Production system , any of the methods used in industry to create goods and services from various resources. The transformation process typically uses common resources such as labour, capital for machinery and equipment, materials, etc. When viewed as a process, a production system may be further characterized by flows channels of movement in the process: both the physical flow of materials, work in the intermediate stages of manufacture work in process , and finished goods; and the flow of information and the inevitable paperwork that carry and accompany the physical flow.
The management of information flows, or the planning and control of the system to achieve acceptable outputs, is an important task of the production manager. While the capacity of the system is the major factor in determining whether output expectations can be met, the additional consideration of quality must also be seen as a limiting factor.
The quality of a product, measured against some objective standard, includes appearance, performance characteristics, durability, serviceability, and other physical characteristics; timeliness of delivery; cost; appropriateness of documentation and supporting materials; and so on.
It is an important part of the definition of a system. There are three common types of basic production systems: the batch system , the continuous system, and the project system. In the batch system, general-purpose equipment and methods are used to produce small quantities of output goods or services with specifications that vary greatly from one batch to the next. A given quantity of a product is moved as a batch through one or more steps, and the total volume emerges simultaneously at the end of the production cycle.
Examples include systems for producing specialized machine tools or heavy-duty construction equipment, specialty chemicals, and processed food products, or, in the service sector, the system for processing claims in a large insurance company. Batch production systems are often referred to as job shops.
In the continuous system , items to be processed flow through a series of steps, or operations, that are common to most other products being processed. Since large volumes of throughput are expected, specially designed equipment and methods are often used so that lower production costs can be achieved. Frequently the tasks handled by workers are divided into relatively small segments that can be quickly mastered and efficiently performed.
Examples include systems for assembling automobile engines and automobiles themselves, as well as other consumer products such as televisions, washing machines, and personal computers. Continuous production systems are often referred to as assembly systems or assembly line systems and, as noted below, are common in mass production operations. Production , the creation of products and services, is an essential function in every firm.
Production turns inputs, such as natural resources, raw materials, human resources, and capital, into outputs, which are products and services. This process is shown in Figure. Managing this conversion process is the role of operations management. The goal of customer satisfaction is an important part of effective production and operations. In the past, the manufacturing function in most companies was inwardly focused.
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In the s, many U. As a result, today most American companies, both large and small, consider a focus on quality to be a central component of effective operations management. Stronger links between marketing and manufacturing also encourage production managers to be more outwardly focused and to consider decisions in light of their effect on customer satisfaction. Service companies find that making operating decisions with customer satisfaction in mind can be a competitive advantage.
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They also work closely with other major divisions of the firm, such as marketing, finance, accounting, and human resources, to ensure that the firm produces its goods profitably and satisfies its customers. Marketing personnel help them decide which products to make or which services to offer.
Accounting and human resources help them face the challenge of combining people and resources to produce high-quality goods on time and at reasonable cost. They are involved in the development and design of goods and determine what production processes will be most effective. Production and operations management involve three main types of decisions, typically made at three different stages:.
All three decisions are ongoing and may occur simultaneously. In the following sections, we will take a closer look at the decisions and considerations firms face in each stage of production and operations management. An important part of operations management is production planning. Production planning allows the firm to consider the competitive environment and its own strategic goals to find the best production methods.
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Good production planning has to balance goals that may conflict, such as providing high-quality service while keeping operating costs low, or keeping profits high while maintaining adequate inventories of finished products. Sometimes accomplishing all these goals is difficult.
Production planning involves three phases. Long-term planning has a time frame of three to five years.