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Canada (158,054)
Commerce (1,633)
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Chapter 16

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McMaster University
Rita Cossa

Producing World-Class Goods & Service in text chapter 10 Canada Today  Largest producers of forest products  Challenges: o Constant and restless change and dislocation, technologies and increasing global competition force companies to respond quickly to these challenges o Inadequate education and retraining programs for our workforce o “branch plant economy” whereby many subsidiaries are owned by foreign parent companies and profits are mostly returned to these foreign-based companies rather than re-invested in Canada o not enough money spent on research and development Research and Development  research and development o work directed toward the innovation, introduction and improvement of products and processes  comparing companies competitiveness  innovation & technology  3 most important objectives of innovation are to improve product quality, to increase production capacity, and to extend product range  through innovation  new product are introduced in the market, new production processes are developed and introduced, and organizational changes are made  through adoption of newer technologies  increase production capabilities, improve their productivity, and expand their lines of new g/s Canada’s Evolving Manufacturing and Services Base  to regain a competitive edge, Canadian manufacturers: o focus on customers o maintain close relationships with suppliers and other companies to satisfy customer needs o practice continuous improvement o focus on quality o saving costs through site selection o relying on the internet to unite companies o adopting production techniques  manufacturing sector employs 7% of Canada’s working population From Production to Operations Management  production o creation of finished goods and services using the factors of production: land, labour, capital, entrepreneurship & knowledge o been associated with manufacturing  production management o describes all of the activities that mangers do to help their firms create goods  operations management o specialized area in management that converts or transforms resources (even human resources) into g/s o does this through the processes of fabrication and assembly ex. school  operations management takes inputs (info, profs, supplies) and creates services that transform students into educated people  process = education Manufacturers Turn a Customer Orientation and Services for Profit  companies that have prospered and grown  expanded operations management out of the factory and moved it closer to the customer, providing services (customer manufacturing, credit, repair, etc)  growing importance of services  corporate computing  operations management has become more focused on services, because by redirecting corporate thinking towards satisfying customer needs better than the competition, they retain their customers Operations Management Planning  involves many issues  facility location, layout, quality control Facility Location  facility location o the process of selecting a geographic location for a company’s operations  find a site that makes it easy for consumers to access the company’s service and to maintain dialogue about their needs  to beat internet stores  have to choose good locations Facility Location for Manufacturers  issue: shift of manufacturing organizations from one city to another o unemployment, economic growth where it moves  issues that influence site selection: o labour costs (main reason)  availability of inexpensive labour or the right kind of skilled labour o availability of resources (labour)  inexpensive resources o access to transportation that can reduce time to market o proximity to suppliers o proximity to customers o low crime rates o quality of life for employees o lower cost of living o ability to train/re-train the local workforce Outsourcing  letting outside companies service them by doing that they are experts at o best quality products at the lowest possible costs  software development, call-center jobs, back-office jobs, accounting, financial analysis  cost saving  being used as a strategic told for focusing scarce human capital on core business activities  Canada  one of the top IT outsourcing destinations Canada’s Auto Industry  Critical to Canada’s manufacturing economy  Biggest contributor to GDP and its largest manufacturing employer  Goal  to improve the future of the assembly industry Taking Operations Management to the Internet  Creating relationships with supplier over the internet, so that operations management is becoming an inter-firm process in which companies work together to design, produce, and ship products to customers  Enable companies to compete more effectively in the future  Effect on operations management as hey adjust one-firm system to an inter- firm environment, and from a relatively stable environment to one that is constantly changing and evolving  Linking of firms  supply chain management Facility Location in the Future  Development in info technology  more flexibility in choosing locations while staying competitive  Telecommuting (working from home via computer)  Companies that no longer need to locate near sources of labour  can move to less expensive land and better quality of life  Relocation incentive  tax situation and degree of gov’t support Facility Layout  Facility layout o The physical arrangement of resources ((even people) in the production process  Have things in the best position to enable workers to produce goods and provide services  Depends on the processes that are to be performed o Services  Designed to help customers find and buy things o Manufacturing plants  Possible costs savings  Moving from assembly line layout  modular layout (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 Control  quality o consistently producing what the customer wants while reducing errors before and after delivery to the customer  when products were completed then tested  problems: 1. there was a need to inspect other peoples work  extra people & resources 2. if an error was found, someone would have to correct the mistake or scrap the product  costly 3. if the customer found the mistake,  dissatisfied and might buy from somewhere else  quality control should be part of operations management, not just at the end  modern quality controls  six sigma quality o a quality measure that allows only 3.4 defects per million events o detects potential problems to prevent their occurrence  statistical quality control o process that some mangers 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 o process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph o any variances from quality standards are recognized and can be corrected if beyond the set standards  both cont
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