2. Project and Production
 Project:
Concrete entity
Idea Facory
Design Building
Plan Highway
Prototype
Products
Services

3. PROJECTS PRODUCTION
 Automobile factory Produce automobiles
 Build a house Operate house holds
 Construct hospital Treat Patients
 Conceive new product Manufacture
 Develop prototype Produce multiples
 DONE ONCE DONE REPETITIVELY

4. MIX OF PROJECTS AND
PRODUCTION
 Projects and production are intimately interwoven in
real life.
 Projects
Starts production and solve problems relating to
-operation, maintenance, house keeping
-Marketing, Distribution, quality

5. ISSUES FOR DISCUSSION
 Pervasiveness of projects and production
 Growing organizational complexity
 Products vs services
 Value addition in operations
 Generalized model of production
 Productivity and other performance indicators
 Kinds of production system
 Key decisions in the life cycle of a production system

6. AIM OF PRODUCTION
 To provide goods and services for mankind
-in the right quantity
-at the appropriate place
-at the desired time
-with the required quality
-at a reasonable cost

7. Nature of production
 Inputs OutputTransformation

8. Nature of production
 Inputs Output
men Desirable
machines Undesirable
materials
money
information
energy
------
Transformation

9. Nature of production
 Inputs Output
men Desirable
machines Undesirable
materials feedback
money
information
energy
------
Transformation

10. Nature of production
 Inputs Output
men Desirable
machines Undesirable
materials feedback
money
information Environment
energy social
------ economic
political
Transformation

11. VALUE ADDITION THROUGH
TRANSFORMATIONS
 Operations is the process of changing inputs into
outputs and thereby adding value to some entity. This
constitutes the primary function of virtually every
organization.

12. HOW VALUE ADDITION TAKES
PLACE?
 ALTER
-physical
-sensual
-psychological
• TRANSPORT
• STORE
• INSPECT

13. KINDS OF TRANSFORMATIONS
 Physical as in manufacturing
 Location as in transpotation
 Exchange as in retailing
 Storage as in warehousing
 Physiological as in hoapital
 Attitudinal as in reading
 Informational as in entertainment

14. GROSS MEASURES OF
PRODUCTION
 PRODUCTION=OUTPUT/TIME
 PRODUCTIVITY=OUTPUT/INPUT(in a given time)
 EFFICIENCY= ACTUAL/TARGET
 EFFECTIVENESS= CAPACITY TO ACHIEVE DESIRED
GOAL
 FLEXIBILITY=CAPACITY TO RESPOND TO
CHANGES (internal and external)

15. ECONOMIC MEASURES OF
PERFORMANCE
 Investment(initial and phased)
 Profit(gross and net after taxes)
 Revenue
 Turn over
 Net present value
 Benefit/cost value
 Internal rate of return
 Payback period

16. NEW CHALLENGES IN
PRODUCTION

 COMPETITION
•More producers
•Demanding customers
price quality
Reduced
Lead time
Greater
variety
Customer
satisfactio
n

17. PRODUCTION AS PART OF
THE SUPPLY CHAIN
TRANSFORMATION
PROCESS
VEN
DO
RS
WAREH
OUSES
RET
AIL

18. FEATURES OF SERVICE
ORGANIZATIONS
 Customer participation
 Services not inventoried
 Service capacity time perishable
 Customer governs location
 Generally labour intensive
 Intangible nature of service

19. OPERATIONS MANAGEMENT
 The performance of managerial activities in
 Selecting
 Designing
 Operating
 Controlling and
 Updating
 Productive systems