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Canada (158,221)
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Chapter 16

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McMaster University
Rita Cossa

Chapter 16 Research and development - Work directed toward the innovation, introduction, and improvement of products and processes In the Survey of Innovation conducted by Stats Can, respondents indicated that the three most important objectives of innovation are to improve product quality, to increase production capacity, and to extend product range. It continues to elaborate by stating that, through innovation, new products are introduced in the market, new production processes are developed and introduced, and organizational changes are made. As you may note, four of the top 10 spenders were organizations that are part of the communications/telecommunications equipment and aerospace industries. Over the previous two decades, foreign manufacturers captured huge chunks of the North American market for basic products such as steel, cement, machinery, and farm equipment using the latest in production techniques. Canadian manufacturers have emphasized the following: - Focusing on customers - Maintaining close relationships with suppliers and other companies to satisfy customer needs - Practising continuous improvement - Focusing on quality - Saving on costs through site selection - Relying on the Internet to unite companies - Adopting production techniques such as enterprise resource planning, computer integrated manufacturing, flexible manufacturing, and lean manufacturing Manufacturers perform 75% of private-sector R&D. Production - The creation of finished goods and services using the factors of production: land, labour, capital, entrepreneurship, and knowledge - Has historically been associated with manufacturing, but the nature of business has changed significantly in the last 20 years or so The service sector has grown dramatically, and the manufacturing sector has not grown much at all. Production management - The term used to describe all of the activities that managers do to help their firms create goods The term production often has been replaced by operations to reflect both goods and services production. Operations management - A specialized area in management that converts or transforms resources (including human resources into goods and services) It includes inventory management, quality control, production scheduling, follow-up services, and more. Another example of the growing importance of services is in the area of corporate computing. Operations management face issues such as facility location, facility layout, and quality control. Facility location - The process of selecting a geographic location for a company’s operations - In keeping with the need to focus on customers, one strategy in facility location is to find a site that makes it easy for consumers to access the company’s service and to maintain a dialogue about their needs One of the most common reasons for a business move is the availability of inexpensive labour or the right kind of skilled labour. Low-cost labour is one reason why some firms are moving to Malaysia, Mexico, and other countries with low wage rates. Inexpensive resources are another major reason for moving production facilities. Companies usually need water, electricity, wood, coal, and other basic resources. Another way to work closely with suppliers to satisfy your customers’ needs is to locate your production facilities near supplier facilities. That cuts the cost of distribution and makes communication easier. Businesses also study the quality of life for workers and managers. Facility location has become a critical issue in operations management. Outsourcing goods and services has become a hot practice in North America. Software development, call-centre jobs, and back-office jobs have been moving to developing countries for some time. According to the Canadian Vehicle Manufacturers’Association, the auto sector is Canada’s biggest contributor to manufacturing GDP and its largest manufacturing employer, employing one out of every seven Canadians. To potential investors, Canada offers cost advantages due to our public Medicare program and, until a few years ago, a low currency. A major goal of the Canadian Automotive Partnership Council (CAPC) is to improve the future of the assembly industry. The Council has acknowledged tax cuts and provincial government support for investment in environmental research as important to the survival of this industry in Canada. Facility layout - The physical arrangement of resources (including people) in the production process - The idea is to have offices, machines, storage areas, and other items in the best possible position to enable workers to produce to produce goods and provide services for customers Services are becoming more and more customer oriented in how they design their stores and their Internet services. Many companies are moving from an assembly line layout, in which workers do only a few tasks at a time, to a modular layout, in which teams of workers combine to produce more complex units of the final product. A process layout is one in which similar equipment and functions are grouped together. When working on a major project, such as bridge or an airplane, companies use a fixed-position layout that 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 Products were completed and then tested. This resulted in several problems: 1. There was a need to inspect other people’s work. 2. If an error was found, someone would have to correct the mistake or scarp the product. 3. If the customer found the mistake, he or she might be dissatisfied and might even buy from someone else thereafter. Companies have turn to the use of modern quality control standard, such as six sigma. Six sigma quality - A quality measure that allows only 3.4 defects per million events - Detects potential problems to prevent their occurance Statistical quality control (SQC) - The process that some managers use to continually monitor all phrases of the production process to ensure that quality is being built into the product from the beginning Statistical process control (SPC) - The process that taking statistical samples of product components at each stage of the production process and plotting those results on a graph The National Quality Institute (NQI) an independent, Canadian, not-for-profit organizations, is the leading authority in Canada on workplace excellence based on quality system and healthy workplace criteria. The Canada Awards for Excellence (CAE) are presented annually to private, public, and not-for-profit organizations that have displayed outstanding performance in the areas of quality and healthy organizations. The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies from more than 140 countries that set the global measures for the quality of individual products. ISO is a non-governmental organization established in 1974 to promote the development of world standards to facilitate the international exchange of goods and services. ISO 9000 - The common name given to quality management and assurance standards - The standards require that a company must determine what customer needs are, including regulatory and legal requirements The European Union is demanding that companies that want to do business w
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