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Full Exam Review

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Rotman Commerce
John Oesch

Yefan Chen RSM100 Exam Review Chapters 11,12, 14,15,16,17,19,20 [Type the author name] 4/9/2011 Chapter 11: Operations Service Operations Production activities that yield tangible and intangible service products Goods Production production activities that yield tangible products GE is an example of both because it invests in electronics and media. Production creates four kinds of utility, satisfaction of wants and value: 1. Time utility producing items when consumers want it (decorations for Christmas) 2. Place utility available in convenient places 3. Ownership utility quality that people can take pleasure in possessing/consuming 4. Form utility requires raw materials to be transformed into something useful/pleasing Operations (previously production) Management is the systematic direction of the processes that transform resources into goods and services. Production managers are responsible for creating utility. Operations Process is a set of methods and technologies used in the production, such as: Good Producing Processes Classified by: Type of Transformation Technology -Such as chemical processes to alter metals, fabrication of lumber into furniture, assembly processes of car parts and electronics, transport processes by moving items, and clerical processes by transferring information Analytic vs. Synthetic Processes [Way of Transforming] -The way resources are converted, whether analytically (breaking down the basic resources into components such as extracting gold), or synthetically (combining resources to make something, like paint). Service Producing Processes Classified by the extent of customer contact: High-Contact Processes -The service cant be provided without the customer being physically in the system, like TTC -Cleanliness is a big factor Low-Contact Processes -A system where service can be provided without the customer being there, like cheque-processing centres and lawn care services, and auto repair shops Operations are designed to support the business strategy. It is in those strategic areas that the company must do really well called operations capability. (eg, Toyota is quality, FedEx is dependability) Toyota High quality standards for materials Just-In-Time material flow for lean manufacturing Specialized equipment for consistency Operations personnel are experts on continuous improvement of product, work methods, and materials FedEx Customer automation: uses online tools to shorten shipping time Wireless info system for package scanning and tracking Maintains a company air force, weather centre, and ground transportation for pickup and delivery with backup vehicles for emergencies Each of the 30 automated distribution hubs processes up to 45,000 packages per hour for next-day deliveries Differences between Service and Manufacturing Operations Service operations have a unique link between production and consumption process and outcome. They are more intangible, more customized, and less storable than most products. Operations Planning Forecast estimate of future demand for both new and existing products Capacity planning for goods usually implies that the amount of a good it can produce under normal conditions is slightly Higher than normal demand. Location Planning is influenced by the proximity to raw materials and markets. Skilled workers, low wages, and good environment led Car Companies to place their manufacturing plants. Layout Planning: Producing Goods layout must be planned for productive facilities, non-productive facilities like storage, and support facilities like offices and cafeterias. Focusing on productive facilities Process Layouts a way of organizing production activities such that equipment and people are grouped together according to function Cellular Layouts a layout used to produce goods when families of products can follow similar flow paths (ie an area to make the same family of pockets for shirts and coats) Product Layout one type of product is produced ina f ixed sequence of steps arranged by its production requirements (assembly lines) Lean Manufacturing suppliers pre-assemble parts nto modules, then production workers combine modules to make the product. Others U-shaped Production Line machines placed in a U so workers can access more than one easily, or Flexible Manufacturing System (FMS), which allows the production of small batches of different goods by integrating sales info with factory production with computer-controlled instructions. Quality Planning (Chapter 12) Methods Planning: Goods: Begins when a manager documents the current method. A detailed process flow chart is helpful for organizing information because it identifies the sequence of production activities, movement of materials, and work performed at each stage. Then, it can be analyzed to find wasteful activities and sources of inefficiencies. The final step is implementing changes! Services: In low-contact, methods improvements are used. Service Flow Analysis shows the process flows that are necessary to provide a service, allowing managers to see which ones are required. Potential problems = fail points. Operations Scheduling Managers must develop time tables for acquiring resources for production. Master Production Schedule shows which products will be produced, when, and what resources will be used during specified time periods. Short term detailed schedules manage start and stop tiemes, and scheduled work assignments. Gantt Charts diagram steps to be performed and specifies the time required to complete each step (like Daniels implementation charts). PERT Charts Program Evaluation and Review Technique; specifies the sequence and critical parth for performing the steps Operations Control This requires production managers to monitor production performance by comparing results with plans and schedules. Follow-up is essential checking to ensure that production decisions are implemented. Materials Management Material cost accounts for 50-70% of total product costs, and this management process involves planning organizing, and controlling the flow of materials from purchase through distribution. This is also called Logistics. -Transportation -Warehousing -Inventory Control -Purchasing (Many opt for the hand-to-mouth option, placing small orders frequently. This makes the lead time faster, the time between customers order to delivery). Tools for Operations Process Control
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