BMG100 Course 15 and 16

Course Overview

• Course Name: BMG 100 Understanding Business and Society

• Instructor: Vincent Cloutier, MBA

• Institution: The Williams School of Business

• Semester: Winter 2025

Course Information

• Managing Service and Manufacturing Operations

• Chapter: 8

• Course Number: BMG100 W25

• Pages Viewed: 1-47

Upcoming Assignments

• Decision Round No. 5:

  • Simulation: Kayak

  • Due Date: Wednesday, March 12th at 3:30 PM

• Quiz No. 6:

  • Availability: Until 5:00 PM on Tuesday, March 11th

Learning Objectives

• Define operations management and make distinctions between operations and manufacturing.

• Explain differences in operations management between manufacturing and service firms.

• Describe elements involved in planning and designing an operations system.

• Identify techniques for managing logistics in transforming inputs into finished products.

• Assess the importance of quality in operations management.

Operations Management

• Definition: Development and administration of activities involved in transforming resources into goods and services.

• Historical Context: Once called production or manufacturing; current terminology emphasizes a broader focus on goods and services.

• Focus: Operations function viewed as a comprehensive unit.

Key Differences in Operations

• Manufacturing/Production:

  • Activities and processes that create tangible products.

• Operations:

  • Encompasses activities for making both tangible and intangible products.

Understanding Services

• Characteristics of Services:

  • Intangible, customized inputs and outputs, more labor-intensive, productivity measurement challenges.

Comparing Manufacturing and Service Products

• Service:

  • Intangible, customized, labor-intensive, productivity is hard to measure.

• Manufacturing:

  • Tangible, uniform inputs and outputs, less labor-intensive, easy to measure productivity.

Product Planning

• Consumer Focus: Understanding consumer desires.

• Development Process:

  • Product ideas converted into workable designs; involves R&D and engineering.

Operations Design Processes

• Standardization: Making identical, interchangeable components or products.

  • Benefits: Speed, cost reduction.

• Modular Design: Creation of items in self-contained units that can be combined or interchanged.

• Customization: Tailoring products to meet specific customer needs; each item is unique.

• Mass Customization: Combines flexibility and personalization of custom-made products with the cost efficiency of mass production.

Capacity Management

• Definition: Maximum load that an organization can carry or operate.

• Capacity Issues:

  • Shortfalls or excesses can impact operations.

Planning Facilities

• Considerations:

  • Proximity to markets, raw materials, transportation, climate, community characteristics, taxes, and incentives.

Facilities Layout Types

• Fixed-Position Layout: Resources brought to a central location, useful in construction projects.

• Process Layout: Organizes processes by grouping similar functions.

• Product Layout: Involves continuous flow assembly lines with similar products.

Technology in Operations

• Flexible Manufacturing: Machinery directed by computers to adapt to different versions.

• CAD (Computer-Aided Design): Designing products/compositions on computers.

• CAM (Computer-Aided Manufacturing): Systems that guide and control manufacturing processes.

• CIM (Computer-Integrated Manufacturing): Comprehensive systems managing designs, manufacturing, and operations.

Supply Chain Management

• Definition: Integration of all parties within the distribution system to ensure customer satisfaction.

• Components: Supplier, Manufacturer, Wholesaler, Retailer, Consumer.

Purchasing and Inventory

• Purchasing: Acquisition of materials focusing on quality, quantity, and cost.

• Inventory: All raw materials and finished goods; includes control measures for tracking and management.

Key Management Strategies

• EOQ (Economic Order Quantity):

  • Optimizes the number of items ordered to minimize management costs.

• JIT (Just-In-Time): Reduces waste by ensuring materials arrive exactly when needed.

Quality Management

• Quality Definition: The extent to which goods/services meet customer requirements.

• Key Elements:

  • Quality Control, Total Quality Management (TQM), and Statistical Process Control: each plays a role in maintaining standards.

Establishing Standards

• ISO Standards:

  • Ensure quality and environmental management; validated by independent audits.

• Investments may be needed to achieve ISO standards, but they are crucial for competitiveness.

Quality Assessment Methods

• Inspection: Verifying whether products meet quality standards.

• Sampling: Adapt inspection numbers based on potential risks and costs of errors.

Reflection Questions

1. Is it more challenging to produce a service than a product?

2. Which facilities layout is most efficient for:

   • A) High-end cars

   • B) Mass-produced toys

3. Discuss the limitation of TQM regarding long-term sustainability.

Final Questions

• Open for discussion or inquiries related to the course content.