BUSN 1200 - Chapter 10 PDF

Preview

Summary

BUSN 1200Chapter 10 - Operations Management, Productivity, and QualityOperations Management:  It is the systematic direction and control of the processes that transform resources into finished goods (transformation of inputs into outputs).  Production managers are responsible for creating utility ...

Description

BUSN 1200 Chapter 10 - Operations Management, Productivity, and Quality Operations Management:  It is the systematic direction and control of the processes that transform resources into finished goods (transformation of inputs into outputs).  Production managers are responsible for creating utility (satisfying a need) for customers regardless of industry. Service vs. Goods:  Service Operations - Production activities that yield tangible and intangible service products.  Goods Production - Production activities that yield tangible products.  Combination - Features from both Service and Goods. Difference Between Service and Manufacturing Operations:  Interacting with customers  Services can be intangible and unstorable  The customers presence in the operations process  Service quality considerations (intangibles make all the difference) Operations Processes:  Processes – methods and technologies used in the production of good & services.  Classified by o Type of transformation technology o Type of process (analytic or synthetic) o Amount of customer contact  Types of Transformation Technology  Chemical Processes - Raw materials are chemically altered. Such techniques are common in the aluminum, steel, fertilizer, petroleum, and paint industries.  Fabrication Processes - Mechanically altering the basic shape or form of a product. Fabrication occurs in the metal forming, woodworking, and textile industries.  Assembly Processes - Put together various components. These techniques are common in the electronics, appliance, and automotive industries.  Transport Processes - Goods acquire place utility by being moved from one location to another. For example, bicycles are routinely moved from manufacturing plants to consumers by truck and through warehouses and discount stores.  Clerical Processes - Transforming information. Combining data on employee absences and machine breakdowns into a productivity report is a clerical process. So is compiling inventory reports at a retail outlet.



Types of Processes:

o Analytic Process – Resources are broken down in the production process. For example, extracting minerals from ore. o Synthetic Process – Resources are combined in the production process. For example, paint production. Amount of Customer Contact:  Customers are involved in and can affect the transformation process. o Low-Contact System – Customers do not need to be physically present. o High-Contact System – Customers need to be physically present. Operations Control:  Monitoring performance by comparing results to original plans and schedules. o Follow-up-checking to ensure that production decisions are being implemented. o Materials management - planning, organizing, and controlling the flow of materials from purchase to distribution of finished goods. Five major roles of Materials Management:  Transportation  Warehousing  Inventory Control  Supplier Selection  Purchasing o Production Process Control  Tools for Production Process Control – Worker Training – Just-in-Time – Parts are delivered when they are needed. o Resources continually flow from raw materials to the finished product. o Saves on warehouse costs. o Smooth movement of product components. – Materials Requirements Planning – computerized bill of materials estimates production needs. o Resources are acquired and put into production only as needed. – Manufacturing Resource Planning (MRP II) - advanced version of MRP; ties all parts of the organization into production activities – Quality Control o Quality – A product’s fitness for use in terms of offering the features that consumers want. o Measuring Productivity – Productivity is measured as a ratio of outputs to inputs.

Often use labour for input because data is easily available.  Labour Productivity – GDP/Total workers. o Company Productivity  High productivity gives a competitive edge.  Lower costs allow for lower prices, more profit or higher wages.  Impacts: investors buying stock, employee profit-sharing plans, managers’ plans for the future. 

Total Quality Management:  Includes all activities and parts of the business (customers, suppliers, employees).  Leadership and customer focus are key.  Requires highest level of commitment (no defects are tolerable).  Highlights continuous improvement.  All employees are responsible for maintaining quality standards.  Performance Quality – Refers to the features of a product and how well it performs.  Quality Reliability – Refers to the consistency or repeatability of performance.  Quality Ownership – The idea that quality belongs to each person who creates or destroys it while performing a job. Tools for Quality Assurance:  Value-added analysis - evaluation process to determine the value added by: o All work activities o Material flows o Paperwork It reveals and eliminates wasteful activities.  Statistical process control o SPC methods enable managers to analyze variations in production data & detect when adjustments are needed to create products with high quality reliability. o Process variation – Change in employees, materials, work methods, or equipment that affects output quality.  Some variation is acceptable.  Variation outside of the acceptable range must be detected and eliminated.  Quality-Improvement Teams – Groups of employees from various work areas who meet regularly to define, analyze, and solve common production problems. o Greatly improve employee attitudes, imparting self-worth and a sense of ownership of quality. o The goal is to improve work methods and products.







Benchmarking - compares the quality of a firm’s output with the quality of the output of the industry’s leaders or itself. o Internal Benchmarking – Comparing to company’s past performances. o External Benchmarking – Comparing to competitor’s best practices. ISO 9000:2000 and ISO 14000 - Program certifying that a company meets the rigorous standards of the International Organization for Standardization (ISO) o To earn the rating, firms are measured by qualified consultants on:  Product Testing  Employee Training  Record Keeping  Correcting Defects Business Process Re-engineering - Redesigning business processes to improve performance, quality, and productivity. o Re-engineering Process:  Identify the business activity to change.  Evaluate information and human resources’ capacity for change.  Identify strengths or weaknesses of current process.  Create the new process design.  Implement the new design....