PRODUCTION & SERVICE SYSTEMS Prof. Dr. Orhan TORKUL Res. Assistant M. Raşit CESUR

Definition of Production & Service Production can be defined as physical and chemical applications for making products or parts by altering property of materilas. Service is range of applications that benefit the clients. Production organizations manufacture products. Service organizations do something for an indivual or another organization (produces service). Production examples: car, plane, computers… Service examples: travelling, banking, hotels…

Difference Between Production & Service Services can not be inventoried. Products are generally tangible; services are generaly intangible. In many instances srvices are created and delivered at the same time (e.g. haircut). Some services have low barriers to entry and exit. This places additional pressures on service design to be innovative and cost – effective.mp

Production & Service Management Process Resource PlanningSales Operations PlannigDemand Management Master Production Schedule Front End

Production & Service Management Process Detailed Capacity Palnning Detailed Materials Requirement Planning Materials and Capacity Plannig Jobshop (Field) System Supplier System Engine Back End

Production & Service Management Sales management Production & Service Management Materials management Capacity management Process management Quality management Supply Chain Management Human resources management Finance & Accounting

Sales Management Competitiveness: How effevtively an organization meets the wants and needs of customers relative to others that offer similar goods or services. Sales Strategy; Organization StrategyOperations Strategy Low priceLow cost High qualityHigh performance design or high quality processing Short timeQuick response NewnessInnovation VarietyFlexibility ServiceSuperior customer service LocationConvenience

Sales Management Master production schedule (MPS) is the production plan of company which will be accomplished. MPS is consisted from customer orders or demand forecasts. Forcasting methods; Delphi Method Regression Trend Analysis Moving Avarages

Sales Management Performance Criterias; Mean Absolute Deviation (MAD) = (Σ|Actual t -Forcast t |)/n Mean Squared Error (MSE) = Σ((Actual t -Forcast t ) 2 )/(n-1) Mean Absolute Percent Error (MAPE) =(Σ(|Actual t -Forcast t |x100/Actual t ))/n

Moving averages example for 2 periods PeriodDemand (Actual) ForecastActual – Forecast |Actual – Forecast| (Actual- Forcast) 2 |Actual – Forecast| x 100/Actual (42+40)/2= (40+43)/2= (43+40)/2= Σ MAD=4/5=0.8MSE=6.5/4=1.625MAPE=9.62/5=1.924

Capacity Management Capacity is ability of doing job. It can be considered as money, time and technology. Production & service operation manager cope with; Obtain excess capacity Provide flexible capacity Control on demand Automate capacity

Process Management Process is the flow of work and materials, not the spesific technique used the perform the service or manufacture the product. Process Types; Line flow Job shop Cellular Fixed site

Quality Management The American Production and Inventory Control Sciety (APICS) defines the quality as “conformance to requirements”. To measure products and services to conform requirements or not; Statistical sampling: Controlling small size of produced products. Full control of process: Controlling every products produced. E.g. Computer aided quality control.

Materials Management Materials management decisions are inextricably interowen. Policy decisions in this area include the following; Selecting criteria for purchasing, and inventory management. Planning the role inventory will have in meeting demand. Planning tle levels of different inventories such as raw materials, component parts, subassemblies, and finished goods. Determining policies and procedures for selecting suppliers. Developing methods of controlling the flow of materials and orders.

Human Resources Management The major elements of human resources management are the folllowing; Management policies and attitudes that recognize basic human needs and create an environment supporting those needs. A system for determining for personnel needs by skill and profession under different marketing and production plans A system that evaluates employee capabilities, skills potentials, interests, and development opportunities. Integration of recruitment and selection policies, personnel levels, capacity requirements, aggregate plans, and processes employed.

Finance & Accounting This management function includes; Cash flow plans, Income and expenditure records (Banking, cheque/receipt, and cash registers), Consisting account charts, Consisting payrolls, Cost accounting, Consisting budget plans.

Product & Service Design Functions Translate customer wants and needs into product & services. Refine existing products & services. Develop new products & services. Formulate quality golas and cost targets. Construct and test prototypes. Translate product and service spesifications into process spesifications.

Reasons for Product & Service Design or Redesign Economic (low demand, the need to reduce cost). Social and demographic (population shifts). Political (government changes). Competitive (new or changed products or services). Technological (processes).

Sustainability Life cycle assesment is the assesment of the environmental impact of a product or service throughout its useful life, focusing on such factors as global warming, smog formation, oxygen depletion, and solid waste generation. Three Rs; Reduce: Value analysis refers to an examination of the function of parts and materials in an effort to reduce the cost or improve the performance of a product. Reuse (Remanufacturing): Remanufacturing refers to refurbishing used products by replacing worn-out or defective components and reselling the products. Recycle: Recycling means recovering materials for future use.

THANKS