 Today, we will deal with basic introduction to the production and operations management. The session is mainly aimed at making you understand the concept and objectives of the production and operations management. The total content will be divided into introduction, definition, the concepts of the production and operation management, what are the objectives of it. We will start with the introduction, what is production? Production is a creation of utility. The production function creates utility by providing form, time and place utilities for the produced goods. Manufacturing provides form utility while physical distribution provides the time and place utility. Let us take a simple example. Any material in any form has definitely no doubt some utility, some value. If I change that features of the particular material item or a service into another better option then probably I have done some process on it and that process may be either a service operation or a production operation. Today has defined production as a step by step conversion of one form of material into another form of material so as to create or enhance the utility. Already the product, the material has some sort of utility. We want to enhance the utility or we want to create the utility with a particular transformation process. For example, iron ore is there. When I convert iron ore into pig iron, I am making a conversion process, it is a production process converting the iron ore into pig iron. Now pig iron has utility. When I produce casting from pig iron, I am making another manufacturing process called as foundry process where I am trying to convert the pig iron into various castings. Casting has utility. Now when I take casting, I make it machining. Then machining adds again another value that have further improvement in the value. Machine components if I assemble, assembly is an operation. It is not a production process, it is a operational process where it again adds to the value and then it has further enhancement of it. So when I transport from one place to another place, it has a place utility. Now I am moving into a service provision where I have provided some service function to the particular product or the process and as a result of that, it enhances the production. So therefore, production or operation is a basically value addition process by conversion. The conversion may be in terms of physical conversion, may be chemical conversion, may be a yearly service confirmation like moving it from one place to another place or keeping it under some controlled conditions. These are some of the service functions as such. Any manufacturing or service or production process definitely will add to the value of the particular product. Then the production management is a process of planning, organizing, directing, controlling the activities of the production function. Once we understand the production function and we understand what is management, management is basically planning, organizing, directing and controlling the activity so as to achieve the desired result. It is the art of getting the things done. So when I apply management definition to the production, then we call it as a production management process. There are number of definitions available in the variety of textbooks. So basically it is the application of the management principles to the production activity or service activity. When I apply the concepts to a service operation, then instead of calling it as production management, I call it as a operations management. So nowadays you will find that production and operation management are merged together and combined. We generally call it as a operation management as the total picture of the entire operations activity. It may include some of the manufacturing activity and some of the service activities as such. It is also dealing with decision making related to production processes so that the resulting goods or services are produced according to the specifications in the amount by the scheduled demand and at minimum cost. It is in short dealing with the production process so as to get the desired output in terms of quality, quantity and time and cost. It also can be defined as a process which combines the transformations of various resources into production or operation subsystems of the organization into value added product or service in a controlled manner as per the policies of the organization, the definition which you have just now discussed. A set of various activities which are involved in manufacturing, certain products is named as production management. We are looking into the various definitions of the production management. If the same concept is extended to the service sector, then the various management activities are called as operation management instead of a production management. In the pictorial form, the transformation process is there is a input and there is output and there are various processes which converts input into output. The various conversion processes are either production processes or the service processes. Now just think for a moment what can be the various forms of the transformation processes. You can have manufacturing processes, you can have the service processes where here is the answer. The various transformation processes can be, it can be a physical manufacturing activity, it can be a locational just like transportation from one place to another, it can be exchange in the real operations, it can be physiological as healthcare, it can be psychological as an entertainment and it can be informational as in the communication. So there are tremendous amount of transformation processes which are possible which convert input into output. The various modes and methods of transformation are the details of the various operations which we are going to study in the further part of the content. As already we are looking into it, the objective of the production management. What is the objective of the production management? It is to produce goods or services of right quality, quantity at the pre-determined time and pre-established cost. In short, the objective of the production management can be right quality, right quantity at right time. Right time is pre-determined time and at the right cost. So we can define it in another way that four hours, the first is right quality, the second is right quantity, the third is right time and the fourth is right cost. What is right quality and right quantity? Quality and quantity are as described by the customers and specifications are generally given by the customers in terms of quality. Quantity is their amount in what particular batch quantity they wanted. What is the time? The delivery schedule of the customer and the cost is of course a pre-determined cost which is generally arrived at by lateral discussions between supplier and the manufacturer or service provider. The details of the what is right quality is given over here. What is right quantity? The right quantity is, it should produce the products at the right number in terms of required this and then excess of the demand in the capital will block up in the form and it is produced in the quantity short of the demand, these will have shortages. So excess will have its own negative impact on the inventory and shortage will have its own negative impact on the customer satisfaction. So excess is also not permitted and shortage is also not permitted. The balance between excess and shortage is the right quantity in short. Right manufacturing cost so that it should be minimum possible cost as decided by the organization therefore we can be comfortable with the applicable profits. Manufacturing schedule, the delivery schedule as decided by customer and supplier. So in short when we look at the various types of production systems we are mainly aiming at what is right quality, what is right quantity, what is right time and what is right cost. We have seen that now there are very less flexibilities in terms of supply of the production or services when it comes to the actual business operations. The fact remains is that you cannot have scope for the quality deviations. You cannot have scope for quantity deviations. The cost is already determined by the bilateral agreement. The only option which we are having is the delivery schedules. I have seen number of companies which are having their competitive age. It is only in terms of delivery of the right time. Even we have come across number of cases where probably the customer is ready to pay an upfront incentive if you give the delivery on time. So in the competitive era quality cost and delivery are the major important. Of course quality, quantity and cost are the three important parameters which are generally almost rigid. We do not have lot of scope to vary for this. The only advantage we can have in the competitive market is the delivery schedules. So we must have the production planning facility, we must have the entire schedules so that we definitely will meet with the customer demand as per their time requirements. So the best competitive advantage for any manufacturing or service provision company is to provide goods and services on time. Of course quality, quantity and cost remains as a pre-requirement for the business operations.