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Canada (158,217)
Commerce (1,634)
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Chapter 16

Chapter 16 notes

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McMaster University
Rita Cossa

Chapter 16 – Producing World Class Goods and Services (Operations)  Canada Today - Canada is a large industrial country with many industries (i.e. Forest products, aluminum, automotive, aircraft, oil and natural gas, metals and minerals – thousands of components and natural resources are produced/processed in Canada) - Canada is facing many challenges to remain a competitive industrial country - Inadequate improvement in productivity; competition from US, Japan, Germany, India, China, etc. ; inadequate education and retraining programs; our “branch plant economy” (other countries build plants in Canada, profits return to the foreign parent companies); not enough money in R&D  Research and Development - Defined as: work directly toward the innovation, introduction and improvement of products and processes - Technology: know-how, knowing how to make and use tools for the job - Innovation: new product or process that can be purchased. An idea may lead to innovation, but not until it is commercialized - Technology know how can turn to innovation - Three most important objectives: 1. improve product quality 2. increase production capacity 3. extend product range  Canada’s Evolving Manufacturing and Services Base - Canadian manufacturers emphasized the following to regain a competitive edge: 1. Focusing on customers 2. Maintaining close relationships with suppliers and other companies to satisfy customer needs 3. Practising continuous improvement 4. Focusing on quality 5. Saving on costs through site selection 6. Relying on the Internet to unite companies 7. Adopting production techniques such as enterprise resource planning, computer-integrated manufacturing, flexible manufacturing, and lean manufacturing - Manufacturing employs 7% of Canadians, performs 75% of private sector R&D - Increasing use of advanced production technologies at an average annual rate of more than 20% over the last several years - Production: the creation of finished goods and services using the factors of production (land, labour, capital, entrepreneurship, and knowledge) - Production management: describe all the activities that managers do to help their firms create goods - Operations management: a specialized area in management that converts or transforms resources into goods and services - Includes: 1. Inventory management 2. Quality control 3. Production scheduling 4. Follow-up services - Manufacturers have turned from manufacturing to a customer orientation and service perspective (ex. IBM, Ford)  Operations Management Planning - Facility location: process of selecting a geographic location for a company’s operations - Factors include easy accessibility to company services, labour costs, availability to resources, access to transportation, proximity to suppliers, quality of life, lower cost of living, ability to train local workforce - Outsourcing is common trend, to get to the experts at a lower cost - Auto industry is Canada’s biggest contributor to manufacturing GDP - Facility layout: the physical arrangement of resources (including people) in the production process - Assembly line layout: workers do only a few tasks at a time - Modular layout: teams of workers combine to produce more complex units of the final product - Process layout: similar equipment and functions are grouped together - Fixed position layout: allows workers to congregate around the product to be completed - Quality: consistently producing what the customer wants while reducing errors before and after delivery to the customer - Quality control once was done at the end of a production line - Problems of this were: 1. Need to inspect people’s work, using extra resources 2. If error was found some would have to correct the mistake or scrap the product 3. If a customer spotted an error, they might be dissatisfied and might buy from someone else after - Quality is not an outcome, it is an never-ending process of continually improving what a company produces - Quality control should be part of the operations management planning process - Six sigma quality: a quality measure that allows only 3.4 defects per million events - Statistical quality control (SQC): process that some managers use to continually monitor all phases of the production process to ensure that quality is being built into the product from the beginning - Statistical process control (SPC): the process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards - Allows mistakes to be caught earlier in the process - Deming Cycle: PDCA ( plan, do, check, act) - National Quality Institution: leading authority in Canada on workplace excellence based on quality systems and healthy workplace criteria - Canada Awards for Excellence awarded to organizations that displayed outstanding performance in regards to quality and healthy workplaces - ISO 9000: quality management and assurance standards - ISO 14000: best practices for managing organizations impact on environment - ISO 26000: guidance on social responsibility - ISO started out to see if a company’s process was under control, if the products were consistent (Consistency is different than quality) - Logistics: activities focusing on getting the right amount of the right product or services to the right place at the right time at the lowest possible costs - Supply chain: sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users - Supply chain man
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