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MGTA02H3 (363)

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Management (MGT)
Chris Bovaird

CHAPTER 1Service operations production activities that yield intangible services 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 and services Production managers managers responsible for ensuring that operations processes create value and provide benefits Operations process A set of methods and technologies used in the production of a good or a service Types of Transformation Technology to turn raw materials into finished goodsChemical process raw materials are chemically altered Such techniques are common in the aluminum steel fertilizer petroleum and paint industriesFabrication processes mechanically alter basic shape or form of producto Occurs in the metal forming woodworking and textile industriesAssembly processes put together various componentso Common in electronics appliance automotive industriesTransport processes goods acquire place utility be being moved from one location to another o Eg trucks routinely move bicycles from manufacturing plants to consumers thru warehouses and discount storesClerical Processes transform info combining data on employee absences and machine breakdowns into a productivity report is a clerical process So is compiling inventory reports as a retail outlet Analytic process any production process in which resources are broken down Synthetic process any production process in which resources are combined Highcontact system system in which the service CANNOT be provided without customer being physically in system eg transit systems Lowcontact system system in which the service CAN be provided without the customer being physically in the system eg lawn care services Service productionthe raw materialsinputare people who choose among sellers because they have unsatisfied needs for which they require some form of care or alterationFinished productsoutputs are ppl with needs met and possessions serviced Difference between Service and Manufacturing OperationsPerformanceo service operations feature unique link between production and consumptionbetween process and income o Services are more intangible and more customized and less storable than most products o Quality considerations must be defined and managed differently in the service sectore than in manufacturing operationsProcess and Outcome o Services must focus on both the transformation process and its outcomeboth on making a pizza and on delivering it to buyerService Characteristics o Service companies transactions always reflect the fact that service products are characterized by 3 key qualities INTANGIBILITY CUSTOMIZATION and UNSTORABILITYIntangibilityOften services cannot be touched tasted smelled or seenIntangible value that customer experiences in form of pleasure satisfaction or feeling of safetySome provide tangible elements lawyer can draw up living will that you want to keep in your safe deposit box Customizationeg you expect to be examined for symptoms at doctorWhen you purchase insurance have your pet groomed or haircut you expect services to be designed for you Services are customized Unstorability Services such as rubbish collection transportation childcare and house cleaning cannot be purchased ahead of time and then stored If service is not used when it is available it is wasted Services have a high degree of unstorabilityFocus on CustomerService Link o Customers are part of the operations process itselfFocus on Service Quality Considerations oForecast estimates of future demand for both new and existing products Capacity amount of a good that a firm can produce under normal working conditionsCapacity planning for goods means ensuring that a manufacturing firms capacity slightly exceeds the normal demand for its product 3 Facilities for Producing GoodsProductive Facilities workstation for transforming raw materialsNonproductive facilities storage areaSupport facilities offices restrooms parking lots etc Process Layout a way of organizing production activities such that equipment and people are grouped together according to their function Cellular Layouts Used to produce goods when families of products can follow similar flow paths Product Layout a way of organizing production activities such that equipment and people are set up to produce only one type of goodAssembly Line type of product layout in which a partially finished product moves thru a plant on a conveyor belt or other equipment Methods improvementManagers must clearly identify every production step then work on reducing waste p inefficiency and poor performance by examining procedures on a stepbystep basis Process flow charthelpful for organizing and recording all information identifies sequence of production activities movements of materials and Service Flow analysis an analysis that shows the process flows that are necessary to provide a service to customers it allows managers to determine which processes are necessaryFail pointssince each process is a potential contributor to goodbad service analysis helps identify and isolate potential problems
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