First Topic Assigned
Managing Products and Services
Group Members:
Abpi JR. Jojitnur G.
Biruar, Ullysses Al Mohaimen B.
Delos Reyes, Angelo Gabriel C.
Imam, Datu Shajod A.
Jazmines, Anton David B.
Masukat, Aljames Carl B.
Sangcupan, Caezzar Yazzer L.
Tanto, Norhassan M.
Organization
❖ Organizations are designed primarily to
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produce products or services. To survive
and grow, the operations function must be
carried out in the most economical manner
possible. As most companies aim for
pro tability, all activities, including
operations, must contribute to achieving
such objectives.
Operation
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Refers to any process that accepts inputs
and uses resources to change those inputs in
useful ways. The transformation process
converts the inputs into nal goods and
services.
Examples of Final Goods and Services
Services for the construction of ports, high-rise buildings, roads, bridges, etc.,
produced by construction rms.
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Electrical products like transformers, circuit breakers, switch gears, power
capacitors, etc., produced by electrical manufacturing rms.
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Industrial chemicals like methylene chloride, borax powder, phosphoric acid,
etc., produced by chemical manufacturing rms.
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Electronic products like oscilloscope, microwave test systems, transistors,
cable testers, etc., produced by electronics manufacturing rms.
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Mechanical devices like forklifts, trucks, loaders, etc., produced by
manufacturing rms.
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Engineering consultancy services for construction management, supervision,
project management services, etc., produced by engineering consultancy
rms.
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Examples of Final Goods and Services
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Operations Management
Is accurately de ned by Aldag and Stearns as "the
process of planning, organizing, and controlling
operations to reach objectives ef ciently and
effectively." Ef ciency relates to the cost of doing
something or resource utilization, while
effectiveness refers to goal accomplishment.
Efficiency
❖ Is related to the cost of doing something or
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resource utilization. When a person
performs a job at a lower cost than another,
they are more ef cient. Effectiveness refers
to goal accomplishment. If one can reach
objectives, like producing 10,000 units in a
month, they are considered effective.
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Operations management must be performed in coordination with
other functions like marketing and nance. Although speci c
activities of operations divisions differ, the basic function remains the
same: to produce products or services.
Operations and the Engineer Manager
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The engineer manager, at any management level, is expected to produce
output. As a manufacturing engineer, their function is to determine and
de ne the equipment, tools, and processes required to ef ciently convert the
design of the desired product into reality. In a construction rm, the engineer
in charge of operations is responsible for the actual construction of bridges or
roads, using the least expensive and easiest methods. The engineer, as an
operations manager, must contribute to the production of quality goods or
services and cost reduction in their department.
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The typical operations manager has several years of experience in the
operations division and possesses an academic background in
engineering.
Managing Service Processes
Managing Service Processes
Flowcharting: A visual representation technique using symbols and diagrams
to illustrate the sequence of steps and interactions in a service process.
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Service Blueprint: A diagram showing how the service elements are
connected and related to each other.
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Identify Failure: A good blueprint will highlight the risks that go with the
service provided.
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Failure Proo ng: Identifying and analyzing the possible failures will help in
doing corrective actions before everything could go wrong.
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Managing Service Processes
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Setting Service Targets: Standards that align with the customer’s
expectations should be set by the service providers to have a satisfactory
service.
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Service Process Redesign: The service features should be able to keep up
with the changes in technology.
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Managing Customers Effectively: This is a way to enhance customer
performance and reduce customer-induces failures.
Types of Transformation Process
Types of Transformation Process
Manufacturing Processes
A. Job shop
B. Batch ow
C. Worker-paced line ow
D. Machine-paced line ow
E. Batch/continuous ow hybrid
F. Continuous ow
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Manufacturing processes involve making products by hand or
with machinery.
Manufacturing Processes
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Batch ow processes manufacture lots of generally own-designed products.
It offers exibility in producing low or high volumes, with not all procedures
performed on all products. Examples include wineries, scrap-metal reduction
plants, and road-repair contractors.
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A job shop's production is based on sales orders for various small lots. Job
shops are useful for manufacturing small lots needed by many companies.
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Manufacturing Processes
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A machine-paced assembly line produces standard products with machines
playing a signi cant role. Examples include automobile manufacturers like
General Motors and Ford Motors. Characteristics include a clear, rigid process
pattern, specialized equipment, line ow layout, capital equipment as a bigger
cost item than labor, large operation size, and machine-paced processes.
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A worker-paced assembly line is arranged to process large volumes of
standardized products or services. Examples include food marts like
McDonald's and Shakeys. Characteristics include standardized products, a clear
process pattern, specialized equipment, variable operation size, worker-paced
processes, line ow layout, and labor as a signi cant cost item.
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Manufacturing Processes
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Continuous ow processing is characterized by the rapid rate at which items
move through the system. It is suitable for producing highly standardized
products like calculators, typewriters, automobiles, televisions, cellular phones,
etc. Characteristics include an economy of scale in production, a clear and rigid
process, the use of specialized equipment, line ow layout, highly capitalintensive operations, very large operation size, and fast processing.
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Batch/Continuous Flow Hybrid combines batch and continuous ow methods.
Two distinct layouts are used, one for batch and one for continuous ow.
Examples include breweries, gelatin producers, and tobacco manufacturers.
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Types of Transformation Process
Service Processes
A. Service factory
B. Service shop
C. Mass service
D. Professional service
Service processes involve providing services to individuals
either by hand or with machinery.
Service Processes
Service Factory: A service factory offers a limited mix of services, resulting in
some economies of scale. This allows the company to compete in terms of
price and service production.
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Service Shop: A service shop provides a diverse mix of services. The layout
used is similar to job shops or xed positions and is adaptable to various
requirements.
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Mass Service: A mass service company provides services to a large number
of people simultaneously. A unique processing method is necessary to satisfy
this requirement, offering a limited mix of services.
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Service Processes
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Professional Services: Professional services provide specialized
services to other rms or individuals. Examples include engineering
or management consulting services, design services, advertising
agencies, accounting services, legal services, data processing
services, and health services. Professional service rms offer a
diverse mix of services, have lower capital equipment utilization
compared to service factories and service shops, use a loose process
pattern, and have a process layout identical to a job shop.
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Service Processes
They often face delivery problems due to non-uniform
demand, and strategies to address this include
staggered work-shift schedules, hiring part-time staff,
providing customers with the opportunity to select the
level of service, installing auxiliary capacity or hiring
subcontractors, using multi-skilled oating staff, and
installing customer self-service.
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Important Parts of Productive System
Important Parts of Productive System
Product Design: Customers expect products to perform according to
assigned functions. Good product design assures this. Product design refers
to the process of creating a set of product speci cations appropriate to the
demands of the situation.
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Production Planning and Scheduling: Production planning involves
forecasting future sales, translating forecasts into demand for various
production facilities, and arranging procurement. It is crucial for capacity
decisions, reducing opportunities for wastages.
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Purchasing and Materials Management: Firms need to purchase supplies
and materials ef ciently for production activities. Proper management of
purchasing and materials is essential, especially in high-volume production
rms.
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Inventory Control: Inventory control establishes and maintains appropriate
levels of reserve stocks of goods. Balancing reserve levels is critical to avoid
high storage costs and related risks.
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Important Parts of Productive System
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Quality Control: Quality control measures products or services against standards
set by the company. Maintaining standard requirements facilitates production and
keeps customers satis ed. Poor quality control leads to customer complaints,
returned merchandise, expensive lawsuits, and signi cant promotional expenditures.
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Work-Flow Layout: Work- ow layout determines the physical arrangement of the
production system, minimizing investment, production time, utilizing existing space
effectively, ensuring employee convenience, safety, and comfort, maintaining
exibility, minimizing material handling costs, reducing variation in types of
material-handling equipment, facilitating the manufacturing or service process, and
organizational structure.
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Important Parts of Productive System
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SUMMARY
Organizations aim for economical
operations. Operations, transforming
inputs into goods and services, demand
ef cient management for pro tability.
Key Points
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Operations: Any process changing inputs into goods/services.
Operations Management: Involves planning, organizing, and controlling to
reach objectives ef ciently.
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Ef ciency vs. Effectiveness: Ef ciency relates to cost/resource utilization,
effectiveness to goal accomplishment.
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Engineer Manager's Role: Producing quality goods/services, reducing costs.
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Examples: Industrial chemicals, construction services, electrical/electronic
products, mechanical devices, engineering consultancy.
A. Service factory
B. Service shop
C. Mass service
D. Professional service
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A. Job shop
B. Batch ow
C. Worker-paced line ow
D. Machine-paced line ow
E. Batch/continuous ow hybrid
F. Continuous ow
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Service Processes
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Manufacturing Processes
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Types of Transformation Process
Important Components
Product Design: Ensures products meet functional
expectations.
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Production Planning: Forecasting sales, arranging
production facilities.
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Purchasing and Materials Management: Ef ciently
managing supplies/materials.
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Important Components
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Inventory Control: Balancing stock levels for cost-effectiveness.
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Work-Flow Layout: Organizing the physical arrangement for
ef ciency.
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Quality Control: Measuring against company standards to
ensure customer satisfaction.
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Conclusion: Ef ciently managing these components ensures
cost-effective operations and customer satisfaction.