Mgmt 309 Exam 2: Chapter 20- Managing Operations, Quality, and Productivity

Reducing Cycle Time

increasing the speed of operations, reduce time and motion, start from scratch, minimize approvals needed, use teams, stick to a schedule, don't ignore distribution, incorporate it into your environment

Just-in-time (JIT) method

inventory system that has the necessary materials arriving as soon as there are needed so that the production process is not interrupted. ties in with backward vertical integration

Quality

the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs - a relative and absolute concept - relevant to both products and services

Increased Employee Involvement

-Increased employee participation can increase both quality and productivity -Cross Training of employees allows firms to function with fewer workers -Rewards are essential to success in improving productivity

Improving Operations

-Spending more resources on research and development helps identify new products, new uses for products, and new methods for making products. -Reworking transformation processes and facilities can boost productivity

Durability

A measure of product life

The Importance of Quality

Competition Productivity Costs

Operations management as control

coordinating operations management with other functions helps to insure the system focuses on critical elements crucial to goal attainment

Features

*Supplements* to a product's basic functioning characteristics Ex. sunroof on a car

Role of Operations in Organizational Strategy

- Operations management has a direct impact on competitiveness, quality, productivity, and effectiveness - Operations management and organizational strategy have reciprocal effect on one another. If one changes so does the other Ex. Falling Down Movie, wanted breakfast, didn't have it, low quality burger - Strategic goals cannot be met if there are deficiencies and inefficiencies in operations resources

Reliability

A probability of not malfunctioning during a specific period

Performance

A products primary operating characteristic Ex. A car being able to drive

Statistical Quality Control (SQC)

Acceptance sampling: Testing a finished product In-process sampling: Testing samples long the way

Levels of productivity/ Ways to measure productivity

Aggregate Productivity Industry Productivity Company Productivity Unit Productivity Individual Productivity

Capacity Decisions

Always Quantifiable, dictate supply and demand, choosing amount of products, services or both that can be produced by an organization. Can be high risk decisions due to uncertainty about future product demand and incurred costs of additional, possible excess capacity. Ex. Disney's Magic Hours, restaurants changing hours in cstat during summer

Productivity

An economic measure of efficiency that summarizes the value of outputs relative to the value of resources used to produce them.

Manufacturing Technology: Robot

Any artificial device that can perform functions ordinarily that thought to be appropriate for human beings Ex. Robots used during surgery

Total Quality Management Tools and Techniques

Benchmarking Outsourcing Reducing Cycle Time Statistical Quality Control (SQC)

Cellular Layout

Configuration of facilities used when families of products can follow similar paths Ex. Clothing Manufacturer; single room for putting on pockets, single room for putting on zippers, etc

Purchasing Management: Procurement

Controlling the buying of the materials and resources is at the heart of effective supply chain management, being able to get the items when you need them.

Determine Product/Service Mix

Deciding how and what products to offer in the market place Ex. Deciding what type of Coke & what size to sell

Designing Operations Systems (3 steps) not in any order

Determine Product/Service Mix Make Capacity Decisions Make Facilities Decisions - Locations - Layouts

Facilities Decisions

Facilities are the physical locations where products or services are created, stored, and distributed

Fixed Position Layout

Facilities arranged around a single work area, people move around product, used for manufacturing of large and complex products Ex. Plane, Kyle Field

Process Layout

Facilities arranged around the process, used when creating a variety Ex. Custom products

Product Layout

Facilities arranged around the product, used when large amounts of a single product need to be created. Ex. Assembly line, all outputs are the same and numerous

Service Organization

Focus on the Experience: An organization that transforms resources into intangible outputs and creates time and place utility for its customers

Manufacturing Organization

Focus on the Product; A form of business that combines and transforms resource inputs into tangible outcomes that are then sold to others

Perceived Quality

How a customer sees the product

Aesthetics

How the product looks, feels, tastes, smells

The Importance of Quality in: Costs

Improved quality reduces costs from customer returns, warranty, and lawsuits for faulty products, and lost sales for future customers.

Improving Productivity

Improving Operations Increasing Employee Involvement

Two factors of Inventory Management

Inventory Control Just in Time Method

Supply Chain Management

Looks at entire operating system, the process of managing operations control, resource and inventory acquisition and purchasing, and thus improving overall efficiency and effectiveness.

Types of Operations:

Manufacturing Organization Service Organization

Organizational Technology

Manufacturing Technology - Technology - Automation - Robot - Robotics Service Technology

Inventory Control

Materials control, managing the organizations raw materials, work-in progress, finished goods, and products in transit

Malcolm Baldrige Award

Named after former secretary of commerce, given by the Commerce Department to firms that achieve major quality improvements

The Importance of Quality in: Competition

People will pay more for quality, Quality has become one of the most important competitive points in business today

8 Dimensions of Quality (Table 20.2)

Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived Quality

Facilities Decisions: Layout

Physical configuration of the facilities, arrangement of equipment, etc.

Facilities Decisions: Location

Physical positioning or geographic site of the facility

Types of Layouts: Internal Factor

Product Layout Process Layout Fixed Position Layout Cellular Layout

Individual Productivity

Productivity obtained by a single person

The Importance of Quality in: Productivity

Quality enhancement programs decrease defects, reduce rework, and eliminate the need for inspections as employees assume responsibility for quality

Service Technology

Services are rapidly moving towards automated systems and procedures Ex. Automated picture check upload

Outsourcing

Subcontracting operations/services out to those who can do them cheaper and/or better, using external company

Conformance

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

Company Productivity

The level of productivity of a single company

Manufacturing Technology: Automation

The process of designing work so taht it can be completely or almost completely performed by machines Ex. Laser Eye surgery automated calculation machine

Benchmarking

The process of learning how and what other firms do in an exceptionally high-quality manner. Comparing yourself against other recognized leaders in the industry

Unit Productivity

The productivity level of a department or unit

Manufacturing Technology: Robotics

The science and technology of the construction, maintenance, and use of robots

Operations Management

The set of Managerial Activities used by an Organization to Transform Resource Inputs into Products, Services, or Both - Part of the Quantitative Perspective - Outputs can only be as good as their Inputs Excellence in operations creates competitiveness, overall performance, value, utility

Manufacturing Technology: Technology

The set of processes and systems used by organizations to convert resources into products or services Ex. New Egg Movie used perfect pick, reduced time and motion, more efficient, when item was needed it was called up and delivered

Serviceability

The speed and ease of repair

Aggregate Productivity

The total level of productivity for a country Ex. US vs China

Industry Productivity

The total productivity of all the firms in that industry Ex. Oil vs gas vs automotive