Chapter 10: Producing World-Class Goods & Services 2012-12-17 7:39 AM
• What are some challenges that Canada faces in its ability to remain a competitive country?
• How is innovation related to research and development?
• Explain the difference between production management and operations management.
• Can you name and define 3 functions that are common to operations management in both
the service and the manufacturing sectors?
• What are the major criteria for facility location?
• What is involved in im plementing these: six sigma, SQC, SPC, ISO 9000 and ISO 14000?
• What are 3 basic requirements of production?
• Define and differentiate the following: process manufacturing, assembly process,
continuous process, and intermittent process.
• Whats the difference bet ween materials resource planning & enterprise resource planning?
• What is just-in-time inventory control?
• How does flexible manufacturing differ from lean manufacturing?
• What are CAD, CAM, and CIM?
Learning Objective #1: Define operations management and explain what types of firms use it.
• Operations management is a specialized area in management that converts or transforms
resources (including human resources) into goods and services.
• What kinds of firms use operation managers?
o Firms in both the manufacturing and the service sectors us e operations managers.
Learning Objective #2: Describe the operations management planning issues involved in both the
manufacturing and the service sectors, including facility location, facility layout, and quality control.
• Functions involved in both the manufacturing and the service sectors include facility
location, facility layout, and quality control.
• What is facility location and how does it differ from facility layout?
o Facility location is the process of selecting a geographic location for ac company’s
operations. Facility layout is the physical arrangement of resources (including
people) to produce goods and services effectively and efficiently.
• Why is facility loc ation so important, and what criteria are used to evaluate different sites?
o The very survival of manufacturing depends on its ability to remain competitive,
and that means either making inputs less costly (reducing costs of labour and
land), or increasing from present inputs (increasing productivity). Labour costs
and land costs are 2 major criteria for selecting the right sites. Other criteria
include whether: 1) resources are plentiful and inexpensive, 2) skilled workers are
available or are trainable, 3) taxes are low and the local government offers
support, 4) energy and water are availab le, 5) transportation costs are low, and 6)
the quality of life and education are high.
• What are the latest quality control concepts?
o Six sigma quality (just 3.4 defects per million products) detects potential problems
before they occur. Statistical qualit y control (SQC) is the process that some
managers use to continually monitor al processes in production to ensure that
quality is being built into the product from the beginning. Statis tical process
control (SPC) is the process of taking statistical sample s of product components at
each stage of the production process and plotting those results on a graph. Any
variances from quality standards are recognized and can be corrected.
• What quality standards do firms use in Canada?
o International standards that Canadian firms strive to meet include ISO 9004:2000
(ISO 9000) and ISO 14000. The first is a European standard for quality and the
second is a collection of the best practices for managing an organization’s impact
on the environment.
Learning Objective #3: Discuss the problem of measuring productivity in the service sector, and tell
how technology is leading to productivity gains in service companies.