ch 1-intro to operation management

8/13/2019 Ch 1-Intro to Operation management

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Chapter outline:

1.1 Introduction to operations managements

1.2 Objectives Operations Management (OM)

1.3 Characteristics of Service & ManufacturedProducts

1.4 Operations Model


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1.1 INTRODUCTION

Fundamentals of operations management

will be discussed in this chapter. It is the

most important process to be considered

to any profit oriented or non profit

oriented company to make sure their

investment worth.

Operation activities not only required in

product manufacturing but also in service

activities.


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Terms In Operations Management

There are several terms in operations such as:a) Product- Also known as output. It is either product or

service produce by any businesses. Most of the

companies consider as final output as either product

or service.

b) Production/Operations- It is creation of products or

service and also called transformation process.

c) Operations management- According to Heizer andRender (2011)operations management is the set of

activities that creates value in the form of goods and

services by transforming inputs into outputs.


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Roles of Operations Manager

a) Performs the basic functions of themanagement process: planning,

organizing, staffing, directing and

controlling

b) Ability to make good decisions, allocate

resources effectively and make efficientoperations functions.


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1.2 OBJECTIVES OF PRODUCTION/OPERATION

There are a few objectives in operation:a) Products or services must meet specific quality

standard at a minimum cost. Example: Reduced

manufacturing cost to gain more profit.

b) Fully utilize of labor, equipment and material.

Efficiency use all resources.Example: proper use

of resource can minimize wastage.

c) To enhance productivity through efficiency byincreased output produced and less input used.

Example: with minimum input can produce

maximum output.


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d) To achieve customer satisfaction by produce

good quality product or service.Example: good

quality at reasonable price.

e) To reach customer at the right time, quantity and

location. Example: avoid product shortages and

on times delivery.

f) To be effective and efficient manufacturer.Example: to meet customer satisfaction and to

maximum the output.

g) To survive in the long term. Example: flexible

production and able to compete within industry

and ability to respond rapidly to changes in

product design or process design.


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1.3 CHARACTERISTICS OF SERVICE AND

MANUFACTURED PRODUCTS

SERVICES MANUFACTURED

GOODS

Intangible output that cannot be

touched (Example: hotel service)

Tangible product that can be seen and

touch must be delivered to customers

(Example: clothing)

Output cannot be inventoried at real

time (Example: service)

Output can be inventoried and produce

in advance (Example: stock)

Extensive customer contact and

involvement (Example: boarding anairplane)

Little customer contact (Example: no

intervention during manufacturingprocess)

Short lead times

Service may need to delivered

immediately when customer wants to

service. (Example: speedy service)

Long lead times

It may takes several days or weeks to

manufacture goods.

(Example: order for car)


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Labor Intensive

(Example: Check In)

Capital intensive and highly

manufacture goods

(Example: robots)

Service quality is subjective Product quality is objective


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1.4 Operations System

Operation system model (OSM) is a process oftransformation input to output. OSM has 4 major

components which is input transformation process,final output and feedback.

Feedback

Land ManufacturingLabour Transportation GoodsCapital Retailing ServicesManagement Warehousing

Telecommunication

Inputs Transformation Output


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Example of Operation System

COMPONENTS EXAMPLE OF

PRODUCT

EXAMPLE OF

SERVICE

Input

It is raw material needed for production

or operation. It is also important

ingredients in operation system.

Consists of manpower, machine,

material, money, equipment

Screws, Mirrors,

Car body

Pilot, Doctor,

Flight attendance

Transformation process

It is a process of convert input intooutput. Conversion system by adding

less value input to become valuable

output. Factors affecting are capacity,

efficiency, effectiveness, flexibility

Painting, testdrive, assembly

parts in a

automobile

factory.

Online ticketing,safety

instructions,

surgical

procedures in a

hospital


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OUTPUT

End result of production

product or service. It is

final production stage.

Also called a product or

service

FEEDBACK

Act as control mechanism

for operation system. It is

also to measure

performance of productor service.

Car model performance,

customer complaints

Services offer, Customer

complaints


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The input, transformation process and output of

various operation system.

SYSTEM INPUTS TRANSFORMATION

PROCESS

OUTPUTS

University Student

Academician/

admin/supporting

staff

Classroom/lab

lib

Lecturer imparting knowledge

Student sitting for an

examination

Graduates

Hospital Patients

Doctors

Medical facilities

Surgical procedures

Administering medication

Healthy people/dead

Airlines Aircraft

Pilot

Passengers

Air transportation Passengers arriving t

their destination

Restaurant

FoodstuffCooking utensils

Order takingCooking

Serving customer

Satisfied customer

Automobile

factory

Engine

Transmission

system

Body panels

tires

Fabrication & assembly of parts

and components

Finished cars


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ch 1-intro to operation management

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