Objectives of Production and Operations Management
The objectives of the production and Operations management are classified as under
1. Ultimate Objectives:
- Right Quality: The quality of product is established based upon the customers needs.The right quality is not necessarily best quality. It is determined by the cost of the product and the technical characteristics as suited to the specific requirements.
- Right Quantity: The manufacturing organization should produce the products in right number. If they are produced in excess of demand, the capital will block up in the form of inventory; and if the quantity is produced in short of demand, it leads to shortage of products.
- Right Time: Timelines of delivery is one of the important parameter to judge the effectiveness of production department. So, the production department has to make the optimal utilization of input resources to achieve its objectives.
- Pre-established Cost: Manufacturing costs are established before the product is actually manufactured. Hence, all attempts should be made to produce the products at pre-established cost, so as to reduce the variation between actual and the standard cost.
2. Intermediate Objectives:
- Machinery and Equipment: The objectives in the area of machinery and equipment are divided into
- Acquisition of machinery and equipment.
- Utilization of machinery and equipment.
The adequacy of the existing machinery should be considered and proper additions and replacements should be made according to the requirements. Efforts should also be made to increase the utilization rate of machinery through repair, maintenance and maximum occupancy of the machines.
Materials: The materials objectives must be prescribed in terms of units, rupee valve and space requirements. The per unit materials costs should be specified and efforts should be made to increase the inventory turnover of all types of inventories-raw materials, work-in-progress and finished goods.
iii. Man Power: Manpower is an important as well as typical input in manufacturing activities objectives of the production activities are as regards manpower must be closely allied with the objectives of selection, placement, training rewarding and utilization of manpower. Usually, these objectives are considered in terms of employee turnover rates, safety measurements, industrial relations, absenteeism, etc.
iv. Manufacturing Services: The provision of proper and adequate services directly affects the utilization of other inputs such as men, machines and materials. Proper objectives should be set for the installation of important facilities such as power, water supply, material handling etc.
Functions of Production and Operations Management
The functions of production and operations management are as follow:
- Production Planning: Production planning deals with the preparation of long-and short-term production programmes. It comprises routing, Scheduling specifies the starting and completion time of various production activities. The authority to proceed with a production programme is called work order. These orders set the operations going in various locations. Finally, production planning function includes the preparation of demand schedules for various kinds of materials, manpower and production facilities required at various points of time.
- Production Control: After Planning, the next responsibility of the production manager is to control the production by taking steps to utilize the various factors of production in an efficient manner so that the goods are produced at the lowest possible cost and according to the requirements and satisfaction of the customers and are supplied to them on the delivery dates in the ordered quantity. This function calls for scheduling the required work.
- Quality Control: The production manager is also responsible for maintaining a specific quality of the product. Steps should be taken to produce the goods according to the specifications and to minimize the amount of defective work. The defective work should be sorted out and sold separately.
- Industrial Engineering: Industrial engineering is concerned with the determination of methods and processes of manufacturing activities. It also designs tools, zigs, fixtures, guages and other accessories required for operations. Finally, it determines standards of performance on the basis of time and motion studies, which lie at the base of incentive schemes.
- Purchasing: Purchasing is partially a production function. It plays a significant role in arriving at make or buy decision. Specifications and quality requirements of materials and equipment,etc are laid down either by the staff department or production department. Decisions relating to quantity requirements and frequency of purchases are generally made by the materials department in consultation with the production manager. Decision relating to supplier, price, delivery date etc., lie in the jurisdiction of purchasing department.
- Plant Engineering: Plant engineering has the responsibility for maintaining the plant and equipment and services including light, heat, and power.
- Manufacturing: Manufacturing is the actual process of conversion of materials into outputs of goods and services. Industrial engineering, plant engineering, production planning and purchasing perform the staff functions of rendering services and advice to manufacturing. They all set stage for the actual manufacturing operations by providing production programs, schedules, routes and work orders; by specifying methods, processes and standards of operations; by taking care of the maintenance of plant and equipment; and by making supplies and raw materials available to the person in-charge of operations.
- Method Analysis: There may be so many alternative for manufacturing a product. As because all alternatives do not work equally. Some may be more economical than others, the production manager must activity of choosing best alternatives and analyze them in right perspective in order to choose the best one. This activity of choosing best alternative is called methods analysis. Methods analysis improves the productivity of the concern and minimizes the cost of production.
- Inventory Control: Production manager is supposed to have control over the cost of production by reducing the wastage of man and material. So he has to make the best use of material. For this purpose, he has to determine the economic lot size, economic order quantity, reorder levels so that the problems of over and under stock of material may not arise. This involves the physical and financial control of material. Thus he has to arrange the procurement of raw materials.
- Plant Layout and Materials Handling: Plant layout is an arrangement of machines and equipment in such a manner so as to maintain the flow of production uninterruptedly. An efficient plant layout aims at efficient material handling which in turn reduces wastage of man and helps in reducing the cost of production. The production manager must see the efficient handling systems and plant layout are designed and developed.
- Work Measurement: One of the main responsibilities of the production manager is to control and reduce the labour cost per unit. At different levels of production, the labour cost per unit differs. Here work measurement is necessary. By work measurement methods we mean the level of performance of work by a worker. Time and motion studies are work-measurement techniques.
- Other Functions: Apart from the above functions, the production manager is to perform certain other functions such as engineering economics, cost control, maximizing the labour efficiency, standardization and storage, price analysis, wage incentives to workers, etc.
Importance of Production and Operations Management
Benefits of Operations Management to Organisation: The benefits of an operations management methodology focusing on capacity-constrained resources include:
- More effective utilization of scarce human and material resources,
- Lower level for work-in-process inventory,
- Better responsiveness to customer needs,
- The discovery of ‘’hidden’’ capacity.
- Consumer: Consumer will be benefited from improved industrial productivity, increased use-value in the product,products are available to him at right place, at right price at right time,in desired quantity and of desired quality.
- Investors: They get increased security for their investments, adequate market returns and good image in the society.
- Employee: They get adequate wages, job security, improved working condition, and increased personal and job satisfaction.
- Suppliers: Suppliers will get confidence in management and their bills can be realized without any delay,
- Community: Community enjoys benefits from economic and social
- Nation: Nation will achieve prosperity and security, because of increased productivity and healthy industrial atmosphere.