CH10 - Operations Management, Productivity, and Quality Flashcards
4 types of utility
time utility : making a product available at a time when consumers want it
place utility : making a product available in a place convenient for consumers
ownership utility : making a product that consumers can take pleasure in owning
form utility : turning raw materials into finished goods
operations management def
the systematic direction and control of the processes that transform resources into finished goods and services
difference between service and manufacturing operations
Both service and manufacturing operations transform raw materials into finished products. In service operations, however, the raw materials, or inputs, are not things like glass or steel. Rather, they are people who have either unsatisfied needs or possessions needing care or alteration. The output of service operations is not physical products, but people with needs met and possessions serviced
4 ways service operations are more complicated than goods production
1 - Interactions with consumers
2 - intangibility and unstorability -> can’t be produced ahead of time + stored for high-demand periods
3 - customer’s presence in the operations process
4 - service quality considerations : quality of work and quality of service are not necessarily the same thing
operations process def
set of methods and technologies used in the production of a good or a service
how goods-producing process are differentiated
the kind of transformation technology used and whether the operations process combines resources or breaks them into component parts
Types of Transformation Technologies
- Chemical processes : raw materials are chemically altered ex. aluminum, steel, fertilizer
- Fabrication processes : mechanically alter the basic shape or form of a product ex. metal-forming, woodworking
- Assembly processes : putting together various components ex. electronics, automotives industry
- Transport processes : goods acquire place utility by being moved from one location to another. ex. bicycles are routinely moved from manufacturing plants to consumers by trucks and through warehouses and discount stores
- Clerical processes : transform information
ex. Combining data on employee absences and machine breakdowns into a productivity report
Analytic vs. Synthetic Processes
Analytic process - breaks down basic resources into their component parts
ex. aluminum is manufactured by extracting it from an ore called bauxite
Synthetic process - combines several raw materials to produce a finished product
ex. fertilizer, paint
how to classify service-producing processes
high-contact systems : customer part of the process (transportation, dental services, hair salons)
low-contact systems : customer not physically present (gas and electric utilities, lawn-care services, auto-repair)
the 5 categories of operations planning
capacity, location, layout, quality, and methods planning
capacity planning def
capacity = amount of a product a company can produce under normal working conditions
capacity planning = deciding how many people to employ and the number and size of facilities -> ensuring that a firm’s capacity just slightly exceeds the normal demand for its product
location planning def
location decisions are influenced by proximity to raw materials and markets, availability of labour, energy and transportation costs, local regulations and taxes, and community living conditions
layout planning def + 3 main layouts
The layout of machinery, equipment, and supplies determines whether a company can respond quickly and efficiently to customer requests for more and different products and services, or whether it will find itself unable to match competitors’ production speed or convenience of service.
Three of the most widely used layouts are process, product, and fixed position.
process (type) layout def
(or custom-product layout) equipment and people are grouped according to function. This layout is well suited to make-to-order shops (or job shops) that specialize in custom work. advantage is flexibility
product layout def
(or assembly-line layout) set up to provide one type of service or to make one type of product in a fixed sequence of production steps. All units go through the same set of steps. This layout is efficient for large-volume, make-to-stock operations that mass produce many units of a product. A partially finished product moves step by step through the plant on conveyor belts or other equipment, often in a straight line, as it passes through each stage until the product is completed.
fixed position layout
a way of organizing production that takes labour, equipment, materials, and other resources to the location where work is to be done, ex. plumbers
operations scheduling def and the 4 different kinds of schedules
def - developing timetables to implement the plans
1) the master operations schedule : deciding the volume of upcoming activities over a period of months
2) detailed schedules : day-to-day activities of production
3) staff schedules : how many employees working + when
4) project schedules : coordination large-scale projects
Operations control def
monitor production performance by comparing results with detailed plans and schedules, if not up to par -> corrective action
Materials Management
Planning, organizing, and controlling the flow of materials
Lean and just-in-time production systems
Lean - smooth production flows that avoid inefficiencies, eliminate unnecessary inventories, and continuously improve production processes
Just-in-time - brings together all the needed materials and parts at the precise moment they are required for each production stage
Total quality management
all the activities necessary for getting high-quality goods and services into the marketplace. TQM emphasizes that no defects are tolerable and that employees are responsible for maintaining quality standards
Internal and external failures
internal : expenses—including the costs of overfilling boxes + sorting out bad boxes—that are incurred during production and before a bad product leaves the plant
external : bad boxes get out of the factory and reach the customer. The costs of correcting them—refunds to customers, transportation costs to return bad boxes to the factory, possible lawsuits, factory recalls—are also tabulated in a quality/cost study
internal and external benchmarking
a company compares its current performance against its own past performance (internal benchmarking) or against the performance of its competitors (external benchmarking
ISO certification meaning
certification program attesting to the fact that a factory, a laboratory, or an office has met the rigorous quality management requirements set by the International Organization for Standardization
