Chapter 10 - Producing World-Class Goods and Services

Canada’s Manufacturing Sector

• Includes 90,000 manufacturers, making up 10% of Canada’s real GDP

• Employs over 5 million people

Fourth Industrial Revolution

The phase of digitization in the manufacturing sector that involves data, analytics, and improved robotics

Research and Development (R&D)

Work directed toward the innovation, introduction, and improvement of products and processes

• Connection between R&D and innovation is often raised when evaluating why some companies are more competitive than others

Production

The creation of finished goods and services using the factors of production

Production Management

The term used to describe all of the activities that managers do to help their firms create goods

Operations Management

A specialized area in management that converts or transforms resources (including HR) into goods and services

• Eg. inventory management, quality control, production scheduling, follow-up services

Facility Location

The process of selecting a geographic location for a company’s operations

Telecommuting

Working from home via computer

Facility Layout

Physical arrangement of resources (including people) in the production process

Materials Requirement Planning (MRP)

A computer-based production management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place

Enterprise Resource Planning (ERP)

A computer application that enables a firm to manage all of its operation on the basis of a single, integrated set of corporate data

Purchasing

A functional area in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services

Just-in-Time (JIT) Inventory Control

A production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time for use on the assembly line

Quality

Consistently producing what the customer wants while reducing errors before and after delivery to the customer

Six Sigma Quality

A quality measure that allows only 3.4 defects per million events

Statistical Quality Control (SQC)

The process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning

Statistical Process Control (SPC)

The process of testing statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards

Deming Cycle

Plan, Do, Check, Act (PDCA)

• Used to find potential errors before they happen

• Used for years before the International Organization for Standardization (ISO) was created

Excellence Canada

Leading authority in Canada on organizational excellence based upon quality systems, innovation, and healthy workplace criteria

Logistics

Those activities that focus on getting the right amount of the right products/services to the right place at the right time at the lowest possible cost

Supply Chain

The sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users

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

The Production Process

Inputs —> Production Control —> Outputs

Form Utility

Value added by the creation of finished goods and services

• Eg. transformation of silicon into computer chip, making a specific cake out of basic ingredients

Process Manufacturing

That part of the production process that physically or chemically changes materials

Assembly Process

That part of the production process that puts together components

Continuous Process

A production process in which long production runs turn out finished goods over time

Intermittent Process

A production process in which the production run is short and the machines are changed frequently to make different products

Flexible Manufacturing

Designing machines to do multiple tasks so that they can produce a variety of products

Lean Manufacturing

The production of goods using less of everything compared to mass production

Mass Customization

Tailoring products to meet the needs of individual customers

Dramatic Shifts in Canada

• Studies predict that almost ¼ of automated tasks will be performed by robots by 2030

• A recent report predicted 10% of banking jobs will be lost in the next decade

Computer-Aided Design (CAD)

The use of computers in the design of products

Computer-Aided Manufacturing (CAM)

The use of computers in the manufacturing of products

Computer-Integrated Manufacturing (CIM)

The uniting of computer-aided design with computer-aided manufacturing

3D Printing/Additive Manufacturing

• One layer at a time until it creates a finished good

• 3D printers are almost the latest CAM technology

Nanometer

One billionth of a meter

Nanomanufacturing

Being able to manipulate materials on a molecular or even atomic scale