Production and Operations Management

(POM) in the Organization Chart

Finance Operations Marketing

Plant Operations Director

Manager Manager

Manufacturing, Production control,

Quality assurance, Engineering,
Purchasing, Maintenance, etc
Production and Operations Process

Definition
 The task of production and operations management is to manage the efforts and
activities of people, capital, and equipment resources in changing raw materials into
finished goods and services
Why study process?
 Processes are complex, cross functional, and difficult to optimize
 ISO says processes must be documented.
 Deming/quality literature says focus on the ‘process’ not the ‘product’ for good
quality
Components of the process:
 Inputs – People and organizations begin with inputs which include raw materials,
ideas, capital, energy, and equipment resources.
 Conversion – The inputs need to be changed into other items to meet the
requirements of the process.
 Output – The end product is the result in the form of finished products or services.
 Types of Processes

 Time Based Methods (time employed in a single day):

 Intermittent Processes
 Continuous Processes
 Production Methods
 Analytic
 Synthetic Method
 Combination Operations
 Contemporary Production Processes
 Mass Production
 Flexible Production
 Make-to-order
 Make-to-stock
 Time Based Methods

 Intermittent Processes – Production and

operations processes that run for a given
period of time and then stop. (Retail stores)

 Continuous Processes – Some

organization function 24 hours a day, all
through the year, maintaining continuous
services. (Hospital emergency rooms)
 Production Methods

 Analytic Method – Analytic-type forms breakdown

things into components and usable parts that can be
used for new purposes. (Petroleum refineries)

 Synthetic Method – These firms collect parts and

then put them together into new finished products.
(Bakeries)

 Combination Operations – Some firms are involved

in both analytic and synthetic processes.
 Mass Production

 Reliance on large batches of given items for profitability.

 Required maintenance of large inventories.
 Departmentalized and “pigeon-holed” workers who are only
involved in specific, limited tasks.
 Production processes based on product needs after the end units
have been produced.
 Suppliers only involved as necessary, but not in the production
process.
 Firm’s dependence on customers to buy the products and use the
services that are produced rather than basing use on
predetermined needs.
 Flexible Production

 Producing in profitable small batches.

 Maintenance of “lean” inventories so that products move quickly.
 Employee involvement in the production by way of cells and teams
and becoming well versed in many aspects of production and
operation processes.
 Product and operation processes designed concurrently with the
determination of the need for goods and services.
 Suppliers intricately involved in production processes, with a great
deal of sharing taking place.
 Determining customer wants before designing and producing
products.
Other Types of Processes

 Make-to-order
– Only activated in response to an
actual order
– Both work-in-process and finished
goods inventory kept to a minimum
 Make-to-stock
– Process activated to meet expected
or forecast demand
– Customer orders are served from
target stocking level
 Technological Integration in
Production Processes

 Robotics – Programmable machines (robots) can perform numerous

tasks, often very repetitive, as long as they are directed by software
programs.
 Computer Aided Design (CAD) – A designer conceives and designs
parts and items to meet predetermined specifications using specialized
computer systems. With CAD, engineers can draw three-dimensional
designs, make changes, and allow for testing as well as the integration of
various materials, all within specific tolerances.
 Computer Aided Manufacturing (CAM) – Specially designed computers
are used to determine the needed steps that machines must take to
produce needed products and components. Relies on programmed
instructions sent electronically to production processing machines,
instructing them to perform specific steps in a given order.
 Computer Integrated Manufacturing (CIM) – Production systems
developed to help workers design products, control machines, handle
materials, and direct entire manufacturing processes in a systematic
manner.
 Process Performance Metrics
After we model a process, Quantify, Analyze, and
Optimize its performance.
 What is Productivity?

Productivity is a common measure on how well resources are being

used. In the broadest sense, it can be defined as the following ratio:

Total Measure Productivity =

Output or Goods and services produced

Input All resources used

Partial Measure Productivity =

Output or Output or Output or Output

Labor Capital Materials Energy

Multi-factors Measure Productivity =

Output Output
Labor + Capital + Material Labor + Capital + Energy
Example of Productivity Measurement

 You have just determined that your service employees have used a
total of 2400 hours of labor this week to process 560 insurance
forms. Last week the same crew used only 2000 hours of labor to
process 480 forms.
 Which productivity measure should be used?
 Answer: Could be classified as a Total Measure or Partial Measure.
 Is productivity increasing or decreasing?
 Answer: Last week’s productivity = 480/2000 = 0.24, and this
week’s productivity is = 560/2400 = 0.23. So, productivity is
decreasing slightly.
Process Analysis

It all depends on the details:

– Exact details,
– Personnel available, Either have to make assumptions
– Work in process, or go find more data.
– Batching details,
– Transport details,
– Variation.
For Complicated Processes, Develop a simulation model:
– Identify critical process steps, bottlenecks,
– Test new process routings, Simulation Software:
– Add process capacity, •Arena
– Evaluate new equipment purchases, •Witness
– Facility/space planning. •ProModel
 Process Improvement

1. Perform processes faster – improve the bottleneck

2. Perform activities in parallel

(concurrently, pull processes forward)

3. Change the sequence of activities

4. Reduce interruptions

5. Reduce Throughput Time and Work in Process

6. Reduce Variation
The Whole Tree Utilization
 Forest Products Technology
DIVISION SCOPE
Basic properties, quality improvement, and processing
of solid wood; Machines that improve efficiency of wood
SOLID WOOD utilization, quality of processed wood, and service life of
wood product

Processing of forest products; Adhesive and Gluing;

Wood composite (plywood, laminated board,
BIO-COMPOSITE particleboard, fiberboard, cement board, wood polymer
composite)

Wood mechanics, construction and engineering; Wood

WOOD ENGINEERING as a building materials; Building safety

Chemical properties of wood and non-wood products;

FOREST PRODUCTS Pulping dan bleaching technology; Processing of non-
CHEMISTRY wood forest products, and derivative wood products

Finance, economics, policy, and production

FOREST PRODUCTS management of forest industry; Production cost,
INDUSTRY ECONOMICS demand and supply of forest products;
Forest Products
Forest Products
Forest Products
Bamboo utilization
 Oil Palm tree utilization

Furniture

Sawit log

Components
RESOURCE PROCESS PRODUCTS

Block core
Sawit Panels

Oil palm plantation

(25-30 years) Handycraft
Quality improvement
?
Industri, Firm, and Plant

Industri Kumpulan dari perusahaan (firms).

Pengertian bersifat arbitrary (not exact).

Firm A financial or management unit.

Satu atau beberapa plant (a technical unit).

Barang yang Industri mobil: Toyota, Honda etc

serupa Industri alat listrik: Polytron, Philip

Bahan mentah Industri besi dan baja: paku, setrika etc.

yang sama Industri kulit: tas, sepatu etc.
Industri kayu: plywood, sawnwood etc.

Proses yang Industri las

sama
Industrial Efficiency

Micro level • Cost minimization.

• Max output given input.
• Min input given output.
• High efficiency implies low cost of
production

Macro level • Cost minimization

• How well in using all resources
• Economic development and
growth
• Economic stability
Tropical Timber Products: Development of Further Processing in ITTO Producer countries (ITT0, 2002)
Tropical Timber Products: Development of Further Processing in ITTO Producer countries (ITT0, 2002)
 Course Schedule

Pengajar • Bintang C. H. Simangunsong, Ph.D.

• E.G. Togu Manurung, Ph.D.; Vera Sitanggang, MSc.

Status/Credit • Major/3 SKS; 3(2-3)

Pra-syarat • Elementary mathematics and statistics

• Elementary economics
• Introduction to forestry

Tujuan • Mampu menilai efektivitas dan efisiensi manajemen produksi

suatu perusahaan hasil hutan

Jadwal • Kuliah: Jumat 7.00 - 8.40 Online

Buku Teks • Jacobs, F. R. and R. B. Chase. 2014. Operations and Supply

Management: The Core. McGraw-Hill/Irwin. New York. 415p.
Ujian dan Quiz • QZ and HW (30%), UTS (35%), UAS (35%)
 Course Outline

 Introduction and Process Analysis (1)

 Supply Chain Strategy (2)
 Strategic Capacity Planning (3)
 Planning and Scheduling Production:
 Forecasting (4)
 Aggregate Planning incl. PL and PT (5-7)
 Inventory System (8-9)
 Material Requirement Planning (10)
 Total Quality Management and SPC (11-12)
 Forest (and Products) Certification (13)
 Project, Planning and Control (14)
 Why Study ‘Processes’ ?

Automotive Assembly Process

Conversions or Transformations

 Physical--manufacturing

 Locational--transportation

 Exchange--retailing

 Storage--warehousing

 Physiological--health care

 Informational--telecommunications