Production and Operations Management (POM) : Presented By: Mridul Aggarwal Amit Jain

Production and Operations
Management (POM)
Presented by:
Mridul aggarwal
Amit jain
Introduction
 Production and operations management (POM) is
the management of an organization’s production
system.
 A production system takes inputs and converts
them into outputs.
 The conversion process is the predominant activity
of a production system.
 The primary concern of an operations management
is the activities of the conversion process.
2
Organizational Model
Finance
Sales HRM
POM
QA
Marketing
MIS
Engineering Accounting
3
Historical Milestones in POM
 The Industrial Revolution
 Post-Civil War Period
 Scientific Management
 Human Relations and Behaviorism
 Operations Research
4
The Industrial Revolution
 The industrial revolution developed in England in
the 1700s.
 The steam engine, invented by James Watt in 1764,
largely replaced human and water power for
factories.
 Adam Smith’s The Wealth of Nations in 1776 touted
the economic benefits of the specialization of labor.
 Thus the late-1700s factories had not only machine
power but also ways of planning and controlling the
tasks of workers.
5
The Industrial Revolution
 The industrial revolution spread from England to other
European countries and to the United Sates.
 In 1790 an American, Eli Whitney, developed the
concept of interchangeable parts.
 The first great industry in the U.S. was the textile
industry.
 In the 1800s the development of the gasoline engine and
electricity further advanced the revolution.
 By the mid-1800s, the old cottage system of production
had been replaced by the factory system
6
Post-Civil War Period
 During the post-Civil War period great

expansion of production capacity occurred.
 By post-Civil War the following developments
set the stage for the great production explosion
of the 20th century:
• increased capital and production capacity
• the expanded urban workforce
• new Western U.S. markets
• an effective national transportation system
7
Scientific Management
 Frederick Taylor is known as the father of

scientific management. His shop system
employed these steps:
• Each worker’s skill, strength, and learning ability were
determined.
• Stopwatch studies were conducted to precisely set
standard output per worker on each task.
• Material specifications, work methods, and routing
sequences were used to organize the shop.
• Supervisors were carefully selected and trained.
• Incentive pay systems were initiated.
8
Scientific Management
 In the 1920s, Ford Motor Company’s
operation embodied the key elements of
scientific management:
• standardized product designs
• mass production
• low manufacturing costs
• mechanized assembly lines
• specialization of labor
• interchangeable parts
9
Human Relations
and Behavioralism
 In the 1927-1932 period, researchers in the
Hawthorne Studies realized that human factors
were affecting production.
 Researchers and managers alike were
recognizing that psychological and sociological
factors affected production.
 From the work of behavioralists came a gradual
change in the way managers thought about and
treated workers.
10
Operations Research
 During World War II, enormous quantities of resources
(personnel, supplies, equipment, …) had to be deployed.
 Military operations research (OR) teams were formed to
deal with the complexity of the deployment.
 After the war, operations researchers found their way
back to universities, industry, government, and
consulting firms.
 OR helps operations managers make decisions when
problems are complex and wrong decisions are costly.
11
Today's Factors Affecting POM
 Global Competition
 U.S. Quality, Customer Service, and Cost
Challenges
 Computers and Advanced Production
Technology
 Growth of U.S. Service Sector
 Scarcity of Production Resources
 Issues of Social Responsibility
12
Different Ways to Study POM
 Production as a System
 Production Layout
 Decision Making in POM
13
Production as a System
Production System
Conversion
Inputs Outputs
Subsystem
Control
Subsystem
14
Inputs of a Production System
 External
• Legal, Economic, Social, Technological
 Market
• Competition, Customer Desires, Product Info.
 Primary Resources
• Materials, Personnel, Capital, Utilities
15
Conversion Subsystem
 Physical (Manufacturing)
 Locational Services (Transportation)
 Exchange Services
 Storage Services (Warehousing)
 Other Private Services (Insurance)
 Government Services (Federal, State, Local)
16
Outputs of a Production System
 Direct
• Products
• Services
 Indirect
• Waste
• Pollution
17
Production Layout
 Fixed position layout
 Process layout
 Product layout
 Combined layout
18
Decision Making in POM
 Strategic Decisions
 Operating Decisions
 Control Decisions
19
Strategic Decisions
 These decisions are of strategic importance and
have long-term significance for the
organization.
 Examples include deciding:
• the design for a new product’s production process
• where to locate a new factory
• whether to launch a new-product development plan
20
Operating Decisions
 These decisions are necessary if the ongoing
production of goods and services is to satisfy
market demands and provide profits.
• how much finished-goods inventory to carry
• the amount of overtime to use next week
• the details for purchasing raw material next month
21
Control Decisions
 These decisions concern the day-to-day
activities of workers, quality of products and
services, production and overhead costs, and
machine maintenance.
• labor cost standards for a new product
• frequency of preventive maintenance
• new quality control acceptance criteria
22
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Production and Operations

 During the post-Civil War period great

 Frederick Taylor is known as the father of

 Decision Making in POM

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