The production managers AIM is to create the end

product in the market in the right quantity, of the right

PRODUCTION - process of converting or transforming quality, at the right time, economically.
resources materials, machines, employees, time into 1. Product Planning- It is often a top management
goods or services. work involving all sectors of the firm.
OPERATIONS- describe the set of all activities 2. Process Planning- This naturally comes after
associated with the production of goods a service product design. Determining required machines,
tools, men, and methods.
SYSTEM- It is a dynamic arrangement of elements; 3. Physical Facilities Management - Heavy
each designed to interact harmoniously with the others. investment. Plant location, engineering
economics, plant layout, plant engineering, and
materials handling comprise this area of activity.
The elements of production system consist of 4. Production Planning and Control- forecasting
the demand for the company's product and
1. physical network of men,
converting the forecast. Scheduling the required
2. materials,
work. Giving the go signal to start. Checking on
3. machines and processes,
the progress and initiating corrective measures
4. and an information network
5. Quality Control- responsible for the provision of
the CORRECT product quality specification of
Production / Operations Management quality standards as well as maintenance.
6. Methods Improvement- There are many ways
Managing the resources needed to produce goods and of producing a product , but not all of these are
services equally attractive as and economical. This is a
Frederick Winslow Taylor (father of scientific never-ending search.
management) 7. Work Measurement- LABOR is one of the most
important resources that the production manager
- management is knowing exactly what you want employs. One must know how much he can
men to do and then seeing to it that they do it in expect from a worker.
the best and cheapest way. 8. Material Management- too much inventory on
This reflects Taylor's dominant interest in efficiency. hand or too little of it can both have a crippling
effect. Reduce Costs and Control Quality.
SCOPE OF PRODUCTION/OPERATIONS 9. Personnel Management
MANAGEMENT - Manpower Planning
- Manpower Procurement
Production and operations management activities are
- Manpower Development
not confined to the manufacturing of products.
- Wage Administration
PEOPLE also perform production activities in - Personal Relations
organizations, which provide services. - Maintaining personnel safety, health, and benefits
Reduce Cost and Control Quality
Seiko–Seiton–Seiso–Seiketsu–Shitsuke
Don't use Pl,000 approach to a P10 program
Distinguish between the forests and woods.

PRODUCT SAFETY AND CONSUMER PROTECTION

Scenario: People don't get their brakes fixed and then
have accident from faulty brakes; they drive their cars
too fast or after drinking too much alcohol; they smoke
in bed; they leave open bottles of aspirin around
children; they go away and leave electric iron turned on;
people ski in unsafe ways; people misuse a product, or
use it purpose for which it was never intended, and then
if it fails or injures them, they blame the manufacturer
or the server. OPERATIONS MANAGEMENT

None of these acts of carelessness, however, excuse Operations management is a SYSTEMATIC APPROACH.
organizations from providing the safest product or - Measures of performance; Collecting relevant
service that they can. data; Using scientific tools, techniques, and
Solution methodologies for analysis

OPERATIONS IN THE SERVICE SECTOR Operations management involves ADDRESSING

VARIOUS ISSUES.
Manufactures produce a tangible product, whereas
service products are often intangible. - Time frame, the nature of the problem, and the
commitment of the required resources. When a
 Services are usually intangible machine breaks down on a shop floor.
 Services are often produced and consumed
simultaneously, there is no stored inventory TRANSFORMATION PROCESSES are central to operations
 Services are often unique. systems.
 Services have high customer interaction - The transformation process ensures that inputs
(uniqueness) are converted into useful outputs.
 Services inconsistent product definition. - The FOCUS of operations management is to
 Services are frequently dispersed. address the design, planning, and operational
control of the transformation process.
 Services differ from manufacturing with respect to
The GOAL of operations management is to ensure that
the organization can KEEP COSTS TO A MINIMUM AND
OBTAIN REVENUE.
- Operations management also involves the
development of performance evaluation systems
and methods
- EVALUATION = IMPROVEMENTS = MEETING
TARGET

Note: Although services and manufacturing are

classified as separate sectors in a macroeconomic
sense, from the perspective of operations management, tangibility, heterogeneity, simultaneity, and
this separation is artificial. perishability.

In operations management, a “pure product” and a TANGIBILITY

“pure service” are just two ends of the spectrum, and - SERVICES are experiences rather than objects,
not separate entities they cannot be touched, tasted or felt as in the
case of objects.
- The PRODUCT is defined by certain attributes.
HETEROGEINITY
- It is likely that no two services are exactly alike.
- The differences are attributed to the differences in
the service receivers (customers) and the service
providers.
SIMULTANEITY
- Services occur in the presence of the customer,
who may also be involved at the time the service
is produced for his/her consumption.
There are certain important differences between - This difference has implications for the DESIGN,
services and manufacturing. PLANNING, AND CONTROL of service operations,
as the degree of customer contact in a service
delivery system is likely to be HIGH.
PERISHABILITY
- services are perishable. This implies that they
cannot be inventoried.

SIMILARITIES

OPERATIONS MANAGEMENT FUNCTION

DESIGN ISSUES
OPERATIONS AS A KEY FUNCTIONAL AREA Design issues relate to the configuration of the
The decisions made in each of these functional areas operations system and provide an overall framework
could form an important input in another functional under which the operations system will function
area.
 OPERATIONS STRATEGY IN GLOBAL ARENA

Crafting a strategy
This entails addressing a series of how’s:
 HOW TO GROW the business?
 HOW TO PLEASE customers?
 HOW TO OUTCOMPETE rivals?
 HOW TO RESPOND to changing market
conditions?
 HOW TO MANAGE each functional piece of the
business and develop needed organizational
capabilities?
 HOW TO ACHIEVE strategic and financial
objectives?
DESIGN ISSUES
The faster a company’s business environment is
Once the CAPACITY of the resources to be used in the
changing, the more critical the need for its managers to
system is decided, IT SETS LIMITS for the actual use of
be good entrepreneurs in diagnosing the direction and
the system in operation.
force of the changes under the way and in responding
Setting policy guidelines and procedural details for with timely adjustments in strategy.
various aspects of the operations system is also a
design activity.
OPTIONS IN CRAFTING A STRATEGY
1. BROAD DIFFERENTIATION
- Companies ATTEMPT TO OFFER SOMETHING
UNIQUE in the industry with respect to
product/services.
- The goal is to CREATE PERCEIVED VALUE FOR
CUSTOMERS, allowing the company to charge a
premium price.
2. FOCUSED (OR MARKET NICHE) STRATEGY
- CONCENTRATES ON A NARROW BUYER SEGMENT
AND OUTCOMPETING RIVALS by offering niche
members customized attributes that meet their
 tastes and requirements better than rivals’  On shoring (or Domestic Outsourcing):
products. Outsourcing to providers within the same
- Instead of trying to appeal to everyone, THEY country.
FOCUS ON A PARTICULAR CUSTOMER GROUP with
unique needs or preferences.
3. STRATEGIC ALLIANCES AND PARTNERSHIP
- TWO OR MORE COMPANIES JOIN FORCES to
achieve mutually beneficial strategic outcomes.
- They involve SHARING RESOURCES, CAPABILITIES,
AND RISKS to pursue opportunities that might be
difficult or impossible to achieve alone.
4. OUTSOURCING STRATEGIES
- involves FARMING OUT CERTAIN VALUE CHAIN
5. CHOOSING FUNCTIONAL-AREA STRATEGIES
ACTIVITIES to outside vendors.
R&D, Production, Human Resources, Sales and
- HIRES A THIRD-PARTY PROVIDER to perform tasks,
Marketing, Finance, Accounting
handle operations, or provide services that were
previously done in-house.
6. TIMING A COMPANY’S STRATEGIC MOVES in
the marketplace
A. FIRST-MOVER
- potential advantage a company gains by
Types of Outsourcing: being the first to enter a new market,
introduce a new product, or utilize a new
A. Business Process Outsourcing (BPO): technology. Facing uncertainty and the
Outsourcing specific business processes, such as possibility that the new market or product
customer support, data entry, or payroll. may not succeed.
B. Information Technology Outsourcing (ITO): - Competitors may learn from the first
Outsourcing IT-related functions, such as software mover’s mistakes and introduce improved
development, network management, or data products or services.
storage.
C. Manufacturing Outsourcing: Contracting out B. FAST LEARNER
the production of goods to external - Company’s ability to quickly adapt, innovate, and
manufacturers. improve based on market feedback, competitor
D. Offshoring: Outsourcing to providers in other actions, and technological advancements.
countries, often to take advantage of lower labor
costs. C. FAST-FOLLOWER
 Nearshoring: Outsourcing to providers in
neighboring countries.
 - Chance to win disenchanted buyers away from
first-movers if products do not live up to buyers’
“Total Quality Control” to TQM
expectations.
- Fast followers closely monitor the market and the Total Quality Management (TQM)
actions of firs movers. They may be perceived as
imitators, which can damage their brand image. - “Quality” to most people, seems to mean “high
- They will have to compete not only with the first quality.”
mover, but also with other fast followers. - The MORE QUALITY the BETTER.

D. LATE-MOVER QUALITY

- Avoid mistakes of first-movers. - “Quality” is a hard concept to pin down. Yet a

- enters a market significantly after the first movers factory must make products of specified quality.
and fast followers have established themselves. - Why not always try to make the best?
- a strategy characterized by patience and a focus - Is a COMPLEX PHENOMENON based on
on leveraging established market dynamics. perceptions by individuals with different
- Faces established competitors with strong brand perspectives on products and service
loyalty and market share.  conformance to specifications
 conformance to requirements
 synonymous with customer needs and
expectations
EFFICIENCY AND EFFECTIVENESS
EFFICIENCY
TOTAL QUALITY MANAGEMENT (TQM)
- means doing things right.
- It entails balancing the number of resources used CONFORMANCE
to achieve an objective against what was actually
accomplished. Managers must not waste scarce - is about ensuring products are made EXACTLY to
and costly resources. specification, reducing defects, and maintaining
consistency.

EFFECTIVENESS
QUALITY
- means doing the right things.
- It entails promptly achieving a stated - Quality is a multifaceted concept with no
organizational objective. universally agreed-upon definition. Over time,
various disciplines and experts have developed
DISTINCT APPROACHES to defining and assessing
quality, each emphasizing different aspects and
Introduction to Total Quality Management (TQM)
priorities
Approach: TRANSCENDENT DAVID GARVIN’S – 8 DIMENSIONS OF QUALITY
- Quality is an innate excellence, recognized
through experience but hard to define or measure.
- Often described as “you know it when you see it,”
but difficult to quantify or measure objectively.
Approach: PRODUCT-BASED
- Quality is determined by the presence or quantity
of specific attributes or features in a product.
- The more of these desirable attributes a product
has, the higher its quality.
Approach: USER-BASED
- Quality is defined by how well a product or service
meets individual user needs or preferences.
- Focuses on customer satisfaction and the extent
to which a product or service meets user needs
and expectations. Performance
- Quality is subjective. - The primary operating characteristics of a product
Approach: MANUFACTURING-BASED —how well it performs its intended function.

- Quality is defined by how well a product or service Features

meets individual user needs or preferences. - Additional characteristics that enhance the
- Focuses on customer satisfaction and the extent product’s appeal or functionality beyond its basic
to which a product or service meets user needs performance.
and expectations.
Reliability
- The likelihood that a product will perform without
failure over a specific period.
Approach: VALUE-BASED
- Quality is assessed in terms of value or Conformance
performance relative to cost; “value for money.”
- Considers quality as a function of performance - The degree to which a product meets established
relative to price or cost. standards and specifications.
Durability
 - The product’s ability to withstand wear, pressure, Quality: with its usual definitions, with all its
or damage over time. complexities.
Serviceability Management: The system of managing with steps like
Plan, Organize, Control, Lead, Staff, provisioning, and
- How easy it is to repair or maintain the product. the likes.
Aesthetics
- The sensory characteristics of the product. TOTAL QUALITY MANAGEMENT
- The subjective dimension indicating the kind of
response a user has to a product. It represents the - Both a philosophy and a set of guiding principles
individual’s personal preference. that represent the foundation of a continuously
improving organization.
Perceived Quality
Goal: “Do the right things right the first time, every
- The customer’s overall impression or reputation of time.”
the product, which may be influenced by brand
image, advertising, or previous experience.

TOTAL QUALITY MANAGEMENT

- Is a management strategy aimed at embedding
awareness of quality in all organizational
processes.
-
According to International Organization for
Standardization (ISO):
TQM is a management approach for an organization,
centered on quality, based on the participation of all its
members and aiming at long-term success through
customer satisfaction, and benefits to all members of
the organization and to society.

Composed of three (3) Paradigms:

Total: Involving the entire organization
CUSTOMER FOCUSED
 - Whatever you do for quality improvement, - Collect metrics.
remember that ONLY customers determine the
MUTUALLY BENEFICIAL SUPPLIER RELATIONS
level of quality, whatever you do to foster quality
improvement, training employees, integrating - COLLABORATE with suppliers for shared success.
quality into processes management, ONLY - Establish long-term partnerships and quality
customers determine whether your efforts were agreements.
worthwhile.
- Prioritize customer needs and exceed COMMUNICATION
expectations. - Ensures all employees understand quality
LEADERSHIP COMMITMENT objectives, processes, and customer expectations.
- LIFE-BLOOD of an organization.
- This done after you remove fear from workplace, - Facilitates two-way communication.
then empower employee.
- Encourage collaboration and problem-solving
PROCESS CENTERED
- Manage activities as interconnected processes.
- Map workflows to eliminate redundancies
- Standardize procedures for consistency
INTEGRATED SYSTEM MANAGEMENT
- All employee must know business mission and
vision, must monitor the process. (ISO 9000).
- Use tools like dashboards to track system-wide
performance.
STRATEGIC AND SYSTEMATIC
- LINK quality goals to organizational strategy.
- Set measurable targets.
CONTINUAL IMPROVEMENT
- Implement PDCA cycles
- Benchmark against industry leaders.

FACT-BASED DECISION MAKING

- USE DATA to drive choices and reduce bias.