CH10 - Operations Management, Productivity, and Quality

Question 1

4 types of utility

Answer 1

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

Question 2

operations management def

Answer 2

the systematic direction and control of the processes that transform resources into finished goods and services

Question 3

difference between service and manufacturing operations

Answer 3

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

Question 4

4 ways service operations are more complicated than goods production

Answer 4

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

Question 5

operations process def

Answer 5

set of methods and technologies used in the production of a good or a service

Question 6

how goods-producing process are differentiated

Answer 6

the kind of transformation technology used and whether the operations process combines resources or breaks them into component parts

Question 7

Types of Transformation Technologies

Answer 7

• 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

Question 8

Analytic vs. Synthetic Processes

Answer 8

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

Question 9

how to classify service-producing processes

Answer 9

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)

Question 10

the 5 categories of operations planning

Answer 10

capacity, location, layout, quality, and methods planning

Question 11

capacity planning def

Answer 11

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

Question 12

location planning def

Answer 12

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

Question 13

layout planning def + 3 main layouts

Answer 13

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.

Question 14

process (type) layout def

Answer 14

(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

Question 15

product layout def

Answer 15

(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.

Question 16

fixed position layout

Answer 16

a way of organizing production that takes labour, equipment, materials, and other resources to the location where work is to be done, ex. plumbers

Question 17

operations scheduling def and the 4 different kinds of schedules

Answer 17

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

Question 18

Operations control def

Answer 18

monitor production performance by comparing results with detailed plans and schedules, if not up to par -> corrective action

Question 19

Materials Management

Answer 19

Planning, organizing, and controlling the flow of materials

Question 20

Lean and just-in-time production systems

Answer 20

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

Question 21

Total quality management

Answer 21

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

Question 22

Internal and external failures

Answer 22

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

Question 23

internal and external benchmarking

Answer 23

a company compares its current performance against its own past performance (internal benchmarking) or against the performance of its competitors (external benchmarking

Question 24

ISO certification meaning

Answer 24

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

Question 25

supply chain def

Answer 25

the flow of information, materials, and services that starts with raw material suppliers and continues by adding value through other stages in the network of firms until the product reaches the end customer

Question 26

outsourcing def

Answer 26

strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials or services. The decision to outsource expands supply chains

Question 27

Lean vs Agile

Answer 27

Lean : rooted in manufacturing, way of thinking about creating needed value with fewer resources and less waste, a practice consisting of continuous experimentation toward achieving perfect value
with zero waste. Lean thinking and practice occur together.
Agile : rooted in software development, Iterative development: get an early prototype of a new product or service out into customers’ hands as
quickly as possible; capture feedback and iterate via quick cycles, to refine product/service over time.