Manufacturing and Service

Operations
Haunan Damar, S.S.T., MBA
10 strategic operations decisions
1. Goods and services
2. Quality
3. Process and capacity design
4. Location
5. Layout
6. Human resource and job design
7. Supply chain
8. Inventory
9. Scheduling
10. Maintenance
8 types of wastes
TIMWOODS
• Transportation
• Inventory
• Motion/movement
• Waiting
• Overprocessing
• Overproduction
• Defects
• Skills
Operations department roles
• Operations is the core function of almost every company
• Responsible for managing resources to produce goods and services
• Planning and execution of operational activities
• Interacts with other departments and elements in the supply chain
 Manufacturing VS Service Operations
• Physical Products • Intangible products
• Low customer interaction • High customer interaction
• Easy to standardize • Difficult to standardize

How does the company $$make its profit$$?

Understanding Resources
Resources Operations Outputs

• People • Manufacturing • Products

• Materials • Trade (supply • Services
• Equipment chain
• Information operations)
• Finances • Services
• Utility
Understanding manufacturing process
• Choosing production strategy is essential for a manageable supply
chain
• Production timing generally falls in one of the categories below
• Make to stock : products are made to anticipate demand, low degree of
customization
• Assemble to order: products are made but not yet assembled before order is
received, medium degree of customization
• Make to order : products are made only when there is a specific order for the
product, high degree of customization
Types of Manufacturing Process
• Discrete
• Repetitive
• Continuous
• Batch
• Job shop

https://www.youtube.com/watch?v=uEhuxYXPTOE
https://www.youtube.com/watch?v=AZyq3TqskAY
Manufacturing processes
• Repetitive These types of rapid manufacturing
operations will produce the same or very similar
products en masse 24/7.
• Discrete production is the assembly line
configuration must often be changed when
switching to a different model of product.
• Continuous process creates the same or similar
products repeatedly, and creates larger order
quantities. The key difference here is that the raw
materials used are gases, liquids, powders, and
slurries, instead of solid-state components.
Manufacturing processes
• In the job shop manufacturing process, production
areas are used instead of an assembly line. Each worker
may add something to the product when it passes
through their station, before it is moved on to another,
and until eventually the final product is finished.
• Batch production is a method whereby a group of
identical products are produced simultaneously (rather
than one at a time).
Toyota Production System
• Find and cut the problem immediately
• Highlight quality in every process/stage
of production
• Make a standardized communication
method
Kanban Board is one of the
Toyota’s method, it is very good
at tracking works and priorities.
Service Operations
• Goods are made, but services are performed
• Services are intangible, perishable and cannot be stored
• If the company doesn’t manufacture or trade to make profit, it is most
likely a service company.

Example of service is the online ticket

ordering application
Different types of services
Service characteristics
1. Participation, customer is involved in each process of the service
itself.
2. Simultaneity, service is created and consumed at the same time
when the service is performed.
3. Perishability, service cannot be stored and will be gone once the
period of service ends.
4. Intangibility, service does not have a shape, it can only be felt and
result on particular feeling after its consumption.
5. Heterogeneity, the quality of service felt by customers will be
different depending on the subjectivity as well as condition when
they receive it.
Service Package
Services are usually packed with other products or facilities called
bundle, in all service, we can at least diversify it into 5 packages:
1. Supporting Facility: physical resources that must be in place before a
service can be sold, example: airplane, golf course, hospital building
2. Facilitating Goods: the material consumed by the buyer. Example: legal
documents, medical records, computer etc.
3. Information: data provided to enable efficient service, example: ticket
information, flight seat availability, etc.
4. Explicit services: Benefits readily observable by the senses.
5. Implicit services: Psychological benefits which consumer only sense
vaguely.
Identify the service package of the following business

Who are the customers?

1. Supporting Facility
2. Facilitating Goods
3. Information
4. Explicit services
5. Implicit services
Thank You