-service operations: production activities that yield tangible and intangible service products
-goods production: production activities that yield tangible products
WHAT DOES “PRODUCTION” MEAN TODAY?
-production refers to both services and goods
-today customers are very involved b/c of advances in electronic communication
The Growth of Global Operations
-production operations have become much environmentally friendly
-with the internet, service/goods producers are integrating their production activities with those
of far-off suppliers and customers
CREATING VALUE THROUGH PRODUCTION
-products provide business with both economic results (proﬁts, wages...) and non-economic
results (new technology...)
-production has been replaced with operations - a term that reﬂects both products and services
-Operations (production) management: the systematic direction and control of the processes
that transform resources into ﬁnished goods and services.
-Production managers: managers responsible for ensuring that operations processes create
value and provide beneﬁts
-operation process: a set of methods and technologies used in the production of a good or a
-We describe goods according to the kind of transformation technology they require (e.g.
whether their operation process combines resources or break them)
-Goods-manufacturing processes can be classiﬁed in 2 ways:
1. Types of transformation technology (turn raw material into goods):
-chemical processes (raw materials are chemically altered)
-fabrication process (mechanically alter the basic shape or form of a product)
-assembly process (put together various components)
-transport processes, clerical process
2. Analytical versus Synthetic Processes:
-analytical process: any production process in which resources are broken down
-synthetic process: any production process in which resources are combined.
-Service-producing processes (according to customer contact):
1. High contact system: a system in which the service cannot be provided w/out the customer
being physically in the system (e.g. transit systems)
2. Low contact system: A system in which the service can be provided w/out the customer being
physically in the system (e.g. lawn care service)
Differences Between Service and Manufacturing Operations
-inputs for a service production are people with unsatisﬁed needs or require some form of care.
The ﬁnish products/outputs then, are people with needs met.
-goods are produced while services are performed.
-3 key qualities in services: intangibility, customization and unstorability
MGTA04 Chapter 1