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Lecture

MGTA02H3 Lecture Notes - Operations Management, Capacity Planning, Human Resources


Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

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of 2
Chapter 1: Producing Goods and Services Operations Management
The Functions” of a Business:
To make a profit, a business must:
o Have people Human resources
o “Make” things – Operations
o Collect information MIS
o Use the information Accounting
o “Sell” things – Marketing
o Raise and spend money Finance
Operations Principal Points: On Midterm!
Operations explained and defined
Why “Operations” not “Production”
“Service” operations – special issues
What operations managers do
Operations create value how?
Operations:
Business is an organized effort to provide things that customers want to buy
… this implies the ABILITY to provide the things that people want to buy
A business must offer what it claims to offer
o Ex: A coffee shop MUST have coffee
Operations Defined:
The direction and control of processes that transform resources into finished
goods OR
The management of the creation of goods and services, using the factors of
production
What Operations Managers Do:
Make things, or make things happen
Demand planning:
o Forecast how much you need to make
o BAD example: Coffee shop that runs out of coffee
Capacity planning:
o Ensure enough space, and workers to meet demand
o BAD example: Tim Horton’s at UTSC
Location planning:
o Find the best location for getting materials, good employees,
transport to market
o GOOD example: Auto making in Ontario
Layout planning:
o Arrange store/factory for smooth flow of materials
o Why is the garbage can always under sink?
Schedule: To finish on time: Start on time!
Why It’s Called “Operations”:
PRODUCTION implies that Canadian business make “PRODUCTS”
In fact, 80% of Canadians work in services
Bankers, doctors, lawyers, professors, accountants: DON’T make products
They provide ideas, analyses, information
BUT: These things still need to be planned, managed, supplied
Thus: operations
Examples of services; finance, consulting services, legal services
Service Operations: Special Issues (differences)
Products (books) can be stored services (serving a meal) can not
Products can be made without customer, services (bus trip) can not
Products (jeans) should be the same, services (hair cuts) should not
Operations Create Value:
Operations: Take factors of production and transform them into products or
services which customers value
Operations involve taking raw materials/other factors of production and
adding value or utility