Comprehensive Complete MGTA04 Study Guide

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

CHAPTER 1: PRODUCING GOODS AND SERVICES Service operations: provide tangible and intangible service products (e.g. entertainment, transportation) Goods production: provide tangible products (e.g. newspapers, buses) Operations (production) management: systematic direction and control of the processes that transform resources into finished goods Management of the creation of goods/services using the factors of production (land, labour, capital, entrepreneurship) Production managers: plan, organize, schedule, control responsible that operation processes must create value & provide benefits (e.g. farmers) Operations process: set of methods & technologies used in production 5 Types of Transformation Technology: - Chemical- through heat/cold/mixture change materials composition - Fabrication- alter the form of a product (cut something, bend it) - Assembly- put things together - Transport- moving raw material/product from A to B - Clerical- transforms information 2 Types of Production Process: Analytic: resources are broken down Synthetic: resources are combined Customer contact: High-contact: cannot be provided without the customer being physically in the system (e.g. transit systems) Low-contact: canbe provided without the customer being physically in the system (e.g. lawn care services) Differences between Service and Goods Operation Service Goods Performance Performed Produced Process and Outcome Process and outcome Outcome Intangibility: cannot be seen or touched Service Characteristics Customization: unique to a particular customer Unstorability: cant store 2 hair cuts (perishable) Customer-Service Link Acknowledgement of customer Service Quality Considerations Quality of work does not equal to quality of service Forecasts: estimates of future demand Ensure enough time, money, factory space, warehousing, Goods- exceed slightly Capacity Planning employees, to meet demand Service-low-contact: average Capacity: Amount of a good that can produce under normal high-contact- peak working conditions Location Planning Find best locations for getting parts, skilled employees, storage, transport to market Process Layout: equipment and people are grouped together according to Layout Planning Smooth flow of materials, good communications, no transport their function or storage problems Cellular Layout: family of products follow a fixed flow path Productive facilities- workstations, equipment Product Layout: equipment and people are set up to produce 1 type of Non-productive facilities- storage and maintenance product (arranged in fixed sequence of steps) Support facilities- offices, restrooms, parking lots etc Assembly line: partially finished product moves through a plant on a conveyor belt U-shaped production line: machines are places in a narrow U shape Flexible manufacturing system (FMS): 1 factory produces small batches of different products (wide-variety) Soft manufacturing: Reducing FMS operations to smaller, more manageable groups of machines Quality Planning Ensure goods are produced to meet the firms quality standards Methods Planning Examine processes used in production. Analyze wasteful activities, delays, bottlenecks and other inefficiencies Or Methods improvement Process flow chart- identifies the sequence of production activities, movements of materials, and work performed at each stage as the product flows through production Service flow analysis: shows the flow of processes that make up a given service, it helps managers decide whether all those processes are necessary Operations scheduling: If you want to get something done on time, know when to start Master production schedule: shows which products will be produced, when production will occur, and what resources will be used during Tools of Scheduling Gantt chart: breaks down large projects into steps and specify the time required to perform each one PERT chart: (Program Evaluation & Review Technique) like Gantt chart, but also identifies the critical path for meeting the project goals Operations control: monitor production performance by comparing results with plans and schedules Follow-up: Checking to ensure that production decisions are being implemented Materials management: Planning, organizing, and control the flow of materials (logistics) Standardization: Using standard and uniform components rather than new or different components 4 Major Areas of Materials Management: Transportation: transporting resources to the company and finished goods to buyers Warehousing: storage of materials for production and finished goods Inventory control: receiving, storing, handling, and counting all raw materials, partly finished goods, and finished goods Purchasing: the acquisition of all raw materials and services that a company needs to produce its products Forward buying: routinely buy materials enough to fill long-term needs Holding costs: Costs of keeping extra supplies or inventory on hand Opportunity costs: additional earnings that the company must pass up b/c funds are tired up in inventory Hand-to-mouth pattern: placing small orders frequently Lead times: the gap between the customers order placement and the sellers shipment and delivery reliability Supplier selection: Finding and determining which suppliers to buy from 1. Find possible suppliers 2. Find the best candidates 3. Negotiate terms of service with a final choice 4. Maintain a positive buyer-seller relationship 4 Tools for Operations Process Control Worker training: b/c customer satisfaction is linked to the employees who provide the service Just-in-time (JIT) production system: - JIT brings together all the needed materials and parts at the precise moment they are required for each production stage, not before - can minimize manufacturing inventory costs Material requirements planning (MRP): bill of materials is used to deliver the right amount of materials at the right place and the right time for production (like JIT) Bill of materials: specifies the necessary ingredients (raw materials and components), the order in which they should be combined, and the quantity of each ingredient needed to make a specified number of products Manufacturing resource planning (MRP II): advanced version of MRP; that ties all parts of the organization into the companys production activities Quality control: the management of the production process so as to manufacture goods or supply services that meet specific quality standards CHAPTER 2: INCREASING PRODUCTIVITY AND QUALITY Productivity: - measure of efficiency that compares how much is produced with the resources used to produce it - ratio of inputs to outputs Operations managers job is => to make things quickly, or cheaply => with a given amount of resources, to maximize the output Quality: - fitness for us in terms of offering the features that consumers want - Meeting or surpassing customer expectations
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