Every organization has an objective or objectives and goals to achieve.

These objectives and goals achieving can be possible only when management organizing the available recourses in a suitable structure with a plan. The whole process of achieving objectives like planning, organizing and implementation and correction process by means of feedback bring together by operation management. The physical resources like space, machinery, money and men who organize those physical will take major role in the operation management. The objectives related to both performance and cost, decision making process related production or operation of the organization, strategic and operational and feedback control system will play important role in deciding life cycle of any organization. The various stages and their life span each stage life cycle of system is discussed in the next section.

. Life cycle concept Life cycle concept is applied in operational management for any production system which takes input and produces some out put by using some process. The production system may be mass production, batch production, Job shop production or unit manufacture or project. The different production system is applicable to process of production depends on the type of product we produce and the volume of the process we use to produce the goods. The whole process of operation form birth to death of a production system can be viewed as definite Life cycle. The life cycle concept of any product is similar to any life cycle of a living being. The major stages in the life cycle concept are 1) Development 2) Introduction or Birth 3) Growth 4) Maturity 5) Decline or Death. The similar Life cycle concept we can apply to any product in production system. The Typical product Life- cycle is represented in Figure A1-1. The concept also shows the product life influenced by the external environment and go through the various stages in its life cycle. Through out the cycle the whole process of operation management is applied on the production system to maintain to sustain longer. The in evitable situation due to the environmental influences like people taste, interest there is always new born of other production system. The same concept is shown in the Figure A1-1 Product A and Product B. product B emerged in the market when the Product enjoying the maturity stage of its life cycle. Birth

Growth

Maturity

Death

Product A

Product B

Volume

Time Figure A1-1 Product Life Cycle Concept The life span of each stage of a product may vary from a few months to years. For an example, within no time some products reach growth stage as soon as they were introduced in the market. Now we will discuss about each stage of the product life cycle. 2.1 Development The development stage can be a protracted stage and will involve activities such as design, planning, costing, test marketing, etc. The costs are high, with no earned revenue (and thus it does not register as a stage on the diagram at Figure A1-1). Promotion for awareness may commence in advance of introduction of the product to the marketplace. 2.2 Birth (or Introduction stage) This is the stage where a product will be introduced after initial decisions like selection, technology selection, location and layout design of production facility after study of various aspects of business unit in transpiration and raw material, manpower resources availability etc. This is the stage we call it as Birth stage of the product. 2.3 Growth stage After introducing the product the next stage for any product is looking for growth. The growth is stage is very critical in the operation management. The key of success is lying in this stage. How we take this product to people or how people will have the feel of necessity of the product depends on the efficient marketing strategies of the management. Sometimes the time taking to reach to growth stage will be faster because of the uniqueness of its usage when compared with its competitor's products. Major efforts are required at this stage to push with all possible strategies in an ethical manner. 2.4 Maturity stage Once the product is established, the product life cycle enters into the maturity stage. At this stage organization takes feedback from various groups of users and improve the product usability with add on features and introduce different models without changing the basic applications. This is the stage where businesses will be exposed more to the external competitive market which initiates the new comers with similar products where they will take off the market or share the market which causes the original product business organization will go for further improvements or for a new product line. Sustainability of this stage depends on the factors like the management's views, how fast they recognize their product obsolesced and how fast new comers takes over the market. 2.5 Death stage. As discussed above in maturity stage, in case business management could not predict the impact of the new product growth and lack of taking necessary changes in the product design, the product life cycle enters into the decline or death stage, which leads to the organization merging with new companies or liquidation or sale.

3. Life-cycle costing The cost of the product throughout the product life cycle is referred to as the Life cycle costing. The new concept of this Life cycle costing is long-term cost. The short-term cost always lead us to inefficient decisions which put us in a wrong track of product selection, design and production. The initial cost may be higher at growth stage, but if we know that the product sustains longer in the market in future, we should go ahead with considerable investments keeping the future market in mind. The decision policy throughout the life cycle should be maintained in the operational management of such business opportunity. 4. Conclusion As we discussed in the above section, any business organization will have their product life cycles. The operation management of the organization should always keep watching the new trends of people's taste or requirements, the available latest technology and competitor's new proposals so that necessary actions can be taken in advance to decrease the growth stage and increase the span of the maturity stage. The type of operational decisions and selection procedures all depends on the product of any organization plans to develop or introduce into the market.

Read more: http://wiki.answers.com/Q/Explain_concept_of_life_cycle_in_operations_management#ixzz1kFsdRjZO

The PLC indicates that products have four things in common: (1) they have a limited lifespan; (2) their sales pass through a number of distinct stages, each of which has different characteristics, challenges, and opportunities; (3) their profits are not static but increase and decrease through these stages; and (4) the financial, human resource, manufacturing, marketing and purchasing strategies that products require at each stage in the life cycle varies (Kotler and Keller, 2006). Whilst there is a common pattern to a product's life cycle, which is bell-shaped in nature, this pattern does vary depending on the specific characteristics of a given product. These life cycle patterns are illustrated and discussed in the subsequent section. The introduction of a new product onto the market is typically characterised by very slow sales, which may grow only very slightly over a long period of time. Whilst profits will gradually improve during this stage, it may take until near the completion of the introductory stage in the PLC before the company witnesses positive profitability. The reason for such low profitability during this stage is not so much the limited success of the product measured in terms of low, albeit growing, sales but the high costs of production and promotion that are required to try to develop customer awareness. Depending on the nature of the product, the firm many need to invest in building inventories or acquiring fixed assets such as plant and machinery. Whilst this stage in the process can take a long time and consume considerable resources, firms must not be tempted to try to obtain early profitability at the expense of long-term product viability. For example, introducing a new product at a low price may encourage a lot of consumers to make an immediate purchase, but the firm not only sacrifices long-term sales because too many people have bought the product early on but also may considerably reduce its margins, making it more difficult and time consuming before the product first becomes profitable and hits its break-even level. As such, firms must make careful choices over their marketing strategies; in particular, their pricing, promotional and placement decisions (Porter, 1980; 1985; Kotler et al., 1996; Blackwell et al., 2001; Grant, 2002; Kotler and Armstrong, 2004). The growth stage in the PLC typically involves a rapid growth in sales as early adopters replace pioneers as the main consumer group. Whilst pioneers are characterised as those consumers who purchase products almost immediately when new products are launched, early adopters wait until the price starts to fall and some of the product's potential weaknesses are ironed out. Nonetheless, over time the risk of purchasing a new product one that is not as well tested and supported decreases and increasing numbers of people become interested in, and purchase, the product. Towards the second half of the

growth stage, later buyers will start to adopt the product as they receive positive word-of-mouth recommendations from people they trust. Whilst profits start to increase during this period, they do not match the growth in sales. This is because the awareness of the new product and growth in product sales make the market for the product more attractive to potential new entrants and competitors. During this period of high sales growth, many competitors may choose to enter the market, reducing the company's relative market share and, in the process, its profitability. As the sales volume increases, the manufacturing and promotional spend per unit decreases, which also helps to increase profitability. Nonetheless, if the firm wants this growth phase to continue rapidly without petering out, it must invest in adding new product features or improving the quality of the product. This may not only attract existing customers to upgrade their current product purchase but it may also attract different customer demographics that would ordinarily not have been drawn to the product's features and functionality. Alternatively, improvements in customer support or the creation of easy-to-use functionality can help the firm acquire more risk-averse consumers who require greater product support. Over time, the company may choose to reduce prices considerably in an attempt to attract more customers, or bundle the product with other offerings that may be approaching the end of their growth stage. Nonetheless, it is typically just a matter of time before the product's growth starts to waiver (Porter, 1980; 1985; Kotler et al., 1996; Blackwell et al., 2001; Grant, 2002; Kotler and Armstrong, 2004). The maturity stage in the PLC is a key point for a firm because it marks the turning point in the product's success. Typically, the growth in sales decreases quite significantly and manufacturer's over-capacity (that is, larger than required inventories) results in a reaction by the firm and its competitors to slash prices. Whilst this prolongs the maturity stage and the total number of sales for some time, the drop in prices has an adverse effect on the product's profitability, and profit level, whilst still positive, starts a downward slide. Many firms, especially single-product firms, will look to every possible marketing management technique known to revitalise product sales, whether this involves starting new users or market segments, or making significant modifications to the product, perhaps improving its quality, reliability or some aesthetic feature. Companies such as HERSHEY'S have managed to prolong this stage considerably through intelligence branding, promoting the fact that their chocolate bars are "unchanged since 1899". Indeed, whilst Coca-Cola manages to increase global sales through entry into additional markets, many of its core products have remained the same over significant periods; it has just been their branding that has changed. Ultimately, the maturity stage becomes the key turning point for companies because at some point during this period, sales will start to decrease and potentially never experience positive growth again (Porter, 1980; 1985; Kotler et al., 1996; Blackwell et al., 2001; Grant, 2002; Kotler and Armstrong, 2004). In most cases this eventually leads to the decline stage during which time the product's sales drop significantly and in some cases, rapidly, with profits continuing to fall until profitability becomes so low that the product is discontinued or a company leaves sales to continue but accepts that the product has passed its core selling years. During this stage, a few laggards adopt the product but these are rarely a profitable customer group. Such a decline may be the result of technological developments, changes in consumer purchasing behaviour or significant increases in competition (Porter, 1980; 1985; Kotler et al., 1996; Kotler and Armstrong, 2004; Grant, 2002). In the case of the latter, international products may suffer from the loss of a patent licence or import protections that have otherwise kept a product's sales high long after its offering became relatively uncompetitive. As such, barriers to entry decrease; products may be substituted by cheap imports that benefit from lower costs of production and an established distribution network. During this period, firms in more advanced nations tend to refocus their efforts on creating new, high-value, technology-backed products that can again achieve a high price and start another PLC for the company (Doole and Lowe, 2004). Not all products follow the classic introduction, growth, maturity and decline cycles. Some products are able to find ways to re-invest themselves at the end of their growth stage or before they witness the negative side of the maturity stage. In so doing, they achieve what Kotler and Keller (2006) call a scalloped pattern. As the authors comment: "Here sales pass through a succession of life cycles based on the discovery of new-product characteristics, uses, or users" (323). As a classic example, they point to nylon sales which have found numerous need users, such as car tyres, carpeting, hosiery, parachutes and shirts, amongst others. For example, companies such as Levi's have managed to re-invent their jeans brand through the use of different fabrics and cuts that have given their product a new, youthful look. In addition to those variations to the common PLC, the concept can also be used to describe (1) fads, (2)

fashion, and (3) style. Fads are fashions that are introduced and adopted very quickly, but just as quickly can fall. They typically have a limited following, but are nonetheless adopted with real zeal, such as the hula-hoop. Fashions grow more slowly but still quite quickly before eventually witnessing a decline. However, in some cases these become a style; that is, they come back into fashion. For example, Beanies and Yo-Yos were in fashion during the 1950s and 1960s respectively before largely dropping off the radar until the 1990s when both products witnessed a revival (Kotler et al., 1996; Kotler and Keller, 2006).