Chapter 16 Flashcards
Operations management
all of the activities involved in producing goods and services and distributing them to customers
Efficiency
producing output or achieving a goal at the lowest cost
Effectiveness
completing tasks and producing products that create the greatest value
Goods
tangible products that you can see and touch, both durable and non-durable
Services
intangible products, such as computer repair and interior design
Characteristics Of Operations
Management Fifty Years Ago
- Focus on Minimizing Costs
- production of Goods
- Mass production
- Simple Supply Chains
- Exploit the Environment
Factors Promoting Change
• Improvements in Production and Information Technologies • Rise of Global Competition and Global Opportunities • Recognition Of Quality as a Source Of Competitive Advantage • Adoption of Marketing Perspective and Customer Focus • Recognition of Serious Environmental Problems
Characteristics Of Operations
Management Today
- Focus on Creating Value
- Provision of Services
- Mass Customization
- Complex Value Chains
- Sustain the Environment
What Do Operations Managers Do?
- Facility location
- Process selection and facility layout
- Inventory control
- Project scheduling
Value chain
the network of relationships that channels the flow of inputs, information, and financial resources
What are the factors that affect location decisions?
- ADEQUACY OF UTILITIES
- LAND
- LABOUR MARKET CONDITIONS
- TRANSPORTATION FACTORS
- QUALITY OF LIFE FACTORS
- LEGAL AND POLITICAL ENVIRONMENT
Process Selection and Facility Layout
Flow shop processes
Job shop processes
Project processes
Cellular layout
Why hold inventories…
- Smoother production schedules
- Meet demand increases
- Reduce switching costs
- Compensate for forecast errors
Operations managers
must manage and schedule projects
Immediate predecessors
activities that must be completed before other activities begin
Critical path
consists of the sequence of activities that takes the longest to complete
Vertical integration
- Gain control over supply chain
- Begin producing its own parts
- Buying suppliers
Outsourcing
- Use outside firm for producing supplies
- Focus on key production areas
- Cost savings
The trend has been to rely more on , which has become a controversial issue.
outsourcing
_______ is a key reason firms focus overseas
Low-wage labour
Key to balance advantages with drawbacks:
- Different laws and customs
- Inadequate infrastructure
- Inexperienced workers
- Political instability
Enterprise Resource Planning (ERP):
- Integrates the flow of information
- Can be costly and challenging to implement
- Most firms using ERP systems report being satisfied with the results
Is this a characteristic for Goods or Services?
Are tangible: They have a
physical form and can be seen, touched, handled, etc.
Goods
Is this a characteristic for Goods or Services?
Are intangible: They can be
“experienced,” but they don’t
have a physical form.
Services
Is this a characteristic for Goods or Services?
Can be shipped and stored in an inventory.
Goods
Is this a characteristic for Goods or Services?
Must be consumed when they are produced.
Services
Is this a characteristic for Goods or Services?
Are produced independently
of the consumer.
Goods
Is this a characteristic for Goods or Services?
Often require the customer to be actively involved in their production.
Services
Is this a characteristic for Goods or Services?
Can have at least some aspects of their quality determined objectively by measuring defects or deviations from desired values.
Goods
Is this a characteristic for Goods or Services?
Intangible nature means
quality is based mainly on
customer perceptions.
Services
Automation
replacing human operations and control of machinery and equipment with some form of programmed control
Robot
a programmable machine that is capable of manipulating materials in order to perform tasks
CAD
Computer-aided design
CAE
Computer-aided engineering
CAM
Computer-aided manufacturing
CIM
Computer-
integrated manufacturing
_____improves effectiveness and efficiency and helps achieve competitive advantage
Lowers costs, increases value
Quality
______ viewed as the father of the quality movement, first proposed the relationship between quality and business in the early 1950s.
W. Edwards Deming
Deming Chain Reaction
- Improve quality (leads to)
- Costs decrease because of less rework, fewer mistakes, fewer delays and snags, and better use of time and materials (which leads to)
- Productivity improves (which leads to)
- Capture the market with better quality and lower price (which leads to)
- Stay in business
(which leads to) - Provide jobs and more jobs
TQM
Total quality management
_____ is a method that provides organizations tools to improve the capability of their business processes.
Six Sigma
Mistake Proofing
Procedures built into the production process that prevent workers from making mistakes …or that catch and correct mistakes
Quality Standards and Quality Initiatives
- Excellence Canada (National Quality Institute)
- Baldrige National Quality Program in the US
- ISO 9000 Certification
JIT
Just-in-Time
Characteristics of JIT (Just-In-Time)
- Produce goods and services to meet actual demand
2. Minimize inventories at all stages of the supply chain through coordination
Lean Thinking in the Service Sector
1 . Standardize
- Minimize costs
- High utilization
- Simplified processes
Sustainability
to meet the organization’s current objectives while protecting and preserving the environment for future generations
ISO 14001
a certification that focuses on environmental management
