CE 135 – ENGINEERING MANAGEMENT

Course Description:

This course deals with the study of the field of Engineering Management, the science of handling
technical undertakings the engineering way so that decision making shall be made more rational and
logical. It is concerned with planning and organizing technical activities, staffing the engineering
organization, communicating, motivating, leading, controlling, managing production and service operations,
managing the marketing functions and managing finance functions.

WEEK 15. MANAGING PRODUCTION AND SERVICE OPERATIONS

Topics for Week 15:

1. What is Operation?
2. What is Operation Management?
3. Operations and the Engineer Manager
4. Types of Transformation Process
5. Important Parts of Production System

Learning Objectives:
At the end of the lesson, the students should be able to:
- Define what operation and operation management are
- Enumerate the different types of transformation process and important parts of production system

Topic 1. What is Operation?-input-process-output

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 of such objectives.

Operation refers to “any process that accepts inputs and uses resources to change those inputs in
useful ways.” The transformation process converts the inputs into final goods or services.

Examples of final goods and services as follows:

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 construction firms.
3. Electrical products like transformers, circuit breakers, switch gears, power capacitors, etc., which are
produced by electrical manufacturing firms.
4. Electronic products like oscilloscope, microwave test systems, transistors, cable testers, etc., which
are produced by electronic manufacturing firms
5. Mechanical devices like forklifts, trucks, loaders, etc., 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.

Topic 2. What is Operations Management?

Operations are activities that need to be managed by competent persons. Aldag and Stearns accurately
defined operations management as “the process of planning, organizing and controlling operations to reach
objectives efficiently and effectively.

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 Operations management must be performed in coordination with the other functions like those for
marketing and finance. Although the specific activities of the operations divisions of firms slightly differ from
one another, the basic function remains the same, example: to produce products or services.

Topic 3. Operations and the Engineer Manager

The engineer manager is expected to produce some output at whatever management level he is. If he is
assignment 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, 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.

Topic 4. Types of Transformation Process

The engineer manager must have some knowledge of the various types of transformation process. They
are as follows:

1. Manufacturing processes
a.) Job shop
b.) Batch flow
c.) Worker-paced line flow
d.) Machine-paced line flow
e.) Batch/continuous flow hybrid
f.) Continuous flow
2. Service processes
a.) Service factory
b.) Service shop
c.) Mass service
d.) Professional service

Manufacturing Process

Manufacturing processes are those that refer to the making of products by hand or with machinery.

a.) Job shop – is one whose production is “based on sales orders for a variety of small lots.” Job shops
are very useful components of the entire production effort, since they manufacture products in small
lots that are 0needed by, but cannot be produced economically by many companies.
b.) Batch Flow – The flow process is where lots of generally own designed products are manufactured.
It is further characterized 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 is 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.
c.) Worker-Paced Assembly Line – an assembly line refers to production layout arranged in a
sequence to accommodate processing of large volumes of standardized products or services. The
quality and quantity of output in a worker-paced assembly line depends to a great extent to the skill of
the labor utilized.
The worker-paced assembly line is characterized by the following:
1. The products manufactured are mostly standardized.
2. There is a clear process pattern.

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 3. Specialized equipment is used.
4. The size of operation is variable.
5. The process is worker-paced.
6. The type of layout used is the line flow.
7. Labor is still a big cost item.
d.) Machine-Paced Assembly Line – this type of production process produces mostly 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.
e.) Continuous Flow – is 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 equipment is used.
4.) The line flow layout is used.
5.) Operations are highly capital intensive.
6.) The size of operations is very large.
7.) Processing fast.
f.) 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 the continuous flow. The
typical size of operation is also very large giving opportunities for economies of scale.

Service Processes

Service processes are those that refer to the provision of services to persons by hand or with
machinery.

a.) Service Factory – it offers a limited mix of services which results to some economies scale in
operations. This also affords the company to compete in term of price and speed of producing the
service.
b.) Service Shop – provides a diverse mix of services. The layouts used are those for job shops or
fixed position and are adaptable to various requirements.
c.) Mass Service – a company that provides services to a large number of people simultaneously. A
unique processing method is necessary to satisfy this requirement. To be able to serve many
people, mass service companies offer limited mix of services.
d.) Professional Services – these are companies that provide specialized services to other firms or
individuals. Examples of such firms are as follows:
 Engineering or management consulting services which can help in improving the plant
layout or the efficiency of a company.
 Design services which supply designs for a physical plant, products and promotion
materials.
 Advertising agencies which help promote a firm’s products.
 Accounting services.
 Legal services
 Data processing services.
 Health services.

Professional services firms are, oftentimes, faced with delivery problems brought about by non-
uniform demand. Strategies that may be used depending on the situation are as follows:

1. The use of staggered work-shift schedules.

2. The hiring of part-time staff.
3. Providing the customer with opportunity to select the level of service.

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 4. Installing auxiliary capacity or hiring subcontractors.
5. Using multi-skilled floating staff.
6. Installing customer self-service.

Topic 5. Important Parts of Productive Systems

Productive systems consist of six important activities as follows:

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

1. Product Design

Product design refers to “the process of creating a set of product specifications appropriate to the
demands of the situations.” Companies wanting to maintain or improve its market share keep a product
design team composed of engineers, manufacturing and marketing specialists.

2. Production Planning and Scheduling

Production planning may be 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.”

Production planning is a very important activity because it helps management to make decisions
regarding capacity. When the right decisions are made, there will be fewer opportunities for wastages.

Scheduling is the “phase of production control involved in developing timetables that specify how long
each operation in the production process takes.” Efficient scheduling assures the optimization of the use of
human and non-human resources.

3. Purchasing and Materials Management

Firms need to purchase supplies and materials required in the various production activities. The
management of purchasing and materials must be undertaken with a high degree of efficiency and
effectiveness especially in firms engaged in high volume production. The wider variety of supplies and
materials needed add to the necessity of proper managing and purchasing of materials.

Materials management refers to “the approach that seeks efficiency of operation through integration of
all material acquisition, movement and storage activities in the firm.

4. Inventory Control

Inventory control is the process of establishing and maintaining appropriate levels of reserve stocks of
goods. As supplies and materials are required by firms in the production process, these must be kept
available when they are needed. Too much reserve of stocks will penalize the firm in terms of high storage
costs and other related risks like obsolescence and theft. Too little reserves, on the other hand, may mean
lost income opportunities if production activities are hampered. A balance between the two extremes must
be determined.

There are ways of achieving proper inventory control. They are as follows:

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 planning and controlling inventories.

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 5. Work-Flow Layout

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.

The job of the operations manager is to assure that a cost-effective work-flow layout is installed. 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 cost.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structure.

6. Quality Control

Quality Control refers to the measurement of products or services against standards set by the
company. Certain standard requirements are maintained by the management to facilitate production and to
keep customers satisfied.

Poor quality control breeds customer complaints, returned merchandise , expensive lawsuits and huge
promotional expenditures.

REFERENCES:

Engineering Management by Roberto G. Medina

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