MGMT 309 Chapter 20

Malcolm Baldrige Award

named after former secretary of commerce, this prestigious award is given to firms that achieve major quality improvement

Methods

operating systems used by the org during the actual transformation process

Sensor

parts of the system that gather information and compare it to present standards

8 Dimensions of Quality

performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality

Decisions =

product-service mix, capacity, facilities

Managers must pay attention to...

quality, reliability of suppliers and getting the best financial terms

JIT Method ____ (reduce/increase) investment in storage space and material costs. It requires ____ (low/high) levels of coordination and cooperation.

reduces; high

Level of Productivity

refers to the units of analysis used to define productivity

Quality

the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs

It provides ____ and ____ utility in a service.

time and place utility

Six Sigma

tries to limit mistakes to within 6 standard deviations

(T/F) The U.S. remains one of the most productive countries in the world.

true

Cellular Layout

used when families of products can follow similar flow paths -clothing manufacturer create a cell dedicated to making a family of pockets (shirts, coats, blouses)

Partial Productivity

using only one category of resources -outputs/direct labor = labor productivity -they want to make sure they're getting the most out of their employees based on what they pay them

Operations management provides _____ to the organization.

utility

Operations management is at the core of what organizations do as they add _____ and create _____/_____.

value; products/services

Service Technology examples

-ATMs -online hotel registrations -electronic textbooks, journal articles, etc. -hospital handling of patient records -restaurants use technology to record customer's orders

Suggestions for Improving Productivity in 2 Categories

-R&D helps identify new products or revamp facilities -increase employee involvement

Employee Involvement

-involve making the person responsible for doing the job, responsible for making sure it is done right

Quality is an important concern for individual managers/organizations for 3 specific reasons:

-quality has become on the most competitive points in business today -managers have also come to recognize that quality and productivity are related, but it is possible for both to increase -improved quality can lower costs

Computer-aided Design (CAD)

-uses computers to design parts, complete products, and simulate performance -prototypes need not be constructed -simulation of performance becomes a major issue

Flexible Manufacturing System (FMS)

-uses computers to move materials from one part of the system to another -robotic work units/workstations, assembly lines and robotic carts to move material

Computer-aided Manufacturing (CAM)

-uses computers to plan and control the process; ensure that the design moves smoothly to production -we use computers to figure out the most efficient way to do things

Guidelines for Increasing the Speed of Operations

1. start from scratch 2. minimize the number of approvals needed to do something 3. use work team as a basis for organization 4. develop and adhere to a schedule 5. do not ignore distribution 6. integrate speed into the organization's culture

Manufacturing

a form of business that combines and transforms resource inputs to tangible outcomes

Durability

a measure of product life

Product Layout

a physical configuration of facilities arranged around the product; used when large quantities of a single product are needed -most assembly lines use this format (Dell computers)

Layout

a physical configuration of facilities, the arrangement of equipment within facilities, or both

Reliability

a probability of not malfunctioning during a specified period

Unit and Individual Productivity

achieved through a department (unit) or an individual

Process Layout

arranged around the process; used in facilities that create or process a variety of products -auto repair shops and healthcare clinics

Perceived Quality

as seen by a customer

The goal of operations managers includes both _____ and _____.

efficiency and effectiveness

Automation relies on...

feedback, information, sensors, and control mechanism

Feedback

flow of information from the machine back to the sensor

In manufacturing, it provides ____ utility.

form

Aesthetics

how a product looks, feels, tastes and smells

In-process Sampling

involves evaluating products during production so that needed changes can be made -it allows problems to be detected before they accumulate and it saves money

Acceptance Sampling

involves sampling finished goods to ensure that quality standards are met

Advantage of Partial Productivity

it is not necessary to transform the units of input into some other unit

Company Productivity

level achieved by an individual company

Inventory Control (materials control)

managing the organization's raw materials, work in process, finished goods and products in transit

Materials in TQM

many firms have increased the quality requirements they impose on their suppliers as a way of improving quality in their products

Features

supplements to a product's basic functioning characteristics, such as power windows on a car

Conformance

the degree to which a product's design and operating characteristics meet established standards

Control Mechanism

the device that sends instructions to the automatic machine

Product-Service Mix decisions have to be made regarding...

the level of quality desired, the optimal cost of each product and exactly how each is to be designed

Facilities

the physical locations where products or services are created, stored and distributed -decisions usually pertain to facility location and layout

Supply Chain Management

the process of managing operations control, resource acquisition, and inventory to improve overall efficiency and effectiveness

Serviceability

the speed and ease of repair

Cycle Time

the time needed by the organization to accomplish activities such as developing, making and distributing products/services

Aggregate Productivity

the total level of productivity achieved by a country

Operations Management

the total set of managerial activities used by an organization to transform resource inputs into products, services, or both.

Industry Productivity

total productivity achieved by all the firms in an industry

Computer-Integrated Manufacturing (CIM)

-allows for coordination of CAD and CAM -computer networks adjust machine placements/settings to enhance the complexity and flexibility of scheduling -all manufacturing activities are controlled by the computer network

Total Factor Productivity

-defines productivity as outputs/inputs -an overall indicator of how well an organization uses all of its resources (labor, capital, materials, energy) to create all of its products and services

Importance of Productivity

-firm productivity is a primary determinant of an organization's level of profitability and of its ability to survive -determines people's standard of living within a particular country

Disadvantages of Computer-assisted Manufacturing

-generate resistance -CAD aren't always reliable -CIM are expensive

Product-Service Mix

-how many and what kinds of products or services (or both) to offer -based on corporate, business and marketing strategies

Outsourcing

-subcontracting of services and operations to other firms that can perform them more cheaply and/or better -save money and have higher quality service

Capacity

-the amount of products, services or both that can be produced by an organization -a critical decision based on demand

Value-added Analysis

-the comprehensive evaluation of all work activities, materials flows and paperwork to determine the value that they add for customers -reveals wasteful or unnecessary activities that can be eliminated without jeopardizing customer service

Location

-the physical positioning or graphic site of facilities -must be determined by the needs and requirements of the org -a company may need to be near amenities such as railroad or an airport -a company may need to locate near their customers

Automation

-the process of designing work so that it can be completely or almost completely performed by machines -operate quickly and make few errors, they increase the amount of work that can be done -improve products/services and fosters innovation

Benchmarking

-the process of learning how other firms do things in an exceptionally high quality manner -this can be direct as in examining competing products or indirect by examining the competitors processes

Strategic Commitment

-the starting point for TQM for top management -the organizational culture must change to recognize that quality is not an ideal, but an objective goal that must be pursued -comes with real costs (new equipment/facilities)

Performance

a product's primary operating characteristic -EX: automobile acceleration and a tv's picture clarity

Technology

a set of processes and systems used by an organization to convert resources into products or services

Statistical Quality Control (SQC)

a set of specific statistical techniques that can be used to monitor quality -acceptance sampling and in process sampling

Total Quality Management (TQM)

a strategic commitment by top management to change its whole approach to business in order to make quality a guiding factor in everything it does -sometimes called quality assurance

Computer-assisted Manufacturing

a technology that relies on computers to design or manufacture products

Disadvantage of Total Factor Productivity

all the ingredients must be expressed in the same terms (dollars)

Productivity

an economic measure of efficiency that summarizes what is produced relative to resources used to produce it

Just-in-time (JIT) Method

an inventory system that has necessary materials arriving as soon as they are needed (just in time) so that the production process isn't interrupted

Service Organization

an organization that transforms resources into intangible outcomes and creates time or place utility for its customers

Robot

any artificial device that is able to perform functions ordinarily thought to be appropriate for humans

Fixed-Position Layout

arranged around a single work area; used for the manufacture of large and complex products such as airplanes -one product needs lots of people working on it

Technology in TQM

automation and robots can often make products with higher precision and better consistency than people

Manufacturing Technology

automation, computer assisted manufacturing and robot

Types of Computer-assisted Manufacturing Technologies

computer-aided design, computer-aided manufacturing, computer-integrated manufacturing, flexible manufacturing systems

Purchasing Management (Procurement)

concerned with buying materials and resources needed to produce products and services -the heart of supply chain management