Production and operation Management Notes

Module 1
Introduction to Production and Operations Management
1. Meaning of Production and Operations:
- Production refers to the process of converting raw materials or inputs into finished goods or
services, while operations encompass the broader set of activities involved in managing these
processes efficiently.
- Production focuses on the creation of goods, whereas operations involve the entire process from
design to delivery of goods or services.

2. Differences between Production and Operations Management:

- Production management primarily deals with the creation of goods, including planning,
organizing, and controlling the manufacturing process.
- Operations management, on the other hand, extends beyond production to encompass broader
aspects such as supply chain management, quality control, and customer service.

3. Scope of Production Management:

- Involves planning, organizing, directing, and controlling the production process to ensure
efficiency and effectiveness.
- Encompasses resource allocation, scheduling, inventory management, quality control, and
maintenance.

4. Production System:
- Refers to the combination of resources, facilities, processes, and technology used to produce goods
or services.
- Includes inputs (raw materials, labor, capital), processes (manufacturing, assembly, packaging),
and outputs (finished products).

5. Types of Production:
- Job production: Customized products made to order, often involving skilled labor and high
flexibility.
- Batch production: Producing goods in batches, allowing for economies of scale and standardized
processes.
- Mass production: Large-scale production of standardized goods using assembly lines and
automation.
- Continuous production: Non-stop production of goods with minimal interruptions, often used in
industries like chemicals or utilities.
6. Benefits of Production Management:
- Increased efficiency and productivity.
- Cost reduction through optimization of resources.
- Improved quality control and consistency.
- Better customer satisfaction and competitive advantage.

7. Responsibility of a Production Manager:

- Planning production schedules and workflows.
- Managing resources effectively.
- Ensuring quality control and adherence to standards.
- Problem-solving and troubleshooting issues in production processes.

8. Decisions of Production Management:

- Capacity planning: Determining the optimal level of production capacity.
- Facility layout: Designing the layout of production facilities for efficient workflow.
- Inventory management: Balancing inventory levels to meet demand while minimizing costs.
- Quality management: Implementing processes to ensure product quality and reliability.

9. Operations Management: Concept and Functions:

- Operations management involves overseeing the entire process of transforming inputs into outputs
efficiently.
- Functions include forecasting demand, capacity planning, scheduling, quality management,
inventory control, and supply chain management.
- Aimed at maximizing efficiency, reducing costs, and meeting customer demand effectively.

Module 2
Plant Location and layout
Meaning and Definition of Location:
- Location refers to the geographical placement of a facility or business.
- It is a critical decision that can significantly impact the success and efficiency of operations.
- The choice of location is influenced by various factors, including market demand, proximity to
suppliers and customers, labor availability, infrastructure, and government regulations.
Factors Affecting Location:
1. Market Proximity: Access to target markets and customers.
2. Availability of Resources: Availability of raw materials, labor, and utilities.
3. Transportation: Accessibility to transportation networks like highways, ports, and airports.
4. Labor Supply: Availability of skilled and unskilled labor in the vicinity.
5. Infrastructure: Quality of infrastructure such as power supply, water, and telecommunications.
6. Government Regulations: Tax incentives, zoning laws, and regulatory requirements.
7. Competition: Presence of competitors and market dynamics in the area.

Theory and Practices in Location Selection:

- Location theories such as Weber's theory of industrial location and von Thünen's model of
agricultural land use provide frameworks for understanding location decisions.
- Practices involve market research, site evaluation, cost-benefit analysis, and consideration of long-
term strategic objectives.

Cost Factor in Location:

- Cost considerations include land acquisition costs, construction costs, labor costs, taxes, and
operating expenses.
- The goal is to minimize total costs while maximizing efficiency and profitability.

Plant Layout Principles:

- Plant layout refers to the arrangement of machines, equipment, and workspaces within a facility.
- Principles include:
1. Flexibility: Layout should accommodate changes in production processes and technology.
2. Flow of Material: Minimize material handling and transportation distances.
3. Space Utilization: Efficient use of available space to optimize productivity.
4. Safety: Ensure a safe working environment for employees.
5. Accessibility: Easy access to machinery and workstations.
6. Ergonomics: Design layout to minimize physical strain on workers.

Space Requirement:
- Determined by production volume, equipment size, storage needs, and workflow patterns.
- Adequate space allocation is essential to ensure smooth operations and employee comfort.

Different Types of Facilities:

1. Manufacturing Facilities: Production plants for goods manufacturing.
2. Warehousing Facilities: Storage facilities for raw materials, work-in-progress, and finished goods.
3. Office Facilities: Administrative offices for management and support functions.
4. Retail Facilities: Stores or outlets for selling products directly to consumers.
5. Service Facilities: Facilities providing various services such as healthcare, education, or
entertainment.

Organization of Physical Facilities:

- Involves arranging physical facilities to optimize workflow and efficiency.
- Considerations include building layout, zoning, material flow, and integration of support services.

Building, Sanitation, Lighting, Air Conditioning, and Safety:

- Buildings should be constructed to meet functional requirements and comply with safety regulations.
- Sanitation facilities are essential to maintain hygiene standards.
- Adequate lighting and ventilation enhance productivity and employee well-being.
- Air conditioning ensures a comfortable working environment, especially in hot climates.
- Safety measures such as fire exits, emergency procedures, and protective equipment are critical to
prevent accidents and ensure employee safety.

Module 3
Production Planning and Control
Meaning and Definition: Characteristics of Production Planning and Control:
- Production Planning and Control (PPC) is the process of coordinating and managing manufacturing
processes to ensure smooth operations and efficient utilization of resources.
- Characteristics include:
1. Coordination: Integrates various production activities to achieve organizational goals.
2. Control: Monitors and adjusts production processes to maintain desired standards and efficiency.
 3. Optimization: Aims to minimize costs, reduce lead times, and maximize productivity.
4. Forecasting: Involves predicting future demand and planning production accordingly.
5. Flexibility: Adapts to changes in demand, resource availability, and market conditions.

Objectives of Production Planning and Control:

- Ensure efficient utilization of resources.
- Minimize production costs and lead times.
- Meet customer demand with high-quality products.
- Optimize inventory levels to balance supply and demand.
- Improve productivity and profitability.

Stages of Production Planning and Control:

1. Forecasting: Predicting future demand based on historical data, market trends, and other factors.
2. Master Production Scheduling (MPS): Creating a detailed plan for production activities based on
demand forecasts, resource availability, and capacity constraints.
3. Material Requirement Planning (MRP): Determining the materials needed for production and
scheduling their procurement or production.
4. Shop Floor Control: Monitoring and managing production activities in real-time to ensure
adherence to schedules and quality standards.
5. Feedback and Improvement: Collecting data on performance, identifying areas for improvement,
and implementing corrective actions.

Scope of Production Planning & Control:

- Encompasses all activities related to planning, scheduling, coordination, and control of production
processes.
- Includes forecasting, capacity planning, inventory management, production scheduling, and quality
control.

Factors Affecting Production Planning and Control:

1. Demand Variability: Fluctuations in demand can impact production schedules and resource
allocation.
2. Resource Availability: Availability of labor, materials, equipment, and facilities.
3. Lead Times: Time required to procure materials, set up machines, and complete production
processes.
4. Technology: Adoption of advanced manufacturing technologies can affect production processes and
resource requirements.
5. Market Conditions: Competitive pressures, customer preferences, and market trends influence
production planning decisions.
6. Regulatory Requirements: Compliance with regulations and standards may impact production
processes and scheduling.

Production Planning System:

- Involves the use of software and systems to automate production planning and scheduling activities.
- Examples include Enterprise Resource Planning (ERP) systems, Manufacturing Execution Systems
(MES), and Advanced Planning and Scheduling (APS) software.

Process Planning in Manufacturing:

- Involves determining the sequence of operations and methods for producing products.
- Considers factors such as material properties, production volumes, equipment capabilities, and
quality requirements.

Planning and Control System:

- Integrates production planning with control mechanisms to ensure that plans are executed
effectively.
- Involves setting performance targets, monitoring progress, and taking corrective actions as needed.

Role of Production Planning and Control in Manufacturing Industry:

- Essential for optimizing resource utilization, reducing costs, and meeting customer demands.
- Facilitates efficient workflow, timely delivery, and consistent product quality.
- Helps in coordinating various departments and functions within the organization to achieve common
goals.

Module 4
Inventory Management

Concepts:
- Inventory management involves overseeing the flow of goods into and out of a company's inventory.
- It includes the processes of ordering, storing, tracking, and controlling inventory items to meet
customer demand while minimizing costs.
Classification:
- Inventories can be classified based on various criteria such as function, stage in the production
process, and demand variability.
- Common classifications include raw materials, work-in-progress, finished goods, and maintenance,
repair, and operating (MRO) supplies.

Objectives:
- Ensure adequate stock levels to meet customer demand.
- Minimize holding costs associated with excess inventory.
- Prevent stockouts and disruptions in production or customer service.
- Optimize inventory turnover and working capital utilization.

Factors Affecting Inventory Control Policy:

1. Demand Variability: Fluctuations in demand influence inventory stocking levels and reorder
policies.
2. Lead Time: The time between placing an order and receiving it affects reorder point calculations.
3. Holding Costs: Costs associated with storing inventory, including storage space, insurance, and
obsolescence.
4. Ordering Costs: Costs related to placing and processing orders, such as order processing fees and
transportation costs.
5. Stockout Costs: Costs incurred when demand exceeds available inventory, such as lost sales and
customer dissatisfaction.

Inventory Costs:
- Inventory costs include holding costs, ordering costs, and stockout costs.
- Holding costs encompass expenses associated with storing and maintaining inventory, such as
storage space, insurance, and obsolescence.
- Ordering costs include expenses related to placing and processing orders, such as order processing
fees and transportation costs.
- Stockout costs refer to the costs incurred when demand exceeds available inventory, such as lost
sales and customer dissatisfaction.

Re-order Level:
- The reorder level is the inventory level at which a new order should be placed to replenish stock
before it reaches zero.
- It is calculated based on the lead time demand and safety stock level to ensure continuity of supply
during lead time.

ABC Analysis:
- ABC analysis categorizes inventory items into three categories based on their value and importance.
- Category A items are high-value items that represent a significant portion of inventory value but a
small percentage of total items.
- Category B items are moderate-value items with moderate importance.
- Category C items are low-value items with minimal importance but often represent a large
percentage of total items.

Quality Concepts:
- Quality management focuses on meeting customer requirements and achieving excellence in
products and services.
- Key concepts include customer satisfaction, continuous improvement, and defect prevention.

Difference between Inspections, Quality Control, Quality Assurance, Total Quality Management:
- Inspections involve examining products or processes to identify defects or deviations from
standards.
- Quality control involves monitoring and controlling processes to ensure products meet quality
standards.
- Quality assurance involves implementing systems and processes to prevent defects and ensure
consistent quality.
- Total Quality Management (TQM) is a holistic approach to quality management that involves all
employees and departments in continuous improvement efforts.

Control Charts:
- Control charts are graphical tools used to monitor and control process variability over time.
- They plot data points such as measurements or defect counts against control limits to identify trends,
patterns, and deviations from the mean.

Acceptance Sampling:
- Acceptance sampling is a statistical technique used to inspect a sample of products from a larger
batch to determine whether the entire batch should be accepted or rejected.
- It involves setting acceptance criteria and sampling plans based on acceptable levels of quality and
risk.
 Module 5
Maintenance and Waste Management
Introduction:
Maintenance is the process of preserving, restoring, or enhancing the condition and performance of
equipment, facilities, or systems to ensure their continued functionality and longevity. It encompasses
various activities aimed at preventing breakdowns, minimizing downtime, and optimizing resource
utilization.

Meaning:
Maintenance involves activities undertaken to keep equipment, facilities, or systems in optimal
operating condition, including inspection, repair, replacement, and preventive measures.
Objectives:
1. Minimize Downtime: Ensure uninterrupted operation by preventing breakdowns and addressing
issues promptly.
2. Maximize Asset Lifespan: Extend the life of equipment and facilities through proper care and
maintenance.
3. Optimize Performance: Maintain equipment at peak efficiency to enhance productivity and quality.
4. Ensure Safety: Identify and mitigate risks to personnel, property, and the environment through
regular maintenance.
5. Control Costs:Manage maintenance expenses by prioritizing activities and optimizing resource
allocation.

Types of Maintenance:
1. Breakdown Maintenance: Reactive maintenance performed after equipment failure to restore
functionality.
2. Preventive Maintenance: Scheduled maintenance tasks performed at regular intervals to prevent
breakdowns and prolong asset life.
3. Predictive Maintenance: Uses data and analytics to predict equipment failures and schedule
maintenance proactively.
4. Corrective Maintenance: Rectifies identified issues or defects to restore equipment to its intended
condition.
5. Proactive Maintenance:Focuses on identifying and addressing potential issues before they escalate
into failures.

Spares Planning and Control:

Involves managing spare parts inventory to ensure availability when needed while minimizing
carrying costs and obsolescence.

Preventive Routine:
Regularly scheduled maintenance tasks performed to prevent equipment degradation, including
inspections, lubrication, and adjustments.

Relative Advantages:
1. Breakdown Maintenance: Simple and cost-effective for low-priority or non-critical equipment.
2. Preventive Maintenance: Reduces downtime, extends equipment life, and prevents costly repairs.
3. Predictive Maintenance: Minimizes unexpected failures and optimizes maintenance schedules
based on actual condition data.
4. Proactive Maintenance: Identifies and addresses underlying issues to prevent future failures and
improve reliability.

Maintenance Scheduling:
Determining the timing and frequency of maintenance activities based on equipment criticality,
operational needs, and resource availability.

Equipment Reliability:
The ability of equipment to perform its intended function under specified conditions for a defined
period without failure.

Modern Scientific Maintenance Methods:

1. Condition-Based Maintenance (CBM): Uses real-time monitoring and diagnostics to schedule
maintenance based on equipment condition.
2. Reliability-Centered Maintenance (RCM): Identifies failure modes and selects maintenance
strategies to maximize reliability and minimize risk.
3. Total Productive Maintenance (TPM): Involves all employees in equipment maintenance and
focuses on maximizing overall equipment effectiveness (OEE).
4. Computerized Maintenance Management Systems (CMMS):Software platforms for managing
maintenance activities, work orders, and asset information.

Scrap and Surplus Disposal:

Proper disposal of unusable or excess materials to minimize waste and reclaim value where possible.
Salvage and Recovery:
Recycling or reusing materials, components, or products to reduce waste and conserve resources.