Chapter 10: Management Operations Part 1 Flashcards
Production
The process and methods that transform tangible and intangible inputs into goods and services
Production Management System
- Application of management principles to the production function in a factory
- Involves planning, organising, leading and controlling the entire production process
Purpose of Product Management System:
Achieve business goal
- Helps businesses to produce products that meets customer’s need at an affordable price with minimised cost
- Increases consumer demand, therefore increases sales and profit
Purpose of Product Management System:
Build positive public image
- People will be more satisfied and happy when products are not faulty or have any defects.
- Create free advertisement through word of mouth
- Builds good reputations and public image in the long run
Features of Product Development:
Disruptive innovation
Has a significant impact on a market and on the economic activity of firms in that market where it focuses on new products and processes to respond to the market needs
Features of Product Development:
Incremental innovation
Concerns an existing product, service, process, organisation or methods whose performance has been significantly enhanced or upgraded
Stages of Product Development:
1) Product Ideas
- Identify an opportunity for a niche market to capture market share
- Ask employees for product ideas and survey customers for feedback on existing products
Stages of Product Development:
2) Evaluate the Ideas
- Make a list of possible product ideas and evaluate them with business leader or with people from a range of business functions such as production, sales, marketing, and finance.
- To evaluate the idea of its marketing potential and efficient production, whether there is time and money to execute it and if staff are able to sell it.
Stages of Product Development:
3) Product Concept Evaluation
- More details are added to selected ideas and businesses can run focus groups to gather feedback on possible product names, colours, design, target market and marketing strategy.
- Analyse the market to identify competitors selling or developing similar products and if there are any substitutes.
Stages of Product Development:
4) Prototype Testing
- Once the idea is chosen and tested, it can be developed into a prototype.
- Staffs can analyse and test the product and give internal feedback.
- What they like can be used for advertising and promotions while criticism can be addressed through improvement of products
Stages of Product Development:
5) Market Testing
- A small amount of product is manufactured and distributed to customers on the database or through newspapers, magazines and online registration.
- Market testing is often part of the campaign to increase interest and desire before a full product launch.
Stages of Product Development:
6) Product Launch
- Have inventory ready for customer orders and distribution to retailers.
- Use range of promotional strategies to generate interest, desire and demand for the product.
- New products may need a more extensive strategy because customers will need to be educated and persuaded on its benefits.
Quality Management
definition
Ensuring that processes and systems result in a consistently high quality product
Quality Control
- Comparing the results with the plan
- Ensures the manufactured product or service meets a defined set of quality criteria and the requirements of the customers
- Check for defects with scanning and inspection
Quality Assurance
- Establish a set of procedures or a process so errors are less likely to happen;
- Overall process of managing quality
- Building a culture within the workplace so that every employee works to quality targets and standards.
