Production System in Operations

Management
Definition: A Production System implies the set-up consisting of assets such as
facilities, machines and equipment that transform resources into valuable output
using processes and technology.

In other words, we can understand it as a system that converts factor inputs into
outputs which is capable of satisfying the market demand.

Majorly, it focuses on the system aspect of the production/operations function. It

is a combination of three significant components given below:

1. Input (Capital, Machines, Equipment & Tools, Labour)

2. Conversion Process
3. Output (Goods and Services)

Production implies the transformation of several Inputs into Outputs, i.e., the
Product.
A system is a mechanism consisting of a set of things working together.

Companies use production systems to cater for the demand of their target market.
However, the requirements of the customers keep varying with time. Therefore, the
requirement of the production also changes accordingly.

The production system depends on the type of products offered by the company. In
addition, it is also affected by the strategies adopted to meet distinct customer
needs.

The companies need to take some crucial decisions in this regard:

 Choice of the technology to be used for production.

 The capacity of the production systems.
 Production volume as per market demand.

The entire system operates in an environment. Some factors from the internal and
external environment affect the production process. Thus, companies consistently
take feedback and make suitable adjustments in the production system.

The system may even fail if the production processes do not generate the
desired output.

Content: Production System

1. Types

 Intermittent Production

 Job-shop Production

 Batch production

 Continuous Production

 Mass Production

 Flow Production

2. Characteristics
3. Example
4. Intermittent Production v/s Continuous Production
 5. FAQ

Production System Types

The type of production system depends upon the type and volume of output.
Besides, it differs across industries and target consumer markets.

The major determinants that aid the selection of a production system are:

 Volume: It indicates the average quantity of goods for production.

 Variety: It is the product variants, alternatives and range for
production.
 Flow: It indicates the nature and intensity of the production process.

Broadly, the production system is classified into two categories as follows:

1. Intermittent Production

 Job-shop Production

 Batch Production

2. Continuous Production

 Mass Production

 Process/Flow Production

1. Intermittent Production
It is a type of production system where the production flow is intermittent or
irregular. It means the production process begins and stops at irregular
intervals.

Here the production is carried out based on the customer orders, i.e. Make-to-
order. Consequently, the producer can customize their products as per the orders
received.

Each time the jobs and route are changed depending on the order received.
Therefore, the producer needs to install general-purpose production equipment.

Features of Intermittent Production

 Order-based production of goods.

 Production on a smaller scale.
 Flexibility in production.
 Production of a greater variety of products.

a. Job-shop Production

Job-shop production or Unit Production facilitates the manufacturing of

customized products. Here, the production of one or a few products takes place.
Moreover, it is completely based on the user specifications and within a stipulated
period and cost.
Each task has a different set of technical requirements because of personalization.
For this reason, the jobs and demand are both unpredictable.

Example: Hairdresser, Aircraft, Gold Jewellery and Tailor.

Also Read: Job Costing

Advantages

1. A wide variety of products can be offered to customers.

2. The workers are more skilled in comparison to other systems.
3. Ease in management due to limited resources and workers.
4. Flexibility in process and creative methods to generate unique output.

Disadvantages

The cost of production is high due to small-scale production.

1. The higher lead time of the system.

2. Under-utilization of equipment.
3. Requirement of highly skilled labours.

b. Batch production

This production system is more than a unit production but less than mass
production. Here, the production happens in lots and batches at regular
intervals.
The batch contains a limited number of similar products manufactured
simultaneously.

The product is disintegrated in the form of Jobs. Further, the whole batch
passes through these jobs one at a time. The production of the next batch begins
post-completion of the ongoing batch.

Example: Medicines, Shoes and Bags

Also Read: Batch Costing

Advantages

1. Usage general-purpose machines.

2. Risk can be substituted among Batches.
3. Better resource utilization.
4. Per-unit cost is lesser in comparison to unit production.

Disadvantages

1. It requires specific fixtures.

2. High cost in sourcing materials.
3. High work-in-progress inventory.
4. More lead time due to changes in set-up.
2. Continuous Production

Here, the production occurs continuously with a consistent supply of materials. In

other words, the products are constantly in motion.

Unlike intermittent production, there are no frequent halts. The production is

carried out on a large scale. The companies maintain the inventory as per demand
forecasts.

Identical goods are produced due to product standardization and bulk production.

Features of Continuous Production

 Complete utilization of equipment and raw materials.

 Production at large scale.
 Per-unit cost is less due to bulk production.
 Less lead time as the set-up is required only at the beginning.
 Highly automated and capital-intensive system.

a. Mass Production

Companies use it for carrying out production in very large quantities. It involves
the manufacturing of discrete parts, popularly known as Assemblies. Here, the
companies adopt a Make-to-stock business strategy.
The flow of this production system is constant and continuous. And, the facility
arrangement is in line or per product layout.

Example: Soaps, Pens and Toothpaste

Advantages

1. The cycle time is comparatively less.

2. Automation of material handling.
3. Low work in progress.
4. The cost of production is low.

Disadvantages

1. Default at one place may stop the entire production.

2. Line layout needs changes with the change in product design.
3. High capital investments.

b. Flow Production

As the name suggests, the flow of production is uniform and standardized. All
the processes are arranged sequentially, and all the products pass through them.
This production system is rigid. Companies stock the products and use them to
fulfil the quick demand of the market.

Examples: Chemical Plants, Tv and Engines.

Advantages

1. Less amount of wastage.

2. Semi-skilled can also be employed.
3. Higher profit margins.
4. The process flow is constant.

Disadvantages

1. Less flexible to increase or decrease the number of processes.

2. Restrictions on product differentiation.
3. Incapable of fulfilling individual demand.

Characteristics of Production System

The varied characteristics and importance of production systems are as follows:

 Organized Activity: The production system is an organized activity.

As all the activities or processes within the system are defined and run
for a specific purpose.
  Transformation: This system’s main work is converting Inputs into
Outputs.
 Coordination: Here, every part of the system is well coordinated. The
absence of coordination may lead to system failure and losses.
 Control: It is a crucial function of this system. This is because, review
and maintenance of the system are required for its healthy functioning
and productivity.
 Value Addition: Through this process, manufacturers add value to the
inputs. Consequently, the output generated serves the needs of the
consumers.

Example of Production System

Nestle

It is a multinational food and beverages corporation having headquarters in

Switzerland. Some of its bestselling products are – Nescafe, Kitkat and Maggi.

It uses Batch Production as its type of production system.

Ford Motor

It is an America-based multinational automobile manufacturer. Ford’s SUV is one

of its best-selling cars, making it America’s best SUV brand.

It uses Moving Assembly Line as its production system.

Difference between Intermittent and Continuous Production

The table below clearly differentiates between Intermittent and Continuous

production systems:

INTERMITTENT PRODUCTION CONTINUOUS PRODUCTION

BASIS
SYSTEM SYSTEM

Flexibility More Flexible Less Flexible

Lead Time The lead time is more as it requires a Here, lead time is less; once set, it

frequent change in set-up doesn't require changes

 INTERMITTENT PRODUCTION CONTINUOUS PRODUCTION
BASIS
SYSTEM SYSTEM

Wastage More amount of waste is generated Less amount of waste is generated

Product Variety of products in less quantity Identical product in large quantity

Cost per unit of The price is high due to the customization Cost is low due to standardization and

Product bulk production

The service process refers to the steps required to deliver a service. Service includes
taking the order to deliver the product or following up with consumers regarding issues,
resolutions, feedback, etc.

The goal of the service process is to ensure customers receive the same high-quality
experience in all stages.

This blog post will discuss the successful service process, its main characteristics, and its
elements.

What is the Service Process?

The service process is a series of activities performed to deliver a service to customers.
The term is often used in manufacturing and logistics to describe how raw materials are
transformed into finished products, but it is mostly used in customer-facing activities,
such as providing professional services, delivering food orders, etc.

Every organization has a service process that reflects its mission, values, and competitive
advantages.
The service process begins with identifying customer needs and ends with the
customer’s satisfaction. It includes all the steps in between, such as planning, designing,
producing, shipping, and delivering the finished product or service, and then after-sales
support and feedback.

Characteristics of the Service Process

The service process is key to a business. It has five main characteristics:

1. Divergence: When service providers deviate from standard service to

meet different customer needs, it is called divergence. With divergence,
customers can get the specific service they need, rather than generic.
2. Complexity: Service processes with many steps or interactions can be
complex. The process should be simple in order to provide the right
expectations to customers.
 3. Service Location: Services can be provided in-person, online, or by phone.
Consider the service location for easy access.
4. Customer Participation and Interaction: Customers need to be involved
in the process to receive the service. This interaction can happen in person,
online, or over the phone.
5. The Service: The service itself is an essential part of the process.
Customers are paying for it, and it needs to be on par with their
expectations.
A 7 Step Process for Managing Service Processes
The service process is the backbone of the business.

The basic framework for the service process is given below.

Step # 1. Flowcharting
Flowcharting refers to creating a diagram that shows the steps in a process and their
relation. The flowchart outlines all steps involved in the process.

Businesses can gain valuable insights by looking at the process from a high-level
perspective and seeing how all steps fit together. It shows where improvements can be
made and help train new employees.

Step # 2. Service Blueprinting

After creating a flowchart, a service blueprint is developed. The service blueprint shows
how the customer interacts with the service process. It includes steps in the process and
shows what happens at each step.

The service blueprint can help identify potential problems and areas where
improvements can be made. It will also help organizations understand how the
customer interacts with the process and their experience.

Step # 3. Identify Failure Points

The next step is to identify failure points in the process. A failure point is a place where
issues can occur. Failure can be caused by human error, equipment failure, etc.
As the U.S. Small Business Administration states, addressing these bottlenecks can
bolster service efficiency.

Identifying failure points is key to improving the service process. It also helps in creating
contingency plans for when things go wrong.

Examples of failure can be a lack of:

 Staff to handle customer demands

 The right tools to finish the job
 A clear understanding of the process
Step # 4. Failure Proofing
After identifying the failure points in the process, the next step is to failure proof them.
Failure proofing making changes to the process to stop failures from happening.

There are different ways to failure proof a service process.

Some common methods include:

 Adding additional staff to handle customer demands

 Providing more training to employees
 Installing better equipment or tools
 Creating clearer instructions for the process
Step # 5. Setting Service Targets
The next step is to set service targets. Service targets are goals that businesses want to
achieve. They can be customer satisfaction, quality, speed of service, etc.

Setting service targets is important because it helps track progress and ensure that
goals are being met. It also helps to identify areas where modifications are required.

Step # 6. Service Process Redesign

Once service targets have been set, the next step is to redesign the process to meet
those targets. Here, processes are redesigned to improve quality, speed of service,
customer satisfaction, etc.
This step can change:

 The way tasks are performed

 The order of tasks
 The tools and equipment used
 The training provided to employees
 The customer interface
Step # 7. Managing Customers Effectively
When it comes to providing service, managing customers is the key. Customers can be
valuable assets or liabilities. It is important to know how to manage them effectively, so
they become an asset.

There are many ways to manage customers effectively.

Below are steps to follow.

 Recruitment and Selection: Recruit people with the right skills and
attitude for the job.
 Job Analysis: Understand the job and customers’ requirements.
 On-boarding: Train customers on how to use the service.
 Coaching and Feedback: Provide coaching and feedback to help
customers improve their performance. Give them opportunities to develop
their skills further.
 Motivate the Best Performer: Recognize and reward good performance.
Help them see how their efforts contribute to the company’s success.
 Appraisal: Review customer performance regularly. Take action to
improve their performance if necessary.
Elements of the Service Process
The three basic elements of the service process are the people involved, the processes
used, and the physical evidence they produce. The interaction between these three
elements creates the customer experience.

 People: The people in a service process play an essential role in creating a

positive customer experience. They need to be friendly and helpful,
knowledgeable, and skilled to provide the service.
 Processes: The processes must be efficient, effective, and designed with
the customer in mind.
  Physical Evidence: Physical evidence is anything that the customer can
see, touch or hear that provides them with information about the service.
It can include staff appearance, display notes, service environment, etc.
Decisions Required for Planning a Service Process
The following decisions are important for a service provider in planning its service
process.

 The Layout Design: The layout of the service facility plays an important
role in the efficiency and effectiveness of the service process. The layout
should be designed to meet the needs of customers and employees.
 Equipment: The service should use the right equipment to serve the
consumers.
 The Organizational Structure: The service provider’s organizational
structure should be designed to meet the needs of the service process.
 Technology: The service process should use the right technology to serve
the consumers.
 Training and Development Needs: Employees’ training and development
needs should be assessed and addressed in the service process.
 The Customer Service Policies: The customer service policies should be
designed to meet the needs of the customers and the employees.
Elements of Blueprinting
A well-designed service process can make the difference between a satisfied and
unsatisfied customer. There are several elements to consider when blueprinting the
service process.

 Service Location: The location is the first element where the service will
be delivered. This could be a storefront, office, or other physical space. It’s
important to consider the customer’s proximity and how easily they can
access the service location.
 Service Personnel: This includes the employees who interact with
customers and support staff who may not be directly involved in customer
interactions. Consider the skills and training required for each role and
how they will work together to deliver the service.
 The Flow of Process: This includes how customers interact with
employees and steps taken to receive the service. Consider the customer’s
point of view when designing the flow and ensure it is easy to understand
and follow.
  Service Tools/Equipment: This includes everything from office supplies to
specialized equipment or software. These tools should be easy to use, well
maintained, and require little maintenance.
 Conversion Process: This is how customers will be converted into paying
clients. Pay attention to the sales process and steps required to close a
sale.
 Technology: This includes everything from the software used to deliver
the service to the devices customers use to access it. Ensure that
technology is easy for employees to use and meets customer expectations.
 Support Processes: This includes everything from accounting to human
resources. These processes should be efficient and support service
delivery.
 Customer Role: This includes everything from how customers will be
involved in the service process to their expectations. Include feedback
while designing the process so they feel like they are part of it.
 Employee Actions: This includes specific tasks employees need to do in
order to interact with customers. Employees must have the information
and training they need to deliver the service.
Challenges in Designing the Service Process
There are four major challenges in designing the service process in any organization
that provides a service.

 Oversimplification: Making the process too simple can lead to

inconsistency and errors.
 Subjectivity: Service processes are often highly subjective, and what
works for one customer may not work for another.
 Incompleteness: The process accounts for all possible customer
interactions, not just the most common ones.
 Biased Interpretation: The people who design the service process may
have a biased interpretation of what the customer wants or needs.
Conclusion
The service process describes all activities that go into providing a service. It begins with
customer interest in the product or service and ends with their satisfaction.

The service process is often intangible, but it is the backbone to delivering a great
customer experience. Understanding and applying its principles can create an
exceptional customer experience that sets a business apart from the competition.