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Operation Management

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Learning Outcomes

Upon completion of this topic you should be able to:

Discuss the various roles production management may play in supporting the strategic plan of an enterprise

Identify situations in which repetitive production and batch production would be appropriate

Production Defined

Production can simply be defined as the activity of transforming raw materials or components into finished products

Therefore production management is the process of the effective planning and control of the operations of that section of an enterprise devoted to transforming materials into finished products.

Production strategy

This is concerned with guiding investment decisions.

Decisions made today provide guidelines for future production operations.

The following points need to be considered in developing a strategy:

Should resources be placed in production rather than in other areas of a business?

Decide capacity needed to meet agreed production and corporate objectives and when production should commence;

Decide where plant should be located and the type of technology to use.

Types of production

Before production commences, forecasting and planning are needed and the actual procedure adopted depends upon a number of items, e.g. whether a standard range of goods is required or whether designing is to follow special orders from customers.

Production policy therefore must be known and then the processes of manufacture, machine requirements, factory layout, storage and handling systems, skills required in the workforce and the method of training can be determined.

This policy is largely determined by the nature of work being carried out.

Factors to consider are the following:

Amount of repetition

Range of products


Amount of repetition

This is a dominating factor and there are three reasonably definite types:

Job production (Unit production)

This occurs when a customer requires a single product made to his specifications, e.g. a car or a suit

Demand can be only broadly forecasted and generally production schedules can be only prepared when the customer's order arrives.

There must be a wider variety of machines and equipment available to do all types of work and labour must have varied skills which may not be too easy to achieve

Batch production

This occurs where a quantity of products or components are made at the same time.

There is repetition but not continuous.

Production often is for stock, but if a batch is required to fulfil a special order the items are usually completed in one run.

Flow production

This occurs where there is a continuous production of products of a more or less identical nature.

There is very little waiting between the execution of one operation and another and each machine is continually used for one product and these are often specialised single purpose machines.

There can also be greater expenditure on equipment because of the high rate of breakdown.

It is vital that maintenance be planned to prevent breakdowns, as the breakdown of one machine can stop the production line

However, for this type of production to occur, there



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