Organizations are designed mainly to produce
products or services. If these organizations must
survive and grow, the operations function must be
undertaken in the most economical manner
possible. As most companies are expected to make
profits, any activity, including those for operations
must be managed to contribute to the
accomplishment of such objectives.
WHAT OPERATIONS IS
Example of final goods and services are as follows:
1. Industrial Chemicals like methylene chloride, borax powder, phosphoric
acid, etc., which are produced by chemical manufacturing firms;
2. Services like those for the construction of ports, high-rise
buildings, roads, bridges, etc., which are produced by construction firms;
3. Electrical products like transformers, circuit, breakers, switch gears, power
capacitors, etc., which are produced by electrical manufacturing firms;
4. Electronic products like oscilloscope, microwave tests
system, transistor, cable testers, etc., which are produced by electronics
5. Mechanical devices like forklifts, trucks, loaders, etc., which are produced
by manufacturing firms;
6. Engineering consultancy services like those for construction management
and supervision, project management services, etc., which are produced by
engineering consultancy firms.
WHAT OPERATIONS MANAGEMENT IS
Operations is an activity that needs to be managed by competent persons. Aldag and
Stearns accurately defined operations management as “the process of
planning, organizing, and controlling operations to reach objectives efficiently and
effectively.” as the terms “planning”, “organizing”, and “controlling” have already been
discussed in the previous chapters, elaboration on the terms “efficiency” and
“effectiveness” will made.
Efficiency is related to “the cost of doing something, or the resource utilization
involved.” when a person performs a job at lesser cost than when another person
performs the same job, he is more efficient than the other person.
Effectiveness refers to goal accomplishment. When one is able to reach his
objectives, say produce 10,000 units in one month, he is said to be effective.
Operations management must be performed in coordination with the other
functions like those for marketing and finance. Although the specific activities of the
operations divisions of firms slightly differ from one another, the basic function remains
the same to produce products or services.
OPERATIONS AND THE ENGINEER MANAGER
The engineer manager is expected to produce some output at
whatever management level he is. If he is assigned as the
manufacturing engineer, his function is “to determine and define
the equipment, tools, and process required to convert the design of
the desired products into reality in an efficient manner.
The engineer in charge of operations in a construction firm is
responsible for the actual construction of whatever bridge or road
his company has agreed to put up. He is required to do it using the
least-expensive and the easiest methods.
The engineer, as operations manager, must find ways to
contribute to the production of quality goods or services and the
reduction of costs in his department.
The typical operations manager is one with several years of
experience in the operations division and possesses an academic
background in engineering.
TYPES OF TRANSFORMATION PROCESS
The engineer manager must have some knowledge of the
various types of transformation process. They are as follows:
1. Manufacturing processes
a) Job shop
b) Batch flow
c) Worker-paced line flow
d) Machine-paced line flow
e) Batch/continuous flow hybrid
f) Continuous flow
2. Service processes
a) Service factory
b) Service shop
c) Mass service
d) Professional service
It is one whose production is based on sales
orders for a variety of small lots.
is process where lots of generally own
designed products are manufactured
there is Flexibility to produce either low or high
not all procedures are performed on all products.
the type od equipment used are mostly for general
the process layout is used.
the operational is labor intensive, although there is
less machine idleness.
the size of operation is generally medium-sized.
An assembly line refers to a production layout
arranged in a sequence to accommodate
processing of large volume of standardized
products or services.
the products manufactured are mostly
there is a clear provess pattern.
specialized equipment is used.
the size of operation is variable.
the process is worker-paced.
the type of layout used is the lines flow.
labor is still a big cost item.
This type of production process produces
mostly standard products with machines
playing a significant role.
Its characterized by the ‘rapid rate at which
items move through the system’.
there is economy of scale in
production, resulting to low unit cost of
the process is clear and very rigid.
specialized equipment are used.
the line flow layout is used.
operations are highly capital intensive.
the size if operations is very large.
processing is fast.
This method of processing is a combination of
the batch and the continuous flow.
Service Processes refers to the provision of
services by hand or with machinery
*offers limited mix of services which results to
company competition in terms of price and
*provides diverse mix of services. They are
adaptable to any various requirements
*provides services to a large number of people
simultaneously, and needed a unique
processing method to satisfy the requirement
needed. But mass service companies offers only
a limited mix of services.
*provides specialized services to other firms or
*example of such firms:
Engineering or management consulting services
Data Processing services
*Professional services may faces delivery
problems, here are some strategies may be used
depending on the situation:
the use of staggered work-shift schedules
The hiring of part time staff
Providing the customer with opportunity to select
the level of service
Installing auxiliary capacity or hiring sub-
Using multiskilled floating staff
Installing customer self-service
Production planning and scheduling
Purchasing and materials management
Work flow layout
-refers to the process of creating a set of
product specifications appropriate to the
demands of the situations.
Production Planning and Scheduling
-forecasting the future sales of the given
Purchasing and Materials Management
-Firms need to purchase supplies and
materials required in the various production
-process of establishing and maintaining
appropriate levels of reserve stocks of goods
Ways to achieve proper invetory control:
Determining reorder point and reorder quantity
Determining economic order quantity
The use of just-in-time(JIT) method of inventory
The use of the material requirement
planning(MRP) method of planning and
-process of determining the physical arrangement of the
Benefits of having good work-flow layout:
Minimize investment in equipment
Minimize overall production time
Use existing space most effectively
Provide for employee convenience ,safety ,and comfort
Maintain flexibility of arrangement and operation
Minimize materials handling cost
Minimize variation in types of materials-handling equipment
Facilitate the manufacturing (or service) process.
Facilitate the organizational structure.
- refers to the measurement of production or
service against standards set by the company.