Introduction to Production Planning and Production Management
The Three Basic Functions The Organization The Three Basic Functions Organization (R&D) Finance Operations Marketing Business organization typically have three basic functional areas: 1. Finance is responsible for financial resources at favorable prices and allocating those sources throughout the organization as well as budgeting, analyzing investment proposals, and providing funds for operations 2. Marketing is responsible for assessing consumer wants and needs and selling and promoting the organization’s goods or services 3. Operations is responsible producing goods or providing services offered by the organization. This consists of PPC, PE, QA, and SC (and R&D; Thai industries do not focus on R&D because most of them just follow customers’ designs or R&D of the headquarter located in other countries) PPC QA SC
The operations function involves the conversion of inputs into outputs Value-Added Process The operations function involves the conversion of inputs into outputs Value-added Inputs Outputs Transformation/ Land Goods Conversion Labor Services process Capital If a business organization is a car, operations would be its engine. And Just as the engine is the core of a car does, in a business organization, operations is the core of what the organization does. Operations management is the management of systems or processes that create goods and/or provide services. The essence of the operations function is to add value during the transformation process. In for-profit organization, the value-added of outputs is measured by the prices that customers are willing to pay for those goods or services. Feedback Control Feedback Feedback
Value-Added & Product Packages
Value-Added & Product Packages Value-added is the difference between the cost of inputs and the value or price of outputs. Product packages are a combination of goods and services. Product packages can make a company more competitive.
Goods-service Continuum Goods (manufacturing) Service Surgery, teaching Song writing, software development Computer repair, restaurant meal Automobile Repair, fast food Home remodeling, retail sales Automobile assembly, steel making
Manufacturing or Service? Tangible Act
The Kinds of Products and Services Make-to-order: products and services are made to customer specifications after an order has been received Make-to-stock: products and services are made in anticipation of demand Assemble-to-order: products and services add options according to customers specifications
Processes Classification for Manufactured Product
Processes Classification for Services
Food Processor Inputs Processing Outputs Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment
Hospital Process Inputs Processing Outputs Doctors, nurses Examination Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy
Types of Operations Operations Examples Goods Producing Farming, mining, construction , manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites
% employed population in manufacturing & some service sections in TH-VN-USA
Change in the number of manufacturing Jobs in US Productivity Increasing productivity allows companies to maintain or increase their output using fewer workers Outsourcing Some manufacturing work has been outsourced overseas (e.g. Thailand, Vietnam, China) to reduce operation cost