Life cycle concept extended to production system


In marketing we have extensively adopted product life cycle approach in which a product over a period of time goes through several distinct stages: introduction, growth, maturity, decline and death. The marketing decisions at each stage of the product life cycle are typical.

The same concept is extended to a production system as a whole. In the introduction stage of production, we have to select a product and its design. We have to set up facilities to manufacture it. All these decisions are major strategic decisions, taken by the promoters of an industry. Immediately thereafter, the production system becomes steady as most on-going organizations are. Here the decisions are short-term tactical decisions. Here the system is influenced slightly by internal and external environmental changes.

When there are radical changes in the external environment, and the production system finds it difficult to adapt to those changes, the system comes to an end. There is either liquidation or sale or merger. Sometimes, the system is phased is phased out intentionally over a period of time. These days we also talk in terms of cycle costing where we do not only consider the initial investment in a project but also the investment spread over a period of time in the form of maintenance cost to evaluate different competing proposals.

Role of Scientific Methods on Operations Management

Scientific management techniques are much relevant and widely used in operations management area than elsewhere. These techniques are an invaluable aid to decision-making. They modify the purely subjective judgment of the manager.

Industrial engineering (IE) which is an integrated system of men, materials and machines helps production systems tremendously.

Modeling where reality is approximated by studying the relationship of certain variables so as to understand, explain, and predict the behavior of the systems has done yeoman’s service to production/operations management. Of special interest are the
optimization techniques of OR like linear programming (LP), transportation, assignment, PERT/CPM etc. We also fall back upon statistical techniques like central tendency, sampling, quality control charts etc

Computers have given us software packages for all these useful techniques. Computers also help us in MIS. Computer based production systems with cybernetic have also come in vogue.

Behavioral sciences with emphasis on human element enlighten us about morale and motivation, group dynamics, supervising styles, merit rating and performance appraisals. Thus these also have a role in operations management.