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Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2 nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected] J a k a r ta , N o v e m b e r 200 7 Week 8 P r o d u c i n g G o o d s a n d Se r v i c e s

Business w08 Producing Goods And Services @1

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Page 1: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Jakarta, November 2007

Week 8

Producing

Goods and Service

s

Page 2: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What Does Production Mean Today?

• The concept of production means services as well as

goods.

• The key difference between production and services

operations is the customer's involvement in the latter.

• Customers are involved in all kinds of production because electronic communications are key components in winning and keeping customers.

Page 3: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Services…

• are performed

• are intangible

• are unstorable

• 50.3% of GDP (US)

Goods…

• are made

• are tangible

• are storable

• 29.7% of GDP (US)

Page 4: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

The Growth of Global Operations

• Global competition has made production a faster-paced,

more complex activity.

• New technologies make machines that run cleaner, faster

and safer and that operate on a global scale.

• With the Internet, producers of both services and goods can integrate their production with those of far-off suppliers and customers.

Page 5: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is utility ?

“A product’s ability to satisfy a human want.”

Four kinds:

– Time

– Place

– Possession/ Ownership

– Form

Page 6: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is Operations (or Production) Management

Systematic direction and control of the processesthat transform resources into finished products

that create value for and provide benefits to customers

Page 7: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Resource Transformation Process

Page 8: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What are Operations (or Production) Managers?

Managers responsible for ensuring that operations

processes create value and provide benefits

Page 9: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Services…

• are performed

• are intangible

• are unstorable

• 50.3% of GDP (US)

Goods…

• are made

• are tangible

• are storable

• 29.7% of GDP (US)

Page 10: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Operations Processes

• Operations process is a set of methods and technologies

used in the production of a good or a service

– Goods classification is based on whether an operations

process combines resources or breaks them into component parts

– Services classification is based on the extent of customer

contact required

Page 11: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Goods-Manufacturing Processes : Analytic vs. Synthetic Processes

• Analytic process breaks down resources into components

• Synthetic process combines raw materials to produce a finished product

Page 12: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Service Processes: Extent of Customer Contact

• High-contact system is an operation in which the customer is part of the system during service delivery

Page 13: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

• Low-contact system is an operation in which the customer need not be a part of the system to receive the service

Page 14: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Differences betweenService and Manufacturing Operations

• Focus on Performance

• Focus on Process and Outcome

• Focus on Service Characteristics

– Intangibility

– Customization

– Unstorability

• Focus on the Customer-Service Link

– E-Commerce: The “Virtual Presence” of the Customer

• Focus on Service Quality Considerations

Page 15: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Operations Planning

• Managers from many departments contribute to decisions

about operations.

• The business plan and forecasts developed by top managers guide operations planning.

– Forecast is a facet of a long-range production plan that predictsfuture demand

Page 16: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Operations Planning and Control

Page 17: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is Capacity ?

Amount of a product that a company can produce

under normal working conditions

Page 18: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Capacity Planning

• Capacity Planning for Producing Goods

– Capacity planning for goods means ensuring that a firm’s capacity slightly exceeds normal demand for its product.

• Capacity Planning for Producing Services

– In low-contact processes, maintaining inventory lets managers set capacity at the level of average demand.

– In high-contact processes, managers must plan capacity to meet peak demand.

Page 19: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Location Planning

• Location Planning for Producing Goods

– Location decisions are influenced by proximity to raw materials and markets, availability of labor, energy and transportation costs and other factors.

• Location Planning for Producing Services

– Low-contact services can be located near resource supplies, labor or transportation outlets.

– High-contact services must locate near the customers who participate in the system.

Page 20: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Layout Planning for Producing Goods

Layout must be planned for three types of space:

1. Productive facilities

2. Nonproductive facilities

3. Support facilities

Page 21: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Layout Planning for Producing Goods

• Process layout groups equipment and people according to function

• Cellular layout works well when a family of products follows a fixed flow path

• Product layout is set up to make one type of product in a fixed sequence and is arranged according to its production requirements

– Assembly line is a product layout in which a product moves step-by-step through a plant on conveyer belts or other equipment until it is completed

Page 22: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Layouts for Producing Goods

Page 23: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Other Developments in Layout Flexibility

• U-shaped product line is a product layout in which machines and workers are placed in a narrow U shape

rather than a straight line

• Flexible Manufacturing System (FMS) is a production system in which a single factory uses automation to produce a wide variety of products

Page 24: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Layout Planning for Producing Services

• In a low-contact system, the facility should be arranged to

enhance the performing of the service.

• In a high-contact system, the facility should be arranged to meet customer needs.

Page 25: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Layout of a Typical Piccadilly Cafeteria

Page 26: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is Quality ?

The American Society for Quality defines quality

as the combination of “characteristics of a product

or service that bear on its ability to satisfy stated

or implied needs.”

Page 27: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Methods Planning

• Methods Improvement in Goods

– Process flowchart is a diagram included in a detailed

description of methods

• Methods Improvement in Services

– Service flow analysis shows the flow of processes that make up a given service

– Designing to Control Employee Discretion in Services

– Design for Customer Contact in Services

Page 28: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Service Flow Analysis

Page 29: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Operations Scheduling

• Scheduling Goods Operations

– Master production schedule

shows which products will be

produced, when production will

take place and what resources

will be used

• Scheduling Service Operations

– In low-contact services, work scheduling may be based

either on desired completion dates or on the time of order

arrivals.

– In high-contact services, the customer must be

accommodated as part of the system and its processes.

Page 30: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Tools for Scheduling Service Operations

• Gantt chart diagrams steps to be performed and specifies the time required to complete each step

Page 31: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Tools for Scheduling Service Operations

• PERT chart breaks down large projects into steps and specifies the time required to perform each one

Page 32: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is Operation Control ?

Process of monitoring production performance by comparing results with plans

Page 33: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is Follow-Up ?

Production control activity for ensuring

that production decisions are being implemented

Page 34: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Materials Management

• Materials management allows managers not only to

control but also to plan and organize materials flow

– Standardization is the use of standard and uniform components in the production process

Page 35: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Major Areas in Material Management

1. Transportation includes the means of transporting resources to the manufacturer and finished goods to

buyers

2. Warehousing is the storage of both incoming materials for production and finished goods for distribution to

customers

3. Inventory control includes the receiving, storing, handling and counting of all raw materials, partly finished goods and finished goods

4. Purchasing is the acquisition of the raw materials and services that a firm needs to produce its products

Page 36: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Purchasing Processes

• Holding costs are costs of keeping extra supplies or inventory on hand

• Opportunity costs are additional earnings that the company must pass up because funds are tied up in inventory

• Lead time is the gap between the customer’s order placement and the seller’s shipment

• Supplier selection is the process of deciding which suppliers to buy from

Page 37: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

Tools for Operations Process Control

• Worker Training

• Lean Production Systems: Just-in-Operations

– Just-in-Time (JIT) Production

• Material Requirements Planning

– Bill of Materials

– Manufacturing Resource Planning (MRP II)

Page 38: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

What is Quality Control

Management of the production process designed to manufacture goods or supply services that meet specific

quality standards

Page 39: Business w08 Producing Goods And Services @1

Universitas Multimedia Nusantara (UMN) Wisma BNI 46, 2nd Floor, Jl. Jend. Sudirman Kav.1 Jakarta

Exclusively prepared & presented by: Anna Riana Putriya, SE, MSi e-mail: [email protected]

thank you