Chapter 12 Flashcards
Service operations are more complicated than goods production in which four ways?
- The interaction with consumers
- The intangible and unstorable nature of some services
- The customer’s presence in the process
- Service quality considerations
When managing a large project, how can a PERT chart be utilized?
To identify the sequence of activities and the time needed to perform them
What is the purpose of a staff schedule?
To show upcoming work shifts for a firm’s employees
_______ is the step in materials management where managers acquire the raw materials they need to produce goods, such as leather for sofas.
Purchasing
In the process of materials management, what is the goal of purchasing?
To acquire needed raw materials
What refers to the activities in transporting resources to the producer and finished goods to customers?
Transportation
What is warehousing?
the storage of incoming materials for production and finished goods for distribution to customers.
What is the acquisition of the materials and services that a firm needs to produce its products.
Purchasing
What is inventory control?
the process of receiving, storing, handling, and counting of all raw materials, partly finished goods, and finished goods.
How does a business create time utility?
By making products available when consumers want them
What is process layout?
The physical arrangement of production activities that groups equipment and people according to function
What is supply chain management?
Evaluating and improving the overall stream of goods and processes among multiple companies that contribute to a finished product
What is used to show upcoming work shifts for a firm’s employees?
Staff schedule
Hector runs a pool maintenance company, going from one house to the next, adding chemicals, cleaning the pools, and making small repairs. Hector relies on a(n) ________ as part of his business model.
fixed-position layout
What is a low-contact system?
The level of customer contact in which the customer need not be part of the system to receive the service
The amount of product that a company can produce under normal conditions is its ________.
capacity
What is ISO 9000?
A program certifying that a factory, laboratory, or office has met the quality management standards set by the International Organization for Standardization
For a large project, managers should use a _______ to identify the sequence of activities, the time needed to perform the various activities, and the most time-consuming set of activities within the sequence.
PERT chart
What is the organization of production steps for a single product in a fixed sequence and according to production requirements?
Product layout
Keeping track of thousands of moving parts — planning, organizing, and controlling the flow of these parts — is known as .
materials management
A supply chain is the flow of information, materials, and services that starts with and continues adding value through other stages in the network of firms until the product reaches the end customer
raw-materials suppliers
What in inventory control is the process of finding and choosing suppliers of services and materials?
Supplier selection
When a theater offers midday, afternoon, and evening shows seven days a week, it creates _______ utility; it adds customer value by making products available when consumers want them.
time
With regard to materials management, a _______ will eliminate excess inventory.
lean production system
Charity owns a hair salon that specializes in unusual cuts and colour. Her business is considered a ________ because customers need to be present during the entire point of service.
high-contact system
What is the Gantt Chart
a production schedule that breaks down large projects into nonsequential steps to be performed and specifies the time required to perform each step
In the automotive industry, parts are brought together from all over the world to create a final product. To reduce storage time, lessen warehouse space, and save money, many car manufacturers engage in __________ .
just-in-time (JIT) production
What is a master operations schedule?
A top-level schedule showing which products will be produced, and when, in upcoming time periods
What is benchmarking?
The process of comparing the quality of the firm’s output with the quality of the output of the industry’s leaders.
What are activities for producing standardized products for mass consumption?
Make-to-stock
Awareness of its impact on the local environment has led Coal Kickers Mining Company to pursue ________ , which certifies improvements the business makes to reduce and manage the pollution it creates.
ISO 14000
A company that produces only textbooks is involved in \_\_\_\_\_\_\_\_. A. value-added analysis B. materials management C. service operations D. utility E. goods operations
goods operations
Magnetic Microprocessors, Inc. uses raw materials and the skill and effort of its employees, to produce goods and services for its customers. What is Magnetic Microprocessors creating? A. Quality control B. Time utility C. Form utility D. Place utility E. Quality ownership
Form utility
A movie theatre is considered a \_\_\_\_\_\_\_\_ operation. A. make-to-order B. make-to-stock C. high-contact D. materials management E. low-contact system
high-contact
In a custom-product layout, people are grouped according to which of the following? Question content area bottom Part 1 A. Product line B. Experience C. Function D. Goals E. Ability
Function
Observing employees, monitoring their interactions with customers and providing training in customer relations skills are part of \_\_\_\_\_\_\_\_. A. operations control B. business process reengineering C. value-added analysis D. quality control E. materials management
quality control
Magnificent Machines, Inc. has found a way use less resources without any decrease in production. What can be said of Magnificent Machines? A. Product quality has improved. B. The company has increased consistency. C. The company has decreased productivity. D. The company has increased productivity. E. The company has decreased consistency.
The company has increased productivity.
Cassie recently began working in the shipping department of a manufacturing company and has noticed that her coworkers are truly concerned about producing quality products. Cassie is scheduled to attend quality training sessions that are required for all new employees. Her team leader told her this training is important and will help her understand how to do the job right. Cassie's team is an example of \_\_\_\_\_\_\_\_. A. performance B. quality ownership C. operations control D. business process reengineering E. value-added analysis
quality ownership
TQM or Total Quality Management can be best defined as:
A.
an outdated method previously used by organizations seeking to please shareholders
B.
a business process improvement method focused on improving quality of all business processes and eliminating all defects
C.
a method of management based on the production output of a given employee
D.
a measurement of the quality of production and manufacturing used to evaluate employees
E.
a method of evaluating management and staff on a quarterly basis
a business process improvement method focused on improving quality of all business processes and eliminating all defects
Petroleum refining operations, such as the Deepwater Horizon, use what type of transformation technology in their goods-producing processes? A. Assembly processes B. Chemical processes C. Clerical processes D. Fabrication processes
Chemical processes
FedEx's operations strategy emphasizes \_\_\_\_\_. A. quality B. low price C. accountability D. flexibility E. dependability
dependability
what is good production?
Production activities that yield tangible products
What is service operations
Production activities that yield tangible and intangible service products
What is operations(production) management? What does an operation managers do?
A set of methods and technologies used in the production of a good or service.
Operation managers bring raw materials, equipment, and labour together under a production plan that effectively uses all the resources available in the production facility.
four ways that service operations are more complicated than goods.
- The interaction with consumers
- The intangible and unstorable nature of some services
- The customer’s presence in the process
- Service quality considerations
how interaction with consumers makes service operation more complicated than good production.
- Manufacturing operations emphasize outcomes in terms of physical goods
○ However most service are combinations of good and services- Service workers
○ Need human relations skills - Factory workers
○ No contact with customers and no need for human relations skills
- Service workers
how intangibility and Unstorability makes service operation more complicated than good production.
- An important satisfier for customers, therefore, is the intangible value they receive in the form of pleasure, gratification
If a service isn’t used when available, it is usually wasted. Service, then, are typically unstorable.
how The Customer’s Presence in the Operations Process makes service operation more complicated than good production.
- When services are provided, the customer is often present in the operations process.
○ Place utility
§ Conveniently located
○ Time utility
§ Convenient times
○ Form utility
§ Provide safe and comfortable facilities and to offer quality grooming
○ Value for money spent
§ Reasonable price- As they participate in the operations process, consumers can affect it.
The service provider must balance customer satisfaction with a tight schedule. High customer contact has the potential to significantly affect the process.
- As they participate in the operations process, consumers can affect it.
what is virtual presence?
- E-commerce introduces a “virtual presence”(opposed to physical presence”) of the customer in the operations process.
Consumes interact electronically and in real time with sellers, collection information about product features, delivery availability, and after-sales service
how is service quality considerations makes service operation more complicated than good production.
- The quality of work and the quality of service are not the same thing
Customers use different measure to judge services and goods because services include intangibles and not just physical objects
What is operation process?
A set of methods and technologies used in the production of a good or a service
2 types of operation processes for the production of physical products
○ Make to order
§ Producing custom-designed products for physical order
○ Make to stock
Producing standard items in large quantities for consumers in general
five types of transformation technologies to run raw materials into finished goods
- Chemical process
1) Raw materials are chemically altered
2. Fabrication processes
1) Mechanically alter the basic shape or form of a product
2) Occurs in the metal forming, woodworking, and textile industries
3. Assembly processes
1) Put together various components
2) Common in the electronics, appliance, and automotive industries
4. Transport processes
1) Good acquire place utility by being moved from one location to another.
5. Clerical processes transform information:
Combining data on employee absences and machine breakdowns into a productivity report is a clerical process
Operation processes in manufacturing firms can be classified on the basis of what?
- The kind of transformation technology that is used
2. Whether the operation process combines resources or breaks them into components parts
difference between analytic process and synthetic process
○ Analytic process
§ Breaks down basic resources into their component parts
□ Aluminum is manufactured by extracting it from an ore called bauxite
○ Synthetic process
§ Combines a number of raw materials to produce a finished product such as a fertilizer or paint.
what is high contact system?
○ A system in which the service cannot be provided without the customer being physically in the system
§ Eg
□ Transit systems
○ In this system, the customer is part of the process
○ Transportation managers need to pay attention to the cleanliness of the transportations
○ Ex.
§ Dental and medical services
§ Hair salons
§ Guided tours
what is low contact systems?
○ A system in which the service can be provided without the customer being physically in the system § Eg □ Lawn-care services □ Cheque-processing centre at a bank □ Gas and electric utilities □ Auto repair shops
The five main categories of operations planning:
○ Capacity ○ Location ○ Layout ○ Quality ○ Methods planning
what is capacity? What does a firm’s capacity depends on?
The amount of a good a firm can produce under normal working conditions.
A firm’s capacity depends on how many people it employs and the number and size of its facilities
what will happen if the capacity is small/large for demand?
- Capacity = small for demand
○ The company must turn away customers, a situation that cuts into profits and alienates both customers and sales people- Capacity = large for demand
○ The firm wastes money by maintaining facilities that are not needed to employing too many workers
- Capacity = large for demand
What does capacity planning do?
Capacity planning means ensuring that a firm’s capacity just slightly exceeds the normal demand for its period.
How are location decision been influenced?
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
difference in location decision of low contact system and high contact system
Low-contact service systems can be located near resource supplies, labour, or transportation outlets
High contact services must locate near the customers who are a part of the system
Three of the most widely used layouts
process, product, and fixed position
what is process layout/custom-product layout? What are the advantages?
It is a way of organizing production activities such that equipment and people are grouped together according t their function
Main advantage is flexibility.
What is product layout? and what are the advantages?
○ Product layout
§ Aka. Same-steps/assembly line layout
§ A way of organizing production activities such that equipment and people are set up to produce only one type of goods
○ Assembly line
§ a type of product layout in which a partially finished product moves through a plant on a conveyor belt or other equipment
This layout is efficient for larger-volume, make-to-stock operations that mass-produce many units of a product
what is fixed position layout?
Fixed position layout:
A way of organizing production activities in which labour, equipment, material, and other resources are taken to the geographic location where all operations work is done.
This layout is also used for building huge ships that can’t be moved, for constructing buildings and for agricultural operations such as plowing, fertilizing, and harvesting.
what is quality planning?
In planning production systems and facilities, managers must keep in mind the firm’s quality goals.
What is methods planning?
In designing production systems, managers must clearly identify all production steps and the specific methods for performing them.
What is operations scheduling?
scheduling means that Operations managers must develop timetables for implementing the plans
What are the four kinds of schedules
- The master operation schedule
- The “game plan” for deciding the volume of upcoming activities over a period of months
2. Detailed schedules
- Show day-to-day activities of production
3. Staff schedules
- Identify how many employees will be working and when
4. Project schedules
- Provide coordination for completing large-scale projects
What is operation control?
○ Managers monitor production performance by comparing results with plans and schedules
○ Operations control involves
- Material management
- Production process control
What is material management?
Planning, organizing, and controlling the flow of materials.
The five major areas of materials management for physical goods
- Transportation
□ Includes the means of transporting resources to the company and finished goods to buyers
- Warehousing
□ Storage of both incoming materials for production and finished goods for physical distribution to customers
- Inventory control
□ Includes the receiving, storing, and handling, and counting of all raw materials, partly finished goods, and finished goods.
□ It ensure that enough material inventories are available to meet production schedules
- Supplier selection
□ Finding and choosing suppliers of services and materials to buy from.
□ It includes evaluating potential suppliers, negotiating terms of service, and maintaining positive buyer-seller relations
- Purchasing
□ Acquisition of all the raw materials and services a company needs to produce its products.
What does the lean production systems do?
- Avoid inefficiencies by eliminating unnecessary inventories and continuously improving production processes
- Just-in-time(JIT) production systems
□ A type of lean production that brings together all the needed materials and parts at the precise moment they are required.
Reduces inventory of goods in process to practically nothing and saves money by replacing stop-and-go production with smooth movement
What is the material management for services?
- Material management is also important for service provider
The most important “inventory” for many high-contact services is not physical goods, but information about service product offerings and clients, there interests, their needs, their activities, and even their plans for interactions with other clients.
tools for process control
- Worker training
○ Employees are both producers and salespeople
○ Human relations skills are very vital for anyone who has contact with the public- Material Requirements Planning(MRP)
○ A 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.
○ Manufacturing resources planning (MRP II)
- An advanced version of MRP that ties together all parts of the organization into the company’s production activities - Quality Control
○ The management of the production process so as to manufacture goods or supply services that meet specific quality standards.
- Material Requirements Planning(MRP)
what does productivity measure?
Productivity measures how much is produced relative to the resources used to produce it.
what is quality?
A product’s fitness for use in terms of offering the features that consumers want
what is labour productivity?
- Partial productivity ratio calculated by dividing gross domestic product by total number of workers
Labour productivity = (GDP for the year)/(total number of labour hours worked for the year)
why do productivity difference exist across nations
- Difference in technologies
- Human skills
- Economic policies
- Natural resources
- Traditions
are manufacturing and service productivity the same?
○ Manufacturing productivity is higher than service productivity
○ It is important to improve service productivity because the service sector is an important and growing part of the Canadian Economy
what do the “fishbone diagrams” or “caused and effect diagrams” “Ishikawa diagrams” do ?
Help employee figure out the causes of quality problems in their work areas
what is TQM
- Total quality management (TQM)
○ A concept that emphasizes that no defects are tolerable and that all employees are responsible for maintaining quality standards
○ Includes all the activities necessary for getting high-quality goods and services into the marketplace.
process of TQM
- A customer focus is the starting point for TQM
○ Includes using methods for determining what customers want and then making sure that all the company’s activities and people are focused on fulfilling those needs- Planning of Quality
○ Performance quality
- The overall degree of quality; how well the features of a product meet consumers’ needs and how well the product performs
○ Quality reliability
- The consistency of quality from unit to unit of a product - Organizing for Quality
○ Everyone must work to assure quality. (quality department is noy enough) - Leading for quality
○ Managers must inspire and motivate employees throughout the company to achieve quality goals
○ Quality ownership
- The concept that quality belongs to each employee who creates or destroys it in producing a good or service; the idea that all workers must take responsibility for producing a quality product - Controlling for quality
○ By closely monitoring its products and services, a company can detect mistakes and make correction
○ Managers must first establish specific quality standards and measurements
- Planning of Quality
tool for achieving the desire level of quality
○ Competitive product analysis
- Process by which a company analyzes a competitor’s products to identify desirable improvements
○ Value-added analysis
- The evaluation of all work activities, material flows, and paperwork to determine the value they add for customers
○ Statistical process control (SPC)
- Statistical analysis techniques that allow managers to analyze variations in production data and to detect when adjustments are needed to create products with high quality reliability
- Process variation
□
- Control charts
□ A statistical process control method in which results of test sampling of a product are plotted on a diagram that reveals when the process is beginning to depart from normal operating conditions
○ Quality/cost studies
- A method of improving product quality by assessing a firm’s current quality-related costs and identifying areas with the greatest cost-saving potential
○ Quality improvement teams
- QI teams are groups of employees from various work areas who meet regularly to define, analyze, and solve common production problems.
- Goal is to improve both their own work, select leaders, and address problems in the workplace
○ Benchmarking
- Comparing the quality of the firm’s output with the quality of the output of the industry’s leaders
- internal benchmarking
□ a company compares its current performance against performance of its competitor
- External benchmarking
□ a company compares its current performance against its
○ Getting closer to the customer
- Know what the customer want in the products or services they buy
○ The ISO series
- ISO9000
□ 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 of Standardization
- ISO 14000
□ A program that certifies improvements in environmental performance
○ Business Process Re-engineering
- Redesigning of business process to improve performance, quality, and productivity
○ Adding value through supply chain
what is the supply chain/ value chain?
Flow of information, materials, and services that starts with raw-material suppliers and continues through other stages in the operations process until the product reaches the end customer
what is SCM?
- Supply-Chain Management (SCM)
○ Principle of looking at the chain as a whole to improve the overall flow through the system
○ SCM means faster delivers and lower cost than customers would get if each member acted only according to its operations requirement
