Overview of POM
• Production and Operations Management
(POM) involves planning, organizing, and
controlling resources to produce
goods/services efficiently.
History of POM
Scientific Globalizatio
Manageme n and Lean
Craft nt (Early Production
Production 20th Operations (1980s–
Era (Pre- Century): Research 1990s):
18th Frederick (WWII Era): Focus on
Century): W. Taylor Use of quality,
Individual introduced quantitative waste
craftsmen time and methods reduction,
produced motion for and
customized studies and decision- internation
goods with work making in al
simple standardiza military competitive
tools. tion. logistics. ness.
Industrial Human Post-War Digital and
Revolution Relations Period Automatio
(Late 18th – Movement (1950s– n Era
Early 19th (1930s– 1970s): (2000s–
Century): 1950s): Developme Present):
Introductio Emphasized nt of Integration
n of power- worker concepts of ERP, AI,
driven motivation like MRP, IoT, and
machines; and EOQ, and Industry 4.0
mass satisfaction JIT. technologie
production (Elton s.
Service Revolution
The service revolution refers to the shift in global economies from manufacturing-
dominated to service-dominated structures.
In most developed and developing economies (including India), services now constitute
more than 60% of GDP.
Growth sectors include IT, finance, healthcare, education, and hospitality.
Operations management adapted to this shift by incorporating strategies for
intangibility, perishability, variability, and inseparability—all unique characteristics of
services.
Definition of POM
• Production and Operations Management (POM)
refers to the process of planning, organizing,
directing, and controlling the resources (people,
materials, technology, and information) required to
produce goods and services efficiently.
Factors Affecting OM
Technolog Globaliz Customer
ical ation: Expectatio Sustainabili Competitio Regulations and
Advances: Sourcing, ns: ty: n: Requires Labor Force: Government
Automatio producti Demand Environme cost- Skills, Policies:
n, on, and for ntal efficiency motivation, Compliance with
robotics, distributi customizati regulations and and labor laws,
AI, and on on, quality, and green differentiat availability. environmental
ERP across and quick operations. ion. standards, etc.
systems. borders. delivery.
Role of OM
Ensures optimal Enhances Aligns operations
use of productivity, strategy with
organizational quality, and cost overall business
resources. efficiency. goals.
Scope of OM
Inventory
Productio , quality, Maintena
Facility
Manufact n and nce and
location
uring & planning supply materials
and
Services and chain managem
layout
control managem ent
ent
Functions
Control: Quality Improvement:
Planning:
Design: Product control, inventory Continuous
Capacity,
and process control, and improvement
production, and
design. workflow through Lean, Six
scheduling.
management. Sigma, TQM.
Performance Criteria
Productivity: Output per unit of input.
Quality: Conformance to specifications and customer satisfaction.
Cost-effectiveness: Minimizing cost without sacrificing quality.
Flexibility: Ability to respond to changes in demand or customization.
Delivery Performance: On-time delivery and lead time management.
Efficiency: Optimal resource utilization.
Operations Strategies
• Cost Leadership Strategy: Compete on low
cost (e.g., Walmart).
• Differentiation Strategy: Unique features or
Operations quality (e.g., Apple).
strategy is the • Focus Strategy: Targeting a niche market
long-term plan with tailored operations.
for using the • Lean Operations: Reducing waste and
production improving flow.
function to • Agile Operations: Flexible systems
responsive to customer needs.
achieve overall
business goals. • Sustainable Operations: Eco-friendly and
ethical production practices.
It includes:
Effect of Growth of Service Sector on
Operations Management
Shift from Tangibles to Intangibles: Requires new performance metrics.
Customer-Centric Focus: Operations must ensure high service quality and
responsiveness.
Real-time Operations: Use of IT systems for real-time service delivery (e.g., banking
apps).
Queue and Capacity Management: Managing demand and reducing wait times (e.g.,
hospitals, airports).
People-Oriented Operations: Employees are often part of the service delivery,
requiring effective HR and training strategies.
Customization and Flexibility: Increased need for personalized services.
Service Quality Metrics: Use of SERVQUAL and Net Promoter Scores.
Conclusion
Production and Operations Management has evolved
from a manufacturing-centric function to a core
component of both manufacturing and service
organizations. Understanding its historical context,
current scope, and strategic importance is crucial for
managing operations efficiently in a globalized, tech-
driven, and service-oriented economy.