MGT 31- PRODUCTION / OPERATIONS MANAGEMENT

Part I: Introduction to Operations MgtI. Functional areas of an organizationII. Production / Operations Function A. Production / operations system B. Definition of terms C. Objectives D. Value – added conceptIII. Features of the production/operations system A. Degree of standardization B. Types of operations C. Manufacturing vs Service

Talk Outline

IV: Other Basic Concepts A. Productivity B. Competitiveness

I. Functional areas of an organization

marketing personnel

finance production

A. Production / operations system1. Physical network – responsible for the

transformation of inputs into desired outputs

INPUTS TRANSFORMATION OUTPUTS

PROCESS

feedbackfeedback

2. Information network – plans, coordinates the physical network

II. Production and Operations Function

INPUTS – Resources of an organization ( factors of production)

Men

Materials

Machines

TRANSFORMATION PROCESSES : Physical, chemical and mechanical transformation

Physical transformation

Mechanical transformation

Chemical transformation

OUTPUTS: Goods and Services

Sample case: Chair making

INPUTS TRANSFORMATION PROCESS OUTPUT

B. Definition of Terms Production management – this involves the planning,

coordinating and executing of all activities related to the creation of goods and services.

Production (in terms of goods) – is the fabrication of a physical object through the use of men, materials and equipment.

Production (in terms of services) – is the discharge of a function which has utility.

C. Objectives of the production / operations departmentTo produce goods / services in the right quantity, right quality, right time, economically

D. Value Added Concept – Essence of the production function

III. Features of the Production / operations SystemA. Degree of standardization

Standardized Customized

Goods Goods

Services Services

B. Type of Processing / Operations

1. Continuous processing

2. Semi-continuous or repetitive processing

3. Batch processing

4. Job shop

C. Manufacturing vs Service1. Customer contact2. Labor content3. Variability of outputs4. Variability of inputs5. Quality assurrance6. Productivity measurement

IV. Other Basic Concepts 1. Productivity

measures how effective the firm is in the use of resources.

Ratio of outputs to inputs (outputs ÷ inputs)

Sample problems:

1. Single or partial productivityFour workers installed 720 square yards of carpeting in eight hours.

2. Multifactor productivity Determine the multifactor productivity for the combined input of labor and machine time using the following data:

Output = 7,000 units; labor hours = 10; machine hours = 10

Factors that affect productivity a. Capital b. Method c. Technology d. Quality e. Management

2. Competitiveness – How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services.

Ways in which companies can compete:a. Priceb. Qualityc. Product differentiationd. Flexibilitye. Time

TRANSFORMATION PROCESSES : Physical, chemical and mechanical transformation

Physical transformation

Chemical transformation Mechanical transformation