Operations Management and Quality: Business Essentials Chapter 7

Operations Activities

• Involves managing the process of creating goods and services
• Includes activities related to production planning, quality control, inventory management, and supply chain management

Types of Utility

• Operations processes provide three kinds of utility: form utility, possession utility, and time utility
• Place utility is NOT one of the three kinds of utility

Operations Capabilities and Business Strategies

• Companies with different business strategies require different operations capabilities
• For example, a company with a low-cost strategy needs efficient operations, while a company with a differentiator strategy needs flexible operations

Operations Planning Factors

• Major factors considered in operations planning include forecasting, capacity planning, and supply chain management
• These factors help determine the production schedule, inventory levels, and supply chain logistics

Operations Schedule

• The following are types of operations schedules: master schedule, production schedule, and material requirements planning schedule
• The "purchase schedule" is NOT a type of operations schedule

Operations Control

• Two key activities required for operations control are monitoring and correcting
• Monitoring involves tracking performance metrics, while correcting involves taking action to correct deviations from the plan

Operations Management

• The systematic direction and control of activities that transform resources into finished products is called operations management
• Operations managers oversee the production process to ensure quality, efficiency, and customer satisfaction

Service Systems

• A low-contact system involves a low level of customer contact in service delivery
• Examples of low-contact systems include online banking and self-service kiosks

Production Location

• The location of production is determined by factors such as costs and flexibility
• Companies often locate production facilities in areas with low labor costs or proximity to suppliers

Production Systems

• Job production involves activities for one-of-a-kind or custom-made production
• Mass production involves producing standardized products for mass consumption
• Batch production involves producing small batches of products

Product Value

• The ability of a product to satisfy a human want or need is called product value
• Operations managers strive to create products that meet customer needs and provide value to customers

Operations Managers

• Operations managers are responsible for ensuring that operations activities create value and provide benefits to customers
• They oversee the production process to ensure quality, efficiency, and customer satisfaction

Business Strategy and Operations

• A company's business strategy determines its operations capabilities
• For example, a company with a low-cost strategy will require efficient operations, while a company with a differentiator strategy will require flexible operations

Production Methods

• The set of methods and technologies used to produce a good or a service is called a production method
• Examples of production methods include lean manufacturing and just-in-time production

Production Capacity

• Capacity planning involves determining the amount of a product that a company can produce under normal conditions
• This helps companies determine their production capacity and make informed decisions about resource allocation

Mass Production

• Mass production involves producing standardized products for mass consumption
• Examples of mass production include assembly-line production and continuous production