Introduction to Business
Introduction to Business BAD 151
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This 5 page Class Notes was uploaded by Mrs. Elsie Hayes on Monday October 5, 2015. The Class Notes belongs to BAD 151 at Clovis Community College taught by Robin Kuykendall in Fall. Since its upload, it has received 41 views. For similar materials see /class/219583/bad-151-clovis-community-college in Business Administration at Clovis Community College.
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Date Created: 10/05/15
Introduction to Business Chapter 7 Operations Management and Quality LECTURE OUTLINE I What Does Operations Mean Today provide tangible and intangible services firms that make tangible products are engaged in or goods production The term or production refers to all activities involved in making products goods and services for customers Creating Value Through Operations Both services and goods provide consumers with which is the ability of a product to satisfy a human want is created merely through transforming raw materials into finished goods is created when marketers make products available when consumers want them is created when products are made available where they are convenient for consumers production management is the systematic direction and control of the processes that transform resources into finished services and goods that create value for and provide benefit to customers or production managers are responsible for ensuring that operations processes create what customers need and want A Differences Between Service and Goods Manufacturing Operations Whereas goods are produced services are performed Four aspects of service operations can make such operations more complicated than simple goods production 1 Interacting with Consumers Manufacturing operations focus on physical goods whereas service operations are a combination of goods and services I Services Can Be Intangible and Unstorable refers to the untouchable value consumers receive in the form of pleasure gratification or a feeling of safety refers to the idea that a service is often wasted if it is not used Customer s Presence in the Operations Process Service operations often acknowledge the customer as part of the service transaction itself 9 P Intangibles Count for Service Quality Customers use different measures to judge services and goods because services include intangibles not just physical objects B Operations Processes An is a set of methods and technologies used in the production of goods and services 1 Goods Production Processes MaketoOrder Operation Versus Maketo Stock Operations A makes oneof a kind products according to customer specifications A produces standardized products in large quantities Revised 9242007 2 Service Production Processes Extent of Customer Contact In the customer must be a part of the service in customers do not have to be present while the service transaction is being performed lll Business Strategy as the Driver of Operations Companies go about selecting the kind of production that is best for their company based on the firm s larger business strategy A The Many Faces of Production Operations Every company identifies a strategy that it can use for winning customer orders such strategies often include quality lower prices flexibility and dependability 1 Business Strategy Determines Operations Capabilities refers to the activity or process that production must do especially well with high proficiency Expanding into Additional Capabilities Over time excellent firms learn how to achieve more than just one competence l IV Operations Planning Managers from many departments contribute to the firm s decisions about operations management this is a process of logical steps upon which the success of the firm depends The overall business plan guides operations planning as do qualitative and quantitative forecasts A Capacity Planning The amount of a product that a company can produce under normal working conditions is its A firm s capacity depends on how many people it employs and the number and size of its facilities B Location Planning Facility location affects production costs and flexibility Depending on the site of its facility a company may either be capable of producing a lowcost product or may find itself at an extreme cost disadvantage C Layout Planning determines whether firms can respond quickly and efficiently to customer requests for additional or different products or finds itself unable to match competitors speed and convenience 1 Process Layouts In a 39 is grouped according to function this type of layout works especially well in maketo order shops 2 Product Layouts In a 39 is set up to produce goods in a fixed sequence and is arranged according to its production requirements It is efficient for largevolume maketo stock operations that massproduce products quickly often using an Page 2 of 5 V S D Quality Planning Any complete operations plan must ensure that products are produced to meet the firm s standards of the combination of characteristics of a product or service that bear on its ability to satisfy stated or implied needs refers to how well the product does what it is supposed to do refers to the sameness of product quality from unit to unit E Methods Planning In operations systems refers to methods implemented to reduce waste inefficiency and poor performance 1 Improving Process Flow A is helpful in identifying the sequence of production activities movements of materials and work performed at each stage of the process 2 Improving Customer Service Customer service can be improved at various stages along the process flowchart Operations Scheduling involves developing timetables for acquiring resources needed for production A The Master Production Schedule A toplevel produced and when in upcoming time periods B Detailed Schedules shows which products will be indicate daily work assignments with start and stop times for assigned jobs at each work station C Staff quot 39 39 39 and f Mr39quot 39Based quot 39 39 quot 3 specify assigned working times in upcoming days for each employee on each work shift can handle multishift activities for many employees both parttime and fulltime accommodating vacation times holiday adjustments and daily adjustments in staffing for unplanned absences D Project Scheduling with PERT break down large projects into steps to be performed and specify the time required to perform each one PERT also identifies the critical path which is the most timeconsuming set of activities for completing the project Operations Control Once longrange plans have been put into action and schedules have been drawn up requires production managers to monitor production performance by comparing results with detailed plans and schedules lf schedules or quality standards are not met managers must take corrective action A Materials Management The process of plans organizes and controls the flow of materials The five major areas of materials management are transportation warehousing purchasing supplier selection and inventory control Page 3 of 5 Vl checking to ensure that production decisions are being implemented is a key and ongoing facet of operations A Lean Production Systems JustinTime Operations are designed for smooth production flows that avoid inefficiencies eliminate unnecessary inventories and continuously improve 39 quot JIT a type of lean system brings together all needed materials at the precise moment they are required for each productions stage not before thus creating fast and efficient response to customer orders Quality Control means taking action to ensure that operations produce products that meet specific quality standards l Quality Improvement and Total Quality Management It is not enough to control quality by inspecting products and monitoring service operations as they occur Businesses must also consider building quality into products and services A Managing for Quality TQM includes all of the activities necessary for getting quality goods and services into the marketplace this process involves all parts of the business including customers suppliers and employees To bring all the interests of the stakeholders together TQM involves planning organizing directing and controlling 1 Quality Ownership Taking Responsibility for Quality With TQM employees and suppliers ultimately accept the idea that quality belongs to each person who creates it while performing a job Tools for Total Quality Management Hundreds of tools have proven useful for quality improvement ranging from statistical analysis of production data to satisfaction surveys of customers to a process by which a company analyzes a competitor39s products to identify desirable improvements 1 refers to the evaluation of all work activities material flows and paperwork to determine the value that they add for customers 2 are groups of employees from various work areas who meet regularly to define analyze and solve common production problems 3 Getting Closer to the Customer Customers are the driving force for all business activity the most successful firms keep close to their customers and know what they want in the products they consume 4 is a certification program attesting to the fact that a firm or laboratory has met the qualitymanagement requirements set by the International Organization for Standardization am certifies improvements in environmental performance progr It requires a firm to Page 4 of 5 develop an environmental management system a plan documenting how the company ahs acted to improve its performance in using resources in managing pollution 5 is a process which focuses on productivity and quality and entails rethinking each by starting over from scratch Reengineering involves the redesign of business processes to achieve improvements in cost quality service and speed Vlll Adding Value Through Supply Chains A or value chain for any product is the flow of information materials and services that starts with rawmaterials suppliers and continues through other stages in the operations process until the product reaches the end customer A The Supply Chain Strategy is based on the idea that members of the chain working as a coordinated unit will gain competitive advantage 1 Supply Chain Management looks at the supply chain as a whole in order to improve the overall flow through a system composed of companies working together Reengineering Supply Chains for Better Results The results often include lower costs faster service and the coordination of flows of information and materials l Outsourcing and Global Supply Chains is the strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials or services Global outsourcing creates new operations jobs for supply chain management and sometimes the need for more or different types of employee training Page 5 of 5
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