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Management (MGT)
Bill Mc Conkey

Part One managing operations and Information Producing goods and services 9/14/2013 5:02:00 PM  Service operations: production activities that yield intangible services  Goods production: production activities that yield tangible products What does production mean today?  Production means making physical goods and services  The growth of global operations. Contamination. Creating value throuhg production  Products provide business with economic results (profie/wage/goods purchased from others), and non economic result (new technology/innovation/pollution).  Operations (production) management: systematic direction and control of processes that transform resources into finished goods and services.  Production managers: managers responsible for ensuring that operations processes create value and provide benefit. o Farmers are production manager because they convert soil into tobacco and employ workers. o Production manager: resource+transformaiton activites + products of services  Operations processes: a set of methods/technologies used in produciton of good/service o Transfmoration technology: require combine resource/break resource. o Customer contact: service. o Goods producing processes. All goods are classified by: 1) type of transformation technology they transform raw material into finished goods. 2) analytic/synthetic nature of transformation process. o 1) types of transformaiton technology: turn raw materials into good  chemical process; raw material chemically altered. E.g al, steel, fertilizer  fabrication process: mechanically alter shape of product. E.g woodworking/textile industry  assembly process: put together component. E.g electronic/appliance  transport process: moving goods. E.g moving truck  clerical process: transform information. E.g combing data/ machine breakdown into a report o 2) analytic VS synthetic process.  Analytic process: production process in which resources are broken down. E.g extracting ore  Synthetic process: production process in which resource combined. E.g fertilizer or paint. o Service-producing processes. Customer contact: when service is provided without customer being part of production system.  High contact system: system where service can’t be provided without customer being physically in system. E.g transit  Low contact processes: system where service can be provided withotu customer being physically there. E.g lawn care service/car repair/bank  Differences between service and manufacturing operations. o Service and manufacture operation transform raw into goods.  Service: not glass/steel: people who choose and if customer needs met o Focus on performance.  1)process and outcome  transformation process and outcome. E.g pipe person fixes pipe and calms person down.  2) focus on service characteristics: intanbility, customization, unstorability  intangibility: customer satisfaction with service hair cut.  Customization: the service each person gets personally. The differnet hair cut you need  Unstorability: service that cannot be produced ahead of time. House cleaning/transportation/childcare. o Focus on customer-service link. Hours of operation, available service, number of employee to meet customer. o Focus on service quality considerations. Operations planning. Forecast: estimates of future demand for new/existing products. Main elements of operation palanning: capacity, location, layout, quality, methods planning 1. Capacity planning  Capacity: the amount of goods that a firm can produce under normal working condition. Number of employee, and size of facilities.  Capacity planning for producing goods.  Capacity planning for producing services. in low contact process, managers set capacity at average demand. E.g one person deals with 10 people. High contact process: manager make peak demand capacity: more cashier in supermarket in weekend. 2. location planning  location planning for producing goods. Location decision influnce by: proximity of raw material/market, availabile labour, energy/transportation cost, local/provincial regulation/tax, community living condition.  Location planning for producing services. low contact service: service can be near resource supplies, labour, customers, transportation outlet. High contact services: locate near customers who are part of system.e.g mcdonald moving into hospital/shopping malls. 3. Layout planning:supplies, company respond to customer, if match competitors  Layout planning for producing goods: 3 types i. Productive facilities: workstations/equipment for transforming raw material ii. Non productive facilities: storage and maintanence area iii. Support facilities: office, restroom, café.  Other layouts: process, celluar, product layouts i. Process layout: organizing production activities such that equipment/people are grouped together by function. E.g one part for sawing wood, one part for painting ii. Cellular layout: used to produce goods when products can follow similar flow paths. Designing pockets. They are all packaged the same. Advantage: similar products means less machine adjustment, equipment set up, flow distance shorter, more order. Disadvantgae: duplicates iii. Product layout: way of organizing production activites such that equipments and people set up to produce only one type of good. Assembly line: product layout where particall finished product moves through plant or other equipment. E.g automobile, TV. Advantage: simple tasks for unskilled worker. Disadvantage: heavy investiment on equipment, bored worker, absence of one worker can stop process.  Layout planning for producing services. i. Low contact system: mail system: product layout. Photocopy: process layout. ii. High contact system. Cate: layout and service. Quality planning Method planning  Methods improvement: operation system that reduce waste, inefficiency, poor performance.  Methods improvemnet in goods. o Process flow chart: identifies sequence of production acitivy, movment mateirial, work performance.  Methods improvement in services. o Service flow analysis: analysis that shows the process fows that are necessary to provide service to customers; allows manager to determine which processes are necessary. o Designing to control employee discretion in services. mcdonald ready made burger o Design for customer contact in services: in high contact service: exchange money/information=clear out customer contact. E.g dentist always clean after patient to prevent transmission. Operations scheduling: timetable for acquiring resource for production  Scheduling goods operations. o Master production schedule: schedule showing which products will be produce, when production occurs, what resource needed.  Scheduling service operations o Low contact service: appoitnments. First come, first servce o High contact service: emergency hospital, not even appointment will help.  Tools for scheduing: for rennovation/relocating o Gantt chart: production schedule diagram the step and time of project.bar chart. Used for delayed appointment o Pert chart: program evaluation and review technique: production scheule specify sequence and step. Star chart. 1- 2-3-4. Start to end. Operational control: managers monitor production performance by comparing results with plan and scheules.  Follow up: checking to see production decision done.  Operational control include: materials managemnet/production process control. Both ensure schedule are met and production done. Materials management: planning, organizing, controlling flow of materials from purchase through distribution of goods. Plans flow of materials. Logistic.  Standardization: using standar/uniform component in production process  material management. E.g law firms file between contracts, agreement, wills.  4 area in material management. o 1. Transportation: means of tranpsorting resource to company and finished goods to buyer o 2. Warehousing: storage of incoming materials for production and finished goods for physical distribution to customers o 3. inventory control: receiving storing, handling, counting all raw materials. Ensure material inventories meet production schedule o 4. Purchasing; acquisition of all raw material/service that company needs ot produce products.  Purchasing process o Forward buying: bought many mateirlas for long term need to bring discount. o Holding costs: costs of keeping extra supplies on hand. E.g real costs of storage, handling, insurance, opportunity cost- earning company needs to give up because they don’t have the supply. o Hands to mouth pattern: placing small order frequently. Lead time= in purchasing conrol, gap between customer’s placement of order and seller’s shipment or product. o Supplier selection: finding and determining suppliers to buy from. 4 stages  1. Investigae possible suppliers  2. Evaluate/isolate best candidate  3. Negotiate terms of service  4. Maintain positive buyer-seller relationship. Tools for operations process control.  Controlling operations: worker training, just in time production system, material requirment planning, quality control.  Worker training: human resource, good customer service.  Just in time production system: JIT: method of inventory control in which materials acquired/put into production jst as they need it. E.g mount sinai does not store equipment: when it needs it , it orders everyday. o Disadvantage: more rush. o Advantage:save money. Increasing productivity and quality 9/14/2013 5:02:00 PM The productivity-quality connection  Productivity: measure of efficiency that compares how much is produced with resource used to produce it.  Quality: product’s fitness for use in terms of offering the features that consumers want Responding to productivity challenge.  4 factors of productivity; customers, quality, proudctivity, profit  measuring productivity: o labour productivity: partial productivity raio calculated by dividing gross domestic product by total numbers of worker. Compare country’s total output goods with resource output.  Productivity among global competitors o Factors on why nations have different productivity: tecnologies, human skills, economic policies, natural resource, tradition.  Domestic productivity: high productivity shared among workers, investor, customer. Low productivity when decrease wage, decrease profit for invester, increase prices for customer.  Manufacturing VS service productivty. Manufacturing productivity higher than service productivity. Machine replacing people. – computer mimic orchestra during performance.  Industriy productivity. Continuous casting-where you don’t’ have to wait until the steel is cooled, you can still work on it while its hot  Company productivity. High productivity=low cost=pay higher wage with worker=help buyer/seller stock for invester. Total quality management  Fishbone/ cause-effct diagram/ ishikawa diagram that helps employee investigate and track down cuases of quality problem in work area. Managing for quality  Total quality mangement: concept that emphasize that no defects are tolerable and that all employees are responsible for maintaining quality standards.= quality assurance. Make high quality stuff! o TQM strategic approach; leadership. Customer focus, inmpovement product, after sale service, internal process- accounting/dilevery/billing.  Planning for quality o Performance quality; overall quality; how well features of a product meet consumers need and how well product perform o Quality reliability: consistency of quality of product.  Organizing for quality.  Leading for quality. o Quality owndership: concept that quality belongs to each employee who creates or destroys it in producing a good/service; idea that all workers must take responsibility for quality product.  Controlling for quality. –review works of employee Process re-engineering  Business process re-engineering: redesigning of business processes to improve performance, quality, productivity. Re engineering helps improve measure of performance such as cost, quality, service, speed.  The re-engineering process. 6 steps o 1. Statements of benefits for customer and company o 2. Identify business activity that will be changed o 3. Evaluate information. Human resource to see if requirements can be met for change o 4. Diagnose current process to identify its strengths and weaknesses o 5. Create the new process design. o 6. Implement new design. Adding value through supply chains  Supply chain: flow of information, material, service that starts with raw material suppliers and continue through other state in operations process until product reaches customer. Raw materialschangeproduct for customer.  The supply chain strategy. Based on idea that members of chain worker together to gain advantage. Provide high quality in low price.  Supply chaing management: principle for looking at the chain as a whole to improve overall flow through system. E.g Dell computer allows people to share informaiton with supplier through internet.  Re engineering supply chains for better result. By lowering cost, speed up service, coordinate flow of information, process improvmenet, improve chain supply. Managing informaiton systems and Communication technology 9/14/2013 5:02:00 PM Information management: an overview  Information manager: manager responsible for activites needed to generate, analyze, disseminate information that a compnay needs to make good decisions  Information management; internal operation that arranges the firm’s information resources to support business performance and outcomes. Data VS informaiton  Data: raw facts/ figures  Information: meaningful, useful interpretation of data. Information systems: organized method of transforming data into information that can be used for decision making. (IS).  IS managers: gather dataapply technolgoy to convert data into info control flow of info so only people who need info gets info. New business technologies in the information age.  Informaiton system assist in scheuling day to day vehicle trip, innovative relationship with organization, new managemnet process, new organizational design, faster technology The exxpanding scope of information system.  Organizational system: business strategy, operating rules, business proccesses  Information system: hardware, database, software, eople, control, telecommunications. Both organization, informaiton system are related. Electronic business and communications technologies.  Electronic information technologies: EIT are Information system applications for telecommunications technoogies. o Function of EIT: provide coordination/communication within firm. Speed up transaction with other firm o Six most innovations:  fax machine-machine that quickly transmite copy of document over telephone lones.  Voicemail-receiv telephone call on computer.  Email: allow people to communicate from computer.  Electronic confercing: people to communicate from different clocations, video ) data conferncing/ videoconferencing.) .  groupware: software that connect members for email distribution, electronic meeting, storing.  Digital information services: online information  Data communication network: carry streams of digital data- electronic message, documment) through telecommunication system. E.g: o Internet: networks that offer information on business, science, government. o ISP internet service provider: commercial firms that sells connection to subscriber thorugh internet. o World wide web: universal system for storing/displaying/retrieving information. Homepage. Aircanada.ca shows canada ariplane flight  Web servers: dedicated worksatations of large computers for support website. Browser: software that enable user to access information on web. Directories: help people find content on web-yahoo. Search engines: searching webpages that does not preclassify to directory e.g just one word search. o Intranet; company’s private network accessible for employees only through a firewall.. Firewall: hardware and software security system that ensure internal computer not accessible for outsider. o Extranet: network that allows outsider access to firm’s internal informaiton. E.g seeing online for supplies. New options for organizational design: the networked enterprise.  Leaner organizations. E.g 24 hour information system. Don’t need bank tellers.  More flexible operations. Mass customization: producing many products but giving customers the choice of features they want.  Increase collaboration.  Network and virtual company. Collaborate with network system. Exhchange ideas.  Greater independence of company and workplace. Use internet to buy things from different location  Improved management processes. o Enterprise resource planning ERP: large information system for integrating all activity of company’s business unit. One large database. Check for materials ordering, packasing, scheduling. Types of information system User groups and system requirements.  4 type of user groups. Knowledge workers: employees whose job involved use of information/knowledge as raw materials of their work. E.g specialist to design new product.  Managers at different levels. o Top level manager-strategic informaiton system=economy. o mid level manager: management IS-set long goals o knowledge woker: knowledge IS=technological project o first level manager: operational IS.-oversee  functional areas and business process. each business functions: marketing, human resource, accounting, production, finance. Major systems by level.  Transaction processing system TPS: application of information processing for basic day to day business transaction.customer order, shipment, first level management. E.g POS lol.  System for knowledge workers and office applications. It support activity of knowleddge worker and clerical worker. o IS knowledge worker: system analysist and application programmers  Systems analysts and designers deal with entire computer system. IS design system and decide type of computer/links to use  System/application programmer: write software instruction. o Operations personnel/data workers. System operationals person
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