POM ppt_new

8/7/2019 POM ppt_new

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By

Aparna T C

Asok

Mohan

Kirubakaran

Saikat

Vijay


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PRODUCTION & OPERATIONS MANAGEMENT

y POM - Transformation of production andoperational inputs into "outputs" that, whendistributed, meet the needs of customers.

y It focuses on the 5Ps Product, Plant, Process,Program and People.

y Operations Manager needs to concentrate on theconversion process.


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Focus of POMFocus of POM CostsCosts

Product Plant

Process Program

People

y There are costsinvolved in each andevery block.

y POM helps reduce costin all these areas.

5 Ps


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Major costsMajor costs Areas for cost controlAreas for cost control

y Production/ Mfg. Costs

y Plant establishment costs

y Maintenance Costs

y Labor Costs

y Inventory Costs

y Transport Costs

y Quality Cost

y 5 M Material

Money

Men

Method

Machine

Cost Control


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Material

y Inventory - goods and materials , held available instock by a business.

y Includes raw material, work In progress and finished

goods.y Inventory maintenance is a primary cost incurred in

any company.


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ConceptConcept BenefitsBenefits

y An inventory strategy that

improves a business's return oninvestment.

y Reduces in-process inventoryand associated carrying costs.

y Relies on signals or Kanbanbetween different points in theprocess, which tell productionwhen to make the next part.

y Reduces or eliminatesinventory.

y Production scheduling andwork hour consistencysynchronized with demand.

y If there is no demand for aproduct at the time, it is notmade. This saves money.

Just In Time


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Economic Order QuantityEconomic Order Quantity

M.Co = Q.s.Cc

Q 2

y Q order quantity

y Co Cost of ordering

y

Cc Inventory Carryingcost

y S - Unit price

y M Annnual Demand

How much stock to order?


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ABC Analysis What material to focus on


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MONEY

y METHODS

y Standard costing

y Budgetary control

y Accounting ratios


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BUDGETARY CONTROL

y A numerical statement expressing plans, policies &goals for a definite future period

y Fixes goals & targets-operation lacks direction

y Reduction in cost & elimination of inefficiency

y Ensures that the capital employed at a particularlevel is kept at minimum

y Aims at maximisation of profit through cost control& proper utilisation of resources


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STANDARD COSTING

y Method of ascertaining cost-Standard cost, actualcost & relationship between the two

y Helps in formulating price & production policy

y Reduces avoidable wastage & losses

y Creates cost consciousness & increasesresponsibility


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ACCOUNTING RATIOS

y Quantitative measure-expected capacity of firm-future obligations or expectations

y Current ratios- 2:1-helps ascertain if the current

assets are sufficient or noty Help find significant trends in market & allocate

funds accordingly

y Helps inter firm comparison & analyse financial

problems & cost control


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MEN

y Job Design

Break up job

Monitor performance

Break up or club jobs if necessaryy Safety

y Training

y Motivation

y Ergonomics

y Hiring strategy


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y Hard on the problem not on the people

y Involving workers Workspace layout

Quality assurance Maintenance

Rebalancing workloads

Continuous improvement


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METHODS

y Methods management reduces unnecessary operation.

Improves the efficiency of the production method.

Efficiency-Production methods for new production runs or analysis of

existing methods

Technical Output produced with fewest possible inputs

Production Output produced with lowest possible cost

-Production decisions depends on

Type of product

Complexity of design

Factor costs labor, land and capital


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Job Production One-off production - each item might have particularspecifications

Flow Production suitable for mass market products that are identical

Batch Production each stage of the production process has an operationcompleted on it before moving on to the next stage allows modifications to bemade to products that otherwise are the same

The design of the production space can influence:

Output levels

Factor use

Efficiency

Cost levels

Quality assurance procedures


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y Japanese concept Small improvements to systemwhen there is an opportunity

y Focus on gradual and continuous improvement

y A whole business philosophy

y

Importance of EVERYONE buying into the conceptand the vision

Kaizen


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Critical Path Method(CPM)

Introduction

y CPM is concerned with shutting down a plant andthen restart it once the maintenance is completed.

y It shows which activitiesare critical to maintain the

schedule and which are not.


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Steps in CPM

` Specify the individual activities.

` Determine the sequence of those activities.

` Draw a network diagram.

` Estimate the completion time for each activity.` Identify the critical path (longest path through the

network)

` Update the CPM diagram as the project progresses.

LimitationsIncase of less routine projects there is more

uncertainty in the completion times.


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Lean manufacturing

y Expenditure of resources for any goal other than the creation of valuefor the end customer to be wasteful, and thus a target for elimination

Seven wastes:

y Unnecessary transportationy Inventory

y Motion

y Defects

y Over-processing

y Waiting


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MACHINE

y Automation : The process of operating the machines can beautomated using computers

y Proper Maintenance : Maintenance of the machines is to

be taken care periodically and the performances of themachines have to be monitored continuously. This reducesthe machine downtime loss and the machine repair costs

y Optimized Job Scheduling: Shifts are to be scheduled

based on the capacity of the machine, such that there is nounder usage as well as no excess usage of the machine.

This reduces the machine maintenance cost andoptimized production reduces the production cost.

Documents

POM ppt_new