INTRODUCTION TO BUSINESS Subarjo Joyosumarto SE, MA, Ph.D 1 September 2016 Meeting 9: OVERVIEW OF MEETING 8 PRODUCING GOODS AND SERVICES (chapter 14)

OVERVIEW OF MEETING 8

MANAGEMENT planning, Is the process of : an organization’s resources: organizing, directing, and controlling , of financial, physical, human, and information to achieve its goals. MANAGERS Oversee the use of these resources in their respective firms.

PLANNING Management process of determining what an organization needs to do and how best to get it done. PLANNING has 3 mean components: determines firm’s goal, develop a comprehensive strategy, design tactical and operational plans for implementing the strategy

ORGANIZING DIRECTING CONTROLLING Management process of determining how best to analize an organization’s resources and activities into a coherent structure DIRECTING Management process of guiding and motivating employees to meet an organization objectives CONTROLLING Management process of monitoring an organization’s performance to ensure that it is meeting its goals

TYPE OF MANAGERS LEVEL: Top Middle First-line AREA: Human resource Operation Marketing Information Financial Other SKILLS: Technical Human relation Conceptual Decision making Time management

HIERARCHY FOR STRATEGY CORPORATE STRATEGY Strategy for determine the firms' overall attitude toward growth and the way it will manage its business or product lines CORPORATE STRATEGY BUSINESS FUNCTIONAL STRATEGY STRATEGY BUSINESS STRATEGY Strategy, at the business-unit or product-line level, focusing on a firm’s competitive position FUNCTIONAL STRATEGY Strategy by which massages in specific areas decide how best to achieve corporate goals through productivity

STRATEGY FORMULATION 1 Match the organization and its environment Analyze the organization 1 Match the organization and its environment Set Strategic goals Formulate strategy 2 3 Analyze the environment

PRODUCING GOODS AND SERVICES

PRODUCTION The term production has historically referred to companies engaged in goods production, the concept as now we use it also means services Much of we need or want, from health care to fast food, is produced by service operation Both goods and services industries are important, but unemployment has rises significantly in the service sector

THE MEANING OF PRODUCTION GOODS PRODUCTION Activities producing tangible products, such as shoes, rice, books SERVICE OPERATIONS Activities producing intangible and tangible products, such as education, entertainment, transportation

RESOURCES TRANSFORMATION PROCESS Operation managers Plan Organize Schedule Control POSC Inputs Land Capital Human resources Material Customer Information Transformation activities Outputs

Draw up plans to transform resources into products OPERATION MANAGERS Managers responsible for ensuring that operations processes create value and provide benefits. Draw up plans to transform resources into products First: bring together basic resources, land, capital, etc. Operation managers Plan Organize Schedule Control Inputs Land Capital Human resources Material Customer Information Transformation activities Outputs POSC Then put them into effective use in a production facility Schedule and control work to produce the requirement amount Control costs, quality levels, inventory, facilities and equipment

DIFFERENCES BETWEEN SERVICE OPERATIONS Raw material: Unsatisfied people, needing care people Finished products: Need met, possessions serviced Focus of service performance Service characteristic Intangible Customization Unstorability MANUFACTURING OPERATIONS Raw material: Wheat, machinery, cow skin, steel etc. Finished products: Bread, shoes, clothes, etc. Focus of goods produced Goods characteristic Tangible General, all sizes Storability

OPERATIONS PLANNING AND CONTROL Business plan and forecast Long range operation plan (capacity/location/layout/quality/method) Operation schedules (master production schedule/ detailed schedules) Operation control (quality control/materials management) Output to customer

OPERATION SCHEDULING D. Move tables and chairs 2 4 1/2 weeks B. Remove chairs and table 1/2 week G. Rework tables and chairs 6 weeks E. Remove old floor tiles A. Get funding approval H. Return tables and chairs START 1 5 6 2 weeks 1 week 1/2 weeks C. Buy new floor tiles F. Install new tiles 2 weeks 3 weeks 3 Example: Replace old floor tiles by new floor tiles FINNISH

QUESTION FOR DISCUSSION TRUE/FALSE whereas the term production refers primarily to the creation of physical goods, the term operations refers to activities for providing services to customers. Which of the following is true regarding differences between service and manufacturing operations? a) whereas manufacturing operations focus on the outcome of the production process, service operations focus on both the transformation process and its outcome. b) the products offered by most service operation are intangible and do not involve physical goods. c) whereas service operation are customized for customer, manufacturing operation focus on mass-production processes. d) customer generally use the same measures for judging the quality of service products and physical goods products. Which of the following is not true for operations planning? a) location planning for both goods- producing facilities and for services producers is influenced by proximity to suppliers and customers. b) methods improvement are feasible in goods-producing operations but are often impossible in service operation because of the unpredictability of customer behavior. c) operation planning should ensure that customers are satisfied by ensuring that products meet the firm’s quality standards. d) the firm’s overall business plan, along with forecast of future demand for current and existing products, should be the driving forces behind operation planning. Consider the diversity of human skills needed at various stages throughout out Banyuwangi preparation for the cultural parade. What are various required skills and what problems do they present for planning the projects. What are the input resources and finished products in the following services? Real estate firm Child care facilities Bank City water and electric department Hotel

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