Textbook Notes (368,317)
Canada (161,798)
MGTA02H3 (363)
Chapter 1

Chapter 1 - Producing Goods and Services.docx

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Management (MGT)
Chris Bovaird

Chapter 1: Producing Goods and Services Service Operations - Production activities that yield tangible and intangible service products Goods Production - Production activities that yield tangible products Operations (Production) Management - the systematic direction and control of the processes that transform resources into finished goods Production Managers - Managers responsible for ensuring that operations processes create value and provide benefits Operations Processes - A set of methods and technologies used in the production of a good or a service Goods-Producing Processes - all goods manufacturing processes can be classified in 2 ways: 1. Types of transformation technology - transforms raw materials into finished goods - Chemical Processes - chemically altered (aluminum, steel, fertilizer) - Fabrication Processes - mechanically alter the basic shape or form (metal forming, wood working) - Assembly Processes - put together various components (common in electronics, automotive) - Transport Processes - goods acquire place utility by being moved from one location to another - Clerical Processes - transform information (combining employee absences, and breakdowns into report) 2. Analytic Versus Synthetic Processes Analytic Processes - any production process in which resources are broken down Synthetic Processes - any production process in which resources are combined Service-Producing Processes High-Contact Processes - A system in which the service cannot be provided without the customer being physically in the system (transit system) Low-Contact - A system in which the service can be provided without the customer being physically in the system (lawn care services) Differences Between Service and Manufacturing Operations - Focus on performance - customer-oriented performance is key factor measuring the effectiveness of a service company - Focus on Process and Outcome - - Manufacturing operations focus on the outcome of production processes - Service operations are combinations of goods and services - Focus on Service Characteristics: Intangibility - intangible value that a customer experiences is pleasure, satisfaction, or feeling of safety Customization - tailored to how you need, like or want it Unstorability - the inability to be stored, such as transportation, childcare, house cleaning etc. - Focus on the Customer-Service Link - often acknowledges the customer as part of the operations process itself - meet requirements of the customer - Focus on Service Quality Considerations - quality of work and quality of service are not necessarily synonymous. Operations Planning Forecasts - Estimates of future demand for both new and existing products Capacity Planning Capacity - The amount of a good that a firm can produce under normal working conditions Capacity Planning for Producing Goods - means ensuring that a manufacturing firm's capacity slightly exceeds the normal demand for its product Capacity Planning for Producing Services - In low contact, maintaining inventory allows managers to set capacity at the level of average demand - in high contact, managers must plan capacity to meet peak demand Location Planning Location Planning for producing goods - location decisions are influenced by proximity to raw materials and markets, availability of labour, energy and transportation costs, local and provincial regulations and taxes, and community living conditions Location Planning for producing services - Low contact: can be located near resource supplies, labour, customers, or transportation outlets - High contact: they must locate near the customers Layout Planning Layout Planning for Producing Goods - 3 different types of space: - Productive facilities: workstations and equipment for transforming raw materials - Non-Productive facilities: storage and maintenance areas - Support facilities: office, restrooms, parking lots, cafeterias, and etc. Process Layout - A way of organizing production activities such that equipment and people are grouped together according to their function Cellular Layout - Used to produce goods when families of products can follow similar flow paths - advantage: similar products require less machine adjustment, equipment setup time in the cell is reduced. - disadvantage: duplication of equipment Product Layout - A way of organizing production activities such that equipment and people are set up to produce only one type of good Assembly Line - A type of product layout in which a partially finished product moves through a plant on a conveyor belt or other equipment U-Shaped production line - Production layout in which machines are placed in a narrow U shape rather than a straight line Flexible Manufacturing System (FMS) - A production system that allows a single factory to produce small batches of different goods on the same production line Soft Manufacturing - Reducing huge FMS operations to smaller, more manageable groups of machines Layout Planning for Produci
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