Muhammad Haris

1. INTRODUCTION OF
OPERATIONS
MANAGEMENT

2. WHAT IS OPERATIONS
MANAGEMENT
• Operations Management is
concerned with the production of
goods and services . In conjunction
with other functional areas it also
deals with the management of
resources (inputs) and the
distribution of finished goods and
services to customers (outputs)

3. Value-Added
The difference between the cost of inputs
and the value or price of outputs.
Value added
Inputs
Land
Labor
Capital
Transformation/
Conversion
process
Outputs
Goods
Services
Feedback
Control
Feedback
Feedback

4. Introduction to Operations
Management
• Operations Management includes:
– Forecasting
– Capacity planning
– Scheduling
– Managing inventories
– Assuring quality
– Motivating employees
– And more . . .

5. A Preview of Operations
Management
• Introduction
Organizational
Levels
– Executive
Management
– Operations
Management
– Operations

6. Why Study Operations
Management?
Systematic Approach
to Org. Processes
Business Education
Operations
Management
Cross-Functional
Applications
Career Opportunities

7. Manufacturing Operations
• Types of Manufacturing Operations
– Based on Processing after Order
• Make-to-order (MTO)
• Make-to-stock (MTS)
• Assemble-to-order (ATO)
– Based on System Flexibility /
Economics
• The Job Shop
• Batch Production
• Line-Flow Production (and Continuous
Flow)

8. Manufacturing Operations
• Types of Manufacturing Operations
Job Shop
Product
1
A
Product
2
C
Line-Flow
B
D
Product
1
A
D
B
Product
2
C
B
A

9. Service Operations
• Defining Services
– The Transformation Process
Inputs
Process
Output
Performance
Measurement

10. CLASSIFICATION OF
SERVICE OPERATIONS
•Extent of service contact.
•Extent of service customization.
•Extent of relationship between
customer and firm.

11. High Contact Services
• Customer is an essence in the
production of services.
• Scheduling is difficult as customer
demand varies.
• Work force attitude effects the
customer’s view of the services.

12. LOW CONTACT SERVICES
• Customer cannot strongly influence
the process by which the service is
provided.
• Standardization makes managerial
control easy and straightforward.
• Low contact service firms tend to
have a systematic and predictable
operation.

13. Service Operations
• Defining Services
Goods
100%
75
50
Services
25
0
25
Video Rental Stores
Appliance Stores
Florists
Fast-food Restaurants
Gourmet Restaurants
Lawn Services
Hospitals
Banks
50
75
100%

14. Manufacturing vs Service
Characteristic
Manufacturing Service
Output
Tangible
Customer contact
Low
High
Uniformity of input
High
Low
Labor content
Low
High
Uniformity of output
High
Low
Measurement of productivity
Easy
Difficult
Opportunity to correct
quality problems
High
Low
High
Intangible

15. Service Operations
• Discussion Questions
• 1. Why are quality and productivity more difficult
to measure in service operations than
manufacturing operations?
2. In what ways might the management style of
a service operations manager differ from that
of a manufacturing operations manager?
3. For some service industries with which you
are familiar, describe some ways they are
trying to improve productivity.