PPT Management: Operations and Service Management PDF

MANAGING PRODUCTION AND SERVICE OPERATIONS  WHAT Operations refers to "any process that accepts inputs and uses resources to change those inputs in useful ways.The transformation process converts the inputs OPERATION into final goods or serv...

MANAGING PRODUCTION AND SERVICE OPERATIONS  WHAT Operations refers to "any process that accepts inputs and uses resources to change those inputs in useful ways.The transformation process converts the inputs OPERATION into final goods or services. Examples of final goods and services are as follows: 1. Industrial chemicals like methylene chloride, borax S IS powder, phosphoric acid, etc., which are produced by chemical manufacturing firms; 2. Services like those for the construction of ports, high-rise buildings, roads, bridges, etc., which are produced by constructions firms; 3. Electrical products like transformers, circuit breakers, switch gears, power capacitors, etc., which are produced by electrical manufacturing firms; 4. Electronic products like oscilloscope, microwave tests systems, transistors, cable testers, etc., which are produced by electronics manufacturing firms; 5. Mechanical devices like forklifts, trucks, loaders, etc., which are produced by manufacturing firms; 6. Engineering consultancy services like those for construction management and supervision, project management services, etc., which are produced by engineering consultancy firms. WHAT OPERATIONS MANAGEMENT IS Operations is an activity that needs to be managed by competent persons. Aldag and Stearns accurately defined operations management as "the process of planning, organizing, and controlling operations to reach objectives efficiently and effectively.“ As the terms "planning", "organizing", and "controlling" have already been discussed in the previous chapters, elaborations on the terms "efficiency" and "effectiveness" will be made. Efficiency is related to "the cost of doing something, or the resource utilization involved.“ When a person performs a job at lesser cost than when another person performs the same job, he is more efficient than the other person. Effectiveness refers to goal accomplishment. When one is able to reach his objectives, say produce 10,000 units in one month, he is said to be effective. Operations management must be performed in coordination with the other functions like those for marketing and finance. Although the specific activities of the operations divisions of firms slightly differ from one another, the basic function remains the same, i.e., to produce products or services. OPERATIONS AND THE ENGINEER MANAGER The engineer manager is expected to produce some output at whatever management level he is. If he is assigned as the manufacturing engineer, his function is "to determine and define the equipment, tools, and processes required to convert the design of the desired product into reality in an efficient manner." The engineer in charge of operations in a construction firm is responsible for the actual construction of whatever bridge or road his company has agreed to put up. He is required to do it using the least-expensive and the easiest methods. The 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. The typical operations manager is one with several years of experience in the operations division and possesses an academic background in engineering.  1. Manufacturing processes a) job shop b) batch flow c) worker-paced line flow d) machine-paced line flow TYPES OF e) batch/continuous flow hybrid TRANSFORMATIO N PROCESS f) continuous flow 2. Service processes a) service factory b) service shop c) mass service d) professional service MANUFACTURING PROCESSES Manufacturing processes are those that refer to the making of products by hand or with machinery. Job Shop. A job shop is one whose production is "based on sales orders for a variety of small lots." Job shops are very useful components of the entire production effort, since they manufacture products in small lots that are needed by, but cannot be produced economically by many companies. Depending upon the customer's needs, a job shop may produce a lot consisting of 20 to 200 or more similar parts. Job shops produce custom products, in general. Products may be manufactured within a short notice. The equipment used are of the general purpose type. The type of layout used by job shops is the process layout, where similar machines are grouped together. The typical size of operation is generally small. Job shops are labor intensive and machines are frequently idle. Batch Flow. The batch flow process is where lots of generally own designed products are manufactured. It is further characterized by the following: 1. There is flexibility to produce either low or high volumes. 2. Not all procedures are performed on all products. 3. The type of equipment used are mostly for general purpose. Worker-Paced Assembly Line An assembly line refers to a production layout arranged in a sequence to accommodate processing of large volumes of standardized products or services. Shown in Figure 10.6 is a diagram of the work flow in an assembly line. The quality and quantity of output in a worker-paced assembly line depends to a great extent to the skill of the labor utilized. Examples of worker-paced assembly lines are food marts like McDonalds and Shakeys. The worker-paced assembly line is characterized by the following: 1. The products manufactured are mostly standardized. 2. There is a clear process pattern. 3. Specialized equipment is used. 4. The size of operation is variable. 5. The process is worker-paced. 6. The type of layout used is the line flow. 7. Labor is still a big cost item. Machine-Paced Assembly Line This type of production process produces mostly standard products with machines playing a significant role. Among its other features are as follows: 1. The process is of clear, rigid pattern. 2. Specialized type of equipment is used. 3. The line flow layout is used. 4. Capital equipment is a bigger cost item than labor. 5. Operation is large. 6. The process is machine-paced. Continuous Flow. Batch/Continuous The continuous flow processing is characterized by "the rapid rate at which items move through the Flow Hybrid. system." This processing method is very appropriate This method of processing is a combination for producing highly standardized products like of the batch and the continuous flow. Two calculators, typewriters, automobiles, televisions, distinct layouts are used, one for batch and cellular phones, etc. one for the continuous flow. The typical Its other characteristics are as follows: size of operation is also very large giving opportunities for economies of scale. 1. There is economy of scale in production, resulting to low per unit cost of production. 2. The process is clear and very rigid. 3. Specialized equipment are used. 4. The line flow layout is used. 5. Operations are highly capital intensive. 6. The size of operations is very large. 7. Processing is fast. Service Processes Service processes are those that refer to the provision of services to persons by hand or with machinery. Service Factory. A service factory offers a limited mix of services which results to some economies of scale in operations. This also affords the company to compete in terms of price and speed of producing the service. The process layout preferred by the service factory is the rigid pattern of line flow processing. McDonalds and Shakeys are also examples of service factories. Service Shop. A service shop provides a diverse mix of services. The layout used are those for job shops or fixed position and are adaptable to various requirements. Service shops abound throughout the Philippines. Examples are Servitek and Megashell. Among the services provided by these shops are car engine tune- up, wheel balancing, wheel alignment, change oil, etc. Mass Service. A mass service company provides services to a large number of people simultaneously. A unique processing method is, therefore, necessary to satisfy this requirement. To be able to serve many people, mass service companies offer limited mix of services. Professional These are companies that provide specialized Services. services to other firms or individuals. Examples of such firms are as follows. 1. Engineering or management consulting services which help in improving the plant layout or the efficiency of a company. 2. Design services which supply designs for a physical plant, products, and promotion materials. 3. Advertising agencies which help promote a firm's products. 4. Accounting services. 5. Legal services. 6. Data processing services. 7. Health services. Professional service firms 1. The use of staggered work-shift schedules. are, oftentimes, faced with delivery problems brought about by 2. The hiring of part-time staff. nonuniform demand. Strategies that may be 3. Providing the customer with opportunity to used depending on the select the level of service. situation are as follows: 4. Installing auxiliary capacity or hiring subcon- tractors. 5. Using multiskilled floating staff. 6. Installing customer self-service. IMPORTANT PARTS OF PRODUCTIVE SYSTEMS Productive systems consist of six important activities as follows: 1. product design 2. production planning and scheduling 3. purchasing and materials management 4. inventory control 5. work flow layout 6. quality control  Product Design Customers expect that the products they buy would perform according to assigned functions. A good product design assures that this will be so. Customers avoid buying products with poor product design. An example is that certain brand of ballpen which fails to write after one or two days of actual use. This happens because of poor product design. Product design refers to "the process of creating a set of product specifications appropriate to the demands of the situation." Companies wanting to maintain or improve its market share keeps a product design team composed of engineers, manufacturing, and marketing specialists. Production Planning and Scheduling Production planning may be defined as "forecasting the future sales of a given product, translating this fore- cast into the demand it generates for various production facilities, and arranging for the procurement of these facilities. Production planning is a very important activity because it helps management to make decisions regarding capacity. When the right decisions are made, there will be less opportunities for wastages. Scheduling is the "phase of production control in- volved in developing timetables that specify how long each operation in the production process takes." Efficient scheduling assures the optimization of the use of human and nonhuman resources. Purchasing and Materials Management Firms need to purchase supplies and materials required in the various production activities. The management of purchasing and materials must be Materials management refers to "the undertaken with a high degree of approach that seeks efficiency of efficiency and effectiveness specially in operation through integration of all firms engaged in high volume material acquisition, movement, and production. The wider variety of supplies storage activities in the firm. and materials needed adds to the necessity of proper managing and purchasing of materials.  Inventory Control Inventory control is the process of establishing and maintaining appropriate levels of reserve stocks of goods. As supplies and materials are required by firms in the production process, these must be kept available when they are needed. Too much reserves of stocks will penalize the firm in terms of high storage costs and other related risks like obsolescence and theft. Too little reserves, on the other hand, may mean lost income opportunities if production activities are hampered. A balance between the two extremes must be determined. There are ways of achieving proper inventory control. They are as follows: 1. determining reorder point and reorder quantity 2. determining economic order quantity 3. the use of just-in-time (JIT) method of inventory control 4. the use of the material requirement planning (MRP) method of planning and controlling inventories.  Quality control refers to the measurement of products or services against standards set by the company. Certain standard requirements are maintained by the management to facilitate production and to Quality keep customers satisfied. Control Poor quality control breeds customer complaints, returned merchandise, expensive lawsuits, and huge promotional expenditures.