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Canada (162,376)
AGEC 242 (10)
Chapter 10

Chapter 10

3 Pages

Agricultural Economics
Course Code
AGEC 242
Brahm Canzer

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Chapter 10 – Production and Operations Management Production: use of resources (workers, machinery) to convert materials to finished G/S Manufacturing: making physical products from resources/raw materials Production and Operations Mgmt: oversee production process by managing people and machinery Strategic Importance of Production - When effective management, can lower firm’s cost of production, inc quality of G/S - Mass Production: manufacturing in large quantities  specialized skills, mechanization, standardization o Led to development of assembly line o Limitations and downsides: inefficient in producing small batches of different items - Flexible Production o More cost-effective for smaller runs o Generally uses  Info Tech to share details of customer orders  Programmable equipment to fill orders  Skilled people to carry out tasks to complete order o Works better when combined with lean production method o Requires lots of communication - Customer-Driven Production: o Depending on the demand of customers, the production quantity and frequency changes Production Processes - Analytical System: reduces raw material to component or parts to extract one or more products o Petroleum refining - Synthetic System: combines two or more raw materials to make finished product o Drugs, chemicals, computer chips, canned soup - Continuous Process: finished product over long period of time o Steel production  blast furnaces never completely shut down except during repairs - Intermittent Process: maybe changed or shut down frequently to produce different products o Accountants, plumbers, dentists  don’t standardize services Technology and Production process - Green Manufacturing Process o Lower energy use, less waste, little to no pollution o LEED: Leadership in Energy and Environmental Design  Voluntary certification program offered by Canada Green Building Council  Standards in energy savings, water efficiency, CO e2ission reduction - Robots: freed workers from boring or dangerous jobs o Repeats same tasks many times w/o changing movements - Computer-Aided Design (CAD): used by engineers to design parts and products o Allows to work faster and make fewer mistakes o Electronic pen to sketch 3-D designs on drafting board or computer o Computer-Aided Manufacturing (CAM)  Picks up where CAD left off, sends instructions to equipment - Flexible Manufacturing Systems (FMS): Can quickly change parts to create different product - Computer Integrated Manufacturing (CIM): Centralized computer system to integrate and control o Inc productivity, quality and equipment utilization, dec design cost Location Decision - Transportation: o Closeness to markets (for selling)  bakeries, dry cleaning o Closeness to raw materials: paper mills o Availability of transportation options - Physical Factors: o Water supply o Energy o Hazardous Wastes - Human Factors o Labour Supply o Local Zoning Regulations o Community Living Conditions: manufacturing companies must file analysis of how proposed plant will affect quality of life in surrounding areas o Taxes, insurance - Availability of employee needs - Size, skills, cost of labour - Enough space for current and future needs (expansion) - Receptiveness of community - Climate and environment to match firm’s needs and employees’ lifestyle - Government incentives Job of Production Managers - Planning Production Process: must plan so that products satisfy customers and be produced efficiently and inexpensively o Converting original product ideas into final specifications o Designing most efficient facilities to produce products o Traditional organization: each manager has specific area of authority or responsibility  Ie: purchasing, or inventory control  means competition between managers o Team-based structure: all workers responsible for their output, manager to make changes to improve quality. Avoids competition between managers
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