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AFM 131 (194)
Lecture 11

AFM 131 Lecture 11: Module 11 - Operations Management

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Accounting & Financial Management
AFM 131
Bob Sproule

Chapter 10 – Leadership, Organization, and Production to Satisfy Customers Canada Today  largest producers of forest products in the world, giant aluminum mills, automotive-related manufacturing, oil, natural gas, coal, metals, minerals > only some of the components, products, and natural resources - Need to find ways to be more competitive internationally - Figure 10.1  page 294 Research and Development (R&D): work directed toward the innovation, introduction, and improvement of products and processes - Technology and innovation - Figure 10.2  page 296 Canada’s Evolving Manufacturing and Service Base: emphasis on… - Focusing on customers - Maintaining close relationships with supplies and other companies to satisfy customer’s needs - Practicing continuous improvement - Focusing on quality - Saying on costs through site selection - Relying on the internet to unite companies - Adopting producing techniques such as enterprise, resource planning, computer- integrated manufacturing, flexible management, and lean manufacturing Production: the creation of goods and services using the factors of production: land, labour, capital, entrepreneurship, and knowledge. Production Management: the term used to describe all of the activities that managers do to help their firms create goods. - Change in importance from product to operations Operations Management: a specialized area in management that converts or transforms resources (including human resources) into goods and services Manufacturers turn to a customer orientation and service for profit: like custom manufacturing, fast delivery, credit, installation and repair Facility Location: the process of selecting a geographic location for a company’s operations (should focus on customers and where they can grow market) Facility Location for Manufacturers: if company shifts in operations causes unemployment in original location and growth in the new location  labour costs, availability of resources, access to transportation that can reduce time to market, proximity to customers, low crime rates, quality of life for employees, lower cost of living, and the ability to train or retain the local workforce - Be more international Outsourcing: works different for every company Canada’s Auto industry: page 303/304 Taking Operations to the Internet  linking of firms (through outsourcing) is called supply chain management Facility Location in the Future: tax situation, degree of government support, Facility Layout: the physical arrangement of resources (including people) in the production process - Assemble line layout: workers do only a few tasks at a time - Modular layout: teams of workers combine to produce more complex units of the final product - Process layout: one in which similar equipment and functions are grouped together - Fixed-position layout: that allows workers to congregate around the product to be complete Figure 10.3: page 306 – Typical Layout Designs Quality Control: Quality: consistently producing what the customer wants while reducing errors before and after deliver to the customer Six sigma quality: a quality measure that allows only 23.4 defects per million events Statistical quality control (SQC): the process that some managers use to continually monitor all phases of the production process to ensure that quality is being built into the product from the beginning Statistical Process Control (SPC): the process of taking statistical samples of product components at each stage of the production process and the plotting those results in a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards. Quality Award: The Canada Awards for Excellence: The National Quality Institute (NQI) hosts the Canada Awards for Excellence The International Organization for Standardization (ISO) 1. ISO 9000: the common name given to quality management and assurance standards a. Determine customer’s needs b. Regulatory and legal requirements c. Communication arrangements to handle complaints d. Process control e. Product testing f. Storage and delivery 2. ISO 14000: a collection of the best practices for managing an organization’s impact
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