Managing Production and Service Operations

Organizations are designed mainly to produce products or services. If these

organizations must survive and grow, the operation 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 OPERATION IS
Operations refer to “any process that accepts inputs and uses resources to change
those input sin useful ways.” The inputs include land, labor, capital, and
entrepreneurship. The transformation process converts the inputs into final goods or
services.

Examples of final goods and services are as follows:

1. Industrial chemicals like methylene chloride, borax powder, hydrochloric 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 systems, transistors, cable

testers, etc., which are produced by electronics manufacturing firms;

5. Mechanical devices like forklift, 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

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.

OPERATIONS AND THE MANAGER

The manager is expected to produce some output at whatever management level he is.
If he is assigned as the manufacturing manager/supervisor, 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 is one with
several years of experience in the operations division and possesses an academic
background in engineering.

TYPES OF TRANSFORMATION PROCESSSES Manufacturing Processes

1. Job shop
2. Batch flow
3. Worker-paced line flow
4. Machine-paced line flow
5. Batch/continuous flow hybrid
6. Continuous flow

Service Processes
1. Service factory
2. Service shop
3. Mass service
4. 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 and orders for a variety of small
lots.”

Batch Flow
The batch flow process is where lots of generally own designed products are
manufactured.

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.

Machine-Paced Assembly Line.

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

Continuous Flow.
The continuous flow processing is characterized by “the rapid rate at which items move
through the system.”

Batch/Continuous Flow Hybrid.

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

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.
Service Shop.
A service shop provides a diverse mix of services.
Mass Service.
A mass service company provides services to a large number of people simultaneously.
Professional Services.
These are companies that provide specialized services to other firms or individuals.

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

Production Design
Product design refers to “the process of creating a set of product specifications
appropriate to the demands of the situation.”

Production Planning and Scheduling

Production planning may be defined as “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 is the “phase of production control involved in developing timetables that

specify how long each operation in the production process takes.”

Purchasing and Materials Management

The management of purchasing and materials must be undertaken with a high degree
of efficiency and effectiveness especially in firms engaged in high volume production.
Materials management refers to “the approach that seeks efficiency of operation
through the integration of all the material acquisition, movement, and storage activities
in the firm.”

Inventory Control
 Inventory control is the process of establishing and maintaining appropriate levels of
reserve stocks of goods.

Work-Flow Layout
Work-flow layout is the process of determining the physical arrangement of the
production system.

Quality Control
Quality control refers to the measurement of products or services against standards set
by the company.