Name : DESY NUR WAHIDAH

NIM : B1034161009

SUMMARY

Chapter 1 operation and Productivity

Understanding operations management

The production is the process of the creation of goods and services. Operations management is
a series of activities that produce value in the form of goods and services by changing the input
to the output. Activities that produce goods and services in progress in all organizations. In
manufacturing companies, production activities can be seen clearly.

Organising to produce goods and services

To produce goods and services and all types of organizations running three functions:

1. Marketing tools that produce the request, most do not receive your order for a goods or
services (there will be no activity if there is no sale).
2. The production operations that produce products.
3. Accounting financial to monitor healthy whether or not an organization, pay your bill and
collect money.

The difference between the products and services

The characteristics of goods The characteristics of services

(Real products)
Goods can be sold back.
Goods can be made on forecasts.
Some aspects of the quality can be measured.
Different sales from production.
Goods can be moved.
The location of the facilities are very affect
costs.
Easy produced automatically.
( The product is not real)
The Sales cant be done
Many services could not be saved.
Many aspects of the quality of difficult
measured
The sale usually is part of services
Service provider services not usually can
switch
The location of the facilities is important to the
relationship with the customer
Usually difficult services produced
 automatically
His earnings is from real goods. The earnings from services that were not
evident

Most of the products of goods involving services, while most services involves the goods.
When a real goods is not included in the services, we can call it with pure service. As an example
of pure service is counseling.

The challenge to increase productivity.

Productivity is a comparison between the output of goods and services) divided with input
(resources such as labor and capital). Operations Manager task is to improve the comparison
between the output and input. Increase productivity means increase efficiency.

Increased productivity can be achieved with two ways: input reduction while maintaining a
constant output, or vice versa, increase output while maintaining a constant input. In terms of the
economy, the input is the capital of labor and management that is integrated in a system of
production. The output is the goods and services, including various kinds of goods such as
weapons, butter system education, judicial system which is better, and playground skiing.

The production is the process of making of goods and services. The high production can
reflect that more people who work and high employment level (unemployment levels low), but
not necessarily reflect the high productivity.

The size of the productivity is a good way to assess the ability of a

train countries can improve the living standards of his people. Furthermore, only with increasing
productivity this is, employment, investors and management can receive a greater income. If
labor, capital and management increased without accompanied with increasing productivity, then
prices will be expensive. On the other hand, forced prices down when productivity increased
because more products produced, while the number of resources .

Measuring productivity

1. Single factor productivity

Productivity =

For example, if the output produced = 1000 hours and used is 250, then:

Productivity =

1000
= = 4 units per hour work
250

2. Multifactor Productivity

Productivity =
+ +++

Variable productivity

There are three variable productivity:

1. Labor, contribute around Ten percent of the annual improvement.

2. Capital and contribute around 38 percent of annual improvement.
3. Management, contribute around 52 percent of annual improvement.
 Chapter 2 Operating Strategy in the Global Environment

Develop mission and strategy

The Mission

This book defines the mission of the organization as its purpose -what will be donated to
the community. The mission statement of the produce limitations and focus of
the organization as well as the concept in the running of the company. The mission stated
that the reason for the existence of an organization. To develop a good strategy is difficult,
but will be easier if the mission has been defined with good.

As example is the mission of the Merck companies. The mission of Merck is to provide
goods and services for the community leading -including innovations and solutions that
improve the quality of life and satisfy the needs of the customer to provide the work which
means for employees with an opportunity to move forward and provide an extraordinary
rate of return to investors.

The Strategy

The strategy is the plan of action for the organization mencapau mission. Each functional
area has strategies to achieve its mission and help the organization to achieve the overall
mission. This strategy to take advantage of the opportunities and strength, neutralize the
threat and avoid the weakness.

The companies achieve their mission through three ways: (1), (2) differentiation and cost
leadership, (3) Quick responsiveness. This means that the operations manager requested to
create goods and services (1) better or at least different from others, (2) is cheaper and (3)
more responsive.

Achieve competitive advantage through operation

Three strategies that are each provides the opportunity for the operations manager to
achieve the competitive advantage. Competitive Advantage means creating system which
have benefits for the other competitor. The idea is to create customer value
with how efficient and happy.
1. Compete in the differentiation

Differentiation associated with the presentation of a uniqueness. Because many products

include services and most services include the basic product, create uniqueness is really
only a matter of the imagination.

2. Compete in the cost

The leadership of the low cost means reaches the maximum value as customers want you.
This requires testing the ten operations management decisions with a tough effort to
reduce costs and continue to meet the value of customer expectations.
3. Compete in response
The third choice of strategy is the rapid response. The response is sometimes considered
as a flexible response, but can also reliable quickly. The flexible response can be
considered as the ability to meet the changes in the markets where the update occurs
volume fluctuation and design.

Ten operations management strategy decision

1. The Design of goods and services. The Design of goods and services specify most of
the transformation process that will be done.
2. The quality. Customer Expectation against the quality must be specified, inaugurated
rules and procedures to identify and reach the quality standards.
3. The design process and capacity. The decision taken process make take management
commitment in terms of technology, quality, the use of human resources and
maintenance of specific. This capital spending and commitment will determine the
structure of the cost base of a company.
4. Location Selection. The decision of the location of the manufacturing organization
and services determine the success of the company.
5. The Design of layout. The flow of raw materials, need capacity, the level of the
employees of the decision of the technology and supply needs influenced the layout.
6. Human resources and job design. The quality of the work environment that was given
to the talent and expertise needed, and wages should be clearly defined.
7. Supply chain management. This decision to explain what should be made and what
must be purchased.
8. The preparation. The decision of the preparation can be optimized only if customer
satisfaction, the supplier, production planning and human resources considered.
9. The scheduling. Production Schedule that can be done and efficiently must be
developed.
10. Maintenance. The decision should be made on the level of reliability and stability of
the desired. The system must be made for it is used to reliability and stability.
Five understanding operations management strategy that obtained from Research
PIMS ( Profit Impact of Market Strategy )

1. The high quality products (relative to the competition)

2. The use of high capacity
3. The efficiency of the operation of the high ratio of employee productivity is expected
to productivity which actually)
4. Low investment intensity (the amount of capital that is needed to produce one dollar
sales)
5. Low direct costs per unit (relative to the competition)

The choices of global operations strategy

1. International Strategy
- Import/Export or existing product license
- Example; Harley Davidson
2. Multi domestic Strategy
- Using the domestic model that is globally
- The joint venture company children franchises
- Example; McDonald's
3. Global Strategy
- Standardized Products
- The scale of the economical
- Cross-cultural learning
- Example; Texas Intrumenis
4. Transnational Strategy
- Move the raw material, or ideas
- The scale of the economical
- Cross-cultural learning
- Example; Coca Cola and Nestle