Production and Operations

What is Production and 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. Production and operations management concerns itself with the conversion of inputs into outputs, using physical resources, so as to provide the desired utility/utilities of form, place, possession or state or a combination thereof to the customer while meeting the other organisational objectives of effectiveness, efficiency and adaptability. It distinguishes itself from the other such functions such as personnel, marketing, etc. by its primary concern for ‘conversion by using physical resources’.

Production and Operations Management 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

Programme:
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: