Tuesday, 16 July 2013

Production and Operations Management its functions

Production and Operations Management

 Production and Operations Management ("POM") is about the transformation of production and operational inputs into "outputs" that, when distributed, meet the needs of customers.
The process in the above diagram is often referred to as the "Conversion Process". There are several different methods of handling the conversion or production process - Job, Batch, Flow and Group
POM incorporates many tasks that are interdependent, but which can be grouped under five main headings:

PRODUCT

Marketers in a business must ensure that a business sells products that meet customer needs and wants. The role of Production and Operations is to ensure that the business actually makes the required products in accordance with the plan. The role of PRODUCT in POM therefore concerns areas such as:

- Performance
- Aesthetics
- Quality
- Reliability
- Quantity
- Production costs
- Delivery dates

PLANT

To make PRODUCT, PLANT of some kind is needed. This will comprise the bulk of the fixed assets of the business. In determining which PLANT to use, management must consider areas such as:
- Future demand (volume, timing)
- Design and layout of factory, equipment, offices
- Productivity and reliability of equipment
- Need for (and costs of) maintenance
- Heath and safety (particularly the operation of equipment)
- Environmental issues (e.g. creation of waste products)

PROCESSES

There are many different ways of producing a product. Management must choose the best process, or series of processes. They will consider:
- Available capacity
- Available skills
- Type of production
- Layout of plant and equipment
- Safety
- Production costs
- Maintenance requirements

PROGRAMMES

The production PROGRAMME concerns the dates and times of the products that are to be produced and supplied to customers. The decisions made about programme will be influenced by factors such as:
- Purchasing patterns (e.g. lead time)
- Cash flow
- Need for / availability of storage
- Transportation

PEOPLE

Production depends on PEOPLE, whose skills, experience and motivation vary. Key people-related decisions will consider the following areas:
- Wages and salaries
- Safety and training
- Work conditions
- Leadership and motivation
- Unionisation
- Communication 


What Are the Functions of Production & Operations?

 The function of the production and operations department(s) in a company is to take inputs and fashion them into outputs for customer use. Inputs can be concrete physical objects, data driven, or service driven. The outputs can be intended for consumer use or for business use. The goal of production and operations is to create an end product in the most economic and efficient way possible. 

  1. Creation

    • The foundation of every production and operations department is the creation of goods or services. Traditionally, production included the physical assembly of goods, but production can also include data-based goods such as websites, analysis services and order processing services.

    Customer Service

    • In many companies, the production and operations department contains the customer-facing customer service department that addresses the needs of the customer after the purchase of goods or services. The support function usually is served through phone, online or mail based support.

    Profit

    • The main function of the production and operations department is to produce a product or service that creates profit and revenue for the company. Actualization of profit requires close monitoring of expenses, production methodology and cost of inputs.

    Evaluation

    • Every production and operations department must function as self-evaluating entity that monitors the quality, quantity, and cost of goods produced. Analysis usually takes the form of statistical metrics, production evaluation and routine reporting.

    Tasks

    • Common task functions in a production and operation department include forecasting, scheduling, purchasing, design, maintenance, people management, flow analysis, reporting, assembly and testing.

    Fulfillment

    • Production and operations departments typically function as a fulfillment entity that ensures the timely delivery of the output from production to customers. Traditionally fulfillment is a shipping and mailing based function, but can be electronically based in a data-driven product.

    Analysis

    • Standard analysis functions in a production and operations department include critical path analysis, stock control analysis, utilization analysis, capacity analysis, just-in-time analysis of inputs, quality metrics analysis and break-even analysis.

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