Chapter 17 DQ PDF

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Sanchez 1 Norma Sanchez SID# 0941397 12/05/20 Operations Management: Putting It All Together 1. How have the goals and strategies of operations management changed over the past fifty years? What are some of the key factors that have precipitated these changes? In the 1960s, the focus of operations management was mainly on efficiency. Today, operations managers realize that keeping costs(and prices) low are only part of the equation. Customers usually buy goods that offer the best value- and these aren't always the same as the goods that sell for the lowest price. Shift from minimizing costs to creating value. The American economy has experienced a fundamental shift away from the production of goods and toward the provision of services. 2. Explain the relationship between the operations management goals of “efficiency” and “effectiveness.” Efficiency is defined as a measure of how productively resources are used to achieve a goal. Effectiveness is a measure of the appropriateness of set goals selected by managers and the degree to which the organization achieves those goals. Efficiency is important for profitability. Effectiveness is important for growth. By increasing efficiency we save both time and money, thus making our businesses more profitable. Being efficient implies the system is operating the 'right' way. The relationship between effectiveness and efficiency is that effectiveness is a measure of 'goodness' of output, while efficiency is a measure of the resources required to achieve the output.

Sanchez 2 3. Explain the difference between a supply chain and a value chain and describe how these concepts are related. Compare the rationales for vertical integration and outsourcing as strategies for improving value chains. Supply Chain refers to the integration of all activities involved in the process of sourcing, procurement, conversion and logistics. On the other hand, value chain implies the series of business operations in which utility is added to the goods and services offered by the firm so as to enhance customer value. These two networks help to provide quality products to the customer at a reasonable price. Most of the time supply chain is juxtaposed with the value chain. The integration of all the activities, persons, and business through which a product is transferred from one place to another is known as supply chain. Value Chain refers to a chain of activities that is indulged in adding value to the product in every single step till it reaches the final consumer. 4. List six key factors operations managers consider when deciding to locate a facility and give an example of a specific consideration that would be important in each case. First, cost is an important factor. The reason for this should be obvious. If a company cannot afford the facilities, then they should look for something else. Also profitability must be considered as a decision needs to be made as to whether the premise you are choosing is a short-term location or if you would like to stay there for the long haul. Accessibility should be considered because it’s important to consider local transport links, particularly main roads and motorways. Your proximity to other competing businesses could be crucial to your success. If there is too much competition then it may be a warning sign to expand your horizons to a new location. If you rely on skilled workers it is best to go to where there is a healthy bank of talent.

Sanchez 3 Employees are often a business’s biggest asset thus choosing a location that’s lacking in required talent may be the start of your business’s downfall. 5. How does offshoring differ from outsourcing? What are the advantages and disadvantages of offshoring? Offshoring usually offers a cost-saving advantage by getting work done in different countries. While outsourcing refers to the process of having work contracted out to a third-party company. It is completely possible to outsource work without having to offshore it. An advantage of offshoring is there cost items such as power, Internet connectivity, rent may be lower in the host country than the country of origin. Another advantage is offshoring gives the company greater control through closer physical collaboration. Two disadvantages of offshoring is it increases the level of unemployment of the local economy. The client will be immersed in the culture and social practices of the host country. This may have an effect on productivity and communication. 6. In the terminology of operations management what is a project? Give some examples to illustrate this concept. Why is good project scheduling important? Describe how operations managers use the critical path method to manage projects. What is the critical path and why is it important? Project is nothing but a series of tasks amalgamated together to complete and achieve the KPIs and to produce good or service. For example IT projects management is nothing but designing and execution of new IT architecture in small tasks and integration of all to form products which can be marketed. Project scheduling is just as important as cost budgeting as it determines the timeline, resources needed, and reality of the delivery of the project. Project managers that have experience are better able to properly dictate the tasks, effort and money

Sanchez 4 required to complete a project. The purpose of a critical path is to find the least amount of time you'll need to complete a task. Critical path analysis furthers your ability to make better estimates for scheduling, because you're mapping out every important task that must be done for a successful project. 7. Briefly describe five differences between goods and services from an operations management perspective. Give an example of a good and a service. Services are intangible and without physical attributes. On the other hand, goods are tangible and can be weighed or measured based on their physical aspects. Services cannot exist separate from the customer. For instance, a doctor needs a patient in order to conduct a diagnosis, which is a medical service. On the other hand, goods do not require customer interaction in order to be goods. For instance, a bottle of soda is good even before it reaches the customer. Services are susceptible to changes in the consistency of how they are delivered, while goods can be created consistently using the same process and materials. Services can’t be preserved for future use. Goods, on the other hand, can be stored. 8. What is automation? Describe the major hardware and software components of a computer-integrated manufacturing system. Automation is the technology by which a process or procedure is performed with minimal human assistance. CIM is a combination of different applications and technologies like CAD, CAM, computer-aided engineering, robotics, manufacturing resource planning and enterprise management solutions. The major components of CIM are as follows: Data storage, retrieval, manipulation and presentation mechanisms. Computer-integrated manufacturing (CIM) is the manufacturing approach of using computers to control the entire production process. It is also known as flexible design and manufacturing.

Sanchez 5 9. What is a good working definition of the term “quality”? Why is achieving high quality important? Briefly describe four approaches to improving quality currently being practiced in the United States. Quality is important to businesses but can be quite hard to define. A good definition of quality is: “Quality is about meeting the needs and expectations of customers” Customers want quality that is appropriate to the price that they are prepared to pay and the level of competition in the market. Quality is critical to satisfying your customers and retaining their loyalty so they continue to buy from you in the future. Quality products make an important contribution to long-term revenue and profitability. They also enable you to charge and maintain higher prices. 10. What is meant by “lean production?” What is the basic idea behind just-in-time (JIT) production methods, and how do such methods contribute to a lean approach? What risks are associated with JIT? Lean production is an approach to management that focuses on cutting out waste, whilst ensuring quality. This approach can be applied to all aspects of a business – from design, through production to distribution. Lean production aims to cut costs by making the business more efficient and responsive to market needs. Just in time is a common inventory management technique and type of lean methodology designed to increase efficiency, cut costs and decrease waste by receiving goods only as they are needed. Companies using JIT will also experience difficulty adapting to sudden surges in customer demand. Any shortage of raw materials or parts will inevitably cause delays in shipment to the customer. With time-sensitive orders, businesses risk losing customers.

Sanchez 6 1. The auto company you work for is about to open a new factory in one of two locations, the United States or China. Do some research about the costs involved in operating a factory in both countries, such as labor, meeting government regulations, dealing with competition, and transportation. Which location would you choose and why? The cheapest way to set up a company in China is by using a virtual office. I have helped some foreign clients set up WFOE in Guangzhou, and their total cost for company formation in China is about USD1,800, including getting their business licenses, opening the company bank accounts, and one-year virtual office. However, some kind of WOFE can’t use virtual offices. According to the U.S. Small Business Administration, most microbusinesses cost around $3,000 to start, while most home-based franchises cost $2,000 to $5,000. While every type of business has its own financing needs, experts have some tips to help you figure out how much cash you'll require. In 2019, China implemented and will implement many significant legislative amendments and new laws, regulations, and policies. Your business must consider these changes, ranging from tax reform to international tariff agreements, to avoid unnecessary issues. In the U.S., there are also many government regulations on businesses that employ workers and independent contractors, in the form of federal and state labor laws. Thankfully, if you're just starting out, you can take advantage of the Department of Labor's FirstStep Employment Law Advisor. I think I would choose to start in the U.S. because i am familiar with the culture and it would be easier for me to research potential locations in the language I learned. Plus, the regulations and start up money is less than in China. 2. Choose an activity that you and a group of friends might undertake, such as forming a local amateur theater group and putting on a play or hosting a dinner

Sanchez 7 party. Identify the specific tasks involved and determine which activities are immediate predecessors for others. Estimate the time it would take to perform each task. Use this information to create a Critical Path Method (CPM) diagram and determine which sequence of related activities makes up the critical path. In any project, you’ll have multiple task sequences. The CPM would describe the sequence that takes the most time. If a group of friends and I were to put on a play, we would have to record the amount of time and resources that it would take for each task. First, we would have to choose the play and review it, which would take about 2 days. For everyone to be assigned a role and practice it, it would take around 2 weeks. Deciding where the play will be and how we could advertise it would take about one week. Getting the clothing and props needed would be another 2 weeks. Finally, knowing what day to present the play and finishing the whole project would be another 2 days. It would take about one month and a week to put a play together if everything goes as planned. If there were to be a delay, it could take up to 2 months at most. 3. Think about your own recent encounters with service providers such as restaurants, theaters, car repair facilities and banks. Identify and describe one service experience that met or exceeded your expectations and another that left you dissatisfied. What characteristics stood out in each case? How did your experience relate to the concept of a servicescape? How could the service provider that disappointed you improve its performance? One experience that stood out to me was the customer service online for a letter sending app. They were really helpful, patient and useful when I asked for them to clarify a question I had about their service. On the other hand, I had a service experience that left me dissatisfied

Sanchez 8 with the local United States Postal Service Office. I had asked for information about a package that has not arrived, and they said they wouldn’t be able to help me with the information provided. Even though the information I had was all that I was given. The person seemed disinterested in helping and tired. The characteristics that stood out to me the most in both cases was the engagement with the customer. In the first situation, the person was really polite and asked many questions. In the second situation, the person was disrespectful and careless. My experience related to servicescape because due to COVID, both situations happened online. The service provider that disappointed me could improve their performance by better training with the customer, more information about items, and being in a good mood. 4. Your text mentions that W. Edwards Deming is recognized as the father of the modern quality movement. But Deming was not the only quality pioneer. Joseph Juran and Phillip Crosby also made major contributions to the topic. Use the Internet to find out more about all three of these quality gurus. What were the main points stressed by each? How were their contributions similar? How did they differ? Which of these men do you think made the most important contribution? Edwards Deming. Considered by many to be the master of continual improvement of quality, as well as their overall operation, Deming is best known for his pioneering work in Japan. Joseph Juran started out professionally as an engineer in 1924. In 1951, his first Quality Control Handbook was published and led him to international prominence. Philip Crosby is another major contributor to the quality movement. In 1979, he left ITT (International Telephone and Telegraph) and wrote his book, Quality is Free, in which he argues that dollars spent on quality and the attention paid to it always return greater benefits than the costs expended on them. Whereas Deming and Juran emphasized the sacrifice required for a quality commitment,

Sanchez 9 Crosby takes a less philosophical and more practical approach, asserting instead that high quality is relatively easy and inexpensive in the long run. According to Deming and Juran, most of the quality problems that exist are due to a defect or failure in processes that are controlled by an organization's top management. I think the man who made the most important contribution is Philip Crosby. The concept of benchmarking. The zero-defects approach to quality improvement. His assertion that the entire organization should be involved in improving quality. His emphasis on totally involvement of the operating employees in improving quality. 5. Though their products are one of the major contributors to global warming, and perhaps because of that fact, auto manufacturers have taken several significant steps toward making their products more environmentally friendly. Identify the different ways that auto companies are making their products greener. In the last five years, car manufacturing has made a significant transition into the green initiative by incorporating far more recyclable materials into car production, choosing fuel alternatives that allow companies to reduce their fossil fuel intakes, and making car parts that are overall more reliable. Honda ranked second among all automakers in fuel economy at the last tally. A deeper dive into the company’s production model reveals flaws in carbon, water, and energy productivity. BMW had exceptional scores in waste productivity, water productivity, emissions controls, and energy use. Nissan checks in at fourth place both in overall fuel economy and in the greenest auto company rankings. Nissan is doing its best work in waste productivity though it could use a better system for conserving water during production. Elon Musk is the name that springs to mind when they think of sustainability in the auto industry. Musk is the CEO of Tesla, an automotive company founded in 2003 that’s dedicated to eco-friendly vehicles

Sanchez 10 and clean energy. Many other car manufacturers are creating electric cars as well, and these electric vehicles have fewer carbon emissions when compared to vehicles with gasoline engines....