Chapter 10 Notes v2.docx

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Business Administration
BUS 100
Kim Milnes

Chapter 10 – Operations Management, Productivity, and Quality The Productivity-Quality Connection 1) Productivity measures how much is produced relative to resources used a) Quality = product’s fitness for use in terms of consumer wants 2) Meeting the Productivity Challenge a) Measuring Productivity  Labour productivity = partial productivity ratio…(GDP/# Workers)  Lab our easier to measure than capital or energy, etc. b) Productivity among Global Competitors c) In 2008, Luxembourg was most productive country d) Productivity needs to continue to grow to ensure standard of living maintains 3) Domestic Productivity a) Improvements internally, (more # from same #) will raise nation’s wealth 4) Manufacturing vs. Service Productivity a) Manufacturing productivity higher than service productivity b) Simply, machines cheaper than humans 5) Industry productivity a) Productivity varies by industry (agri. in Canada more productive than most of world due to tech) 6) Company Productivity a) High productivity give edge…lower costs Meeting the Quality Challenge 1) Managing for Quality a) Total Quality Management (TQM) = concept that emphasizes that no defects are acceptable and that all employees are responsible for maintain the quality standards  TQM customer focuses – determine what they want/need/desire  All employees must buy in, or there he HR waste = company’s loss 2) Planning for Quality a) Managers need to set goals before production for quality and quality management b) Performance quality = overall degree of quality; how well the features meet needs, how well it performs c) May be related to quality reliability = consistency of quality from unit to unit of product 3) Organizing for Quality a) Not enough to have quality control department b) All employees now have to be involved in maintain quality 4) Leading for Quality a) Firms must take initiative to make quality happen b) Managers must inspire employees…quality ownership = concept that quality belong to each employee who creates or destroys it in producing a good/service…all responsible 5) Controlling for Quality a) Managers must establish specific standards for quality b) Review standards with employees after evaluating them 6) Tools for Quality Assurance a) Competitive product analysis = process by which a company analyzes a competitor’s products to identify desirable improvements b) Value-added analyses  evaluation of al
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