Manufacturing and Service Operations

• Operations is the part of a business organization responsible for producing goods and/or services.
• Goods are physical items produced by business organizations, including raw materials, parts, subassemblies (like motherboards), and final products (like cell phones and automobiles).
• Services are activities that provide a combination of time, location, form, and psychological value.
• Manufacturing Operation refers to a framework where man, machine, and material combine to produce a tangible product.
• Service Operation involves intangible and non-physical products offered in exchange for money.

Classification of Manufacturing Operations

• Make to Order (MTO) begins processing material and components after receiving an order from a customer.
• Make to Stock (MTS) manufactures products and places them in inventory before receiving customer orders.
• Assemble to Order (ATO) manufactures standardized option modules based on forecasts and assembles specific combinations after receiving an order.

Types of Manufacturing Operations

• Project Manufacturing involves big, costly, and highly customized items.
• Job Shop uses process-focused groupings of resources.
• Line Flow Production uses product-focused groupings of resources.
• Batch Production is similar to Job Shop but produces a mix of products in lot sizes, while a Hybrid Process combines job shop, batch production, and line flow.

Basic Functions in Business Organization

• Goal: Achieve an economic match of supply and demand.
• Key Functions on the supply side: Operations and Supply chains
• Key Functions on the demand side: Sales and Marketing
• Finance secures financial resources at favorable prices and allocates them throughout the organization, including budgeting, analyzing investment proposals, and providing funds.
• Marketing assesses consumer wants and needs and sells and promotes the organization's goods or services.
• Operations is responsible for producing goods or providing services.
• A Supply Chain is a sequence of organizations, facilities, functions, and activities involved in producing and delivering a product or service, from raw materials to the final customer.
• The creation of goods or services involves transforming or converting inputs into outputs, with measurements taken and compared to standards to determine if corrective action is needed.
• Value-added is the difference between the cost of inputs and the value or price of outputs and the essence of the operations functions.
• Quantitative approaches to problem-solving often seek mathematically optimal solutions for managerial problems.
• Linear programming and related mathematical techniques are widely used for optimum allocation of scarce resources.
• Queuing techniques are useful for analyzing situations with waiting lines.
• Inventory models are widely used to control inventories.
• Project models such as PERT (program evaluation and review technique) and CPM (critical path method) are useful for planning, coordinating, and controlling large-scale projects.
• Forecasting techniques are widely used in planning and scheduling.
• Statistical models using Minitab applications are used in many areas of decision-making.
• Time & Motion Studies and techniques are used to set standard time and improve processes.

Scientific Management

• Frank Gilbreth, the father of motion study, developed principles of motion economy applicable to small task portions.
• Henry Gantt recognized the value of nonmonetary rewards and developed Gantt charts for scheduling.
• Harrington Emerson applied Taylor's ideas to organization structure and encouraged the use of experts to improve organizational efficiency.
• Henry Ford employed scientific management techniques in his factories.
• Productivity is the total value of outputs (goods and/or services) divided by the total cost of inputs (labor, materials, and equipment).
• Productivity = [Total Outputs] / [Total Inputs]
• Productivity can be increased by using the same amounts of inputs to produce more output, using smaller amounts of inputs to produce the same amount of output or Using smaller amounts of inputs to produce more output
• A time and motion study analyzes the exact motions required for task completion and the time required, reviewing tasks in the workplace to identify task duration and physical activity.
• Time Study is a structured process of directly observing and measuring human work using a timing device to establish completion time by a qualified worker at a defined performance level.
• Frederick Winslow Taylor is considered the Father of Time Study.
• Stages in performing a Time Study: Analysis of Work, Standardization of Methods, Making Time Study
• Motion Study involves the systematic study of human motions used to perform an operation Eliminate unnecessary motions and Identifying the sequence of motions necessary for maximum efficiency.
• The principles are grouped into three headings: Use of the human body, Arrangement of workplace, Design of tools, and equipment based on the amount of work to be done by an employee.
• Therbligs, coined by the Gilbreths, describes any elemental motion used to perform a task and is an anagram of Gilbreth (Frank B. Gilbreth), used to analyze motions in a task.