Three Primary Function of Organization

1. Operation

 Core of most business Two types of customers

 Includes activities relating to the production of
goods and services
 Operation Management
 Managing the resources
 Create and deliver service product
Role of management
Plan, organize, direct, evaluate
Resources
o Are man-made good capable of producing
another goods
o Raw materials – Source of all resources
 Land Ex: plants in lowland
 Mineral Ex: lead, gold, silver
Creation
 Create recreate, retach to the original product
Deliver
 Make the product available for consumers
consumptions
Two types of goods
1. Service
 Intangible thing rendered to others
 Does not require ownership
2. Products -Tangible goods
Note: Make this available for consumers consumptions.
2.Marketing
 Responsible for communicating the
organization’s service and gproducts to its
market
 Create the needs of the product operation
 Entails cost
 Called frontliners of business by having 100%
customer contact
 Cheapest-Radio
 Expensive- TV, Magazines
1. Actual buyer
 People who know the product and buys the
products habitually
2. Potential buyer
 Buyers who don’t know and don’t buy the
product
 Also who do know but don’t buy the product
Note: Once the product is in demand because of
marketing, the production will come and rise.
3. Finance
 Secure monetary resources at favorable price
and allocating them throughout the org.
 Distribute to different areas of organization
 Secure-Look for fund
Budgeting Activities in Finance
1. Budgeting
 Periodically prepared to plan financial
requirements
 Budgets must sometimes be adjusted and
performed and relative to a budget must be
evaluated.
2. Economics analysis of investment proposal
 Evaluating the investment = 100% ROI
 Evaluation of alternative investment in plant
and equipment requires inputs from both
operating and finance people
3 Provision of funds
 The Necessary funding of operation and the
amount and timing of funding can be important
INPUT-TRANSFORMATION-OUTPUT-A process
Throughtput process/methods
Is a process that take in a set of input
resources which are used to  transform
 something, or  are transformed  themselves,
into outputs  of services and products.
TRANSFORMATION

INPUT  Manner to which we choose to produce goods

and services
 Resources needed to produce some goods
 Management input Two ways of transformation

Capital intensive means of production

6Ms in Management  Uses 70% machine, 30% labor
Money Labor Intensive means of production
 Money would be required depend on the size of  Uses 70% labor, 30% machine
an entity or organization Both the ways are use to produce goods and service
Materials
 Transformation ends when we reach the things
 Varies from what you are producing or output that we want
Methods
OUTPUT
 How you will produce the product or goods
 Either be a product or services
Machines
 Gives value to your customers =Value added to
 To make production easier customers
 They could be push button machine  Can also be extractive output
 Output that would require another
transformation process
Manpower
Ex: Mining, Fishing
 Refers to the people who transformed material
 Fish that is extracted can be transform into
into a goods
other product, e.g. sardines then cook in homes
 Need to be skilled
put egg sabi ni maam.
Management

 This gives direction to the organization Controlling

Present in INPUT-TRANSFORMATION-OUTPUT
Factors of production:
Input- control the materials used, its quality
LAND-natural resources
Transformation- Make use of the control/production
LABOR -manpower process to make the finish product that we like

 Labor force-those people whose age is 18-60 Output- control the quality, quantity and delivery time
capable of doing productive works
 Retirement will vary on the age or years of
works Pictures on the phone
 Unemployed- people who want to work but
their skills are not suitable Materials
 58 years old- can already apply for resignation  transformation process changes its physical
CAPITAL- appearance
 change in possession
  Simply stores materials  Responsible for production of goods and
services
Information
 Acquisition, convertion of input to different
 Changes its informational properties, location, outputs using one or more process.
possession  Involves planning

Production
IMPORTANT THINGS IN THE FUNCTIONS OF Org. Mngt.
 Co-production/producers
1. The creation of system design
Facilities
a. System capacity
 Building’s equipment, plant and process
technology, of the operation  Are we capable to producing the product?
 differ from what you are producing  Machine should always compliment your
available resources
Staff
b. Geographic location of facilities
 people who operates, maintain, plan and
manage the operations  office of the operation
 increase of you are servicing bigger quantity
c. Arrangements of department
Operations
 e.g. Fire hydrant, fire extinguisher
 Must produce product and services

Customer
d. product and service planning
 who change a particular product
e. action your design

THE PROCESS HIERARCHY

2. System Operation
Business operation- we begin in the end in mind
 Putting into order/action the plans in system
design
Process Activities:

a. Management of Personnel
Resources  Skills must be present in employees.

b. Inventory planning and control

3 FUNCTIONS OF AN ORGANIZATION MANAGEMENT
 materials should be available anytime
Acquisition of resources  inventory management
 communicate with people to know what to
Transformation (throughput) inventory
Input-throughput c. Scheduling product management
(mabilison si maam mag discuss)  when to start and stop production

d. Quality Assurance
Operation-Care of business  assurance of input of resources
Production Manager  to have the required output
  wrong input=wrong output. How much can your company produce
in 1 production
 Must not be less than 50% of
Functions of the Operations Manager. production to avoid loss
 Must be 60-75% of production should
 Directly responsible for the production of goods
be produced
and service
Allocating financial resources
 Engage in the day to day activities to the
 Total amount of money required in
organization
production to pay for the materials,
 Responsible for the productive use of resources equipment and wages.

SCOPE OF THE OPERATION MANAGEMENT FIRST LEVEL

TOP-STRATEGIC a. Responsible for the production use of resources

 Reads strategy and making decision for overall b. Productivity

strategies  Measures the relationship between input and
MIDDLE-TACTICAL your output.

 Can make decision without permission to top Scheduling of personnel

management or don’t need approval from top  Shifting
management
 Find who will operates the strategy made by the
top management
Adjusting Output rate
FIRST LEVEL-OPERATIONAL DECISION MAKING  To make sure the customer will never
sawa sawa sa inyong products HAHAHA
 Focus on operational decision making Controlling Quality
 Inventory Replenishment
 aram ng kada isa ang trabaho ninda
SCOPE

1. TOP

Product Selection
 What product to offer?
Know facility construction
 Build or create?
 Rent a place
 Put your production area
Choice of technology
Choice of location

2. MIDDLE

Employment Level
 Employment requirements
 Skill requirements
 Work for people for the job
Output Level