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Chapter 1&2

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Management (MGT)
Chris Bovaird

MGTA04Introduction to Management IIBusiness Volume 2Chapter 1Producing Goods and Services Pg 628Service OperationsProduction activities that yield intangible servicesEx Entertainment transportation and educationGoods ProductionProduction activities that yield tangible products Ex Radios newspaper buses and textbooks Servicesector managers focus less on equipment and technology than on the human element in operationsSuccess or failure may depend on providercustomer contact Products provide business with both economic results profits wages goods purchased from other companies and noneconomic results new technology innovations pollution Since the term production has historically been associated with manufacturing it has been replaced in recent years by operations which reflects both services and goods productionGrowth of Global OperationsMany countries have recently joined the global competition that has reshaped production into a fasterpaced more complex business activity Factories bear little resemblance to its counterpart of a decade ago smoke grease and danger have been replaced in many companies Instead of needing to maintain continuous mass production factories with online manufacturing machines can log on to the Internet adjust their own settings and make minor decisions without human helpOperations Product ManagementThe systematic direction and control of the processes that transform resources into finished goods and services Production managers are ultimately responsible for creating utility for customersProduction ManagersManagers responsible for ensuring that operations processes create value and provide benefits Some examples of different types of production management include resources land capital human resources and material transformation activities and products or services Operation ProcessA set of methods and technologies used in the production of a good or serviceDescriptions of goods accord to the kind of transformation technology they require or according to whether their operations process combine resources or breaks them into component parts Description of services accord to the extent of customer contact required All goodsmanufacturing processes can be classified in 2 different ways type of transformation technology that transforms raw materials into finished goods and analytic or synthetic nature of the transformation process1GoodsProducing ProcessesTypes of Transformation TechnologyManufacturers use the following 7 types of transformation processes to turn raw materials into finished goodsChemical Processes raw materials are chemically altered Ex Aluminum steel fertilizer petroleum and paintFabrication Process mechanically altered the basic shape or form of a product Fabrication occurs in the metal forming woodworking and textileAssembly Process various components are put together Ex Electronics appliances and automotivesTransport Processes goods acquire place utility by being moved from one location to anotherEx Trucks routinely move bicycles from manufacturing plants to consumers through warehouses and discount storesClerical Processes transform information Ex Combining data on employee absences and breaking it down into productivity report and compiling inventory reports at a retail outletAnalytic ProcessAny production process in which resources are broken down It breaks down the basic resources into components Ex Alcan manufactures aluminum by extracting it from an ore called bauxiteSynthetic ProcessAny production process in which resources are combined It combines raw materials to produce a finished product such as fertilizer or plantServiceProducing Processes Services are classified according to the extent of customer contactHighContact SystemA system in which the service cannot be provided without the customer being physically in the system Ex Transit SystemLowContact SystemA system in which the service can be provided without the customer being physically in the system Ex Lawn care servicesDifferences between Service and Manufacturing Operations In service productions raw materials or inputs are people who choose among sellers because they have either unsatisfied needs or possessions for which they require some form of care or alterationIn service operations finished products or outputs are people with needs met and possessions servicedOne obvious difference is that goods are produced and services are performed2
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