page_title: Operations management
section_title: Production systems
hierarchical_section_title: Operations management / Topics / Production systems
caption_attribution_description: Français&#160;: Configuration d'un Atelier à Cheminement Multiple, par Younes
context_page_description: Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in terms of meeting customer requirements. Operations management is primarily concerned with planning, organizing and supervising in the contexts of production, manufacturing or the provision of services.
  It is concerned with managing an entire production or service system which is the process that converts inputs into outputs. Operations produce products, manage quality and create services. Operation management covers sectors like banking systems, hospitals, companies, working with suppliers, customers, and using technology. Operations is one of the major functions in an organization along with supply chains, marketing, finance and human resources. The operations function requires management of both the strategic and day-to-day production of goods and services.
context_section_description: A production system comprises both the technological elements (machines and tools) and organizational behavior (division of labor and information flow). An individual production system is usually analyzed in the literature referring to a single business, therefore it's usually improper to include in a given production system the operations necessary to process goods that are obtained by purchasing or the operations carried by the customer on the sold products, the reason being simply that since businesses need to design their own production systems this then becomes the focus of analysis, modeling and decision making (also called "configuring" a production system).
  A first possible distinction in production systems (technological classification) is between continuous process production and discrete part production (manufacturing). 
  Process production means that the product undergoes physical-chemical transformations and lacks assembly operations, therefore the original raw materials can't easily be obtained from the final product, examples include: paper, cement, nylon and petroleum products.
  Part production (ex:cars and ovens) comprises both fabrication systems and assembly systems. In the first category we find job shops, manufacturing cells, flexible manufacturing systems and transfer lines, in the assembly category we have fixed position systems, assembly lines and assembly shops (both manual and/or automated operations).
  Another possible classification is one based on Lead Time (manufacturing lead time vs delivery lead time): engineer to order (ETO), purchase to order (PTO), make to order (MTO), assemble to order (ATO) and make to stock (MTS). According to this classification different kinds of systems will have different customer order decoupling points (CODP), meaning that work in progress (WIP) cycle stock levels are practically nonexistent regarding operations located after the CODP (except for WIP due to queues). (See Order fulfillment)
  The concept of production systems can be expanded to the service sector world keeping in mind that services have some fundamental differences in respect to material goods: intangibility, client always present during transformation processes, no stocks for "finished goods". Services can be classified according to a service process matrix: degree of labor intensity (volume) vs degree of customization (variety). With a high degree of labor intensity there are Mass Services (e.g., commercial banking bill payments and state schools) and Professional Services (e.g., personal physicians and lawyers), while with a low degree of labor intensity there are Service Factories (e.g., airlines and hotels) and Service Shops (e.g., hospitals and auto mechanics).
  The systems described above are ideal types: real systems may present themselves as hybrids of those categories. Consider, for example, that the production of jeans involves initially carding, spinning, dyeing and weaving, then cutting the fabric in different shapes and assembling the parts in pants or jackets by combining the fabric with thread, zippers and buttons, finally finishing and distressing the pants/jackets before being shipped to stores. The beginning can be seen as process production, the middle as part production and the end again as process production: it's unlikely that a single company will keep all the stages of production under a single roof, therefore the problem of vertical integration and outsourcing arises. Most products require, from a supply chain perspective, both process production and part production.
caption: In a job shop machines are grouped by technological similarities regarding transformation processes, therefore a single shop can work very different products (in this picture four colors). Also notice that in this drawing each shop contains a single machine.
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