CH-1-An Overview of Production Management Assist Prof Banu OZKESER October, 2015

Before the beginning…

Info about the course Information about lecturer Production management – Syllabus How is this course evaluated?

In addition to this… NEVER FORGET THAT YOU ARE A GREAT VALUE FOR THIS COURSE AFTER A WHILE, YOU WILL ATTEND THIS COURSE LIKE A HOBBY NO MEMORIZE IN THIS COURSE YOU WILL LEARN WHAT IS IMPORTANT IN YOUR BUSINESS LIFE and BRAIN STORM !!

A quick look to agenda 1.1. Production 1.2. Why is Production Important for Economy? 1.3. Products and Services 1.4. System Management 1.5. Production Management Point in Business 1.6. Implementation Examples from Business Life

1.1. Production Production is; «the act of making products / services» «the act of manufactuing goods» «the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user.» Production OR Manufacturing OR Operations

1.1. Production Production / Manufacturing / Opeations Management; «is the process, which combines and transforms various resources used in the production/operations subsystem of the organization into value added product/services in a controlled manner as per the policies of the organization.» «is a set of general principles for production economies, facility design, job design, schedule design, quality control, inventory control work study and cost band budgeting control» «is about how organizations produce or deliver the goods and services that provide the reason for their existence»

1.1. Production Production system

1.1. Production Classification of Main Production system; Job-Shop Batch Mass Continuos

1.1. Production Job-Shop Production; Job shop production are characterised by manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. Each job has its own route. (Exm: print shop, a machine tool shop, paint shop…) Batch Production; 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. (Exm: electrical goods, furniture, clothing, newspapers, bakery, books…) Mass Production; 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. (Exm: cars, guns, fast food…) Continuous Production; Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. (Exm: oil and gas refinery, flat glass, chemical plant…)

1.1. Production Importance of Productivity: Effectiveness of production and operation system may be viewed as the efficiency with which inputs are converted into outputs. Productivity is the ratio of input facilities to the output of goods and services. Productivity = Output / Input = Goods or services / Capital, manpower, materials, machines and land and building The higher the productivity of the operating system, more efficient the operation function said to be. Management of operation system thus is essentially concerned with the management of productivity.

1.2. Why is Production Important for Economy? In a simple definiton; People must earn money for their future The way of earning money passes through the people’s producing sth. Everybody need another person’s production So, money cycle begins and a dynamic economy bases on this!

1.3. Products and Services The production system has the following characteristics: Production is an organized activity, so every production system has an objective The system transforms the various inputs to useful outputs It does not operate in isolation from the other organization system There exists a feedback about the activities, which is essential to control and improve system performance

1.3. Products and Services Products are the goods that can be touched or felt in the real world. Services especially depends on the human resources. There so many objective factors (atmosphere of the company, the way of act etc.) that can effect the service quality. Thus, the satisfaction of the customer may not be as easy as products. Following characteristics can be considered for distinguishing manufacturing operations with service operations: Tangible/Intangible nature of output Consumption of output Nature of work (job) Degree of customer contact Customer participation in conversion Measurement of performance

1.3. Products and Services A general model for managing operations

1.4. System Management System; «a set of detailed methods, procedures and routines created to carry out a specific activity» «a set of interacting or interdependent component parts forming a complex/intricate whole» «an organized, purposeful structure that consists of interrelated and interdependent elements» System management is planning, implementing and controlling of a whole system.

1.4. System Management Elements of a system: Boundary -seperates a system from its environment -often not sharply defined -also known as an interface Environment -part of the world with which the system can interact -system and environment are interrelated Observable Interactions -How the system interacts with its environment -E.g. inputs and outputs

1.4. System Management Elements of a system: Subsystems -Can decompose a system into parts -Each part is also a system -For each subsystem, the remainder of the system is its environment -Subsystems are inter-dependent Control Mechanism -How the behaviour of the system is regulated to allow it to endure -Often a natural mechanism Emergent Properties -Properties that hold of a system, but not of any of the parts -Properties that cannot be predicted from studying the parts

(The Key of Continuous Improvement) 1.4. System Management Inputs Process Outputs Feed – Back (The Key of Continuous Improvement)

1.4. System Management

1.5. Production Management Point in Business Following are the activities which are listed under management functions: Location of facilities Plant layouts and material handling Product design Process design Production and planning control Quality control Materials management Maintenance management

1.5. Production Management Point in Business Operations Competitve Priorities: Cost Time Quality Flexibility

1.5. Production Management Point in Business Purchasing Finance Human Resources Production management Accounting Information Technology Production Planning R&D Inventory Maintenance

1.6. Implementation Examples from Business Life EXAMPLES OF PRODUCTS / SERVICES DHL PEPSI XEROX MC DONALD’S SHELL ZIRVE UNIVERSITY TUBITAK MIGROS NESTLE

1.6. Implementation Examples from Business Life EXAMPLES OF PRODUCTS / SERVICES RESTAURANT TURKCELL TOMMY HILFIGER GARANTI BANK HOSPITALS THY STARBUCKS MADO

1.6. Implementation Examples from Business Life Some of the biggest problems that producers are face to face nowadays, are; -A fast introduction in market -Developing flexible manufacturing systems due to everything’s focusing on customer needs -Managing global production networks -Developing and entegration of new process technologies for existing production systems -Managing different cultures in human resources (foreign country people)

Questions?