pom - introduction & history

8/6/2019 POM - Introduction & History

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POM Introduction & History

Production and Operations Management ("POM") is about the transformation of production and

operational inputs into "outputs" that, when distributed, meet the needs of customers.

Production: Production can be defined as, the process and methods employed in transformation oftangible inputs(raw materials, semi finished goods or sub assemblies) and intangible inputs(ideas,

information, know how) into goods or services. Major elements of production system are:

1. Input: Raw material labor, power and other consumables2. Resources: Machinery, plant, building, human resources etc.3. Process: Series of operations which are performed.4. Output: Output resulting from conversion process.

Operations: Operations is frequently used where various inputs are transformed into intangibleservices in addition to tangible goods. It is now being realized that goods like cars, washing machines,

televisions, etc, has to be supported by a host of services like information, training, warranty, back-up,

hire purchase, leasing, etc. Therefore the process of manufacturing of goods comes under ProductionManagement whereas the process of providing after sales services comes under Operations

Management.

Production and Operation Management: Production & Operations Management is theprocess of planning, organizing, directing and controlling the activities of the production process or

production function i.e. transformation of inputs into outputs.

Irrespective of whether it is an industrial, agricultural or service organization, it requires a large number

of input resources like plant and building, equipment, materials and capital, labour and management,

energy and consumables, information and knowledge, etc.

Diverse enterprises like a manufacturing company, an agricultural farm or an insurance firm have anumber of common features as illustrated below.

Environment

Input Output

y Men Goodsy Machiney Methods Conversion Processy Materialsy Moneyy Managementy Measurementy Message Comparing actual withy Motive desired Performance

standards

Fig. : A Manufacturing Firm

Raw Materials are converted into value added goods which can be sold in the market at a profit


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Environment

Input Output

y Men Grainsy Machine Milky Methods Conversion Process Poultryy Materials Muttony Moneyy Managementy Measurementy Message Comparing actual withy Motive desired Performance

standards

Fig. : An Agricultural Firm

Grain, milk poultry, meat etc can be sold in the market at a profit

Environment

Input Output

y Men Satisfiedy Machine Customery Methods Conversion Processy Materialsy Moneyy Managementy Measurementy Message Comparing actual withy Motive desired PerformanceStandards

Fig. : A ServiceOrganization

Criteria of Performance for the Production and Operations Management

System: The objectives or criteria of performance of the production and operations managementsystem are:

a) Production at Pre-established Cost: Primary objective of production and operationsmanagement is to make every effort to stick to the standard cost. It can be done through

optimal utilization of resources.b) Quality Product: Organizations should try to meet established quality standards through POM. A

proper balance must be maintained between quality and cost as well as quality and time

schedule.

c) Time Bound Production: Another important objective of POM is to produce goods and serviceson pre-defined time for delivery.


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Jobs/Decisions of Production/Operations Management: As a discipline of managementsome of the jobs/decisions involved in the production and operations management function can be

fragmented as under:

Jobs of Production and Operations Management

Long Time Horizon ImmediateTime Horizon Short Time Horizony Product Designy Quality Policyy Technology to be

employed

y Process Selectiony Machinery and Plant

Selection

y Plant size selectiony Manpower training and

development

y WarehousingArrangements

Design of Jobs

y Setting up workstandards

y Effluent and wastedisposal system

y Safety and maintenancesystem

y Product Variationsy Methods Selectiony Quality implementation

inspection and control

methods

y Forecastingy Deployment of

manpower

y Overtime decisionsy Shift working decisionsy Temporary hiring or lay-

off manpower

y Purchasing policyy Purchasing source

selection

y Make or buy decisiony Inventory policyy Transport and delivery

arrangements

y Preventive maintenancescheduling

y Production Schedulingy Available materials

allocation and handling

y Scheduling of manpowery Breakdown maintenancey Progress check and

change in priorities in

production scheduling

y Temporary manpowery Supervision and

immediate attention toproblem areas in labour,

materials, machines, etc.


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Brief History of the Production and

Operations Management Function

At the turn of this century, the economic structure in most of the developed countries of today was fast

changing from a feudalistic economy to that of an industrial or capitalistic economy. The nature ofindustrial workers was changing and methods of exercising control over the workers, to get desired

output, had also to be changed. The changed economic climate produced the new techniques and

concepts.

1. Individual Efficiency:Fredric W. Taylor (1878) studied the simple output-to-time relationship formanual labour such as brick-laying. This formed the precursor of the present day time-study.

Gilberth (1911) examined the motions of the limbs of the workers (such as hands, legs, eyes,

etc.) in performing the jobs and tried to standardize these motions in certain categories and

utilized the classification to arrive at the standards for time required to perform a given job. This

was precursor of present day motion study.

2. Collective Efficiency: The primary objective of production management was that of efficiency efficiency of the individual operator i.e. manual labour or machine operator. The aspects of

collective efficiency came into being later, expressed through efforts of scientists such as Gantt

who shifted the attention to scheduling of the operations.

3. Quality Era: The focus of production was to maximize the quantity. In 1931, Walter Shewartcame up with his theory regarding Control Charts for controlling the quality of goods produced.

These charts suggested a simple graphical methodology to monitor the quality characteristics of

the output and how to control it. In 1935, H.F. Doge and H.G. Romig came up with application of

statistical to accept or reject consignment supplied by the suppliers to exercise control over the

quality.

4. Effectiveness as a Function of Internal Climate: Hawthrone experiments conducted in 1933-39showed that workers efficiency went up when the intensity of illumination was graduallyincreased, and even when it was gradually decreased, the workers efficiency still kept rising.

Experiments proved the very fact that somebody cared, mattered much to the workers who

gave increased output.

5. Advent ofOperational Research Techniques: During World War II, the Allied Forces took thehelp of statisticians, scientists, engineers, etc. to analyse and answer questions such as: What is

the optimum way of mining the harbours of the areas occupied by the Japanese? What should

be the optimum size of the fleet of the supply ships, taking into account the costs of loss due to

enemy attack and the costs of employing the defence fleet? Such studies about the military

operations was termed as Operations Research. After World War II, this field was further

investigated and developed by academic institutions.

6. The Computer Era: Around 1955, IBM developed digital computers. This made possible thecomplex and repeated computations involved in various Operations Research and otherManagement Science techniques. It helped to spread the use of Management Science concepts

and techniques in fields of decision making.

7. Service & Relationship Era: In recent times demand for services such as transportation,telecommunication, entertainment, business process services have also grew at a rapid pace.

Worldwide service economy became as important as that of physical goods. Therefore, almost

all production management principles have been finding their place in services in order to

improve efficiency & effectiveness.

pom - introduction & history

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