PRODUCTION AND OPERATION MANAGEMENT
PRODUCTION AND OPERATION MANAGEMENT
[I] Production (and) operations management is the process which combines and transforms various resources used in the production (and) operations subsystem of the organization into value added product (and) services in a controlled manner as per the policies of the organization.
Production management is management activities that are concerned with the manufacture of products while operations management is management activities that involve production and services.
Production is the conversion, transformation, modification or alteration of one material to its succeeding form through different stages or processes to generate or improve its utility value to the consumer. It can be achieved through mechanical or chemical procedure. Overall, it creates the products carried by a business entity.
Produce is a systematized form of activity. Every stage or step has its own purpose and objective to attain. It makes sure that all inputs are converted into practical and/or functional outputs. It is interrelated to the other stages, even to the organizational system. Feedback system or comments are in existence to manage and further improve the execution of the method or procedure.
Production management is further defined by E.S Buffa as “…deals with decision making related to production processes so that the resulting goods or services are produced according to specifications, in the amount and by the schedule demanded and out of minimum cost”.
Its main objective is to create products of right quality (what the customer wants and needs), right quantity (not in excess as this will add to inventory and not short of demand as this will lead to shortage), right time (maximum usage of input resources to deliver on-time), and right manufacturing cost (creating the products based on pre-established costs, that is, the established costs of producing the products before the first step or stage in actually creating or manufacturing the product. Minimizing or eliminating the discrepancy between pre-established and actual cost is its main objective).
An operation is identified through the methods it employs, the manpower resources it involves, and the task it provides the company. Operations, aside from the manufacturing operations, involve service operations as effort, act, or execution of a process.
Services are intangible productivities that affect customers immediately by having a direct or personal encounter with the customer, regular customer feedback or involvement during the conversion procedure, employ more manpower than materials or equipments, and techniques for evaluating conversion activities and utilization of resources. Examples are telecommunication services, real estate services, airport services, even hair salon services and other forms of services to customers.
Operation management involves itself with activities that influences personnel actions and performances by planning (implementing actions and guidance for decision makers to use in the present and in the future), organizing (setting up tasks and authority structures), controlling (ensures that performance is based on planned or pre-determined form of performance), and behavior (involves itself on how employees will react and relate to their plan and administration schemes).
The service profit chain institutes a connection between personnel satisfaction and fulfillment, productivity, customer loyalty, and organizational prosperity. The idea behind the service profit chain is that income and expansion are generated by the loyalty of customers to the product/s of a company.
Loyalty is due to satisfaction experienced by the customer in the product or services created by the company. This is in turn due to above standard support services of company personnel along with regulations or guidelines that allow company personnel to produce and offer results to customers. Outstanding support services are generated by employee satisfaction.
Leadership method of a service profit chain highlights the value of labor and consumer. The main deciding factor why a customer is said to be satisfied in a product is because of its perceived value. It gives the impression that the customer had gotten more from the product than the product’s actual value. Value is given more on services that makes the transactions and interactions with company personnel pleasurable and even memorable to the customer.
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