Introduction to Production & Operations

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