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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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