Manufacturing and Service Delivery Process

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MANUFACTURING AND SERVICE DELIVERY PROCESS

By: Ot Chan Dy, BE & Msc.

Management Institute of Cambodia

Manufacturing

Service

Process

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AFTER FINISH THIS CHAPTER YOU WILL BE ABLE TO

Define what are the four block of heart of manufacturing and service delivery process

Describe stages of manufacturing process

Differentiate one firm’s service to another using activities sequences

Describe the five process characteristic and their interrelationship

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CONTENT

Production and Service Delivery Process

Stages of manufacturing

Service delivery process

Process characteristic

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PRODUCTION AND SERVICE DELIVERY

Manufacturing and service delivery processes are diverse, but at their heart contain 4 basic elements:

INPUT OUTPUT

RESOURCES

ACTVITIES

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Inputs: inputs are either consumed or transformed by process.

Automakers require sheet steel Airlines require fuel Hospital require medical supplies and energy Schools need students News services need content (wire stories, photo, video) etc.

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Outputs: outputs are the end of product of the process (or service performed by the processes).

Completed car Transported passenger The cured patient The educated student The completed news story

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Resources: resources are the means by which inputs are converted into outputs. Resources include asset such as

Auto plant The airport gates Specialized knowledge of physician The classrooms The network of local reporter

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Activities: activities involve a specific use of resources to help convert inputs into outputs.

Bolting bumper onto a car Loading an airplane with passengers Performing an operation Teaching a class Dispatching a reporter to cover an election

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When analyzing a firm’s operation: What exactly are the inputs to the processes? What are the outputs? What resources does the firm use or have

available to it? Which activities does it perform or not perform?

At its core, operation management is about managing this four components.

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CONTENT





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STAGES OF MANUFACTURING PROCESS

Procurement: Procurement is the act of acquiring the basic

inputs require to manufacture a product or provide service

Procurement activities may involve: Securing mineral rights and leases for natural

resources Developing suppliers networks Overseeing the component design of one’s

suppliers activities Certifying suppliers quality Coordinating inbound logistic

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Fabrication: Fabrication is refers to the basic processes used

to form parts, components and minerals required in later stages of production.

Fabrication processes include: Molding plastic parts from resin Stamping automobile body panels from sheet

metal Die casting aluminum valve covers Weaving and dying fabric Extruding molten steel into bars or rods

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Assembly: Assembly is a process of putting together

components to produce more complex intermediate components (called subassemblies) or to produce final product (called final assembly).

It is different from fabrication, an assembly process does not alter the form of incoming parts.

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Testing: Testing of some sort is usually part of any

manufacturing process. It can be done at final product or any stages of process.

In some industries, testing is the most time consuming: Semiconductor Military electronic parts often require “burning”

test Pharmaceutical companies must test and verify

each batch (lot) of drug produced

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Packaging & Distribution: Packaging involves placing products into boxes,

bottles, cans, pallets or other containers for delivery to customers.

Packaging process is critical to some of these products: Household cleaner Cosmetics Food products

For example: Beer industry, packaging operation is the core of

production process

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Packaging & Distribution: Distribution is the shipment of final products to

firm’s customer. It is the final stage of manufacturing process.

It is involving: processing of customer orders managing distribution centers controlling inventories picking and assembling orders for shipment selecting shipment modes routing and scheduling trucks handling of return flow of products and packaging

waste (reverse logistic)

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Packaging & Distribution: Some firms choose to outsource many of these

distribution activities either by selling only to large wholesalers or by subcontracting distribution to third party.

For grocery store chains and other retailing businesses, it is the vital and central activity.

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CONTENT





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SERVICE DELIVERY PROCESS

Most important feature of service operations are:

Output or service offering – what it is offering?

Delivery process – how it is deliver?

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Exercise # 1: Car repairing!

Exercise # 2: Air travel from Phnom Penh – Kuala Lumpur

Instruction: Split into two group Discuss and describe the sequence of service

delivery process of each case above (both of each group)

Present the result on flipchart

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WHAT MAKE DIFFERENT FROM ONE AIRLINE OR CAR

REPAIR SHOP’S SERVICETO ANOTHER?

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CONTENT





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PROCESS CHARACTERISTICS

1. Efficiency Efficiency, in simplest term, is a measure of

how much input is require to generate a unit of output.

The input/output ratio

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2. Capacity Capacity is a measure the maximum output a

process is capable of sustaining.

It is usually express as rate, i.e. # parts per hour a machine can produce, # of kilowatts per hour an electric plant can provide, or number of passengers per trip a plane can transport.

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3. Quality Quality refers to a broad range of

characteristics that are often difficult to precisely define, measure, and control.

A basic definition: it is measure of conformance with a product’s design standards.

Poor quality can significantly affect production costs, due to scrap, rework and warranty costs.

It is also affect both the price customers are willing to pay and loyalty.

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4. Throughput time Throughput time refers to time it takes to

provide a product or service.

Most customers value speed service and fast delivery times and many are willing to pay a premium to firms that provide speed.

Example: Throughput time of car maker is from start to end a car

body pass through the plant On line retailer throughput time is time between order

to arrival Transportation throughput time is time moving from

point A to point B

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5. Flexibility A process is said to be Flexible if operating cost

and performance is not adversely affected by changes in the outputs it produces.

The two main dimensions are: Volume flexibility: refers to ability to change its output

rate without having significant effects on other characteristic such as efficiency, quality, and throughput time.

Product mix flexibility : refers to the ability to switch to production among a range of products or services without detrimental impact on operating cost and performance.

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The interrelationship of process characteristic

Efficiency

Capacity

Quality

Throughput

Time

Flexibility

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THANK YOU

Q & A

Manufacturing and Service Delivery Process

Business

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