THE PRODUCTION AND OPERATIONS FUNCTION - Free enterprise allows the flow of foreign products to our local market.

This is beneficial to consumers since they would have plenty of goods

to choose from. At alam naman natin ang gusto ng Pinoy, ung mura at
1. What is the definition of production? magandang klase. But the said type of economy obstacles businesses
in some ways since there would be plenty of competition.
- Kaya dapat laging dekalidad at laging may bagong i ooffer ang
The processes and methods used to transform business sa merkado, kung hindi mapag iiwan ito. Businesses must
cope up with global competition in order for it to survive. And
tangible inputs (raw materials, semi-finished goods, operations management is one office in an organization that makes
subassemblies) and intangible inputs (ideas, sure that it would do so.
- Dapat din siguraduhin ng opisinang ito na mapangangalagaan ang
information, knowledge) into goods or services. tanging yaman ng negosyo. The ultimate aim of business
Resources are used in this process to create an organizations is to maximize profit. And in order for this to happen is
for it to minimize production cost without sacrificing quality.
output that is suitable for use or has exchange
value. 5. Inputs to the process
2. What is the definition of Operations One set of inputs to any operation’s processes are
Management? transformed resources. These are the resources
that are treated, transformed or converted in the
Operations management is the activity of process. They are usually a mixture of the
managing the resources which are devoted to following:
the creation and delivery of services and ● Materials – operations which process
products. It is one of the core functions of any materials could do so to transform their physical
business, although it may not be called operations properties (shape or composition, for example).
management in some industries. Most manufacturing operations are like this. Other
Operations management is concerned with operations process materials to change their
managing processes. And all processes have location (parcel delivery companies, for example).
internal customers and suppliers. But all Some, like retail operations, do so to change the
management functions also have processes. possession of the materials. Finally, some
Therefore, operations management has relevance operations store materials, such as warehouses.
for all managers. ● Information – operations which process
- Operations Management is the activity that ensures that the
production of goods are done properly. In our example of information could do so to transform their
sugar production at CAT, operation management oversees informational properties (that is the purpose or
that quality sugar and its by-products are milled or created. form of the information); accountants do this.
Sinisuguro ng mga taong bahagi ng opisinang ito na
maganda ang lilikhaing asukal ng planta. This is by ensuring
Some change the possession of the information, for
that quality raw materials are used in producing sugar. The example market research companies sell
office likewise hires and trains highly qualified employees for information. Some store the information, for
the job. More importantly, operations management monitors example archives and libraries. Finally, some
the actual process of transforming raw mats to finished
goods. Dapat dekalidad lahat ng proseso na gagawin ng operations, such as telecommunication companies,
planta magmula sa pagpili ng tubo (sugarcane) hanggang sa change the location of the information.
maging asukal at iba pang produkto. Ito ay trabaho ng - Information – unlike materials wherein their physical properties
operations management.
are altered (ung tubo magiging asukal), information as a
transformed resource is when its informational property is
3. Why is operations management important in changed or transformed.
all types of organization? Ang halimbawa nito ay nitong nakaraang online enrolment
natin. Kinuha ng enrolment system ang student information
Operations management uses the organization’s ninyo (student data, subjects to enrol) at ito ay ipoproseso para
resources to create outputs that fulfil defined maging COR ninyo.
market requirements. This is the fundamental
activity of any type of enterprise. ● Customers – operations which process
Operations management is increasingly important customers might change their physical properties
because today’s business environment requires in a similar way to materials processors: for
new thinking from operations managers. example, hairdressers or cosmetic surgeons. Some
- Free enterprise allows the flow of foreign products to our local market. store (or more politely accommodate) customers:
This is beneficial to consumers since they would have plenty of goods hotels, for example. Airlines, mass rapid transport
to choose from. At alam naman natin ang gusto ng Pinoy, ung mura at
magandang klase. But the said type of economy obstacles businesses systems and bus companies transform the location
in some ways since there would be plenty of competition. of their customers, while hospitals transform their
- Kaya dapat laging dekalidad at laging may bagong i ooffer ang
business sa merkado, kung hindi mapag iiwan ito. Businesses must physiological state. Some are concerned with
cope up with global competition in order for it to survive. And transforming their psychological state, for example
operations management is one office in an organization that makes
sure that it would do so. most entertainment services such as music,
- Dapat din siguraduhin ng opisinang ito na mapangangalagaan ang theatre, television, radio and theme parks. But
tanging yaman ng negosyo. The ultimate aim of business
organizations is to maximize profit. And in order for this to happen is customers are not always simple ‘passive’ items to
for it to minimize production cost without sacrificing quality. be processed. They can also play a more active
part in many operations and processes. For
4. The input – transformation – output process example, they create the atmosphere in a
restaurant; they provide the stimulating
All operations create and deliver services and environment in learning groups in education; they
products by changing inputs into outputs using an provide information at check-in desks, and so on.
‘input–transformation–output’ process. The table When customers play this role, it is usually referred
shows this general transformation process model. to as co-production (or co-creation for new
Put simply, operations are processes that take in a services) because the customer plays a vital part in
set of input resources which are used to transform the provision of the product/service offering.
something, or are transformed themselves, into - Customers – they become transformed resources or inputs
outputs of services and products. And although all when they subject themselves to certain physical or physiological
operations conform to this general input– transfornation.
transformation–output model, they differ in the Ang halimbawa nito ay pag ang isang tao ay magpapagupit.
nature of their specific inputs and outputs. Yung nagpapagupit or customer ang transformed resource. The
barber is considered as the transforming resource or the one that
does the transformation. Yung actual na pag gupit ay ang
process at ang kinalabasang gupit o hairstyle ang output

The following table gives examples of operations

with their dominant transformed resources.

1
 examine the more important decisions that should
be of interest to all managers of operations and
- Inputs are what organizations use to create products. It would be
highly improbable for goods to be made without them. Most input
processes.
resources are referred to as transformed resources. Mayroon tatlong
uri ng transformed resources. Ito ay materials, information at
customers.
- Materials – these are tangible resources that are transformed to
take another form. Ang halimbawa ito ay ang CAT kung saan ang tubo
o sugarcane ay ang transformed resource na ginagamit para maging
asukal (another form).
- The table expounded the input-process-output
- There are other organizations that take-in materials but they do
transformation table for us. Pinakita dito na kumukuha ng
not change their form. Ang halimbawa nito ay ang LBC kung saan
mga input resources ang organization para gawing produkto
kumukuha ito ng mga packages (input) at ipapdala (process) ito sa
o serbisyo. This are referred to as transformed resources.
ibang lugar (output). Hindi nabago ang form nung package.
We have to take note that the this could not happen if there
is no one doing it. Ang tawag dito ay transforming
6. Outputs from the process resources. Sila ang mga tao at mga bagay na ginagamit
para maging produkto o serbisyo ang mga transformed
Products and services are different. Products resources.
- The table likewise presented the second idea of the
are usually tangible things, whereas services are model. It showed to us that when the input resources enter
activities or processes. A car or a newspaper or a the processing area, they are directed, designed, developed
restaurant meal is a product, whereas a service is and delivered. Ipapaliwanag ang mga ito sa mga susunod
na slides.
the activity of the customer using or consuming - After the 4 stages, output in the form of a product or a
that product. Some services do not involve service is achieved. These are now available to customers.
products. Consultancy advice or a haircut is a
process (though some products may be supplied in 9. What do operations manager’s do?
support of the service, such as a report or a hair
gel). Also, while most products can be stored, at So, you are considering a career in operations
least for a short time, service only happens when it management, and you want to know, ‘is it for you?’
is consumed or used. So accommodation in an What skills and personal qualities will you need to
hotel room, for example, will perish if it is not sold make a success of the job as well as enjoying
that night; a restaurant table will remain empty yourself as you progress in the profession? Well,
unless someone uses it that evening. the first thing to recognize is that there are many
- Outputs are the result of the transformation process done to input
resources. They may be classified as either a product or a service.
different roles encompassed within the general
- A product is tangible output. It was basically created when category of ‘operations management’. Someone
materials are brought in to undergo transformation and be changed to
another form. In our previous examples, CAT is producing sugar and
who makes a great risk control system designer in
other by-products. Therefore, we can conclude that they are products. an investment bank may not thrive as a site
Usually, manufacturing companies, output products.
- Services on the otherhand, are activities or processes. In our
manager in a copper mine. A video game project
example, yung pagpapagupit ay service at hindi product. Walang manager has a different set of day-today tasks
physical o tangible na nalikha dulot nang proseso. Like in the manner
on how we conduct our flexible classes, Telcos or Internet Service
when compared with a purchasing manager for a
Providers (ISPs) facilitate the bandwidth needed for Internet hospital. So, the first skill you need is to
Connection. Hence, the output that they deliver to us is service. Just
like TSU, the service that it is giving students (its customers) is
understand the range of operations-related
education or knowledge. responsibilities that exist in various industries.
However, there are also some generic skills that an
7. Value of Customers effective operations manager must possess. Here
are some of them.
Customers may be an input to many operations,
but they are also the reason for their existence. If SKILLS AND QUALITIES OF AN OPERATIONS MANAGER
there were no customers (whether business  Enjoys getting things done – operations
customers, users or consumers), there would be no management is about doing things. It takes
operation. So it is critical that operations managers energy and/or commitment to finishing
are aware of customer needs, both current and tasks. It means hitting deadlines and not
potential. This information will determine what the letting down customers, whether they are
operation has to do and how it has to do it (the internal or external.
operation’s strategic performance objectives),  Understands customer needs –
which in turn defines the service/product offering operations management is about adding
to be designed, created and delivered. value for customers. This means fully
- It would be easy to understand why a prime considration
for not only operations management but all those are part of understanding what ‘value’ means for
the organization to value its customers. Ang ganda nga customers. It means putting yourself in the
nang produktong ginawa o ang husay ng mga taong gagawa customer’s place: knowing what it is like to
ng serbisyo, hindi naman pala yun ang kailangan ng
customers. Paano kikita yung negosyo? be the customer and knowing how to
- Organizations must be sensitive to the ever changing ensure that your services or products make
consumer behavior. They must be aware of what they need. the customer’s life better.
Magagawa lamang ito kung kikilalanin nila ang mga target
markets nila.
 Communicates and motivates –
operations management is about directing
8. Model of Operations Management resources to produce services or products
in an efficient and effective manner. This
The first is the idea that operation and the means articulating what is required and
persuading people to do it. Interpersonal
processes that make up both the operations and
skills are vital. Operations managers must
other business functions are transformation be ‘people people’.
systems that take in inputs and use process  Learns all the time – e very time an
resources to transform them into outputs. operations manager initiates an action (of
The second idea is that the resources both in any kind) there is an opportunity to learn
an organization’s operations as a whole and in from the result. Operations management is
its individual processes need to be managed in about learning, because without learning
there can be no improvement, and
terms of how they are directed , how they
improvement is an imperative for all
are designed , how delivery is planned and operations.
controlled and how they are developed and  Committed to innovation – operations
improved. The Table shows how these two ideas management is always seeking to do
go together. This module will use this model to things better. This means creating new

2
 ways of doing things, being creative,  Human resource management – the people
imaginative, and (sometimes) employed by an organization either work
unconventional. directly to create a good or service or provide
 Knows their contribution – operations support to those who do. People and the way
management may be the central function they are managed are a key resource of all
in any organization, but it is not the only organizations.
one. It is important that operations  Asset management – an organization's
managers know how they can contribute to buildings, facilities, equipment and stock are
the effective working of other functions. directly involved in or support the operations
 Capable of analysis – operations function.
management is about making decisions.  Cost management – most of the costs of
Each decision needs to be evaluated producing goods or services are directly related
(sometimes with very little time). This to the costs of acquiring resources,
involves looking at both the quantitative transforming them or delivering them to
and the qualitative aspects of the decision. customers. For many organizations in the
Operations managers do not necessarily private sector, driving down costs through
have to be mathematical geniuses, but efficient operations management gives them a
they should not be afraid of numbers! \ critical competitive edge. For organizations in
 Keeps cool under pressure – operations the not-for-profit sector, the ability to manage
managers often work in pressured costs is no less important.
situations. They need to be able to remain
calm no matter what problems occur. Decision making is a central role of all operations
managers. Decisions need to be made in:
The exact details of what operations managers do  designing the operations system
will, to some extent, depend on the way an  managing the operations system
organization defines the boundaries of the function.  improving the operations system.
Yet there are some general classes of activities
that apply to all types of operation irrespective of The five main kinds of decision in each of these relate
whether they are service, manufacturing, private or to:
public sector, and no matter how the operations 1. the processes by which goods and services are
function is defined. We classify operations produced
management activities under four headings: direct, 2. the quality of goods or services
design, deliver and develop. 3. the quantity of goods or services (the capacity
of operations)
CLASSIFICATION OF OM ACTIVITIES 4. the stock of materials (inventory) needed to
 Directing the overall nature and strategy of produce goods or services
the operation. A general understanding of 5. the management of human resources.
operations and processes and their strategic
purpose and performance, together with an
appreciation of how strategic purpose is 11. Careers in Operations Management
translated into reality, is a prerequisite to
the detailed design of operations and The concept of operations management has been
process around for a very long time; however, there is an
 Designing the operation’s services, increasing number of aspirants who today
products and processes. Design is the specialise in MBA in Operations Management due
activity of determining the physical form, to the numerous opportunities available in the job
shape and composition of operations and market today. Contemporary operations are
processes together with the services and inclusive of strategic elements with behavioral and
products that they create engineering concepts. Operations utilize
 Planning and control process delivery. management science, operations research tools
After being designed, the delivery of and techniques for systematic decision-making and
services and products from suppliers and problem-solving thus interacting with other
through the total operation to customers functional areas within the organization.
must be planned and controlled Earlier Operations was recognized as a cost control
 Developing process performance. exercise but the contemporary viewpoint for
Increasingly it is recognized that operations judging operations is changing from a narrowly
managers, or indeed any process managers, defined operating objective of cost control to global
cannot simply routinely deliver services and performance measurements in areas such as
products in the same way that they always product performance and variety, product quality,
have done. They have a responsibility to delivery time, customer service, and operational
develop the capabilities of their processes to flexibility. By linking operations and operating
improve process performance strategies with the overall strategy of the
organisation, be it engineering, financial, marketing
10. Operations managers and some responsibilities or information system strategies better synergies
are extracted. The widened scope of operations
management has led to a rise in job opportunities
So operations managers are responsible for for those looking for a break into this sector.
managing activities that are part of the production Operations management is essential for all
of goods and services. Their direct responsibilities industries like banking, hospitals, e-commerce,
include managing both the operations process, suppliers, manufacturers, technology companies,
embracing design, planning, control, performance and more. While the core aspects of the job remain
improvement, and operations strategy. Their the same, there are a few refined job roles that
indirect responsibilities include interacting with have been created based on the industry. Let's
those managers in other functional areas within the take a look at some of these job roles:
organization whose roles have an impact on
operations. Such areas include marketing, finance, CAREERS IN OPERATIONS MANAGEMENT
accounting, personnel and engineering.
Operations managers' responsibilities include: Deputy Manager Manufacturing

3
A deputy manager manufacturing is responsible for They collect data to help improve an organization's
planning, managing, and executing manufacturing supply chain operations and report to department
operations. They are also accountable for ensuring heads. They also identify problems with the
the execution of the manufacturing process is workflow, analyze costs and benefits, suggest
prioritized in accordance with the process workflow improvements, and assist in negotiations with
and schedule. suppliers. Moreover, they are also required to
Since deputy manufacturing managers are understand client requirements and translate them
responsible for the production process, they are into business and technology solutions.
also required to inspect production equipment to
prevent any malfunctions regularly. If they do Sourcing Specialist
identify any issues, they are required to report the Sourcing Specialist’s task is to develop both short
operational or maintenance problems to avoid and long term sourcing plans by benchmarking all
delays in production. suppliers, contracts, and services associated with
Apart from the technical aspects of the job, they delivering services. Provide evaluations of
are also required to manage their teams by suppliers’ (product and services) capabilities and
addressing concerns and complaints. Moreover, how they relate in the competitive landscape .The
they also assist in interviewing, hiring, and training sourcing specialist has to lead supplier
new employees, along with regular performance development and sourcing activities in supplier
reviews, appraisals, and promotions. selection and qualification for assigned products &
services. One has to continuously drive supplier
Associate Product Manager productivity, quality and services to improve
An associate product manager participates in the supplier performance and meet business operation
creation of new products and features right from targets.
ideation to launch. Their prime responsibility The Sourcing Specialist is also expected to gather
includes gathering product requirements and information on the market trends and current
suggesting product enhancements to improve user market price points, create information repository
experience. They are also required to be familiar & share the latest insights with the management,
with market research and competitor analysis to use the market benchmarks of other large
identify market needs accurately. They also need organizations in order to improve current price
to monitor and report consumer reactions after a points in the vendor ecosystem. Conducting
product is launched. periodic market benchmarks and comparison of
To be successful in this job role, it's vital that an suppliers is an ongoing activity with this role.
associate product manager communicate and
collaborate with other teams to understand Supplier Risk Manager
customer and market requirements. Moreover, it's Supplier Risk Manager is expected to conduct a
also vital that they possess strong analytical and supplier risk assessment for Operational risk,
quantitative skills and can effectively use data and Information security risk and reputational risk for a
metrics to provide recommendations and make the supplier before on-boarding. Maintain supplier
right decisions. compliance in terms of local regulations and
company policies/processes. Partner with
Operations Manager stakeholders to identify opportunities within the
Operations managers have varied responsibilities Organization for new initiatives, support the
and are, therefore, a senior position. The duties sourcing team to execute special & simplification
vary based on the company and the product or projects based on stakeholder requirements to
service they offer. However, there are a few meet Quality standards & timelines. Gather
responsibilities that are universal across information on the market trends and current
industries. market price points, create information repository
An operations manager is liable for identifying & share the latest insights with the management,
operational inputs, processes, outputs, and use the market benchmarks of other large
feedback. With the information they gather, they organizations in order to improve current price
are also accountable for transforming processes to points
improve operational systems and policies to
support the organization's target. Functional Consultant
They also work closely with the Chief of Operations A functional consultant may be assigned
(COO) and oversee financial management, responsibility for a specific functional vertical or
planning, systems, and controls. Their aim in doing client-specific tasks. Given the complexity, it
so is to measure and manage the impact that requires the delivery of specific capability in
working capital, budgets, financial statements, and Technology Consulting. A functional consultant
cost-cutting has on the overall cash flow of a needs to understand Business Requirements and
business. Needs and accordingly support application design,
Finally, they are also accountable for enhancing develop functional/process documents, Build, test
the effectiveness and productivity of the HR, IT, and deliver solutions. A functional consultant is
and finance departments and implement reforms responsible for Functional specification creation,
to each department if required. Their goal is to functional Unit Testing, Test Data Creation & Test
build an empowering work atmosphere to scripts creation and execution. A functional
maximize and align workforce efforts and overall consultant has to adhere to defined processes and
team productivity. tools while performing day-to-day operations

Supply Chain Functional Analyst Analyst Operations Advisory Services

The primary duty of a supply chain functional Analyst Operations Advisory Services is expected
analyst is to deliver projects in the supply chain to support in building and executing innovative
division by focusing on planning, fulfillment, solutions for delivery excellence at an optimized
manufacturing, sourcing, & procurement. A supply delivery cost. Business operations analysts are in
chain functional analyst does this by leveraging charge of conducting extensive, accurate analyses
Supply Chain Packaged Solutions in improving the of their organization's existing business operations.
client's business performance. Many supply chain Their main duties include gathering data and
functional analysts are required to have an developing solutions to meet business needs. They
understanding of tools like SAP, Oracle, JDA, also analyze cross-departmental business
Kinaxis, etc. processes for efficiency.

4
 There are various specificity roles that fall under outstanding value by adopting two principles not
the category of operations management, and all of always associated with hotel operations –
them are integral to an organization's success. standardization and an innovative use of
While there is pressure to get the job done right, technology. Formule 1 hotels are usually located
there is also an immense opportunity for career close to the roads, junctions and cities which make
growth. Operations management professionals can them visible and accessible to prospective
grow to hold the position of Chief of Operations customers. The hotels themselves are made from
with enough experience. state-of-the-art volumetric prefabrications. The
There are various other professions available as prefabricated units are arranged in various
well, like, Logistics Manager, Warehouse Manager, configurations to suit the characteristics of each
Asst. Management -Quality, Vendor Development, individual site. All rooms are nine square metres in
Category Manager, etc. area, and are designed to be attractive, functional,
comfortable and soundproof. Most important, they
are designed to be easy to clean and maintain. All
1. Besides those mentioned above, cite 4 more career have the same fittings, including a double bed, an
opportunity for operations management graduates. additional bunk-type bed, a wash basin, a storage
area, a working table with seat, a wardrobe and a
television set. The reception of a Formule 1 hotel is
2. What do you think a typical operations manager staffed only from 6.30 am to 10.00 am and from
do? 5.00 pm to 10.00 pm. Outside these times an
automatic machine sells rooms to credit card users,
provides access to the hotel, dispenses a security
3. Use the matrix below to analyze your role as an code for the room and even prints a receipt.
operations manager. In as many of the cells in the Technology is also evident in the washrooms.
matrix as you can, jot down an example of a Showers and toilets are automatically cleaned after
decision you have made in the last month. each use by using nozzles and heating elements to
spray the room with a disinfectant solution and dry
it before it is used again. To keep things even
simpler, Formule 1 hotels do not include a
A B C restaurant as they are usually located near existing
Designin Managin Improvin ones. However, a continental breakfast is available,
g the g the g the usually between 6.30 am and 10.00 am, and of
operatio operatio operatio course on a ‘self-service’ basis!
ns ns ns
system system system Anantara Bangkok Riverside Resort & Spa
1 I n Sanskrit the word means ‘without end’, and
Processe Anantara really does evoke, as its publicity states,
s the freedom, movement and harmony that are the
2 Quality spirit of the ‘Anantara experience’. The Anantara
3 Bangkok Riverside Resort and Spa, which is a
Capacity member of the exclusive ‘Small Luxury Hotels of
4 the World’, is to be found luxuriating in 11 acres of
Inventor tropical gardens beside the Chao Phraya River just
y 3 kilometres from the centre of Bangkok. Its
5 Human concept is about providing guests with laid-back
resource luxury, sensitive service, with an experience of
s local culture. The resort’s owners say that it draws
its strength from the rich cultural traditions,
historic heritage and natural beauty of its
4. Identify the principal inputs (both transformed and destination; every customer experience being a
‘unique voyage of discovery and inspiration that is
transforming resources) used by each of the
distinctly Anantara’. It employs over 550 staff and
following organizations, and their principal outputs. has 407 spacious rooms and suites decorated in a
Thai style making use of colourful Thai silks,
Organization Input Output hardwood floors and fine furniture. All rooms have
s s internet access, TVs and DVD players with iPod
Restaurant docks and private balconies that have spectacular
University views over the city, garden or river. The hotel’s ten
Doctor's surgery restaurants and bars serve local, international and
Nuclear fuel reprocessing plant fusion cuisines. The outdoor tropical pool and
Jacuzzi provide areas for enjoyment and relaxation.
Should any guests want to venture outside the
5. Remember a famous fast food chain and a sit-in luxury, the hotel also offers river cruises in
restaurant. Observe how each shop operates, for converted rice barges, supervised activities for
example, where customers go, how staff interact children, and Thai cooking classes. A frequent
with them, how big it is, how the shop has chosen complimentary boat service takes guests to the
to use its space, what variety of products it offers, Sky Train and the heart of the city. An alternative
and so on. Write the similarities and differences in to city centre shopping is provided in the mall
your journal. adjacent to the hotel.
Hotel.
6. Case Study
Questions:
Formule 1 A. Why is operations management
Formule 1 Hotels are high-contact operations – important in the two hotel examples?
they are staff- intensive and have to cope with a B. Identify the similarities and the
range of customers, each with a variety of needs differences noted in the two given
and expectations. So, how can a highly successful examples.
chain of affordable hotels avoid the crippling costs C. List down the services offered by the
of high customer contact? Formule 1, a subsidiary two hotels
of the French Accor group, manage to offer
5
D. What would you recommend to the two
hotels if they asked you to advise them
in improving their operations?
E. With the current operations, who
among the two hotels do you think has
a much better operations?