Earlier the word "manufacturing" was used synonymously with the word "production", but nowadays, we use the term "manufacturing" to refer to the process of producing only tangible goods
Introduction about Production/Operations Management
Content of Production/Operations
Production implies the creation of goods and services to satisfy human needs
Manufacturing, a specific form of production, transforms tangible inputs into finished products While the terms "production" and "manufacturing" were once interchangeable, "manufacturing" now designates the process of producing physical goods, while "production" encompasses both tangible and intangible service outputs.
Any process which involves the conversion of raw materials and bought-out components into finished products for sale is known as production Such conversion of inputs adds to the value or utility of the products produced by the conversion or transformation process The utility or added value is the difference between the value of outputs and the value of inputs The value addition to inputs is brought about by alteration, transportation, storage or preservation and quality assurance
Operations encompass the transformation of inputs into outputs of enhanced value through a well-defined system or function This transformation process involves the conversion of inputs like materials, machinery, labor, and capital into outputs in the form of tangible goods or services The term "production system" is commonly used to describe systems exclusively producing tangible goods, highlighting the conversion process that results in the creation of finished products.
“production” Nowadays, the service system in which the output is predominantly a service or even a pure service, is also treated as a productive system and often referred to as an “operating system” instead of a “production system”.
Distinction between Production Management and Operations
Production Management refers to the application of management principles to the production function in a productive system such as a factory or a manufacturing plant (e.g., steel plant, cement plant, etc.) It involves application of planning, organizing, directing and controlling the production processes employed for the conversion of inputs into outputs in a productive system
Operations Management refers to a set of activities that creates value in the form of goods and/ or services by transforming inputs into outputs Operations management designs and operates productive systems or operating systems such as banks, hospitals, hotels, government agencies and manufacturing plants Operations management includes activities such as organizing work, selecting processes, arranging layouts, locating facilities, designing jobs, measuring performance, controlling quality, scheduling work, managing inventory and planning production From the above definition of production management and operations management, it becomes clear that there is hardly any difference between the two terms But the two apparent differences between production management and operations management are:
(i) The term “production management” is mainly used for a productive system where tangible goods are produced; whereas the term “operations management” is more frequently used where various inputs are transformed into intangible services
Operations management, a more contemporary term, encompasses the activities involved in transforming inputs into outputs (goods or services) within a productive system In contrast, "production management," an earlier term, primarily focused on activities related to converting inputs into tangible goods.
Contents Production/Operation Management
Nature of Production/Operations
The nature of production or operations can be better understood by viewing the manufacturing function as:
(ii) Production/operations as an organizational function,
(iii) Production/operations as a conversion or transformation process and (iv) Production/operations as a means of creating utility
This view is also known as "systems concept of production" A system is defined as the collection of interrelated entities The systems approach views any organization or entity as an arrangement of interrelated parts that interact in ways that can be specified and to some extent predicted Production is viewed as a system which converts a set of inputs into a set of desired outputs A production system has the following elements or parts: (i) Inputs, (ii) Conversion process or transformation process, (iii) Outputs (iv) Transportation subsystem, (v) Communication subsystem and (vi) Control or decision-making subsystem
Fig 2 Systems View of Production/Operations Function
Production/Operations as an Organizational Function
To create goods and services, all organizations whether manufacturing goods or providing services perform four basic functions They are (i) Marketing function (ii) Production or Operations function (iii) Finance function and (iv) Human Resources function Production is considered as a crucial function which creates goods and services whereas marketing function generates demand for products or obtains customers’ orders, finance function keeps track of how well the organization performs and takes care of all cash inflows and cash outflows, and human resources function looks into the people aspect of the organization and the best utilization of people in the organization Production function plays a center role in achieving the objectives of any business organization
Production/Operations as a Conversion/Transformation Process
The conversion or transformation sub-system is the core of a production system because it consists of processes or activities wherein workers, materials, machines and equipment are used to convert inputs into outputs, i.e.,
The conversion process may include manufacturing processes such as cutting, drilling, machining, welding, painting, etc., and other processes such as packing, selling, etc
Any conversion process consists of several small activities referred to as
"operations" which are some steps in the overall process of producing a product or service that leads to the final output
Production/Operations as a Means of Creating Utility
Production involves adding value to outputs by satisfying human needs through the creation of utility This multifaceted process transforms raw materials into finished goods by incorporating different types of utility, enhancing their worth and meeting specific requirements.
(i) Form utility: which is created by changing the size, shape, form, weight, color, smell of inputs in order to make the outputs more useful to the customers
(ii) Place utility: which is created by changing the places of inputs or transporting the inputs from the source of their availability to the place of their use to be converted into outputs
(iii) Time utility: which is created by storage or preservation of raw materials or finished goods which are in abundance sometime, so that the same can be used at a later time when they become scarce due to higher demand exceeding the quantity available
(iv) Possession utility: which is created by transferring the possession or ownership of an item from one person to another person
(v) Service utility: which is the utility created by rendering some service to the customer
(vi) Knowledge utility: which is created by imparting knowledge to a person
The activities carried out while creating the utilities discussed above are referred to as production functions
Production function may be defined as the creation of useful products for sale with the help of inputs such as materials, machines, labor, land, capital and management The production function represents basically a physical relationship between inputs and outputs It may be represented as
The production function, denoted as Q = (a, b, c, d ), quantifies the output (Q) resulting from the combination of several inputs (a, b, c, d) within a specific time frame These inputs include material, machine hours, labor, and energy Productivity is a concept that captures the efficiency with which resources are used in production It serves as an index that measures the ratio of outputs (goods and services) to inputs (materials, energy, etc.).
It is usually expressed as, Productivity = Output/Input
Productivity is also known as productive efficiency or the efficiency of the production process It indicates how well a productive process is carried out to convert a set of inputs into a set of outputs of value to the customer which also provides reasonable profits to the manufacturer or seller
The production is the core function of any business organization Production function creates goods and services and organizations exist primarily to create goods and/or to provide services Without production function, there would be no need for any other function such as marketing, finance or human resource function Also, more than 50 per cent of employees in a business organization have jobs in the area of production Moreover, the production function is responsible for a major portion of assets in most organizations Consumption of goods and services is an integral part of any society and production function facilitates creation of goods and services for the benefit of people in the society
Some of the areas in which production/operations management can offer competitive advantage to a firm:
Shorter new product lead time (i.e., speed to market)
Higher inventory turnover (i.e., low inventory)
Higher product quality (i.e., reduced defects)
Production/Operations Systems
The production system of an organization is that part, which produces products of an organization It is that activity whereby resources, flowing within a defined system, are combined and transformed in a controlled manner to add value in accordance with the policies communicated by management A simplified production system is shown above
The production system has the following characteristics:
1 Production is an organized activity, so every production system has an objective
2 The system transforms the various inputs to useful outputs
3 It does not operate in isolation from the other organization system
4 There exists feedback about the activities, which is essential to control and improve system performance
Fig 3 Classification of production systems
Job shop production are characterized by manufacturing of one or few quantities of products designed and produced as per the specification of customers within prefixed time and cost The distinguishing feature of this is low volume and high variety of products
A job shop comprises of general-purpose machines arranged into different departments Each job demands unique technological requirements, demands processing on machines in a certain sequence
The Job-shop production system is followed when there is:
1 High variety of products and low volume
2 Use of general-purpose machines and facilities
3 Highly skilled operators who can take up each job as a challenge because of uniqueness
4 Large inventory of materials, tools, parts
5 Detailed planning is essential for sequencing the requirements of each product, capacities for each work center and order priorities
Following are the advantages of job shop production:
1 Because of general purpose machines and facilities variety of products can be produced
2 Operators will become more skilled and competent, as each job gives them learning opportunities
3 Full potential of operators can be utilized
4 Opportunity exists for creative methods and innovative ideas
Following are the limitations of job shop production:
1 Higher cost due to frequent set up changes
2 Higher level of inventory at all levels and hence higher inventory cost
Batch production is defined by American Production and Inventory Control Society (APICS) “as a form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing.” It is characterized by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales
Batch production system is used under the following circumstances:
1 When there are shorter production runs
2 When plant and machinery are flexible
3 When plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch
4 When manufacturing lead time and cost are lower as compared to job order production
Following are the advantages of batch production:
1 Better utilization of plant and machinery
3 Cost per unit is lower as compared to job order production
4 Lower investment in plant and machinery
5 Flexibility to accommodate and process number of products
6 Job satisfaction exists for operators
Following are the limitations of batch production:
1 Material handling is complex because of irregular and longer flows
2 Production planning and control is complex
3 Work in process inventory is higher compared to continuous production
4 Higher set up costs due to frequent changes in set up
Manufacture of discrete parts or assemblies using a continuous process are called mass production This production system is justified by very large volume of production The machines are arranged in a line or product layout Product and process standardization exists and all outputs follow the same path
Mass production is used under the following circumstances:
1 Standardization of product and process sequence
2 Dedicated special purpose machines having higher production capacities and output rates
4 Shorter cycle time of production
7 Flow of materials, components and parts is continuous and without any back tracking
8 Production planning and control is easy
9 Material handling can be completely automatic
Following are the advantages of mass production:
1 Higher rate of production with reduced cycle time
2 Higher capacity utilization due to line balancing
3 Less skilled operators are required
5 Manufacturing cost per unit is low
Following are the limitations of mass production:
1 Breakdown of one machine will stop an entire production line
2 Line layout needs major change with the changes in the product design
3 High investment in production facilities
4 The cycle time is determined by the slowest operation
Production facilities are meticulously organized based on the sequential order of production operations, ensuring a smooth and efficient workflow From the initial processes to the final product, the items are strategically moved through each operation using material handling equipment like conveyors and transfer devices This systematic approach streamlines production, enhancing productivity and minimizing disruptions, ultimately leading to a high-quality end product.
Continuous production is used under the following circumstances:
1 Dedicated plant and equipment with zero flexibility
2 Material handling is fully automated
3 Process follows a predetermined sequence of operations
4 Component materials cannot be readily identified with final product
5 Planning and scheduling is a routine action
Following are the advantages of continuous production:
1 Standardization of product and process sequence
2 Higher rate of production with reduced cycle time
3 Higher capacity utilization due to line balancing
4 Manpower is not required for material handling as it is completely automatic
5 Person with limited skills can be used on the production line
6 Unit cost is lower due to high volume of production
Following are the limitations of continuous production:
1 Flexibility to accommodate and process number of products does not exist
2 Very high investment for setting flow lines
Operating system converts inputs to provide outputs which are required by a customer It converts physical resources into outputs, the function of which is to satisfy customer wants i.e., to provide some utility for the customer In some of the organization the product is a physical good (hotels) while in others it is a service (hospitals) Bus and taxi services, tailors, hospital and builders are the examples of an operating system
Everett E Adam & Ronald J Ebert define operating system as, “An operating system (function) of an organization is the part of an organization that produces the organization’s physical goods and services.”
Ray Wild defines operating system as, “An operating system is a configuration of resources combined for the provision of goods or services.”
Objectives of Production/Operations Management
Some of the important objectives of production/operations management are:
Maximum customer satisfaction through quality, reliability, cost and delivery time
Minimum scrap/rework resulting in better product quality
Minimum inventory levels (i.e., optimum inventory levels)
Maximum utilization of all kinds of resources needed
Maximum profit or return on investment
Concern for protection of environment
Decision Making in Production/Operations Management
What Production/Operations Managers Do?
The production/operations managers manage all activities of the production/operations systems which convert inputs into the desired outputs (goods and services) The production/operations managers have the ultimate responsibility for the creation of goods or provision of services Even though the kind of jobs that production/operations managers oversee vary from organization to organization, (because of the different products or services involved) their job is essentially managerial They must co-ordinate the use of
15 resources through the managerial process of planning, organizing, staffing, directing (or influencing) and controlling
Table 2.4a: Shows some of the responsibilities of productions/operations managers
Responsibilities of Production/Operations Managers
Planning Capacity, location, products and services, make or buy, layouts, projects and scheduling
Organizing Degree of centralization, subcontracting
Staffing Hiring/laying off employees
Directing Incentive plans, issue of work orders, job assignments Controlling Inventory control, Quality control, Cost control
A better insight to how production/operations managers manage can be had by examining the decisions in production and operations management, since all managerial functions such as planning, organizing, staffing, directing and controlling involve decision making
The decisions which production/operations managers make may be classified into three general categories:
(i) Strategic Decisions: Decisions about products, processes and facilities These decisions are strategically important and have long-term significance for the organization
(ii) Operating Decisions: Decisions about planning production to meet demand
(iii) Control Decisions: Decisions about controlling operations concerned with day-to-day activities of the workers, quality of products and services, production costs, overhead costs and maintenance of plant and equipment
2 Design of goods and services (product design)
Table 2.4b: The ten decision areas in production/operations management
Problems of Production/Operations management
The problems involved in production management require two major types of decisions relating to:
(i) Design of the production system
(ii) Operation and control of the production system
Decisions related to the design of production system are long-run decisions whereas, decisions related to operations and control of the production system are short-run decisions
The problems involve the relative balance of the emphasis on such factors as cost, service and reliability of both functional and time performance, which depends on the basic purposes of the total enterprise and on the general nature of goods and services produced In general, manufacturing organizations emphasize more on cost, consistent with quality and delivery commitments whereas, service organizations may emphasize reliability and service, consistent with cost objectives
Long-run decisions related to the design of the production system are:
(i) Selection and Design of Products: Product selections and designs with productive capability (i.e., producibility of products) are interdependent
Equipment and process selection should balance economic viability and the firm's production capabilities For instance, capital investment constraints and production strategy (job, batch, mass, or continuous) influence equipment choices and operational processes.
(iii) Production Design of Parts Processed: Production design aims at selection of equipment, processes, and tools for economic production which set limits on the cost of outputs (iv) Job Design: It involves basic organization of work as well as matching workers to their jobs in order to reduce fatigue and improve productivity
(v) Location of the System: It is a trade-off decision since there is no one best location for a productive system to be located The balance of cost factors determined by various considerations is critical
(vi) Facility Layout: This involves decisions related to design capacity, basic modes of production, shifts of working, use of overtime and subcontracting In addition, operations and equipment must be located in relation to each other such that the overall material handling cost is minimized Other factors involved are heating, lighting and other utility requirements, the allocation of storage space, washing space and the design of the building to house the layout
Short-run decisions related to the operations and control of the system are:
(i) Inventory and Production Control: Decisions made are concerned with allocation of productive capacity consistent with demand and inventory policy Feasible schedules must be worked out and the load on machines and labor and the flow of production must be controlled
(ii) Maintenance and Reliability of the System: Decisions must be made regarding the maintenance effort, maintenance policy and practice recognizing the fact that machine down time may lead to idling of labor and production stoppage resulting in lost sales
Quality control plays a crucial role in manufacturing, involving decisions to establish acceptable risk levels for defective output To optimize quality, it's essential to weigh the costs of inspection against the potential losses from releasing faulty products or scrapping acceptable ones due to stringent inspections Additionally, manufacturers must continuously monitor and control ongoing processes to ensure consistent quality levels.
(iv) Labor Control: Labor is the major cost element in most products and services Hence, work measurement and wage incentive systems must be developed to control labor costs and to increase labor productivity
(v) Cost Control and Improvement: Day-to-day decisions which involve the balance of labor, material and overhead costs must be made by production supervisors
The relative importance of these problems of production management varies considerably depending on the nature of the production system The production manager must be able to sense the relative importance of these various problems in a given situation and take appropriate decisions to solve these problems.
Factors affecting Production and Operation Management
Rapid technological advancements, globalization of markets, increasing customer demand for customization and quality, heightened competition, the need for sustainability, and the impact of the digital age are the six primary factors significantly influencing Production and Operations Management (POM) today These factors present both opportunities and challenges for POM professionals, requiring them to constantly adapt and innovate to optimize production processes and meet the evolving demands of the marketplace Understanding these factors is crucial for businesses to remain competitive and successful in the modern global economy.
Quality, customer service and cost challenges,
Rapid expansion of advanced production technology,
Continued growth of service sector,
Scarcity of production resources, and
The impact of these factors on production and operations management today is discussed in greater detail in the following paragraphs
The world is rapidly transforming itself into a single global economy which is also referred to as a global village or global landscape Markets once dominated by local or domestic firms are now vulnerable to competition from firms in all corners of the world A country's borders no longer provide protection from intense competition from foreign firms To succeed in global competition, companies must offer quality products at reasonable costs Also, as companies expand their business to include foreign markets, so too must the operations management function take a broader, more global perspective in order for companies to remain competitive The trend towards globalization has placed increased emphasis on the logistics of where to locate facilities and the issues associated with moving materials over long distances
Quality, Customer Service and Cost Challenges
Another key factor affecting POM today is quality Successful firms now recognize that quality is no longer limited to the POM function but is important in all functional areas throughout the entire organization, a new concept known as total quality management (or TQM in short) However, POM is primarily responsible to ensure that the firm is able to produce the products in the required quantities, in the required quality level, delivering the products to the customers at the desired time schedule and at the minimum possible cost
Quality is no longer limited to the technical requirements of the goods being produced on the manufacturing shop floor Service quality (i.e., how we deal with our customers on a wide variety of issues affecting customer satisfaction) is equally important
How companies integrate product quality and service quality, to properly meet the needs of the customers is a major challenge to today's managers Improving quality in all respects of the business improves customer satisfaction and increases customer loyalty Today's customers are demanding better quality, more variety and increased responsiveness to their needs all at lower prices
Rapid Expansion of Advanced Production Technology
Advances in technology in recent years have also had a significant impact on the POM function Computer-numerical control (CNC) technology, increased automation and robotics have enabled the companies to improve the quality of products that are being manufactured Information technology facilitates collection of data on individual customers so that the products can be mass customized to meet the needs of individual customers However, advances in
Technological advancements have reshaped workforce requirements, particularly in service industries Unskilled labor is being replaced by skilled workers with computer literacy essential for internet and e-business operations As a result, organizations' workforces are becoming increasingly educated, representing a valuable asset that drives efficiency and competitiveness.
Continued Growth of Service Sector
Amidst economic shifts, the service sector has emerged as a dominant force, outpacing the manufacturing sector in growth and workforce employment Illustrating this trend, the motion picture industry in the United States boasts a larger workforce than the auto parts industry Within the service sector, computer software services stand as the most rapidly expanding subsector.
Despite shared challenges between service and manufacturing sectors, services face unique constraints that differ based on the service type These constraints arise from the intangible and experience-based nature of services, which present distinct challenges in areas such as quality control, measurement, and delivery Understanding these constraints is crucial for managers in the service sector to effectively address operational issues and enhance service quality.
Operations managers are faced with the problem of scarce production resources and matching the production resources with anticipated product demand They are constrained to obtain the scarce resources such as materials and labor at the minimum possible cost and utilize the same with maximum efficiency Operations managers nowadays devote much of their energy to inventory and materials management, scheduling operations and personnel, reduce wastage of materials and labor, cut costs and improve productivity in order to improve the competitive positions of their companies They are responsible to prepare intermediate plans to consider what to buy, from whom to buy, when to buy and how much to buy to manage the scarce material resources and also to co-ordinate personnel decisions such as hiring, lay-offs overtime and subcontracting to make best use of the human and equipment resources
A new challenge facing operations managers is to make production systems environmentally compatible, yet efficient This can be achieved by reducing production of harmful by-products, recycling waste materials and energy, reducing packaging, using closed water systems for cooling and waste discharge and even scheduling employee work hours to reduce traffic and air pollution Using environmentally sound production methods is not only the social responsibility but also a means of achieving economic benefits The other ethical issues arising in many aspects of operations management are:
Worker Safety: Providing adequate training, maintaining equipment in good working conditions and maintaining a safe working environment Product Safety: Providing products that minimize risk of injury to user or damage to property or the environment
Quality: Honoring warranties, avoiding hidden defects
Obeying government regulations, regarding regulation of environment The Community: Being a good neighbor, providing employment opportunities to the local people and improving the standard of living of the community surrounding the company
Closing Facilities: Taking into account the impact on the community and honoring commitments that have been made
To conclude, we can summaries the current issues facing operations managers are as below
Speeding up the time it takes to get new products into production Developing flexible production systems to enable mass customization of products and services
Effectively managing global production networks and supply chains involves overseeing the seamless flow of information, materials, and services from suppliers to factories, warehouses, and ultimately the end customer Furthermore, integrating cutting-edge process technologies into existing production systems plays a crucial role in enhancing efficiency and optimizing operations.
Achieving high quality quickly and keeping it up in the face of restructuring (i.e., achieving quality parity with the competition through total quality management)
Conforming to environmental constraints, ethical standards and government regulations.
Scope of Production and Operations Management
Production and operations management concern with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other organizational objectives of effectiveness, efficiency and adoptability It distinguishes itself from other functions such as personnel, marketing, finance, etc., by its primary concern for ‘conversion by using physical resources.’ Following are the activities which are listed under production and operations management functions:
2 Plant layouts and material handling
The location of operations facilities is a critical strategic decision that involves long-term commitments and impacts geographically static factors affecting an organization This decision determines the primary geographical location for a business's operations and is considered a high-level strategic matter It addresses the essential question of where a company should establish its core operations.
The selection of location is a key-decision as large investment is made in building plant and machinery An improper location of plant may lead to waste of all the investments made in plant and machinery equipment Hence, location of plant should be based on the company’s expansion plan and policy, diversification plan for the products, changing sources of raw materials and many other factors The purpose of the location study is to find the optimal location that will results in the greatest advantage to the organization Plant Layouts and Material Handling
Plant layout refers to the physical arrangement of facilities It is the configuration of departments, work centers and equipment in the conversion process The overall objective of the plant layout is to design a physical arrangement that meets the required output quality and quantity most economically
According to James Moore, “Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipment and all other supporting services along with the design of best structure to contain all these facilities”
Material handling encompasses the efficient movement and storage of materials throughout the manufacturing process, significantly impacting production costs (50-75%) Proper implementation and maintenance of material handling devices can drive down these costs while boosting output, enhancing quality, expediting deliveries, and reducing expenses Therefore, material handling plays a pivotal role in the design and operation of both new and existing manufacturing facilities.
Product design deals with conversion of ideas into reality Every business organization have to design, develop and introduce new products as a survival and growth strategy Developing the new products and launching them in the market is the biggest challenge faced by the organizations The entire process of need identification to physical manufactures of product involves three functions: marketing, product development, manufacturing Product development translates the needs of customers given by marketing into technical specifications and designing the various features into the product to these specifications Manufacturing has the responsibility of selecting the processes by which the product can be manufactured Product design and development provides link between marketing, customer needs and expectations and the activities required to manufacture the product
Process design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods These decisions encompass the selection of a process, choice of technology, process flow analysis and layout of the facilities Hence, the important decisions in process design are to analyze the workflow for converting raw material into finished product and to select the workstation for each included in the workflow
Production planning and control can be defined as the process of planning the production in advance, setting the exact route of each item, fixing the starting and finishing dates for each item, to give production orders to shops and to follow up the progress of products according to orders The principle of production planning and control lies in the statement ‘First Plan Your Work and then Work on Your Plan’ Main functions of production planning and control includes planning, routing, scheduling, dispatching and follow-up
Planning involves strategizing in advance by defining objectives, methods, timelines, and responsibilities It establishes a roadmap from the present state to desired outcomes By bridging this gap, planning enables the execution of actions that facilitate progress and the realization of goals that might otherwise remain unattainable.
Routing may be defined as the selection of path which each part of the product will follow, which being transformed from raw material to finished products Routing determines the most advantageous path to be followed from department to department and machine to machine till raw material gets its final shape
Scheduling determines the programme for the operations Scheduling may be defined as ‘the fixation of time and date for each operation’ as well as it determines the sequence of operations to be followed
Fig 4 Scope of production and operations management
Dispatching is concerned with the starting the processes It gives necessary authority to start a particular work, which has already been planned under
‘Routing’ and ‘Scheduling’ Therefore, dispatching is ‘release of orders and instruction for the starting of production for any item in acceptance with the route sheet and schedule charts
The follow-up process involves daily reporting of work progress in designated shops using a specific format It also examines reasons behind any deviations from planned performance, ensuring timely identification and mitigation of potential issues This allows for proactive management of projects, enhancing efficiency and adherence to timelines.
Quality Control (QC) may be defined as ‘a system that is used to maintain a desired level of quality in a product or service’ It is a systematic control of various factors that affect the quality of the product Quality control aims at prevention of defects at the source, relies on effective feedback system and corrective action procedure Quality control can also be defined as ‘that industrial management technique by means of which product of uniform acceptable quality is manufactured’ It is the entire collection of activities which ensures that the operation will produce the optimum quality products at minimum cost The main objectives of quality control are:
To improve the company’s income by making the production more acceptable to the customers i.e., by providing long life, greater usefulness, maintainability, etc To reduce companies cost through reduction of losses due to defects
To achieve interchangeability of manufacture in large scale production
To produce optimal quality at reduced price
ANALYSIS OF POSTEF’S PRODUCTION AND
Analysis, planning and management of production activities
The plan implemented at factory 123 is: long-term plan and short-term plan The long-term plan usually involves the direction of development, improvement of production work, upgrading investment in production machinery and equipment to increase productivity to meet increasingly strict demands from customers Short-term plan is a type of plan that is set up every month so that work can be assigned to each production department in order to complete the orders on time Then, the deputy planning department will receive the confirmed order from the head of the department Then, be responsible for implementing and balancing weekly, monthly and regional customer plans; control and take responsibility for the timeliness and accuracy of detailed production, delivery and revenue dispatch The Deputy Order Management Department is responsible for controlling and consolidating orders (contracts, settlements, payments, ordering materials, outsourcing ); managing and supervising outsourcing
Because the company's characteristics are specific production and production to order, it is almost not important to understand market demand and then forecast demand What the company needs to forecast is productivity t and the completion schedule of each item code to ensure on-time delivery as contracted with the customer Based on the characteristics of the upcoming product code and the product code that has been produced to what extent, the productivity of the previous item is to forecast the time to complete the proposed output
The optical fiber workshop and the optical fiber workshop are two workshops that produce some specific products such as optical fibers and optical cables, and are invested with the most modern production equipment in Southeast Asia
Forcasting Receive orders Material balance
Buy raw materials Production planning Create a work order
With a substantial production capacity, two factories maintain sufficient warehouse space to support demand forecasting and monthly production planning These facilities include a fiber optic factory with nine production lines and an optical fiber factory with four lines, each equipped with its own finished product warehouse In contrast, other factories with limited warehouse capacity focus solely on order-based production due to the challenges of demand forecasting with limited storage facilities.
The customer will send the purchase order and technical requirements, the technical department and the purchasing department will base on the documents sent by the customer, compare whether it is suitable for the equipment base, the level of the staff Whether the progress of the completion is satisfactory, the decision to deploy the order and quote the product to the customer is decided
After receiving the order, the technology department will send a detailed copy of the materials used to produce a finished product requested by the customer
In the detailed list, there is information about product codes, production parts, component names, target materials,
Fig 6: Detailed list of TCA-OUT 8-24 Box
Next, the head of the planning department will make statistics of the balance of materials and calculate the specific amount of each material compared to the total required product
Fig 7: Material balance sheet of TCA-OUT 8-24 Box
After balancing the materials, the purchasing department will compare with the warehouse department about the materials to be purchased with the inventory quantity, then give a complete list of the materials to be purchased and start ordering
The planning usually follows the orders that have been accepted from the two parties, thereby serving as a basis for planning for the following months Create a production order
Production orders are sent to relevant departments 5 to 7 days in advance
-Production orders need to be issued 5 to 7 days before the date of production -On the work order will have the following information:
+ Name of production team, product name
- Change of work order or delivery must clearly note the reason for the change and promptly deploy to relevant departments
-Work orders need fast, timely and accurate information Before issuing the order, it is necessary to consult the information from the manufacturer
When there is a production order, the workshops need:
+ Transfer orders and deploy to other departments + Build a tentative plan before entering the line
+ The division goes to apprentices and prepares equipment
+ Adhere to and promote planned goals in terms of productivity, quality and meet delivery dates When there is a problem, it is necessary to report back to the relevant departments
Effective communication between the customer and production workshops is crucial for timely adjustments to production plans Upon customer requests to modify product specifications, the planning department promptly generates an order This order details the required alterations, ensuring that the production workshops can swiftly adapt to these changes, minimizing disruptions and maintaining production efficiency.
Monitor and supervise production activities
Production managers will assign work to department heads and supervise production, and they also supervise the production process and the working process of workers as well as department heads to ensure the use of raw materials reasonable material, correct production process On the other hand, the production manager must also determine the necessary equipment for
31 production, direct the production process, arrange overtime and adjust the production plan as needed
In order to ensure smooth and on-time production activities, production managers need to closely monitor the production process to promptly detect defective products, quickly investigate the causes affecting the production process product quality and fix in the fastest time At the same time, production managers must also ensure that production activities always take place safely
In addition, the production manager is also responsible for developing, supplementing and revising production documentation, checking product quality, and drafting product description documents They will have to set specific production quality goals and conduct continuous evaluation and monitoring
Each production workshop has a manager who is responsible for:
Organize production to ensure work progress and efficiency
Build, adjust, perfect and optimize the production process and labor norms on the basis of equipment and technology of the factory Urging, inspecting and supervising the production deployment in accordance with technology requirements, ensuring the performance of equipment and labor productivity
Training to operate technical machinery and equipment in accordance with technical and technological processes for production technicians Calibrate machinery and equipment, troubleshoot problems within the scope of assigned work in accordance with procedures and techniques, statistics on errors and malfunctions of machinery and equipment in the production process
Propose plans and solutions to improve technology and techniques, improve efficiency and operational efficiency of machinery and equipment; participate in formulating production norms
Keeping the working environment in accordance with the production requirements according to the clean room level, ensuring labor safety and preventing fire and explosion
During the transition between production shifts, responsibilities include: receiving and handing over products (finished, semi-finished, and waste materials), as well as raw materials and consumables This ensures seamless production continuity and proper handover to the next shift or Quality Management Team.
Production progress report will be statistically and daily reported to the planning department
Participate in scientific research and training according to job requirements
3 Management of machinery, production equipment
/-*/ Organizational form in the workshop
Fig 11: Fiber Optic Factory Instruction (Factory 3)
The manufacturing process of finished optical fiber includes 6 different stages from A B C D E F This is a workshop that mainly stops automatic machines in production and requires 1 to 2 workers at each stage to operate the machines
Fig 12: Cable Factory Instruction (Factory 3)
Cable workshop includes 9 different fiber optic product production lines, they are arranged scientifically The machines are arranged in a separate line for each product from production to packaging and only 1 worker can handle 1 line when producing.
Factory 2 includes workshops: plastic injection workshop, assembly workshop, mechanical workshop, painting workshop, welding workshop which are arranged scientifically to form a closed production line, greatly reducing transportation time of semi-finished materials from one workshop to another
The functional specialization makes the production optimal in terms of productivity, workers will maximize their capacity and skills The arrangement of labor organization in the form of combination helps to maximize the productivity of each line and create production independence, competitive productivity between the lines
The current layout for production helps the supervisor The factory manager can easily control the production activities of the enterprise The layout of the premises according to the principle of water flow makes the operation flow of the enterprise smooth, without congestion during the movement and production process In addition, on the side, there are many doors designed to facilitate the movement of workers, loading and unloading and exiting when there is a fire incident
To best meet the production needs of enterprises, production managers need to organize the technical handover and instruct employees and factory workers how to use machines and equipment Periodically inspect, maintain and repair damaged machinery and equipment At the same time, the production manager must also have a plan to purchase new machinery and equipment so that the production activities of the enterprise always achieve optimal performance
At the end of each shift, workers will have to clean the machines they used for the next shift workers to use
Recruitment and training management
- Regarding recruitment: in 2022, on the basis of actual needs, the Company will develop a plan to use existing employees and recruit new personnel to meet the needs and requirements of professional qualifications and professional skills service to the development strategy in the trend of the 4.0 technology revolution
- Regarding training: In 2022, the Company will continue to organize training courses, classes, and re-training for sales staff technical skills for product groups through self-organization or hiring experts in related fields in order to improve the qualifications of the Company's employees
- Building and developing the Company's R&D human resources to strengthen and support the units in quality supervision and consulting technical solutions and towards the goal of specializing in the number of businesses
- Graduated from intermediate or higher in automation, mechatronics, electricity, mechanics or related technical disciplines
- Basic understanding of machinery and equipment, mechanical and electrical systems in the factory; have a sense of responsibility at work, honesty and caution; have good health, can meet working time in 3 shifts.
GENERAL EVALUATION
Advantages
- Infrastructure and equipment: With 3 business branches, 4 factories and 2 subsidiaries (100% capital of POSTEF) located in 3 regions, the company's products are sold throughout the country In addition, the Company also has an associate company in Laos As a unit operating for a long time in the industry, with prestige and large consumption, the Company always has the strength in finding suppliers with the lowest preferential prices, goods quality and delivery conditions ensure Apply the latest and most advanced technology in the field of production to its products The optical fiber and optical fiber workshop have applied ERP software to the management of the workshop Therefore, the labor and enterprises productivity are increasing day by day
- The company's organizational apparatus is arranged quite methodically
- Production method: the company has been effectively applying the lean production method LEAN, 5S As a result, waste in production has been reduced, creating a safe and professional working environment
- Enterprises have management teams as well as highly skilled workers, able to meet technical requirements as well as orders with complex designs, high prices, high production requirements from the most demanding customers
- Quality management at the source is strictly carried out Each department has its own quality control regulations and the QA department of the whole company supervises Since input materials, semi-finished products in production and output finished products are all strictly controlled for quality.
Disadvantages
During the internship, besides the advantages and advantages that helped the company achieve many successes in the past time, I realized that Postef- Factory123 still has the following limitations and difficulties:
- The warehouse management of factory 123 has not yet applied management methods by information technology (product codes, software management ) still uses many types of documents, which can cause unnecessary confusion
- Importing and exporting materials in the warehouse is still very manual, takes a lot of time, and lacks flexibility
- The company's input materials are mostly imported from China, which are screws, bolts, etc are often behind schedule, maybe up to 1 to 2 months Not only from foreign countries, but also sometimes the materials purchased in the country are the same
- There is a change in labor, due to the specialization of the work, it is easy to cause boredom for workers The turnover rate of workers is quite high, leading the company to regularly recruit more workers and train them from scratch.