Concept of production

a. Production
- The process of converting or transforming resources materials, machines,
employees, time-into goods or services.
- The action of making or manufacturing from components or raw materials
or the process of being so manufactured.
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b. Production Function
- Any process which involves conversion of raw material into finished
product for satisfaction of human wants.
- Refers to creation of goods and services in order to satisfy human needs
by converting resource into outputs.

c. Production System
- Implies the set up consisting of assets such as facilities, machines and
equipment that transform resources into valuable output using processes
and technology.
- Manufacturing system that includes all functions required to design,
produce, distribute and service a manufactured product.

CHARACTERISTICS

 System Discrimination – It is primarily concerned about input and output

only.
 Interrelationship – it exists on a close relationship with other systems of
the organization.
 Level Formulation – it consists of various levels of corporate hierarchy like
headquarters, administrative departments etc.
 Specialization of Functions – since there are large numbers of levels, each
level performs a specialized function.
 Renovation – in order to cope up with changes, the production system
needs to be renovated from time to time

Classification of Production System

Job-shop production
- It is featured by manufacturing one or more quantities of
products designed and produced as per the specification of customers
within prefixed time and cost. The distinguishing feature of this is low
volume and a high variety of products. A job shop comprises of general-
purpose machines arranged into different departments. Each job demands
unique technological requirements that demand processes on machines in
a certain sequence.
 Characteristics
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a challenge because of
uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of each
product, capacities for each work center and order priorities.

Advantages
1. Because of general purpose machines and facilities variety of products can be
produced.
2. Operators will become more skilled and competent, as each job gives them
learning opportunities.
3. Full potential of operators can be utilized.
4. Opportunity exists for Creative methods and innovative ideas.

Limitations
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.
3. Production planning is complicated.
4. Larger space requirements.

Batch Production
- Batch Production is a form of manufacturing in which the job pass through
the functional departments in lots or batches and each lot may have a
different routing. It is characterized by the manufacture of a limited number
of products produced at regular intervals and stocked and stored for sale.

Characteristics
1. Shorter production runs.
2. Plant and machinery are flexible.
3. Plant and machinery set up is used for the production of item in a batch and
change of set up is required for processing the next batch.
4. Manufacturing lead-time and cost are lower as compared to job order
production.

Advantages
1. Better utilization of plant and machinery.
2. Promotes functional specialization.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of products.
6. Job satisfaction exists for operators.

Limitations
1. Material handling is complex because of irregular and longer flows.
2. Production planning and control is complex.
 3. Work in process inventory is higher compared to continuous production.
4. Higher set up costs due to frequent changes in set up.

Mass Production
- Manufacture of discrete parts or assemblies using a continuous process
are called Mass Production. This production system is justified by very
large volume of production. The machines are arranged in a line or
product layout. Product and process standardization exists and all outputs
follow the same path.

Characteristics
1. Standardization of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and
output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back
tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

Advantages
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilization due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.

Limitations
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.

Continuous Production
- Production facilities are arranged as per the sequence of production
operations from the first operations to the finished product. The items are
made to flow through the sequence of operations through material
handling devices such as conveyors, transfer devices, etc.

Characteristics
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.
5. Planning and scheduling is a routine action.
 Advantages
1. Standardization of product and process sequence.
2. Higher rate of production with reduced cycle time.
3. Higher capacity utilization due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.

Limitations
1. Flexibility to accommodate and process number of products does not exist.
2. Very high investment for setting flow lines.
3. Product differentiation is limited.

Production Management
A. Definition
- It is also called operations management, planning, and control of industrial
processes to ensure that they move smoothly at the required level.
- Deals with decision–making related to the production process. So that the
resulting goods and services are produced in accordance with the
quantitative specifications and demand schedule with minimum cost.

B. Objectives
- The main objective of production management is to produce goods and
services of the right quality, right quantity, at the right time and at minimum
cost. It also tries to improve the efficiency. An efficient organization can
face competition effectively. Production management ensures full or
optimum utilization of available production capacity.
- Is to maximize efficiency while producing goods and services that
effectively fulfill customer needs.

C. Operations System, definition

- Is a management system that enables organizations to design, direct, and
control an organization’s operations to create products or services that
meet customers’ expectations and achieve organizational goals.