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Managing Product and Service Operation

This document discusses key concepts in operations management. It defines operations as any process that transforms inputs into useful outputs. The production process involves inputs of land, labor, capital, and entrepreneurship that are transformed through equipment, procedures, and technology into products and services. Operations management aims to efficiently and effectively plan, organize, and control operations to meet objectives. Key transformation processes are manufacturing and service processes. The six important activities in production systems are product design, production planning and scheduling, purchasing and materials management, inventory control, work-flow layout, and quality control.

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46 views4 pages

Managing Product and Service Operation

This document discusses key concepts in operations management. It defines operations as any process that transforms inputs into useful outputs. The production process involves inputs of land, labor, capital, and entrepreneurship that are transformed through equipment, procedures, and technology into products and services. Operations management aims to efficiently and effectively plan, organize, and control operations to meet objectives. Key transformation processes are manufacturing and service processes. The six important activities in production systems are product design, production planning and scheduling, purchasing and materials management, inventory control, work-flow layout, and quality control.

Uploaded by

Kevinjosh Friginal
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MANAGING PRODUCTIONS AND SERVICE OPERATIONS

OPERATIONS - any process that accepts inputs and uses resources to change those inputs in useful
ways.

THE PRODUCTION PROCESS

INPUTS TRANFORMATION PROCESS OUTPUT

 Land
 Equipment
 Labor  Products
 Procedures
 Capital  Services
 Technology
 Entrepreneurship

Example of Final Goods and Services:

1. Industrial Chemicals
2. Services for Construction
3. Electrical Products
4. Electronic Products
5. Mechanical products
6. Engineering Consultancy Services

OPERATIONS MANAGEMENT
- the process of planning organizing, and controlling operations to reach objectives efficiently
and effectively.
 Efficiently - when a person does a job with lesser cost than another who does the same job.
 Effectively - when one is able to reach his objectives e.g., produce 10,000 units in one month

- must be performed in coordination with the other functions like marketing and finance.
Operations and the Engineer Manager
As the engineer manager is expected to produce some output whatever management level he
is, an engineer as operations manager must find ways to contribute to the production of quality goods
or services and the reduction of costs in his department.

TYPES OF TRANSFORMATION PROCESS

1. MANUFACTURING PROCESS - those that refer to the making of products by hand or with
machinery.
a) Job Shop - small manufacturing systems that handle job production - custom/bespoke
manufacturing processes. Production only starts when an order is made; each order is unique
and has to meet specific requirements of the customer.
b) Batch Flow - where lots of generally own designed products are manufactured. Each unique
batch is completed before moved to next work center.
c) Worked-Paced Assembly Line - workers themselves are the one who move the
products/components from one task to the next. Workers are assigned a repeated task.
d) Machine-Paced Assembly Line - produces mostly standard products. Machines play
significant roles.
e) Continuous Flow - characterized by “the rapid rate at which items move through the
system”. very appropriate for producing highly standardized products like calculators,
typewriters, televisions, etc.
f) Batch and Continuous Flow Hybrid - combination of batch and continuous flow. Size of
operation is very large.

2. SERVICE PROCESSES - those that refer to the provision of services to persons by hand or with
machinery.
a) Service Factory - offers a limited mix of services which results to some economies of scale
in operations. The idea that the factory can be a source of customer services in addition to a
place where products are manufactured.
b) Service Shop - provides a diverse mix of services. Layout used are those for job shops or
fixed position and are adaptable to various requirements.
c) Mass Service - provides services to a large number of people simultaneously thus offer
limited mix of services.
d) Professional Services - companies providing specialized services to other firms of
individuals.
IMPORTANTS PARTS OF PRODUCTIVE SYSTEM

6 IMPORTANT ACTIVITIES

1. PRODUCT DESIGN
- “Process of creating a set of product specifications appropriate to the demands of the
situation”
- Team usually consists of engineers, manufacturing and marketing specialist.
2. PRODUCTION PLANNING
- Forecasting the future sales of a given product, translating this forecast into the demand it
generates for various production facilities, and arranging for the procurement of these
facilities”
SCHEDULING

- “Phase of production control involved in developing timetables that specify how long
each operation in the production process takes”
- Efficient scheduling assures optimization of the use of human and nonhuman resources.
3. PURCHASING AND MATERIALS MANAGEMENT
- “Approach that seeks efficiency of operations through of operation through integration of
all material acquisition, movement, and storage activities in the firm”
4. INVENTORY CONTROL
- Process of establishing and maintaining appropriate levels of reserve stocks of goods.
4 ways:

 Determined reorder point and reorder quantity


 Determined economic order quantity
 Uses of just-in-time method (JIT)
 Use of the material requirement planning (MRP) method of planning and
controlling inventories.
5. WORK-FLOW LAYOUT
- Process of determining the physical arrangement of the production system.
BENEFITS:

 Minimize investment in equipment


 Minimize overall production time
 Use of existing space most effectively
 Provide for employee convenience, safety and comfort
 Maintain flexibility of arrangement and operation
 Minimize material handling cost
 Minimize variation in types of material-handling equipment
 Facilitate the manufacturing (or service) process
 Facilitate the manufacturing organizational structure

6. QUALITY CONTROL
- Measurement of products or services against standards set by the company
Poor quality control leads to: customer complaints, returned merchandise, expensive lawsuits,
huge promotional expenditures.

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