Mid-Term Review.docx

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Management (MGT)
William( Bill) Mc Conkey

MGTA04 Mid-Term Review Chapters 1-4 PART ONEManaging Operations and Information service operations production activities that yield tangible and intangible service products goods production production activities that yield tangible products 1.2 CREATING VALUE THROUGH PRODUCTION operations (production) management the systematic direction and control of the processes that transform resources into finished goods production managers managers responsible for ensuring that operations processes create value and provide benefits Operations Processes a set of methods and technologies used in the product of a good or a service all goods-manufacturing processes can be classified in two ways: - type of transformation technology (raw material finished goods); o chemical processes raw materials are chemically altered (e.g. aluminum, steel, etc.) o fabrication processes mechanically alter the basic shape or form of a product (e.g. metal forming, woodworking ,etc.) o assembly processes put together various components (e.g. electronics, appliances, etc.) o transport processes goods acquire place utility by being moved from one location to another (e.g. trucks moving bicycles from plants to consumers) o clerical processes transform information (e.g. compiling inventory reports) - analytic vs. synthetic processes (resources finished goods); o analytic process any production process in which resources are broken down o synthetic process any product process in which resources are combined all service-producing processes can be classified to the extent of customer contact: - high-contact system a system in which the service cannot be provided without the customer being physically in the system (e.g. transit systems) - low-contact system a system in which the service can be provided without the customer being physically in the system (e.g. lawn care services) Differences Between Service and Manufacturing Operations - in service production, people choose among sellers because they have either unsatisfied needs or possessions for which they require some form of care or alteration Focus on Service Operations Manufacturing Operations Performance performed; customer-oriented, more goods are produced; tangible, more customized, more complex storable, less complex Process & Outcome combinations of g&s; focus on both focuses on the outcome of the transformation process and its production process outcome, require different skills Service Characteristics intangibility, customization, tangible, not customized, storable unstorability Customer-Service Link acknowledge customer as part of the operations process; E-Commerce Service-Quality quality of work =/= quality of service (e.g. flawless car repair vs. crappy service) 1.3 OPERATIONS PLANNING forecast estimates of future demand for both new and existing products Capacity Planning capacity the amount of a good that a firm can produce under normal working conditions - goods manufacturing firms capacity slightly > normal demand for its product MGTA04 Mid-Term Review Chapters 1-4 PART ONEManaging Operations and Information - services low-contact (maintaining inventory allows capacity to be set at average demand) & high- contact (managers must plan capacity to meet peak demand) Location Planning - goods location decisions are influenced by proximity to raw materials and markets, availability of labour, energy and transportation costs, local and provincial regulations and taxes, and community living conditions some decisions are simplified by rise of industrial parks - services low-contact (options; can be located near resources suppliers, labour, customers, or transportation outlets) & high-contact (more restricted; must locate near customers) Layout Planning - goods layouts must be planned for productive, non-productive, and support facilities o process layout a way of organizing production activities such that equipment and people are grouped together according to their function the various tasks are each performed in specialized locations (e.g. job shop); many paths and potentially much congestion o cellular layout used to produce goods when families of products follow similar flow paths equipment setup time is reduced, flow distances are usually shorter; duplication of equipment o product layout a way of organizing production activities such that equipment and people are set up to produce only one type of good efficient for producing large volumes of product quickly through usage of assembly lines, simplified work tasks; product layouts are inflexible assembly line a type of product layout in which a partially finished product moves through a plant on a conveyor belt or other equipment u-shaped production line production layout in which machines are placed in a narrow U shape rather than a straight line one worker can work on all tasks when slow & workers can be added until 1/machine flexible manufacturing system (FMS) a production system that allows a single factory to produce small batches of different goods on the same production line adapt both mechanical and human resources to meet changes in customer demand; sufficient # of products in high demand & avoid overproduction soft manufacturing reducing huge FMS operations to smaller, more manageable groups of machines - services low-contact (the facility should be arranged to enhance the production of the service) & high-contact (arranged to meet customer needs and expectations) Quality Planning - in planning production systems & facilities, goods are produced to meet the firms quality standards Methods Planning - in designing operations systems, managers can work to reduce waste, inefficiency, poor performance through a step-by-step basis (aka methods improvement) - goods methods improvement begins when a manager documents the process flow chart and ending with the implementation of the improvements - services low-contact (use methods improvements to speed services) & high-contact (develop procedures that clearly spell out the ways in which workers interact with customers) service flow analysis an analysis that shows the process flows that are necessary to provide a service to customers; it allows managers to determine which processes are necessary identify & isolate fail points 1.4 OPERATIONS SCHEDULING master production schedule schedule showing which products will be produced, when production will take place, and what resources will be used Scheduling Service Operations Gantt chart production schedule diagramming the steps in a project and specifying the time required for each estimated time; if ahead, another project, if behind, add workers or delay projectMGTA04 Mid-Term Review Chapters 1-4 PART ONEManaging Operations and Information PERT chart (program evaluation and review technique) production schedule specifying the sequence and critical path for performing the steps in a project identifies the critical path for meeting project goals - critical path defines the duration of the project; longest path through the network 1.5 OPERATIONS CONTROL operations control managers monitor production performance by comparing results with plans and schedules if quality or expectations are not met, corrective action by managers follow-up checking to ensure that production decisions are being implemented Materials Management planning, organizing, and controlling the flow of materials (i.e. logistics) from purchase through distribution of finished goods (1) transportation the means of transporting resources to the company and finished goods to buyers (2) warehousing the storage of both incoming materials for production and finished goods for physical distribution to customers (3) inventory control receiving, storing, handling, and counting of all raw materials, partly finished goods, and finished goods (4) purchasing the acquisition of all the raw materials and services that a company needs to produce its products o most companies have purchasing departments to buy, at reasonable prices and at the right time, proper materials in required amounts; forward buying, large quantities for LT needs o holding costs costs at keeping extra supplies or inventory on hand (e.g. storage, handling, insurance, opportunity costs, etc.) o lead times in purchasing control, the gap between the customers placement of order and the sellers shipment of mer
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