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

Management (MGT)
Course Code
Chris Bovaird

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?
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
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