Lesson 2

Decision Making

People often say that they find it hard to make decisions.

Unfortunately we all have to make decisions all the time, ranging

from trivial issues like what to have for lunch, right up to life-
changing decisions like where and what to study, and who to
marry.

Some people put off making decisions by endlessly searching for

more information or getting other people to offer their
recommendations.

Others resort to decision-making by taking a vote, sticking a pin in

a list or tossing a coin.

What is Decision Making?

In its simplest sense, decision-making is the act of choosing between
two or more courses of action.
In the wider process of problem-solving, decision-making involves choosing
between possible solutions to a problem. Decisions can be made through
either an intuitive or reasonedprocess, or a combination of the two.

Intuition
Intuition is using your ‘gut feeling’ about possible courses of action.
Although people talk about it as if it was a magical ‘sense’, intuition is actually
a combination of past experience and your personal values. It is worth taking
your intuition into account, because it reflects your learning about life. It is,
however, not always based on reality, only your perceptions, many of which
may have started in childhood and may not be very mature as a result.
It is therefore worth examining your gut feeling closely, especially if you have
a very strong feeling against a particular course of action, to see if you can
work out why, and whether the feeling is justified.

Reasoning
Reasoning is using the facts and figures in front of you to make
decisions.
Reasoning has its roots in the here-and-now, and in facts. It can, however,
ignore emotional aspects to the decision, and in particular, issues from the
past that may affect the way that the decision is implemented.
Intuition is a perfectly acceptable means of making a decision, although
it is generally more appropriate when the decision is of a simple nature
or needs to be made quickly.
More complicated decisions tend to require a more formal, structured
approach, usually involving both intuition and reasoning. It is important to be
wary of impulsive reactions to a situation.

Applying Both Reason and Intuition

One way to do this is to apply the two aspects in turn. It’s useful to start with
reason, and gather facts and figures. Once you have an obvious ‘decision’, it’s
the turn of intuition. How do you feel about the ‘answer’? Does it feel right?
If not, have another look, and see if you can work out why not. If you’re not
emotionally committed to the decision you’ve made, you won’t implement it
well or effectively.
Effective Decision-Making
Decisions need to be capable of being implemented, whether on
a personal or organisational level. You do, therefore, need to be
committed to the decision personally, and be able to persuade
others of its merits.

An effective decision-making process, therefore, needs to ensure that

you are able to do so.

What Can Prevent Effective Decision-Making?

There are a number of problems that can prevent effective decision-
making. These include:

1. Not Enough Information

If you do not have enough information, it can feel like you are making a
decision without any basis.
Take some time to gather the necessary data to inform your decision, even if
the timescale is very tight. If necessary, prioritise your information-gathering
by identifying which information will be most important to you.

2. Too Much Information

The opposite problem, but one that is seen surprisingly often: having so much
conflicting information that it is impossible to see ‘the wood for the trees’.
This is sometimes called analysis paralysis, and is also used as a tactic to
delay organisational decision-making, with those involved demanding ever
more information before they can decide.
This problem can often be resolved by getting everyone together to decide
what information is really important and why, and by setting a clear timescale
for decision-making, including an information-gathering stage.

3. Too Many People

Making decisions by committee is difficult. Everyone has their own views, and
their own values. And while it’s important to know what these views are, and
 why and how they are important, it may be essential for one person to take
responsibility for making a decision. Sometimes, any decision is better than
none.

4. Vested Interests
Decision-making processes often founder under the weight of vested
interests. These vested interests are often not overtly expressed, but may be
a crucial blockage. Because they are not overtly expressed, it is hard to
identify them clearly, and therefore address them, but it can sometimes be
possible to do so by exploring them with someone outside the process, but in
a similar position.
It can also help to explore the rational/intuitive aspects with all stakeholders,
usually with an external facilitator to support the process.

5. Emotional Attachments
People are often very attached to the status quo. Decisions tend to involve the
prospect of change, which many people find difficult.
For more about overcoming this, see our pages on Change Management, but
also remember that ‘deciding not to decide’ is also a decision.

6. No Emotional Attachment
Sometimes it’s difficult to make a decision because you just don’t care one
way or the other. In this case, a structured decision-making process can often
help by identifying some very real pros and cons of particular actions, that
perhaps you hadn’t thought about before.
Many of these issues can be overcome by using a structured decision-making
process. This will help to:

 Reduce more complicated decisions down to simpler steps;

 See how any decisions are arrived at; and
 Plan decision making to meet deadlines.
Many different techniques of decision making have been developed, ranging
from simple rules of thumb, to extremely complex procedures.  The method
used depends on the nature of the decision to be made and how complex it is.
Functions of Management
Management in some form or another is an integral part of living and is
essential wherever human efforts are to be undertaken to achieve desired
objectives. The basic ingredients of management are always at play, whether
we manage our lives or business.
“Management is a set of principles relating to the functions of planning,
organizing, directing, and controlling, and the applications of these
principles in harnessing physical, financial, human, and informational
resources efficiently and effectively to achieve organizational goal

Management is essential  for an organized life and necessary to run all types
of organizations. Managing life means getting things done to achieve life’s
objectives and managing an organization means getting things done with and
through other people to achieve its objectives.

There are basically five primary functions of management. These are:

1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling
The controlling function comprises coordination, reporting, and budgeting,
and hence the controlling function can be broken into these three separate
functions. Based upon these seven functions, Luther Gulick coined the
 word POSDCORB, which generally represents the initials of these seven
functions i.e. P stands for Planning, O for Organizing, S for Staffing, D for
Directing, Co for Co-ordination, R for reporting & B for Budgeting.
But, Planning, Organizing, Staffing, Directing,and Controlling are widely
recognized functions of management.
Contents
 Five Functions of Management
o 1. Planning
o 2. Organizing
o 3. Staffing
o 4. Directing
o 5. Controlling
Five Functions of Management
1. Planning
Planning is future-oriented and determines an organization’s direction. It is a
rational and systematic way of making decisions today that will affect the
future of the company. It is a kind of organized foresight as well as corrective
hindsight. It involves predicting of the future as well as attempting to control
the events. It involves the ability to foresee the effects of current actions in the
long run in the future.

READ   Organization Management - Meaning, Need and its Features

Peter Drucker has defined planning as follows:

“Planning is the continuous process of making present entrepreneurial
decisions systematically and with best possible knowledge of their futurity,
organizing systematically the efforts needed to carry out these decisions and
measuring the results of these decisions against the expectations through
organized and systematic feedback”.
An effective planning program incorporates the effect of both external as well
as internal factors. The external factors are shortages of resources; both
capital and material, general economic trend as far as interest rates and
inflation are concerned, dynamic technological advancements, increased
governmental regulation regarding community interests, unstable
international political environments, etc.

The internal factors that affect planning are limited growth opportunities due

to saturation requiring diversification, changing patterns of the workforce,
more complex organizational structures, decentralization, etc

2. Organizing
Organizing requires a formal structure of authority and the direction and flow
of such authority through which work subdivisions are defined, arranged and
coordinated so that each part
relates to the other part in a united and coherent manner so as to attain the
prescribed objectives.

According to Henry Fayol, “To organize a business is to provide it with

everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”.
Thus the function of organizing  involves the determination of activities that
need to be done in order to reach the company goals, assigning these
activities to the proper personnel, and delegating the necessary authority to
carry out these activities in a coordinated and cohesive manner.

It follows, therefore, that the function of organizing is concerned with:

1. Identifying the tasks that must be performed and grouping them
whenever necessary
2. Assigning these tasks to the personnel while defining their authority and
responsibility.
3. Delegating this authority  to these employees
4. Establishing a relationship between authority and responsibility
5. Coordinating these activities

3. Staffing
Staffing is the function of hiring and retaining a suitable work-force for the
enterprise both at managerial as well as non-managerial levels. It involves
the process of recruiting, training, developing, compensating and evaluating
employees and maintaining this workforce with proper incentives and
motivations. Since the human element is the most vital factor in the process
of management, it is important to recruit the right personnel.

According to Kootz & O’Donnell,  “Managerial function of staffing involves

manning the  organization structure  through the proper and effective
selection, appraisal & development of personnel to fill the roles designed in
the structure”.
This function is even more critically important since people differ in their
intelligence, knowledge, skills, experience, physical condition, age and
attitudes, and this complicates the function. Hence, management must
understand, in addition to the technical and operational competence, the
sociological and psychological structure of the workforce.

4. Directing
The directing function is concerned
with leadership, communication, motivation, and supervision so that the
employees perform their activities in the most efficient manner possible, in
order to achieve the desired goals.

The leadership element involves issuing of instructions and guiding the

subordinates about procedures and methods.
The communication must be open both ways so that the information can be
passed on to the subordinates and the feedback received from them.
Motivation is very important since highly motivated people show excellent
performance with less direction from superiors.
Supervising subordinates would lead to continuous progress reports as well
as assure the superiors that the directions are being properly carried out.

5. Controlling
The function of control consists of those activities that are undertaken to
ensure that the events do not deviate from the pre-arranged plans. The
activities consist of establishing standards for work performance, measuring
performance and comparing it to these set standards and taking corrective
actions as and when needed, to correct any deviations.

According to Koontz & O’Donnell, “Controlling is the measurement & correction

of performance activities of subordinates in order to make sure that the
enterprise objectives and plans desired to obtain them as being accomplished”.
The controlling function involves:
a. Establishment of standard performance.

b. Measurement of actual performance.

c. Measuring actual performance with the pre-determined standard and

finding out the deviations.
d. Taking corrective action.

All these five functions of management are closely interrelated. However,

these functions are highly indistinguishable and virtually unrecognizable on
the job. It is necessary, though, to put each function separately into focus and
deal with it.

Introduction to Operations Management of

Products and Services: Overview and
Resources

What is Operations Management (OM)?

Various Definitions
Operations management focuses on carefully managing the processes
to produce and distribute products and services. A great deal of focus
is on efficiency and effectiveness of processes. Therefore, operations
management often includes substantial measurement and analysis of
internal processes.

Ultimately, the nature of how operations management is carried out in

an organization depends very much on the nature of the products or
services in the organization, for example, agriculture, mining,
construction or general services. Here are some additional
perspectives on the field.

 "Operations management is chiefly concerned with planning,

organizing and supervising in the contexts of production,
manufacturing or the provision of services." -- TOPMBA
 "Operations management is an area of management concerned
with designing and controlling the process of production and
redesigning business operations in the production of goods or
services." -- Wikipedia:

What Are Goods and Services?

Basically, a product is a tangible offering to a customer, whereas a
service is an intangible offering. The former is usually a one-time
exchange for value. In contrast, a service usually involves a longer
period of time.

The value of a product is inherent in the tangible offering itself, for

example, in the can of paint or pair of pants. In contrast, the value of
a service often comes from the eventual benefit that the customer
perceives from the time while using the service.

In addition, the customer often judges the value of a service based on

the quality of the relationship between the provider and the customer
while using the service.

Wikipedia mentions that there are certain differences between

manufactured goods and services, including that services can have
simultaneous (in the moment) production and consumption, are
perishable (there is no inventory management), ownership (ownership
of the service is not owned by the customer) and tangibility (it is
difficult to evaluate). These features make operations management
more of a challenge in services.

Difference Between Product and Service

6 Key Differences Between Services and Products
Operations Management Specific Roles
Chief Operating Officer
"The chief operating officer (COO), also called the chief operations
officer, is one of the highest-ranking executive positions in an
organization, comprising part of the "C-Suite". The COO is responsible
for the daily operation of the company,[1] and routinely reports to the
highest-ranking executive, usually the chief executive officer (CEO)...
The COO is usually the second in command at the firm, especially if
the highest-ranking executive is the Chairman and CEO. " Wikipedia
Chief Operating Officer (COO)
All About COOs (Chief Operating Officers)
The Misunderstood Role of the Chief Operating Officer

Operations Manager
A useful definition of the role of an operations manager comes
from Investopedia:

 "Operations management is the administration of business

practices to create the highest level of efficiency possible within
an organization.
 Operations management is concerned with converting materials
and labor into goods and services as efficiently as possible.
 Corporate operations management professionals try to balance
costs with revenue to maximize net operating profit."

They oversee product development and delivery, inventory and supply

chain management, operations staffing and job design, and
production. They oversee an organization's key operations and, thus,
they usually have a wide and strategic view of the organization. The
specific duties of the role depend on the nature of the product and
service that the company produces and provides, for example, in
agriculture, industry or construction.
Operations Management
The Role of the Operations Manager
Operations Manager Job Description
Operations Manager Job Description
What Are Operations Manager Job Responsibilities?
What Are Operations Systems?
It can seem overwhelming to read about the numerous activities
involved in operations management. One wonders where they fit into
an organization? How are they connected? This is where a systems
view is very helpful.

What is a System?
Simply put, a system is an organized collection of parts that are highly
integrated to accomplish an overall goal. The system has various
inputs, which go through certain processes to produce certain outputs,
which together, accomplish the overall desired goal for the system.

For example, an automobile is a system. Its inputs are gasoline, a

driver, a steering mechanism, tires, as well as various tubes, pipes and
electrical cords. The system's processes are when they work together
to burn the gasoline, resulting in the systems outputs of the tires
moving and the car steering as the driver prefers. The overall system's
desired goal is a very useful automobile.

What is an Operations System?

The primary activities in operations management is a system -- they
are all integrated and aligned with each other. The operations
manager's job is to ensure they are all effectively and efficiently
working together in order to produce the desired goal of useful goods
and services for customers.

Look at this diagram of a system of an overall organizations. Notice

the various inputs that are processed to produce certain outputs and
outcomes (desired goals).

An operations system includes, for example:

1. Inputs -- such as expertise, best practices, funding, equipment,

facilities and technologies, as well as the customer's feedback
and the overall organization's strategic priorities
 2. Processes -- such as planning (capacity, product and service
design, production, facilities, jobs, inventory, quality control,
etc.) and managing productivity to produce high-quality products
and services
3. Outputs -- high-quality products and services
4. Outcomes -- very satisfied customers

Feedback from customers should be continually collected and

considered as an input to the processes of the planning the
development and production of goods and services. In that way, the
operations system is really a recurring loop of outcomes which, in turn,
influence the inputs to the next round of the system.

Align Operations Systems With Strategic

Planning
Notice that one of the inputs to the operations system is the strategic
priorities of the organization. It is critical that the operations system
be closely integrated and aligned with the purpose (the mission) and
priorities (strategic goals) of the organization. Otherwise, the system
will not be operating as effectively as it should be. For the system to
be operating as efficiently as it should be, there should be closely
integrated and aligned parts within the system.

Phase 1: Planning Operations Systems

Product/Service Planning
The planning of products and services (the outputs from the system)
includes market research to:

 Clarify the needs and wants of potential groups (market niches)

of customers, as well as how those needs and wants might be
met with certain products and services.
 Clarify how the new products and services should best be
provided to those target markets.
 Identify competitors, as well as potential collaborators.
 Suggest the best terms in pricing for the products and services.
  Suggest how best to advertise and promote to those groups of
customers.

The results of that research produce a specification of the product or

service. Various feasibility studies and perhaps a prototype might be
done, as well, to refine the description of the product or service. See
Product and Service Development

The specification could be further enhanced by adding information

about costs to develop and produce the product or service, including
employees, facilities and management. This information is often
included in a business plan. (This information is also sometimes
referred to as the business strategy.)
All About Business Planning

Capacity Planning
Capacity planning includes specifying how many of the outcomes
(products or how much service) will be produced and how often. That
includes predicting, or forecasting, the demand for those outcomes.
The previous market research will be very useful here. There are a
variety of other tools that could be useful, as well.
Four Steps to Forecast Total Market Demand
How to Choose the Right Forecast Technique
What is Demand Forecasting and How Can It Help Your Business?
What Are the Best Demand Planning Software Tools for 2019?

A useful planning technique to ensure consideration of many possible

influences is scenario planning, including to consider various external
driving forces that could have a strong influence.
Driving Force Impacts for Environmental Scanning in Strategic
Planning

It also might be useful to hire an expert with knowledge about

developing the particular product or service.
How to Successfully Hire and Work With an Excellent Consultant

The results of the planning should produce estimates of the needed

inputs to produce the product or service, including types of expertise
needed, amounts of certain kinds of materials, what technologies to
use, etc.
Facilities and Layout Planning
This is one of the most critical activities in operations management,
not just because they underlie and facilitate the activities to very
effectively and efficiently produce products and services, but also
because facilities and their maintenance are one of the most
expensive, as well. Fortunately, there is a variety of helpful articles
about how to do this acclivity in operations management.
Relationship Between Plant Layout and Material Handling
Plant Layout and Material Handling
Introduction to Manufacturing Facilities Design And Material Handling
The Ultimate Facility Manager Checklist

Job and Work Design

The Business Dictionary defines work design as:

 "An arrangement in the workplace that has the objective of

overcoming employee alienation and job dissatisfaction that
comes about from mechanical and repetitive tasks in the
workplace. Work design is used by organizations to boost
productivity by offering employees non- monetary rewards such
as satisfaction from a greater sense of personal achievement.
Also called job design."

From Wikipedia:

 "Job design (also referred to as work design or task design) is a

core function of human resource management and it is related to
the specification of contents, methods and relationship of jobs in
order to satisfy technological and organizational requirements as
well as the social and personal requirements of the job holder or
the employee."

Work Design
Work Design (Wikipedia)
Work Design in an Organizational Context
Principles of Good Work Design
Work Flow Management
"Workflow management is creating and optimizing the paths for data
in order to complete items in a given process. Workflow management
includes mapping out the workflow in an ideal state, finding redundant
tasks, automating the process, and identifying bottlenecks or areas for
improvement." kissflow

The map depicts the flow of activities through the system, including its
input, processes, outputs and outcomes. These are sometimes also
referred to as operations management process maps. (This technique
is at the heart of the Business Process Re-Engineering approach.)

Workflow
What Should You Include in Your Operations Management Process
Map?
9 Powerful Workflow Examples For Smart Teams in 2019

Phase 2: Planning Operations, Inventory and

Quality Control
Production and Scheduling
Production Planning

This is the processes part in the operations system where the inputs
are transformed into the desired product or service. Considerations
include, for example:

 Are there technologies currently or soon available that could

expedite the production?
 Are there best practices suggested by various experts about the
product or service?
 Can components of the product be purchased as-is or off-the-
shelf?
 What components are needed, in total, to produce the product or
service?
 What are the costs associated with developing and producing the
product or service?
  What are the estimated demands of customers for the next six
months? 12 months? 18 months? These estimates drive the
scheduling of the production activities.

This activity also includes developing a detailed map of the activities

required to obtain, assemble, integrate and test the product or service
before it is provided to customers.
What Makes a Good Production Plan?
What Must Be Considered for Production Planning?
Production Planning
Production Planning

Scheduling

A critical activity in ensuring that the operations system is highly

effective and efficient is coordinating (scheduling) the timing of
activities to organize, monitor and optimize the equipment, people and
production activities. Scheduling has a major impact on the
productivity of the system.
Scheduling (production processes)
Production Scheduling Approaches for Operations Management
Scheduling (in operations management)

Supply Chain Management and Inventory

Management
Supply Chain Management

"In business and finance, supply chain is a system of organizations,

people, activities, information, and resources involved in moving a
product or service from supplier to customer." Wikipedia

" Supply chain management (SCM) is the active management of

supply chain activities to maximize customer value and achieve a
sustainable competitive advantage. It represents a conscious effort by
the supply chain firms to develop and run supply chains in the most
effective & efficient ways possible. Supply chain activities cover
everything from product development, sourcing, production, and
logistics, as well as the information systems needed to coordinate
these activities." Supply Chain Resource Cooperative
Guide to Supply Chain Management for any Organization: Overview
and Resources
What is Supply Chain Management (SCM)
CSCMP Supply Chain Management Definitions and Glossary

The Death of Supply Chain Management

What Are the Main Supply Chain Challenges?
The Seven Deadly Supply Chain Sins

Inventory Management

Inventory includes unprocessed materials, finished products, supplies

and works-in-progress. Inventory management is a part of supply
chain management that oversees the inventory items from
manufacturers to storage to where they are sold. There must be a
very careful balance between the size of the inventory of items
compared to the actual rate of their sales. Too many items in
inventory means their costs are not recovered in a timely manner from
their sales. It also might mean high costs of storage. Insufficient
numbers of items means the organization cannot meet the customer
demand, resulting in lost revenue.
What is Inventory Management?
What is Inventory Management?

Your Essential Guide to Effective Inventory Management + 18

Techniques You Need to Know
3 Inventory Management Problems and How To Avoid Them
5 Common Inventory Mistakes and How to Avoid Them

Service Design
In the past, an organization was expected to provide a product or
service to the customer, and then that transaction was done -- the
activity was done to the customer. The customer was more or less at
the mercy of the organization.

Today, that is changing dramatically. Customers have a much wider

range of organizations, products and services to choose from, and they
can access them instantly. Customers can also access numerous
sources of useful opinions or reviews about the product or service even
before they buy them. Thus, it is more important than ever that
organizations remain very good at attracting, satisfying and retaining
customers. That requires a carefully designed and implemented
customer services plan.

Service design "is the activity of planning and organizing people,

infrastructure, communication and material components of a service in
order to improve its quality and the interaction between the service
provider and its customers. Service design may function as a way to
inform changes to an existing service or create a new service
entirely." Wikipedia
Customer Service Business Plan Template
Why Your Business Needs a Customer Service Plan
8 Steps to Creating a Superior Customer Service Plan
How to Create a Customer Service Plan
How to Create a Customer Service Plan

Quality Control
Quality management, including quality control, is crucial to effective
operations management, particularly continuous improvement. More
recent advancements in quality, such as benchmarking and Total
Quality Management, have resulted in advancements to operations
management as well. 
Quality Management

Quality control can be defined "part of quality management focused on

fulfilling quality requirements." While quality assurance relates to how
a process is performed or how a product is made, quality control is
more the inspection aspect of quality management. An alternate
definition is "the operational techniques and activities used to fulfill
requirements for quality." American Society for Quality
Quality Control
Quality Control (QC): Definition, Importance and Tools of Quality
Control
Quality Control Techniques
Phase 3: Managing Productivity
What is Productivity?
In the context of operations systems, productivity is defined as the
ratio of the output to the input of the system. The higher the ratio, the
more productive the system. One of the most common measures of
productivity is output per hour. This is important especially in
manufacturing industries.
The Concept of Productivity
5 Steps to Achieving Better Results through Productivity Management
How to Create a Successful Productivity Management System
Productivity and Operations Management

Methods to Measure and Improve Productivity

Where many guidelines are in regard to increasing employee
productivity, Productivity: A Practical Handbookdistinguishes between
three factors that drive productivity, not all of them around employee
productivity, including:

1. Job-related
2. Resource-related
3. Environment-related

The above Handbook is a very useful overview of the many different

methods to improve productivity.

Here are various measures, or indicators, to help monitor and assess

the levels of productivity.
Measuring Productivity Levels
Operations Management (scroll down to "Metrics: efficiency and
effectiveness")
 MANAGING PRODUCTION AND SERVICE OPERATIONS

Organizations are designed mainly to produce products or services. If these

organizations must survive and grow, the operations function must be undertaken in the most
economical manner possible. As most companies are expected to make profits, any activity,
including those for operations must be managed to contribute to the accomplishment.

WHAT OPERATIONS IS?

Operations
- Any process that accepts inputs and users resources to change those inputs in useful ways

            - Is an activity that needs to be managed by competent persons.

Transformation Process - converts the inputs into final goods or services.

Examples of final Goods and services:

1.     Industrial
chemicals like methylene chloride, borax powder, phosphoric acid, etc., which are
produced by chemical manufacturing firms.
2.      Services like those for the construction of ports, high-rise buildings, roads, bridges, etc., which
are produced by constructions firms.
3.      Electrical products like transformers, circuit breakers, switch gear, power capacitors, etc., which
are produced by electrical manufacturing firms
4.      Electronics products like oscilloscope, microwave test systems, transistors, cable testers, etc.,
which are produced by electronics manufacturing firms
5.      Mechanical devices like forklifts, trucks, loaders, atc., which are produced by manufacturing
firms
6.      Engineering consultancy services like those for construction management and supervision,
project management services, etc., which are produced by engineering consultancy firms.

WHAT IS OPERATIONS MANAGEMENT?

Operations Management - defined by Aldag and Stearns as “the process of planning,

organizing, and controlling operations to reach objectives efficientlyand effectively”
Efficiency - related to “the cost of doing something, of the resource utilization involved”
 Effectiveness - refers to goal accomplishment.

OPERATIONS AND THE ENGINEER MANAGER

The engineer manager is expected to produce some output at whatever managing level
he is. If he is assigned as the manufacturing engineer, his function is “to determine and define
the equipment, tools, and processes required to convert the design of the desired product into
reality in an efficient manner.”
The engineer in charge of operations in a construction firm is responsible for the actual
construction of whatever bridge or road his company has agreed to put up. He is required to do
it using the least-expensive and the easiest methods.
The engineering, as operations manager, must find ways to contribute to the production
of quality goods or services and the reduction of costs in his department.
The typical operations manager is one with several years of experience in the operations
division and possesses an academic background in engineering.

TYPES OF TRANSFORMATION PROCESS

1. Manufacturing processes
1. Job shop
2. Batch flow
3. Worker-paced line flow
4. Machine-paced line flow
5. Batch/continuous flow hybrid
6. Continuous flow
2. Service processes
1. Service factory
2. Service shop
3. Mass service
4. Professional service

MANUFACTURING PROCESSES
 - Are those that refer to the making of products by hand or with machinery.

Job Shop
- Whose production is “based on sales ordersfor a variety of small lots. ”

Batch Flow
 - Is where lots of generally own designed products are manufactured. It is further
characterizes by the following:
1. There is flexibility to produce either low or high volumes.
2. Not all procedures are performed on all products.
3. The type of equipment used are mostly for general purpose
4. The process layout is used.
5. The operation is labor intensive, although there is less machine idleness.
6. The size of operation is generally medium-sized.
Worker-Paced Assembly Line
- An assembly line refers to a production layout arranged in a sequence to
accommodate processing of large volumes of standardized products of services.
The quality and quantity of output in a worker-paced assembly line depend to a great extent to
the skill of the labor utilized.

Characteristics of Worker-Paced Assembly Line

1. The products manufactured are mostly standardized.
2. There is a clear process pattern.
3. Specialized equipment is used.
4. The size of operation is variable
5. The process is worker-paced
6. The type of layout used us the line flow.
7. Labor is still a big cost item.

Machine-Paced Assembly Line

- This type of production process producesmostly standard products with machines
playing a significant role.  Among its other features are as follows:
1. The process is of clear, rigid pattern.
2. Specialized type of equipment is used.
3. The line flow layout is used.
4. Capital equipment is a bigger cost item than labor
5. Operation is large.
6. The process is machine-paced

Continuous Flow
            - Characterized by “the rapid rate at which items move through the system .” this
processing method is very appropriate for producing highly standardized products like
calculators, typewriters, automobiles, televisions, cellular phones, etc.
Its other characteristics are as follows:
1.      There is economy of scale in production, resulting to low per unit cost of production.
2.      The process is clear and very rigid.
3.      Specialized equipments are used.
4.      The line flow layout is used.
5.      Operations are highly capital intensive.
6.      The size of operations is very large.
7.      Processing is fast.

Batch/ Continuous Flow Hybrid

- This method of processing is a combination of the batch and the continuous flow.
Two distinct layout are used, one for batch and one for continuous flow.
- The typical size of the operation is also very large giving opportunities for economies of scale.

SERVICE PROCESSES
- Are those that refer to the provision of services to persons by hand or with  machinery

Service Factory
          - Offers a limited mix of services which results to some economies of scale in operations.
      - Also affords the company to compete in terms of price and speed of producing the service.
            *Process Layout preferred by ht eservice factory is the rigid pattern of line flow
processing. Ex: McDonalds and Shakeys

Service Shop
            - Provides a diverse mix of services. The layouts used are those for jobs or fixed position
and are adaptable to various requirements. Ex: Servitek and Megashell, which services
provided by these shops are car engine tune-up, wheel balancing, wheel alignment, change oil,
etc.

Mass Service
            - Provides services to large number of people simultaneously. To be able to serve many
people, mass service companies offer limited mix of services.
         -The process layout used is typically fixed position where customers move through the
layout.

Professional Services
            -These are companies that provide specialized services to other firms or individuals.
            Examples of Firms:
1.      Engineering or management consulting services which help in improving he plant layout or the
efficiency of a company.
2.      Design services which supply designs for a physical plant, products, and promotion materials.
3.      Advertising agencies which help promote a firm’s products.
4.      Accounting services.
5.      Legal services
6.      Data processing services.
7.      Health services.
            *Professional services firms offer a diverse mix of services. There is a lower utilization of
capital equipment compared to the service factory and the service shop. The process pattern
used is very loose. The process layout used is identical to the job shop.*

IMPORTANT PARTS OF PRODUCTIVE SYSTEMS

1. Product design
2. Production planning and scheduling
3. Purchasing and materials management
4. Inventory control
5. Work flow layout
6. Quality control

Product Design
            -The process of creating a set of product specifications appropriate to the demands of
the situation.
Production Planning and Scheduling
            Production Planning
            -Defined as “forecasting the future sales of a given product, translating this forecast into
the demand it generates for various production facilities, and arranging for the procurement of
these facilities”
            -A very important activity because it helps management to make decisions regarding
capacity.
            Scheduling
            -The phase of production control involved in developing timetables that specify how long
each operation in the production process takes.
Purchasing and Materials Management
            Materials management
             -The approach that seeks efficiency of operation through integration of all material
acquisition, movement, and storage activities in the firm.
Inventory Control
            -The process of establishing and maintaining appropriate levels of reserve stocks of
goods.
Ways of achieving proper inventory control
1. Determining reorder point and reorder quantity.
2. Determining economic order quantity.
3. The use of just-in-time (JIT) method of inventory control.
4. The use of the material requirement planning (MRP) method of planning and controlling
inventories.

Work-Flow Layout
            - Is the process of determining the physical arrangement of the production system. In
the  transformation process, the flow of work may be done either haphazardly or orderly.

A good work-flow layout will have the following benefits:

1. Minimize investment in equipment.
2. Minimize overall production time.
3. Use existing space most effectively.
4. Provide for employee convenience, safety, and comfort.
5. Maintain flexibility of arrangement and operation.
6. Minimize material handling cost.
7. Minimize variation in types of material-handling equipment.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structure.

Quality Control
            - Refers to the measurement of products or services against standards set by the
company.