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Wilfrid Laurier University
Roopa Reddy

Operations – Sustainability Looking at ways to operate more sustainably for their future Critical Success Factors – indicators of business success - Achieving financial performance - Meeting customer needs - Providing quality products and services – most clearly linked to operations - Encouraging innovation and creativity (which creates new products that fill customer needs) - Gaining employee commitment (drives innovation and creativity) 3 Decisions 3 Stages - Planning o Starts with product - design should be driven with customer’s needs o Production Types (how its produced which affects the processes) and Process  Mass production  Mass customization o Choice of location and facility layout  Link between type of production, process used and layout o Resource planning and supply chain management (growing)  Make or buy? (quantitative and qualitative – decision based)– outsourcing – makes managing supply chain more involved – manage moving parts coming from different countries  Inventory management – timing and flow of goods – liquidity and finance - Controlling o Routing and scheduling  How are we getting things to different locations  How are we sending this out o Quality and cost control  Variable and fixed costs – break even  Quality – people expect a specific level of quality  E.g. Harley-Davidson – productivity-quality connection  They became caught up is high production – thinking it created better productivity  Customers started to not like the quality  Increased foreign competitors – Harley Davidson was near bankruptcy  Changed views and became successful again – look in text book for further details  Improving  Application of technology - Trends Service vs. Manufacturing - Both transform sometime of raw material into a finished good - More obvious in a manufacturer - In services the raw material is people – requires care o Someone with an unsatisfied need o Performed – not produced o You have to experience o Sometime of contact with the customer o Focus on the process – the entire experience not just the end product e.g. not just about your finished hair style, it’s how you were treated, and service throughout your hair cut 3 main differences - Intangible – you can’t touch it – making your experience with the service is very important o Customized to the individual o Service can’t be stored - Customer is part of process o Extent of contact affects operations affects your operations o E.g. taxes you drop your information off and he does them for you vs. your hair dresser - Impacts capacity o Integration of marketing (reaching your customers) and operations (target market  Demand//Capacity (how much you can produce) trade off  Your capacity can affect demand  Demand helps determine capacity  Can affect each other both ways - Manufacture o Set capacity slightly ahead of demand  Expensive to add inventory in small amount – better to produce a little bit more // sit idle – you don’t want to have too much inventory sitting because that money could be used in other places  In short term turn away customers or outsource at lower margins o Seasonality – shift demand and capacity  To try to offset that you try to shift demand and capacity through pricing  You could offer discounts on golf sets in the winter, etc. - Service o Low contact – set capacity to average demand  It may take longer to process but they can normally do it  E.g. tax accountant o High Contact – set capacity at peak demand (restaurant, hair dresser, baby sitter, etc.)  Dinner, - e.g. having enough waiters for dinner time (may have extras during the day but that’s the give and take)  Make sure you have enough to serve all customers at your peak hours Zara - Turn around is fast - Most stuff is in house – or go to poorer European countries - Very efficient Mass Production vs. Mass customization Change in the environment and technology – technology allows us to do this Had to have stable market conditions - today you need flexibility and be able to react to customers and change -Efficiency (getting most done) vs. effective (reaching your customer’s needs) --- more effective to have smaller batches of production that are more driven towards the customer and what they want -Repetition ---- today focuses on customization and innovation – meeting future needs of the customer Mass Customization – still producing in mass, but it is still customized to different people e.g. cars fully loaded and customization Sustainability - Meets the needs of the present - Without compromising future generations without taking away from fut
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