22 Pages

Accounting & Financial Management
Course Code
AFM 131
David G.Hawthorn

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ARBUS 101AFM 131MIDTERM II SOS SESSION TutorCoordinator Alexandra PazBarreirasCH 10PRODUCING WORLDCLASS GOODS AND SERVICES OPERATIONS CANADAS BUSINESSES Facing serious challenges in ability to remain modern and competitiveBusiness climate characterized by constant and restless change and dislocationReasons for CANs difficulties in competitive race 1 Inadequate improvement in productivity and unrelenting competition from foreign countries 2 Inadequate education and retaining programs for workplace 3 Our BranchEconomy Profits are returned to foreignbased countries who are parent companies to Canadian businesses therefore profits NOT invested back in CAN economy4 Not enough money spend on research and developmentValue of dollar closer to parity forcing CAN manufacturers to improve productivity RESEARCH AND DEVELOPMENT RDResearch and development RD work directed toward the innovation introduction and improvement of products and processes Companies are more competitive due to technology and innovationTechnology is the know howcreates innovationcombination gives competitive edge Innovation GOALSa improve product qualityb increase production capacityc extend product rangeAdoption and dissemination distribution of innovative technologies and processes are vital to economic growthdevelopment Companies are squeezing profit margins with fall of US dollar leaving less money for RDMANUFACTURING AND SERVICES BASECompetition forced companies to alter production techniques and managerial styles How to regain a competitive edge 1 Focus on customers 2 Maintain close relationships with suppliers and other companies to satisfy customer needs 3 Practice continuous improvement 4 Focus of quality5 Save on costs through site selection6 Rely on Internet to unite companies 7 Adopt production techniques such as enterprise resources planning computer integrated manufacturing flexible manufacturing and lean manufacturing Manufacturing sector employs over 7 of CAN working populationcritical to economyCritical to CAN economymanufactures perform 75 of privatesector RDMajor business issues with growth of manufacturing to services a Increased use of advanced production technologies Service sector is expanding and becoming a larger part of the economy manufacturing no growthb Moving production facilities to foreign countriesFROM PRODUCTION TO OPERATIONS MANAGEMENTProduction creation of finished goods and services using the factors of production land labour capital entrepreneurship and knowledge Production management describes all of the activities that managers do to help their firms create goodsTerm production replaced by operations to reflect both goods and services productionOperations management specialized area in management that converts or transforms resources including human resources into goods AND services Includes inventory management quality control production scheduling etc Eg automobile plant transforms raw materials human resources parts supplies paints tools and other resources into automobiles through process offabrication and assemblyEg school takes inputs information professors supplies buildings and creates services that transform students into educated people through process of educationSome companies produce combination of goods AND servicesManufactures spend a lot on productivity and quality expand operations management out of factory and closer to customer Outsourcing more production and focusing on building customer relationships and brand images more focused on servicesRedirecting corporate thinking towards satisfying customer needs better than the competition to retain customers OPERATIONS MANAGMENT PLANNING 3 Issues 1 FACILITY LOCATION the process of selecting a geographic location for a companys operations Strategy find a site that makes it easy for customers to access the companys servicemaintain a dialogue about their needs by offering outstanding serviceInternet bankingonline shoppingonline education popular bcs ultimate convenience is never having to leave home to get services For Manufacturers Shifts from one cityprovincecountry result in pockets of unemployment in some geographical areas and lead to great economic growth in others that benefit Issues influencing site selection 1 Labour costs inexpensive labour or right kind of skilled labour2 2 availability of inexpensive and plentiful resources ie water electricity wood coal people etc lowers costs of buying resourcescost of shipping finished productresources as people companies tend to cluster where smart and talented people areeg Silicon Valley North Ottawa 3 access to transportation reducing time to market reducing costsie highways rail lines airports water systems Information technology 4 proximity to customers such as supplier facilitiescuts costs of distribution and eases communication5 quality of life for employees including low crime rates 6 lower cost of living 7 ability to train or retrain local workforceOutsourcingDivide production between core competencies work company does best inhouse and outsourcing what other companies are experts at in order to achieve best quality at lowest price Can be a problem due to language and cultural differences etc
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