MANAGING

PRODUCTIONS
and SERVICE
OPERATIONS
What Operation is…
 Refers to “any process that accepts, inputs and uses resources to
change those inputs in useful ways.”
 It’s the transformation process converts inputs into final goods or
services.

INPUTS TRANSFORMATION OUTPUTS

• Land PROCESS • Products
• Labor • Equipment • Services
• Capital • Procedures
• Entrepreneurship • Technology

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What Operation Management is…
- “the process of planning, organizing and controlling operations to
reach objectives efficiently and effectively.” – Aldag and Stearns
To define:

Efficiency Effectiveness
- related to the cost of - refers to goals
doing something or the accomplished.
resource utilization involved.

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What Operation Management is…
● Must be performed in coordination with the other functions like
those for marketing and finance.
● Although the specific activities might slightly differ from one
another, the basic functions remain the same, to produce products
and services.

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Operations and the Engineer Manager
● The engineer manager is expected to produce some output at
whatever management level he is.
● Example: 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.

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Operations and the Engineer Manager
● The engineer must find ways to contribute to the production of
quality goods or services and the reduction of cost in his
department.
● Typical operations manager is one with several years of
experience in the operations division and possesses an academic
background in engineering.

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TYPES OF TRANSFORMATION PROCESS
MANUFACTURING PROCESS
SERVICE PROCESS

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MANUFACTURING PROCESS
-are those that refer to the making of products by hand or with
machinery.
● Job shop
● Batch flow
● Worker-paced line flow
● Machine-paced line flow
● Continuous flow
● Batch/continuous flow hybrid

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MANUFACTURING PROCESS
Job shop
- Production is based on sales orders for a variety of small lots.

Preparation Inspection
Lathe
and grouping Milling Grinding and
work
of materials Shipping

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MANUFACTURING PROCESS
Batch flow
-lots of generally own designed products are manufactured.

● There is flexibility to produce either low or high volumes.

● Not all procedures are performed on all products.
● The type of equipment used are mostly for general purpose.
● The process layout is used.
● The operation is labor intensive, although there is less machine idleness.
● The size of operation is generally medium-sized.

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BATCH FLOW PROCESS

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MANUFACTURING PROCESS
Work-paced Assembly Line
-production lay-out arranged in a sequence to accommodate
processing of large volumes of standardized products or services.

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MANUFACTURING PROCESS
Work-paced Assembly Line
● The products manufactured are mostly standardized.
● There is clear process pattern.
● Specialized equipment is used.
● The size of operation is variable.
● The process is work-paced.
● The type of lay-out used is the line flow.
● Labor is still a big cost item.

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MANUFACTURING PROCESS
Machine-paced assembly line
-produces mostly standard products with machines playing a
significant role.
● The process is of clear, rigid pattern.
● Specialized type of equipment is used.
● The line flow layout is used.
● Capital equipment is a bigger cost item than labor.
● Operation is large.
● The process is machine-paced.
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MANUFACTURING PROCESS
Continuous flow
-rapid rate at which items move through the system.
● There is economy of scales in production, resulting to low per unit per 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 of operation is very large.
● Processing is fast.

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MANUFACTURING PROCESS
Batch/Continuous Flow Hybrid
-combination of batch and continuous flow process

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Why is the machine-paced assembly line very popular among
large corporations?
It is popular among large corporations because the process is
clear rigid pattern, the technique used is specialized, the capital
equipment is bigger cost item than labor, operation is large and lastly
the process is machine-paced.

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1. The process is clear rigid pattern,
2. The technique used is specialized,
3. The capital equipment is bigger cost item than labor,
4. Operation is large
5. Lastly the process is machine-paced.

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Continuous Production
- (also called process production) is a derivative of flow
production. Put simply, this method is used to process materials
without interruptions. Products flow continuously through a linear
process on autopilot.

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SERVICE PROCESS
- Service Processes are those that refers to the provision of
services to persons by hand or with machinery.
Service Processes
● Service Factory
● Service shop
● Mass service
● Professional service

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SERVICE PROCESS
Service Factory
- A service factory offers a limited mix of
services which result to some economic of scale
in operation.

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SERVICE PROCESS
Service shop
A service shop provides a diverse mix of
services. The layout used are those for jobs or
fixed position and are adoptable to various
requirements.

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SERVICE SHOP

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SERVICE PROCESS
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 requirements. To able to serve many
people.

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SERVICE PROCESS
Professional service
- These are companies that provides
specialized services to offer form or individuals.

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Professional Service

Professional service firms are, oftentimes

faced with delivery problems brought by ununiform
demand . Strategies used depending on the
situations are follows.

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Professional Service

● The use of staggered work-shift schedule.

● The hiring of part-time staff.
● Providing the costumer with opportunity to select
the level of services.
● Installing auxiliary capacity of hiring
subcontractors
● Using multiskilled floating staff
● Installing costumer self-services.

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IMPORTANT PARTS OF
PRODUCTIVE SYSTEMS

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

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Production Planning and Scheduling
- 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”.

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Purchasing and Materials Management
- concept that is concerned with bringing materials
from outside of an organization to the point of
production and moving in the purchases in the process
inventory.
- materials management refers to the approach that
seeks efficiency of operation through the integration of
all material acquisition, movement, and storage activities
in the firm.

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Inventory Control
- process of establishing 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.

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Inventory Control
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.

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Work –Flow Layout
- process of determining the physical arrangement of
the production system. In the transformation process, the
flow of work may be done either haphazardly or orderly.
- the job of the operations manager is to assure that a
cost-effective work-flow layout is installed.

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Work –Flow Layout
A good work-flow layout will have the following benefits:
1. Minimize investment in equipment.
2. Minimize overall production time.
3. Use existing space most effectively.
4. Provide for employee convenience, safety, and comfort.
5. Maintain flexibility of arrangement and operation.
6. Minimize material handling cost.
7. Minimize variation in types of material-handling equipment.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structure.

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

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