Week 10, Chapter 9
Producing World-Class Goods and Services
Agenda
1. Review
2. Chapter 93. Exercise(s)
Imports < Exports
=
Imports > Exports
=
Review - Balance of Trade
Trade Surplus Favourable
Trade Deficit Unfavourable
Review - Balance of Payments
Cashflowin
exports
foreign tourist spending in
Canada
foreign investments in Canada
earnings ...
Review - Foreign Exchange Rate
“strong” CAD $ = high demand for Canadian dollars and products
When the value of the
CAD$ d...
Review - Barriers to Trade
Learning Objectives
Define operations
management
• and explain what types of firms
use it
Describe the operations
manageme...
Canada Today: constant and restless change and dislocation, as
ever-newer technologies and increasing global competition f...
Canada Today - Figure 9.1
Research and Development - work directed toward the innovation,
introduction, and improvement of products and processes
Th...
Canada’s Evolving Manufacturing and Services Base
the manufacturing sector employs slightly over 7% of
Canada’s working po...
Operations
Management -
specialized area
in management
that converts or
transforms
resources
(including
human
resources) i...
Operations Management Planning
A major issue of the recent past has been the shift of
manufacturing organizations from one...
Operations Management Functions
Facility Location
Facility Layout
Quality Control and
Standards
ISO 9000/ISO 140000
Operations Management Planning: Facility Location - WHY?
availability of inexpensive labour or the right kind of skilled l...
Operations Management Planning: Facility Location in the Future
Developments in
information
technology
(computers, modems,...
Image source: http://www.flickr.com/photos/historicallyinaccurate/
Operations Management Planning: Facility Layout
The phy...
Operations Management Planning: Facility Layout – Figure 9.3
Operations Management Planning: Facility Layout – Figure 9.3
Operations Management Planning: Facility Layout – Figure 9.3
Operations Management Planning: Facility Layout – Figure 9.3
Outsourcing
Outsourcing goods and services
has become a hot practice in
North America.
Software development, call-
centre ...
Canadian companies are also benefiting from other countries’
outsourcing. Canada is one of the top IT outsourcing destinat...
Canada’s Auto Industry – lots of competition!
The industry supports jobs across Canada in 13
assembly plants, more than 54...
0
5
10
15
20
25
30
35
Toyota Honda GM Ford Daimler/Chrysler
Productivity Challenge in the Automobile Industry
Source: Harb...
Define “GOOD QUALITY”
Peter F. Drucker
(American Educator and Writer, b.1909)
“Quality in a product or service is not what the supplier puts in....
Quality
consistently producing what the
customer wants while reducing errors before
and after delivery to the customer
not...
Dimensions of Quality
performance
features
reliability
conformance
durability
serviceability
aesthetics
perceived quality
The International Organization for Standardization (ISO) is a
worldwide federation of national standards bodies from more ...
ISO 9000 Standards - quality management and assurance
The standards require that a company
must determine what customer ne...
ISO 14000 Standards - a collection of the best practices for
managing an organization’s impact on the environment
Quality Control Standards
Six Sigma ( ) Quality - 3.4 defects/million
Statistical Quality Control (SQC)
Statistical Proces...
Logistics - activities that focus on getting the right amount
of the right products or services to the right place at the ...
Supply Chain - The sequence of firms that perform
activities required to create and deliver a good or service to
consumers...
Supply Chain Management –
the integration and organization of
information and logistics activities
across firms in a suppl...
Supply Chain Management
When implementing supply chain management,
firms are trying to improve quality, reduce
costs, incr...
Service Sector Operations Management -
is all about creating a good experience for
those who use the service.
Productivity measures do not capture improvements in quality
Interactivity helps provide quality service.
Manufacturing Sector Operations Management – Figure 9.4
INPUTS
• land
• capital
• entrepreneurship
• knowledge
PRODUCTION
...
Manufacturing Sector Operations Management
Form Utility – value added by
creating finished goods and
services
Manufacturin...
Manufacturing Sector Operations Management
Materials requirement planning (MRP) is a computer-based
operations management ...
Manufacturing Sector Operations Management
The newest version of MRP is
enterprise resource planning
(ERP).
ERP is a compu...
Modern Production Techniques
MRP
Just-In-Time (JIT) Inventory
Purchasing
Flexible Manufacturing
Lean Manufacturing
Mass Cu...
JIT: Just-in-Time - Inventory Control systems keep a minimum of
inventory on the premises and parts, supplies, and other n...
JIT: Just-in-Time Inventory Control
JIT runs into
problems when
suppliers are farther
away.
Shipments may be
delayed due t...
Purchasing - the functional area in a firm that searches for quality
material resources, finds the best suppliers, and neg...
Flexible manufacturing - designing machines to do
multiple tasks so that they can produce a
variety of products
Flexible m...
Lean manufacturing
Lean manufacturing is the production of goods
using less of everything compared to mass
production: les...
Mass Customization
Computer-Aided Design and Manufacturing (CAD/CAM)
CAD + CAM = CIM
(computer-integrated
manufacturing)
Image source: http:/...
Chapter Summary
Define operations management - what types of firms use it
Firms in both the manufacturing and the service ...
Chapter Summary
Discuss the problem of measuring
productivity in the service sector
How technology is leading to productiv...
Chapter Summary
How manufacturing
processes can be
used in the
manufacturing sector.
Process
manufacturing
physically or
c...
Chapter Summary
7 Manufacturing techniques that have improved
the productivity of companies:
• materials requirement plann...
57
Homework
Bus106 wk10 ch9 producing world class goods and services
Bus106 wk10 ch9 producing world class goods and services
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BUS106 Producing World-Class Goods and Services - from UNDERSTANDING CANADIAN BUSINESS, 7th Canadian Edition (custom publication for Seneca) ; published by McGraw-Hill

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Bus106 wk10 ch9 producing world class goods and services

  1. 1. Week 10, Chapter 9 Producing World-Class Goods and Services
  2. 2. Agenda 1. Review 2. Chapter 93. Exercise(s)
  3. 3. Imports < Exports = Imports > Exports = Review - Balance of Trade Trade Surplus Favourable Trade Deficit Unfavourable
  4. 4. Review - Balance of Payments Cashflowin exports foreign tourist spending in Canada foreign investments in Canada earnings from Canadian investments outside of Canada Cashflowout imports Canadian tourist spending outside of Canada Canadian investments outside of Canada earnings of foreign investments in Canada foreign aid, military expenditure outside of Canada $ $
  5. 5. Review - Foreign Exchange Rate “strong” CAD $ = high demand for Canadian dollars and products When the value of the CAD$ depreciates • exports increase and imports cost more When the value of the CAD$ appreciates • exports decrease and imports cost less $ $
  6. 6. Review - Barriers to Trade
  7. 7. Learning Objectives Define operations management • and explain what types of firms use it Describe the operations management planning issues involved in manufacturing and the service sectors. Discuss the problem of measuring productivity in the service sector, • and tell how technology is leading to productivity gains in service companies Explain how manufacturing processes can be used in the manufacturing sector. Describe seven manufacturing techniques that have improved the productivity of companies.
  8. 8. Canada Today: constant and restless change and dislocation, as ever-newer technologies and increasing global competition force companies to respond quickly to these challenges Canada is facing some serious challenges to its ability to remain a modern, competitive industrial country.
  9. 9. Canada Today - Figure 9.1
  10. 10. Research and Development - work directed toward the innovation, introduction, and improvement of products and processes Through the adoption of newer, more advanced technologies and practices, industries can: increase their production capabilities, improve their productivity, and e x p a n d their lines of new goods and services.
  11. 11. Canada’s Evolving Manufacturing and Services Base the manufacturing sector employs slightly over 7% of Canada’s working population manufacturers perform 75% of private-sector R&D operations management has become a challenging and vital element of Canadian business
  12. 12. Operations Management - specialized area in management that converts or transforms resources (including human resources) into goods and services
  13. 13. Operations Management Planning A major issue of the recent past has been the shift of manufacturing organizations from one city or province to another in Canada, or to other foreign sites.
  14. 14. Operations Management Functions Facility Location Facility Layout Quality Control and Standards ISO 9000/ISO 140000
  15. 15. Operations Management Planning: Facility Location - WHY? availability of inexpensive labour or the right kind of skilled labour reducing time to market building factories in foreign countries to get closer to their international customers
  16. 16. Operations Management Planning: Facility Location in the Future Developments in information technology (computers, modems, email, voice mail, teleconferencing, etc.) are giving firms and employees more flexibility than ever before in choosing locations while staying in the competitive mainstream.
  17. 17. Image source: http://www.flickr.com/photos/historicallyinaccurate/ Operations Management Planning: Facility Layout The physical arrangement of resources (including people) in the production process. The idea is to have offices, machines, storage areas, and other items in the best possible position to enable workers to produce goods and provide services for customers.
  18. 18. Operations Management Planning: Facility Layout – Figure 9.3
  19. 19. Operations Management Planning: Facility Layout – Figure 9.3
  20. 20. Operations Management Planning: Facility Layout – Figure 9.3
  21. 21. Operations Management Planning: Facility Layout – Figure 9.3
  22. 22. Outsourcing Outsourcing goods and services has become a hot practice in North America. Software development, call- centre jobs, and back-office jobs have been moving to developing countries for some time. The range of jobs now shifting to these countries includes accounting, financial analysis, medicine, architecture, aircraft maintenance, law, film production, and banking activities.
  23. 23. Canadian companies are also benefiting from other countries’ outsourcing. Canada is one of the top IT outsourcing destinations in the world, especially for the United States. Source: http://www.youtube.com/watch?v=-e7DndFck-k
  24. 24. Canada’s Auto Industry – lots of competition! The industry supports jobs across Canada in 13 assembly plants, more than 540 parts manufacturers, 3,900 dealerships, and many other related industries.
  25. 25. 0 5 10 15 20 25 30 35 Toyota Honda GM Ford Daimler/Chrysler Productivity Challenge in the Automobile Industry Source: Harbour & Associates, Center for Automotive Research Labour/Hour
  26. 26. Define “GOOD QUALITY”
  27. 27. Peter F. Drucker (American Educator and Writer, b.1909) “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.” Source: http://www.gear6.net
  28. 28. Quality consistently producing what the customer wants while reducing errors before and after delivery to the customer not an outcome; it is a never-ending process of continually improving what a company produces should be part of the operations management planning process rather than simply an end-of-the-line inspection
  29. 29. Dimensions of Quality performance features reliability conformance durability serviceability aesthetics perceived quality
  30. 30. The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies from more than 140 countries that set the global measures for the quality of individual products. ISO is a non- governmental organization established to promote the development of world standards to facilitate the international exchange of goods and services.
  31. 31. ISO 9000 Standards - quality management and assurance The standards require that a company must determine what customer needs are, including regulatory and legal requirements. What makes ISO 9000 so important is that the European Union (EU) is demanding that companies that want to do business with the EU be certified by ISO standards. Some major Canadian companies are also demanding that suppliers meet these standards.
  32. 32. ISO 14000 Standards - a collection of the best practices for managing an organization’s impact on the environment
  33. 33. Quality Control Standards Six Sigma ( ) Quality - 3.4 defects/million Statistical Quality Control (SQC) Statistical Process Control (SPC) Deming Cycle – Plan, Do, Check, Act (PDCA) Quality Function Deployment (QFD) ISO 9000/14000/19011:2002 (Guidelines for quality and/or environmental management systems auditing)
  34. 34. Logistics - activities that focus on getting the right amount of the right products or services to the right place at the right time at the lowest possible cost.
  35. 35. Supply Chain - The sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users
  36. 36. Supply Chain Management – the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to customers
  37. 37. Supply Chain Management When implementing supply chain management, firms are trying to improve quality, reduce costs, increase flexibility and speed, and improve customer service while reducing the number of suppliers used.
  38. 38. Service Sector Operations Management - is all about creating a good experience for those who use the service.
  39. 39. Productivity measures do not capture improvements in quality Interactivity helps provide quality service.
  40. 40. Manufacturing Sector Operations Management – Figure 9.4 INPUTS • land • capital • entrepreneurship • knowledge PRODUCTION CONTROL • planning • routing • scheduling • dispatching • follow-up OUTPUTS • goods • services • ideas
  41. 41. Manufacturing Sector Operations Management Form Utility – value added by creating finished goods and services Manufacturing Processes Assembly Process Continuous Process Intermittent Process Materials Requirement Planning Bill of Materials Enterprise Resource Planning IT/Customer-Relationship Marketing
  42. 42. Manufacturing Sector Operations Management Materials requirement planning (MRP) is a computer-based operations management system that uses sales forecasts to ensure that needed parts and materials are available at the right time and place in a specific company.
  43. 43. Manufacturing Sector Operations Management The newest version of MRP is enterprise resource planning (ERP). ERP is a computer application that enables multiple firms to manage all of their operations (finance, requirements planning, human resources, and order fulfillment) on the basis of a single, integrated set of corporate data.
  44. 44. Modern Production Techniques MRP Just-In-Time (JIT) Inventory Purchasing Flexible Manufacturing Lean Manufacturing Mass Customization Computer-Aided Design (CAD) and Computer-Aided Manufacturing (CAM)
  45. 45. JIT: Just-in-Time - Inventory Control systems keep a minimum of inventory on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line. To work effectively, however, the process requires excellent coordination with carefully selected suppliers.
  46. 46. JIT: Just-in-Time Inventory Control JIT runs into problems when suppliers are farther away. Shipments may be delayed due to poor weather, worker strikes, and events such as the power outage in Ontario in August 2003.
  47. 47. Purchasing - the functional area in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for quality goods and services
  48. 48. Flexible manufacturing - designing machines to do multiple tasks so that they can produce a variety of products Flexible manufacturing (also known as flex) not only leads to improved productivity, but it may also result in cost savings.
  49. 49. Lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. A company becomes lean by continuously increasing its capacity to produce high-quality goods while decreasing its need for resources.
  50. 50. Mass Customization
  51. 51. Computer-Aided Design and Manufacturing (CAD/CAM) CAD + CAM = CIM (computer-integrated manufacturing) Image source: http://www.flickr.com/photos/cadcamzone/
  52. 52. Chapter Summary Define operations management - what types of firms use it Firms in both the manufacturing and the service sectors use operations managers Describe the operations management planning issues involved in manufacturing and the service sectors Functions involved in both the manufacturing and the service sectors include facility location, facility layout, and quality control
  53. 53. Chapter Summary Discuss the problem of measuring productivity in the service sector How technology is leading to productivity gains in service companies New information systems must be developed to measure the quality of goods and services, the speed of their delivery, and customer satisfaction.
  54. 54. Chapter Summary How manufacturing processes can be used in the manufacturing sector. Process manufacturing physically or chemically changes materials. Assembly processes put components together.
  55. 55. Chapter Summary 7 Manufacturing techniques that have improved the productivity of companies: • materials requirement planning, • just-in-time (JIT) inventory control, • purchasing, • flexible manufacturing, • lean manufacturing, • mass customization, and • computer-aided design and manufacturing (CAD/CAM)
  56. 56. 57 Homework

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