAGEMENT
PROCESS
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PRODUCTION
AND OPERATIONS MANAGEMENT
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The most important task of the production
or operations manager is to initiate the Production
And Operations Management Process within the
organization.
Planning
and control of the production and operations
management process entails
a number of steps, as outlined below.
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Note:
Familiarize yourself
with all relevant steps according to the nature of
your company's activities, as indicated below. (The
information in brackets indicates to which type
of business each step is applicable.):
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Manufacturing
- Merchandising - Service - Project - Contract.
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THE PRODUCTION AND OPERATIONS MANAGEMENT PROCESS
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Step
1: Examine Relevant Operational Activities.
(Manufacturing - Merchandising
- Service - Project - Contract)
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Step
2: Design, Select Location, Organize And
Maintain The Operational Facility. (Manufacturing
- Merchandising - Service - Project - Contract)
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Step
3: Establish And Maintain The Design Office.
(Manufacturing - Merchandising
- Service - Project - Contract)
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Step
4: Initiate And Maintain The Product Or
Service Selection, Design And Standardization
Processes. (Manufacturing
- Service)
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Step
5: Develop Cost-Effective Manufacturing
And Operational Methods And Processes.
(Manufacturing -
Service)
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Step
6: Evaluate And Select Suitable Plant,
Machinery, And Equipment.
(Manufacturing
- Merchandising - Service - Project - Contract)
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Step
7: Develop And Implement Cost-Effective
Plant Layout In The Operational Facility.
(Manufacturing - Merchandising
- Service - Project - Contract)
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Step
8: Develop And Implement Cost-Effective
Equipment Maintenance And Replacement Programs.
(Manufacturing - Merchandising
- Service - Project - Contract)
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Step
9: Develop And Implement Cost-Effective
Tool Planning And Control Systems.
(Manufacturing)
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Step
10: Develop And Implement Accurate Cost
Estimating Procedures. (Manufacturing
- Service - Project - Contract)
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Step
11: Develop And Implement Cost-Effective
Production Planning And Control Systems.
(Manufacturing)
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Step
12: Develop And Implement Cost-Effective
Material Requirements Planning (MRP) System.
(Manufacturing)
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Step
13: Develop And Implement A Supply Chain
And Material Management Program. (Manufacturing
- Merchandising - Service - Project - Contract)
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Step
14: Develop And Implement The Total Quality
Management (TQM) Program. (Manufacturing
- Merchandising - Service - Project - Contract)
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Step
15: Develop And Implement KAIZEN And
Just-In-Time Methodologies. (Manufacturing
- Merchandising - Service - Project - Contract)
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Step
16: Develop And Implement Cost-Effective
Service Planning And Control Systems.
(Service )
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Step
17: Develop And Implement Cost-Effective
Project And Contract Planning And Control
Systems.
( Project - Contract)
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4.
CLASSIFICATION OF OPERATIONAL ACTIVITIES
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CLASSIFICATION OF OPERATIONAL ACTIVITIES
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The production and operations management process
requires familiarization with various types
of operational activities. These activities
are generally classified into several types,
as illustrated below.
Classification Of Operational
Activities
is discussed in details later in Tutorial
4.
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THREE
MAIN TYPES OF OPERATIONAL ACTIVITIES
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Manufacturing
Activities
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Non-Manufacturing
Activities
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Projects
And Contracts
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MANUFACTURING
ACTIVITIES
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Manufacturing Activities entail
conversion of raw materials into finished
products by utilizing labor, equipment,
and plant in a production facility,
based on one of the three production
or operations methods.
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The
Job Shop
Method
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The Batch
Production
Method
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The Flow
Production
Method
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NON-MANUFACTURING
ACTIVITIES
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Non-Manufacturing
activities include two types of services,
namely custom or standard service, and
two types of merchandising operations,
namely wholesaling and retailing.
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Rendition
Of Custom
Or Standard Services
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Sale Of Merchandise
On A Wholesale
Or Retail Basis
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PROJECTS AND CONTRACTS
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Projects And Contracts
include a broad range of specialized
activities which may be undertaken by companies
for clients, or for their own purposes,
on an irregular basis.
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5.
FACILITY DESIGN, LOCATION, AND ORGANIZATION
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FACILITY DESIGN, LOCATION, AND ORGANIZATION
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Once a particular type of operations is
identified and selected, a suitable facility
needs to be designed, located, and organized.
Some of
the issues related to Facility Design,
Location, And Organization in various
types of companies are outlined below.
Management
needs to be familiar with various aspects
of facility design, location, and organization
to ensure an efficient overall performance
of their organization.
Facility Design,
Location, And Organization are
discussed in details later in Tutorial
4.
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ISSUES
RELATED TO FACILITY DESIGN, LOCATION,
AND ORGANIZATION
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No.
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Details
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1
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Facility
Design.
Facility design entails consideration
of a broad range of factors such
as present and future accommodation
needs, manufacturing or operational
requirements, budget limitations, and
time parameters.
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2
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Facility Selection.
The facility selection process is usually
based on such considerations as inter-company
integration; availability and cost of
labor, services, materials, and transportation;
expansion potential; cost of land; and
living conditions.
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3
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Facility
Organization.
The
process of facility organization entails
building a working structure and developing
an efficient framework for relationships
within the production or operations
department. This process also entails
assigning authority and allocating duties
and responsibilities to employees within
the production or operational facility
to ensure the most cost-effective accomplishment
of objectives. Additional details will
be provided later.
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6.
THE DESIGN OFFICE
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THE DESIGN OFFICE
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The design of products, services,
and processes represents an important
function within the Design Office
in many manufacturing companies.
A company's needs for a design office
will vary, depending upon the specific
nature of the organization's activities. Thus,
if a design office is required, management
must become familiar with various aspects
related to design office to ensure successful
performance of their organization.
Some of
the issues related to the design office
in various types of companies are outlined
below.
The
Design Office is discussed in
details later in Tutorial 4.
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ISSUES RELATED TO THE DESIGN OFFICE
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No.
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Details
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1
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The
Design Office Functions.
The design office is responsible for
the timely issue of all new and revised
drawings, or blueprints, related to
product and process design and modifications.
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2
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The
Design Office Employees.
The design office functions are normally
carried out by a team of designers or
design engineers, depending upon the
company's organizational structure.
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3
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The Design Office Competitiveness.
To remain competitive and successful
in meeting their objectives, the design
office employees must become familiar
with the existing world class manufacturing
and operational guidelines.
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4
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The
Design Office Effectiveness.
The effectiveness of the design office
depends substantially upon the use of
the modern computer aided design and
computer aided manufacturing (CAD-CAM)
technology which offers an increasing
number of computer software packages
for a broad range of engineering design
applications.
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5
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The
Design Office Working Procedures.
It is necessary to develop effective
working procedures within the design
office to meet various manufacturing
and operational requirements. This will
enable designers to develop and implement
new innovations in the area of product
and process design, production capacity
utilization, material handling equipment,
plant and machinery maintenance, and
overall production or operational facility
improvements.
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7.
PRODUCT AND SERVICE DESIGN AND STANDARDIZATION
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PRODUCT AND SERVICE SELECTION, DESIGN,
AND STANDARDIZATION
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Selection, design, and standardization
of products or services offered to customers
represents an important aspect of production
and operations management.
Company's
management, therefore, needs to become
familiar with various aspects of Product
And Service Selection, Design, And Standardization
to ensure their company's success. Some
of the issues related to the product and
service selection, design, and standardization
in various types of companies are outlined
below.
Product
And Service Design And Standardization
are discussed in
details later in Tutorial 4.
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ISSUES RELATED TO THE PRODUCT
AND SERVICE
SELECTION, DESIGN AND STANDARDIZATION
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No.
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Details
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1
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The
Product And Service Selection.
The product or service selection represents
the combined and continuous effort of
production or operations and marketing
executives. This process represents
the beginning of any effective product
and service design and development in
any organization.
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2
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The Product And Service Design.
The product design is usually
carried out by product designers in
the engineering design department and
involves several steps. These steps
generally include product conception,
feasibility study, preliminary design,
prototype construction and testing,
final design, and pre-production testing.
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3
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Equipment Used In The Product Design
Process.
The modern CAD-CAM technology and software
packages are widely used in the process
of the product design in accordance
with the world class manufacturing and
operational guidelines.
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4
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Product
Range Standardization.
Sound production management requires
continuous simplification and
standardization of the product range
to maximize overall operational efficiency.
This entails evaluating the existing
range of products with an objective
to reduce the number of different products
and their components to secure the most
cost-effective manufacturing methods.
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8.
PROCESS DESIGN
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PROCESS
DESIGN
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Selection, design, and standardization
of products and services are meaningless
without a comprehensive Process Design.
This issue is particularly important in
most manufacturing and some non-manufacturing
companies alike.
Thus, depending upon the nature of the
company, management should become familiar
with various aspects of process design
to ensure an efficient performance of
their organization. Some
of the main issues related to process
design in various types of companies are
outlined below.
Process
Design
is discussed in details later in Tutorial
4.
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MAIN
ISSUES RELATED TO PROCESS DESIGN
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No.
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Details
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1
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Process
Design Procedures.
Process
design includes a set of procedures
for manufacturing products or providing
services in a most cost-efficient manner.
Hence, one of the major responsibilities
of the production or operations manager
is to develop a specific range of manufacturing
or operational processes to satisfy
customers' needs.
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2
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Guidelines
For Process Design.
Manufacturing or operational processes
must be developed in accordance with
the world class manufacturing and operational
guidelines, which incorporate the traditional
elements of production and operations
management, coupled with Just -In-Time
Methodology, KAIZEN, Total Quality Management
(TQM), and Supply Chain Management .
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3
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Factors Influencing Process Design.
Process design requires consideration
of several important factors including
company financial resources, specific
design requirements, equipment and manpower
availability, and demand in the marketplace.
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4
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Importance Of Process Design.
Process design is particularly important
for manufacturing and service organization.
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9.
EQUIPMENT EVALUATION AND SELECTION
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EQUIPMENT EVALUATION AND SELECTION
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Without proper plant, machinery, and equipment
selected in accordance with the world
class manufacturing and operational guidelines
the company's chances of remaining competitive
in the existing environment are very slim.
Thus, Equipment Evaluation And Selection
represents another important function
of the production or operations manager. This
function is particularly important in
all manufacturing and some non-manufacturing
companies alike.
The
equipment evaluation and selection process
requires consideration of several factors,
as outlined below. The final selection
of equipment also demands comprehensive
evaluation of anticipated operating costs
associated with the utilization of equipment
in the production or operations department.
Equipment Evaluation
And Selection
is discussed
in details later in Tutorial 4.
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EQUIPMENT EVALUATION AND SELECTION FACTORS
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No.
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Details
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1
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Equipment
operational capacity.
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2
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Equipment
versatility.
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3
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Equipment
reliability.
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4
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Equipment
maintenance.
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5
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Equipment
safety.
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Equipment
compatibility.
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7
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Equipment
availability.
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Equipment
installation.
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Equipment
design.
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Auxiliary
equipment.
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Overall
effect on the organization.
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10.
PLANT LAYOUT
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PLANT LAYOUT
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Facility Layout,
or Plant Layout
* is designed to ensure effective
performance of plant, machinery and equipment
in the operational facility. Good
plant layout involves consideration of
several factors such as operational flexibility,
coordination, accessibility and visibility,
movement and handling of materials, employee
comfort, safety, and operational security.
The
development of the world class manufacturing
and operational guidelines helps to focus
the manufacturing and operational efforts
in maximizing the effectiveness of the
modern plant layout. Thus, depending
upon the specific technological requirements,
four different types of plant layout
may be selected, as illustrated below.
Each type of plant layout has its advantages
and disadvantages
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