20-03-2012, 12:35 PM
PRODUCTION SYSTEMS
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INTRODUCTION
Operations Management refers to the direction and control of the processes that transform inputs into finished goods and services. It is the process whereby resources, flowing within a defined system, are combined and transformed in a controlled manner to add value in accordance with policies communicated by management.
The definition includes some key terms: Resources, System, Transformation and Value adding activities.
MANUFACTURING AND SERVICE SYSTEMS
The top investment motive for manufacturing organizations is consolidation of operations and integration of processes and systems. But in service organizations, the top motive is to meet the demand for high quality service from customers. This is a reflection of the major difference between the operational orientations of manufacturing and service organizations. In manufacturing, the customer does not interact directly with the production process. However, in services, the customer is directly involved with the production process. In general, manufacturing operations have a process or internal focus where process efficiency is of paramount importance. Service operations, on the other hand, have a customer or external focus where production and marketing are inseparable.
The following are the main points of difference between the two types of business.
Simultaneous Production and Consumption
In the service sector, there is simultaneous production and consumption of the service. For example in a restaurant, production and consumption of the service are taking place at the same time. This is very different from a manufacturing situation.
Tangibility
Manufactured product has a size and a shape. It can be touched, seen, and is tangible in nature. In a service business, the atmosphere, the attitude and the feelings that are part of the whole experience are intangible, but are critical aspects of the service. How a customer is treated in a restaurant or when traveling in an airplane etc, are all important parts of the service delivery, which is part of the product. Because many services include intangible aspects, it is difficult to quantify and measure. With a physical product, which comes off the production line, we can look at it, subject it to testing, examine it for defects, and easily measure whether or not it meets the specifications. How do we measure whether or not a person had a positive experience in a restaurant or other service business? From a manager's point of view, clearly this is important, but unlike with the manufacturing business, it is much more difficult to know if you are meeting customer expectations.