MANAGING PRODUCTION AND SERVICE OPERATIONS

Organizations are designed mainly to produce products or services. If these organizations must survive and grow, the operations function must be undertaken in the most economical manner possible. As most companies are expected to make profits, any activity, including those for operations must be managed to contribute to the accomplishment of such objectives.

WHAT OPERATIONS IS

Example of final goods and services are as follows:

1. Industrial Chemicals like methylene chloride, borax 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 construction 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 system, transistor, 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, elaboration on the terms “efficiency” and “effectiveness” will 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 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 process required to convert the design of the desired products 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.

TYPES OF TRANSFORMATION PROCESS

The engineer manager must have some knowledge of the various types of transformation process. They are as follows:

1. Manufacturing processesa) Job shop b) Batch flowc) Worker-paced line flowd) Machine-paced line flowe) Batch/continuous flow hybrid f) Continuous flow

2. Service processesa) Service factory b) Service shop c) Mass service d) Professional service

Manufacturing Process

Job Shop

It is one whose production is based on sales orders for a variety of small lots.

Batch Flow

is process where lots of generally own designed products are manufactured

The Batch Flow characterized by the ff.

there is Flexibility to produce either low or high volumes.

not all procedures are performed on all products.

the type od equipment used are mostly for general purpose.

the process layout is used. the operational is labor intensive, although

there is less machine idleness. the size of operation is generally medium-

sized.

Worker-Paced Assembly Line

An assembly line refers to a production layout arranged in a sequence to accommodate processing of large volume of standardized products or services.

The Worker-Paced Assembly characterized by the ff.

the products manufactured are mostly standadized.

there is a clear provess pattern. specialized equipment is used. the size of operation is variable. the process is worker-paced. the type of layout used is the lines flow. labor is still a big cost item.

Machine-Paced Assemble Line

This type of production process produces mostly standard products with machines playing a significant role.

Continuous Flow

Its characterized by the ‘rapid rate at which items move through the system’.

Its other characteristics are as follows

there is economy of scale in production, resulting to low unit cost of production.

the process is clear and very rigid. specialized equipment are used. the line flow layout is used. operations are highly capital intensive. the size if operations is very large. processing is fast.

Batch/Continuous Flow of Hybrid

This method of processing is a combination of the batch and the continuous flow.

Service Processes

Service Processes refers to the provision of services by hand or with machinery

Service Factory

Services Factory*offers limited mix of services which results to company competition in terms of price and speed

Service Shop

Service Shop*provides diverse mix of services. They are adaptable to any various requirements

Mass Service

Mass Service*provides services to a large number of people simultaneously, and needed a unique processing method to satisfy the requirement needed. But mass service companies offers only a limited mix of services.

Professional Services

Professional Services*provides specialized services to other firms or individuals*example of such firms:

Engineering or management consulting services Design services Advertising services Accounting agencies Legal services Data Processing services Health Services

Professional Services

*Professional services may faces delivery problems, here are some strategies may be used depending on the situation:

the use of staggered work-shift schedules The hiring of part time staff Providing the customer with opportunity to

select the level of service Installing auxiliary capacity or hiring sub-

contractors Using multiskilled floating staff Installing customer self-service

IMPORTANT PARTS OF PRODUCTIVE SYSTEMS

6 important activities of productive system

Product design Production planning and scheduling Purchasing and materials management Inventory control Work flow layout Quality control

Product design -refers to the process of creating a

set of product specifications appropriate to the demands of the situations.

Production Planning and Scheduling -forecasting the future sales of the

given product.

Purchasing and Materials Management -Firms need to purchase supplies and

materials required in the various production activities.

Inventory Control -process of establishing and maintaining

appropriate levels of reserve stocks of goods

Ways to achieve proper invetory control: Determining reorder point and reorder quantity Determining economic order quantity The use of just-in-time(JIT) method of inventory

control The use of the material requirement

planning(MRP) method of planning and controlling inventories

Work-flow Layout -process of determining the physical arrangement of the

production system.

Benefits of having good work-flow layout: Minimize investment in equipment Minimize overall production time Use existing space most effectively Provide for employee convenience ,safety ,and comfort Maintain flexibility of arrangement and operation Minimize materials handling cost Minimize variation in types of materials-handling equipment Facilitate the manufacturing (or service) process. Facilitate the organizational structure.

Quality Control - refers to the measurement of

production or service against standards set by the company.