1. AKASH BAKSHI

2. INTRODUCTION
 Four functional areas of business organisation
(i) Marketing
(ii) Production
(iii) Finance
(iv) personnel

3. PRODUCTION
 It is a transformation system where inputs are
converted into outputs.
 Production involves the step by step conversion of one
form of materials into another through chemical or
mechanical processing to create or enhance the utility
of the products or services.
 According to economists, production is an activity
through which utility is either created or enhanced

4. OPERATIONS
 It is a process of changing inputs into outputs with the
creation or adding value to some entity. The process of
alteration or transportation or storage or inspection or
any combination there of to add value to an entity is
rightly called operations.

5. FEATURES
 Non-inventoriable output of service, since generally no
stock is produced
 Variable demand
 Labour intensive operations mostly
 Location of service is dictated by the location of the
user.

6. PRODUCTION MANAGEMENT
 Production management is the process of planning,
organizing, directing and controlling the activities of
the production function. Production function is the
conversion of raw material into finished products.
 Acc to H.A. Harding,” production management is
concerned with those processes which convert the
inputs into outputs.

7. OBJECTIVES OF PRODUCTION
MANAGEMENT
 (i) Ultimate objectives
 (ii) Intermediate objectives

8. Ultimate Objective
The primary responsibility of the manufacturing
activity to produce a product or products at
(1) Pre-established cost
(2) According to specified quality
(3) Within the stipulated time period

9. The ultimate objectives can be classified as under:
(i) Manufacturing costs
(ii) Product quality
(iii) Manufacturing time schedule

10. Manufacturing costs:
 Efforts should be made for following
(i) Reduction in variable costs.
(ii) Reduction in fixed costs
(iii) Increase in the volume of production, so that the
fixed costs may be spread over more production
resulting in the reduction in the per unit absorption
(iv) The allocation of the fixed overhead should be made
on scientific basis.

11. Product quality
 The product quality standards are often established by
the consumer. The manufacturing organizations
should try to translate such quality prescriptions into
some measurable objectives. The maintenance of the
quality should not result in increase in manufacturing
costs or delay in production

12. Manufacturing schedule
 The time system should not be set for the shipment
alone, it should be broken into all sub systems like
operating cycle time, inventory turnover rate, machine
and labour idle time, set up, repair and maintenance
time etc.

13. Intermediate objectives
 Machinery and equipment
 Materials
 Manpower
 Manufacturing services

14. Machinery and equipment
 Acquisition of machinery and equipment: The
adequacy of existing machinery should be considered
and proper additions and replacements should be
made according to requirements.
 Utilization of machinery and equipment: Efforts
should be made to increase the utilization rate of
machinery through repair, maintenance and
maximum occupancy of the machines.

15. Materials
 The material objective must be prescribed in terms of
rupee value, units and space requirements. The per
unit material cost should be specified and efforts
should be made to increase the inventory turnover all
types of inventories – raw matrial, work in progress
and finished goods.

16. Manpower
 Manpower must be closely allied with the objective of
selection, placement, training, rewarding and
utilization of manpower. Usually these objectives are
considered in terms of employees turnover rates, safety
measures, industrial relations, absenteeism etc.

17. Manufacturing services
 The objective of manufacturing service is to
manufacture a quality product, on schedule, at the
lowest possible cost, with maximum asset turnover, to
achieve consumer satisfaction.

18. Characteristic of modern
production and operations function
(i) Manufacturing as competitive advantage
(ii) Service orientation
(iii) Disappearance of smokestacks
(iv) Small has become beautiful

19. Conclusion
 To summarise the product has to
(i) Make sure that it develops a product which can
function as expected, i.e. product with the correct
quality
(ii) Produce the product in correct quantity
(iii) Deliver the product in Time to right place
(iv) And to perform these functions at the right price.