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MGTA02H3 (363)
Chapter 1

Chapter 1-MGTA04

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Department
Management (MGT)
Course
MGTA02H3
Professor
Chris Bovaird
Semester
Winter

Description
Chapter 1-Producing Goods and Services  successful recall o measured by proportion of products that are returned o if there is a risk to children, less than 90% return within 3 months is considered a failure  service operations o production activities that yield intangible services  goods production o production activities that yield tangible products  production o historically referred to making physical goods o today, means services as well  service sector o focuses more on human element in operations, rather than technology o usually has more customer involvement than producing goods  operations management o the control of processes that transform resources into finished goods and services  production managers o managers responsible for ensuring that operations processes create value and provide benefits Operations Processes  operations process o set of methods and technologies used in the production of a good or service Goods-Producing Processes can be classified in 2 ways: type of transformation technology & analytic or synthetic nature of transformation process  types of transformation technology o chemical  chemically altering raw materials o fabrication  mechanically altering shape of a product o assembly  putting together various components e.g. electronics, automotive o transport  moving from one location to the other (so that they can be used) o clerical  combining data on employee absences and etc.  analytic vs. synthetic processes (the way that resources are converted into finished goods)  o analytic process  breaks down resources into components e.g. breaking down ore into aluminum o synthetic process  combines raw materials to produce finished product e.g. paint Service-Producing Processes  high-contact system  o system where the service cannot be provided unless the customer is physically in the system  low-contact system o system where the service can be provided without the customer being physically present e.g. lawn care, bank cheque-processing Differences between Service and Manufacturing Operations  Focus on performance o goods are produced, while services are performed o needs to have a customer-oriented performance  Focus on process and outcome o while manufacturing only has to focus on the oucome, services focus on transformation and outcome  Focus on service characteristics o service products have 3 characteristics o intangibility  intantgible value e.g. pleasure, satisfaction or feeling of safety  some serices can provide tangible elemnts as well e.g. attorney drafts will o customization  services are customized o unstorability  cannot be produced ahead of time and stored  Focus on customer-service link o since the cx is often part of the operations process itself, they can affect it o e.g. location of service, hours of operation etc.  Focus on service quality considerations o it is possible for the quality of work to be good but service is poor, so need to focus on high level of service as well Operations Planning Business plan and forecasts   developed by to managers  long-range production plans are made based on forcasts of future demand  Long-range operations plan  capacity  location  layout  quality  methods Capacity  depends on # of employes and size of facilities  the amount of a product that a firm can produce under normal working conditions  Capacity Planning for Goods o needs to slightly exceed normal demand  Capacity Planning for Services o low-contact processes  capacity needs to be at average demand o high-contact processes  needs to be able to meet capacity at peak demand e.g. grocery stores have more cash registers than they use, but open them at peak times Location  Location for goods o influenced by proximity to raw materials and markets, availability of labour, transportation costs, locla and provincial regulations  Location for services o low contact  influenced by resource supplies, labour, cx's, transportation o high contact  ust be located near the customer Layout  layout for goods o must be planned for 3 different types of spaces  productive facilities  non-productive facilities e.g. storage  support facilities e.g. offices, parking lots o process layouts  equipment and people are grouped according to function e.g. part for sawing, part for painting etc.  con: when there is a large varity of products, congestion  used in machine shops, bakeries, dry cleaning places o cellular layouts  used when a family of products has the same flow path e.g. flow path only for pockets, though each pocket is different, it has the same production steps  pro: less machine adjustment, less material handling and transit time  con: duplication of equipment o product layouts  equipment set up to produce only one type of product  often uses assembly lines (partically finished product moves step by step through plant)  pro: efficient for producing large volumes of product quickly  because work skill is built into machine, needing only unskilled labour  con: ha
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