Ch10 Flashcards
service operations
production activities that yield tangible and intangible service products (entertainment, education, transportation, and food preparation etc)
goods production
production activities that yield tangible products (books, electronics, etc)
difference btwn production and operations
productions historically associated with manufacturing, operations includes both service and goods production
utility
power of a product to satisfy a human want; smthg of value
time utility
quality of a product that satisfies a human want because of the time at which it is made available (Christmas ornaments ex.)
place utility
quality of a product that satisfies a human want because of where it is made available
ownership (possession) utility
quality of a product that satisfies a human want during its consumption or use (consumers take pleasure in owning)
form utility
quality of a product that satisfies a human want because of its form; requires raw materials to be transformed into a finished products (ornaments are made from glass, plastic, etc)
operations (or production) management
set of methods and technologies used in the production of a good or a service
production managers
managers responsible for ensuring that operations processes create value and provide benefits
4 ways service operations are more complicated than goods production
- interacting with consumers
- intangible and unstorable nature of some services
- customer’s presence in the process
- service quality considerations
operations process
set of methods and technologies used in the production of a good or a service
types of transformation technologies
chemical process (chemically altering raw materials) fabrication ' (mechanically alters the shape or form of a product) assembly " (puts together various components) transport " (goods are moved from one location to another) clerical " (combining data on employee absences and machine breakdowns into a productivity report)
analytic process
production process in which resources are broken down into their component parts
synthetic process
any production process in which resources are combined
high-contact system
system in which the service cannot be provided without the customer being physically in the system (ex. transit)
low-contact system
system in which the service can be provided without the customer being physically in the system (ex. shoveling snow)
operations capability (production capability)
the activity or process that production must do especially well and with high proficiency
forecast
estimate of future demand for both new and existing products
capacity
amount of a good that a firm can produce under normal working conditions
five categories of operations planning
capacity, location, layout, quality, and methods planning
capacity planning
ensuring that a firm’s capacity is just slightly over the normal demand for the product
- low-contact system: capacity should be at the level of average demand
- high-contact system: capacity should be set to meet peak demand
location planning
- in goods-producing operations – influenced by proximity to raw materials and markets, availability of labour, energy and transportation costs, local regulations/taxes, and community living conditions
- low-contact services can be located near resource supplies, labour, or transportation outlets
- high-contact services must locate near customers
layout planning
- layout of machinery, equipment, and supplies
- in a facility that makes physical goods, layout must be planned for three types of space: actual work stations, storage and maintenance, and support facilities (offices, restrooms, etc)
process layout
way of organizing production activities such that equipment and ppl are grouped together according to their function
cellular layout
used to produce goods when families of products can follow similar flow paths
product layout
way of organizing production activities so that equipment and ppl are set up to produce only one type of good
assembly line
type of product layout in which a partially finished product moves through a plant on a conveyor belt or other equipment
lean manufacturing
system designed for smooth production flows that avoid inefficiencies, eliminate unnecessary inventories, and continuosly improve production processes
flexible manufacturing system (fms)
production system that allows a single factory to produce small batches of different goods on the same production line
soft manufacturing
emphasizes computer software and computer networks instead of production machines
movable factory
purchasing relatively modern production equipment and transporting it to another location to create a new manufacturing plant, typically in a developing country
methods improvement in goods
manager creates diagram called the process flow chart, which identifies the sequence of production activities, mvts of materials, and work performed at each stage
- flow is then analyzed to identify wasteful activities, delays, and inefficiencies
improvements in services
- low-contact services, similar to methods improvement in goods
- high-contact services – steps in the process must be analyzed to see where improvements can be made
master production schedule
schedule showing which products will be made, when production will take place, and what resources will be used
tools for scheduling
gantt and PERT charts
Gantt chart
scheduling tol that diagrams steps to be performed and specifies the time reuired to complete each step
PERT chart
production schedule specifying the sequence and critical path for performing the steps in a project
operations control
managers monitor production performance by comparing results with plans and schedules
follow-up
checking to ensure that decisions are being implemented
materials management
planning, organizing, and controlling the flow of materials from purchase through distribution of finished goods
- five major areas: transportation (transporting resources to companies and products to buyers), warehousing, (storage of materials and finished goods), inventory control (receiving, storing, handling, and counting of raw materials, partly=finished goods, and finished goods), supplier selection (finding suppliers), purchasing (acquiring raw materials and services)
standardization
using standard and uniform components in the production process
just-in-time (JIT) production systems
method of inventory control in which materials are acquired and put into production just as they are needed
material requirements planning (mrp)
method of inventory control in which a computerized bill of materials is used to estimate production needs, so that resources are acquired and put into production only as needed
bill of materials
production-control tool that specifies the necessary ingredients of a product, the order in which they should be combined, and how many of each are needed to make one batch
quality control
management of the production process so as to manufacture gods or supply services that meet specific quality standards
quality
product’s fitness for use in terms of offering the features that consumers want
labour producitivity
partial productivity ratio calculated by dividng gross domestic product by total number of workers
tools for quality assurance
competitive product analysis, value-added analysis, statistical process control, etc
competitive product analysis
process by which a company analyzes a competitor’s products to identify desirable improvement
value-added analysis
evaluation of all work activities, material flows, and paperwork to determine the value they add for customers
statistical process control
statistical analysis techniques that allow managers to analyze variations in production data and to detect when adjustments needed to create products with high-quality reliability
process variation
any change in employees, materials, work methods, or equipment that affects output quality
ISO 9000
certification program attesting to the fact that a factory, a lab, or an office has met the quality management requirements set by the International Organization for Standardization
business process re-engineering
redesigning of business processes to improve perfomrnace, quality, and productivity
supply chain
flow of info, materials, and services that start with raw materials suppliers and continues thru other stages in the operations process until product reaches customer
