Chapter 10 Summary (2)

Chapter 10
MANAGING PRODUCTION AND SERVICE OPERATIONS

Operations refers to “any process that accepts inputs and uses resources to change those inputs
in useful ways.”
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.”
Efficiency is related to “the cost of doing something, or the resource utilization involved.
Effectiveness refers to goal accomplishment
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 and services and the reduction of costs in his department.
TYPES OF TRANSFORMATION PROCESS

1. Manufacturing processes
a.) Job shop
b.) Batch flow
c.) Worker-paced line flow
d.) Machine-paced line flow
e.) Batch/continuous flow hybrid
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 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.
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.
4. The process layout is used
5. The operation is labor extensive, although there is less machine idleness.
6. The size of operation is generally medium-sized.
Worker-Paced Assembly Line refers to a production layout arranged in a sequence to accommodate

processing of large volumes of standardized products or services.
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 is the 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 processing is characterized by “the rapid rate at which items move through the
system.” This processing method is very appropriate for producing highly standardized products like
calculators, typewriters, automobiles, televisions, cellular phones, etc.
Its other characteristics are as follows:
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.
Batch/Continuous Flow Hybrid is a combination of the batch and the continuous flow. Two
distinct layouts are used, one for batch and one for the continuous flow. The typical size of operation
is also very large giving opportunities for economies of scale.
SERVICE PROCESSES
Service processes are those that refer to the provision of services to persons by hand or with
machinery.
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.
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.
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 Services. These are companies that provide specialized services to other firms or
individuals. Example 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.
Strategies that may be used depending on the situation are as follows:
1. The use of staggered work-shift schedules.

2. The hiring of part-time staff.
3. Providing the customer with opportunity to select the level of service.
4. Installing auxiliary capacity or hiring subcontractors.
5. Using multiskilled floating staff.
6. Installing customer self-service.
IMPORTANT PARTS OF PRODUCTIVE SYSTEMS

Productive systems consist of 6 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
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. 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 undertaken with a high degree of efficiency and
effectiveness especially in firms engaged in high volume production.
Material management refers to the approach that seeks efficiency of operation through
integration of all 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.
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.
WORK-FLOW LAYOUT
Work-flow layout is the 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 the a cost-effective work-flow layout is installed.A
good work-flow layout is installed. 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.
QUALITY CONTROL
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 to
keep customers satisfied.
Poor quality control breeds customer complaints, returned merchandise, expensive lawsuits, and
huge promotional expenditures.

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Chapter 10

MANAGING PRODUCTION AND SERVICE OPERATIONS

WHAT OPERATIONS MANAGEMENT IS?

OPERATIONS AND THE ENGINEER MANAGER

TYPES OF TRANSFORMATION PROCESS

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

Worker-Paced Assembly Line refers to a production layout arranged in a sequence to accommodate

The worker-paced assembly line is characterized by the following:

1. The products manufactured are mostly standardized.

1. The process is of clear, rigid pattern.

Its other characteristics are as follows:

Strategies that may be used depending on the situation are as follows:

1. The use of staggered work-shift schedules.

IMPORTANT PARTS OF PRODUCTIVE SYSTEMS

PRODUCTION PLANNING AND SCHEDULING

PURCHASING AND MATERIALS MANAGEMENT

1. Determining reorder point and reorder quantity.

1. Minimize investment in equipment.

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