Important decision making areas in OM

Product Selection and design:

The product mix makes our system either efficient or inefficient. Choosing the right products, keeping the mission and overall objectives in mind is the key to success. Design of the product, which gives it enough functional and aesthetic value, is of paramount importance. It is the design of the product which makes us competitive or non-competitive. Value engineering does help us to retain enough of features, while eliminating the unnecessary cost increasing features.

Process selection and planning:

Selection of a process involves taking decisions about technology, machines and equipment. We have to optimize the output from a given process. Process planning, detailing the stages of the process, gives us an idea of optimum automation and mechanization.

Facilities location:

Where can we locate our operations / production? It commits us at a location for a long time. So a wrong decision may prove disastrous. Location should as far as possible cut down on production and distribution cost. Therefore, from the alternatives open to us, we have to evaluate and judge a suitable location for us. While evaluating, there are diverse factors to be considered.

Facilities Layout and Material Handling:

Plant layout deals with the arrangements of machines and plant facilities. The machines should be so arranged that the flow of production remains smooth. There should not be over-lapping, duplication or interruption in production flow. Product layout, where machines are arranged in a sequence required for the processing of a particular product, and process layout, where machines performing similar processes are grouped together — are two popular methods of layout. The departments are laid out in such a way that the cost of material handling is reduced. There should be proper choice of material handling equipment. These days computer software is available for planning the Process layout like CRAFT, CORELAP etc. Group Technology (G.T), Cellular Manufacturing Systems (CMS) and Flexible Manufacturing systems (FMS) have made our concepts of layout planning undergo a tremendous change.

Capacity planning

This deals with the procurement of productive resources. Capacity refers to a level of output of the conversion process over a period of time. Full capacity indicates maximum level of output. Capacity is planned for short-term as well as for long term. Process industries pose challenging problems in capacity planning, requiring in the long run, expansion and contraction of major facilities in the conversion process. Some tools that helps us in capacity planning are marginal costing, learning curves, linear programming, and decision trees.

Operational or short-term Decisions:

These deal with short-term planning and control problems. Some illustrative decisions are:

Production Planning

Planning is a pre-operation activity. It aims at anticipating the probable difficulties so that they can be eliminated before they materialize or be mitigated before they become grave. Production planning aims at setting the goals or targets and allocating the existing resources viz., men, machines, materials and plant services, among varied production operation so that their best possible use can be made in the light of the set goals or standards.

Thus, production planning is a management technique which attempts to gain the best utilization of a firm’s manufacturing facilities. It is gained by the integration and co-ordination of the manpower, machines, materials and plant services employed I the manufacturing cycle.

Production Control

Control is a management technique which aims to see that the activities are carried on in line with the predetermined standards. In case of production activities, production control tries to see that the actual manufacturing conforms to the predetermined standards and schedules of productions. Production control is considered to have a wider scope and thus it includes production planning. In practice, a joint reference is made of production planning and control and it is popularly known as PPC.