Introduction of Operation and Production Management

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					Production and Operations

             Jiaqin Yang

     Department of Management

  Georgia College & State University
    Introduction to
operations Management
  Operations as a System

         Production System

Inputs                       Outputs

    Introduction to operations Management

 Operations: All activities that involved in the
  Conversion Process of Input to Output
 Management: The Process of Planning,
  Organizing and Controlling in achieving the
  desired objectives.
 University as an Example:
 Introduction to Operations Management

Input       Planning &    Supportive Output
            controlling   Subsystems
Students    Class Times   Bookstore  Educated
Professor Course
          Development Library        Research
Buildings   School        Computer
            Regulations   Lab        Service to
Operations Management as
        a Function
    Functions of Operations Management
   Relationship between Operations and Other Functions:
         Three Primary Functions in Business:

    Finance          Production          Marketing

   Broader Perspective of Operations Management:
    An Integrated Production System Including:
    Inventory Control / Aggregate Planning / Demand
    Functions of Operations Management
    Scheduling / Capacity Planning / Purchasing / Quality
    Control / Facility Location & Layout / Production and
    Process Design / Job Design / Maintenance / Project
    Management / ……

   Operations Manager’s Responsibility: (typically)
      ——— 75% of the Firm’s Investment
      ———80% of the Firm’s Personnel
      ———85% of Firm’s Expenditures for Materials
       Entry-Level Jobs in OM
 Purchasing planner/buyer
 Production (or operations) supervisor
 Production (or operations)
 Production (or operations) analyst
 Inventory analyst
 Quality specialist
       Manufacturing vs Service

   Manufacturing: Provide Tangible Goods (Cars / TV
    Sets / Foods /……

   Service: Provide Intangible (Goods) (Education /
    Banking / Legal/Repairing / Medical Service /

   Four Major Differences between Manufacturing
    and Service:
     Manufacturing vs Service
                          Manufacturing Service

Measure of Productivity   Easy          Difficult
Measure of Quality        Easy          Difficult
Customer Involvement      Low           High
Ability to Inventory      Yes           No

Most Principles and Techniques for Manufacturing
can also be applied to Service Operations.
A Classification Scheme For Service
   The Classification scheme is based upon the
    extent of customer contact in the creation of the
   Customer Contact---The physical presence of the
    customer in the system. The extent of contact is
    the presence time of the customer must be in the
    system relative to the total time required to service
    the customer.
   Creation of the service---The work process that is
    involved in providing the service.
A Classification Scheme For Service
   High customer contact service system---
       More difficult to control, customer can affect the time if
    demand, exact nature of service quality of service. More
    uncertainty, customer can disrupt service planning.
    Capacity unlikely to equal demand at any given time.
    Balance of work more difficult, must staff for demand close
    to peak rather than average. Skills of employees must
    include significant public relations component.

   Low customer contact service system---
      Easier to control. Customer usually has little impact on
    the system during the production process. Can more easily
    match capacity with demand.
                      Service Organization
                                                 Pure service
               Entertainment Centers
Type contact   Hospital / Clinics

   High        Public Transportation

               Schools                          Increasing
               Jails                            Efficiency in
               Restaurants                      Designing
               Branch Offices of Banks
               Branch Offices of post offices

               Funeral Homes
               Police and Fire Protections      Procedures
               Moving Companies

               Home Offices of Banks

               Central Post Offices

               Mail Order Services

               Durable Goods Factory
    Low        Food Processing Plants           Manufacturing
               Mining Companies

               Chemical Plants
Operations Approaches to Improving
          Service Design
1.Substitute Technology for personnel

   Automatic Banking Tellers
   Scanners at Grocery and Department stores
   Long Distance Direct Dialing
   Vending Machines
   Automatic Car Wash
   Computerized Legal Research System
Operations Approaches to Improving
          Service Design
2. Increasing Customer Involved in Production of

   Self Service Department Store
   Customer Reading of Utility meters
   Mail Order Shopping
   Customer Fills out Order Blank at Discount Store
   U-Frame-It Picture Frame Shops
   ……….
Operations Approaches to Improving
          Service Design
  General System Approach in Service Operations
 Color Coding of Food Wrappers at Fast Food
 Drive-In Claims Service in Insurance-Use of Rate
 Computerized Allocation of Police to Patrol Routes
      Classification of Operations
   1.Based on Demand Pattern:
a) Make-to-Order (e.g. Airplane / Film
   Assembly-to-Order (e.g. Car/ Fast food/……)
b) Make-to-Stock (e.g. Clothes/ Toys/……)
   Assembly-to-Stock (e.g. Electronic Products/ TV
      Classification of Operations
   2.Based on Type of Conversion Process:

Type of Conversion        Goods          Service
1.Project Shop         House Building   Landscaping
2.Job Shop             Printing Shop    Dept. Store
  (Batch Shop)
3.Assembly Line        Automobile      Airport
4.Continuous Process   Oil Refinery Gas Station
                       Food Process TV Channels
 Major Characteristics of Operations
                       Product     Production
Type of Conversion     Mix Size    Volume

1.Project Shop         Few         Single or Few
2.Job Shop             Many        Low
 (Batch Shop)          (Several)   (Medium)
3.Assembly Line        Few         High
4.Continuous Process   Single      Very High
        Trends Impacting Operations Management

             From                                To
Massification                    Customization

Relatively simple task process   Complex, High-Tech Operations

Long delivery cycles             Short delivery cycles
(people can wait)                (time is money)
Loyal employees                  Empowered employees
(want to be let)                 (value-driven)
Functional hierarchical, self-   Complex, cross-functional,
contained units                  matrix (networked) organizations
           From                         To
Margins  in production   Margins  after-market
  (manufacturing)              (service)
Service quality          Service quality critical

  important                (uptime, customer interface)
Multiple vendors         Few, strategic, value-added

 (suppliers) competing      suppliers (service partners)
 on price (commodity)
Quality costs more       Qualitycosts less
Regulated markets        Competitive markets

Domestic markets         Global markets
Labor/management          Labor/management

 conflicts                  collaboration

Controlled    situation   Ambiguity     & uncertainty

Distinctionbetween        Distinction   blurred
 customers, suppliers,
    Today's Factors Affecting OM
 Global Competition
 Quality, Customer Service, and Cost
 Rapid Expansion of Advanced Technologies
 Continued Growth of the Service Sector
 Scarcity of Operations Resources
 Social-Responsibility Issues

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