Mod 5 Reading Notes - Module 5: Production & Quality...

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Module 5: Production & Quality Management Reading Notes – Textbook and Reader Ch 7: Operations Management and Quality A. What does Operations Mean Today? a. Service Operations (Service Production) = those that provide intangible and tangible service products, such as entertainment, transportation, edu, and food prep. b. Goods operations (good production) = firms that make only tangible products, ie radios, newspapers, books c. Operations (production) refers to all activities involved in making products—goods and services—for customers. Managers in service sector give more consideration to human element (instead of machines) b/c success w/customers affect customer feelings about service B. Creating Value thru Operations a. Utility = a product’s ability to satisfy a want or need i. Forum utility – by converting raw materials and human skills into finished goods. production makes products available ii. Time utility – adds customer value by making products aval when customers want them iii. Place utility – makes products aval where they are convenient for customers b. Operations (production) management = systematic direction and control of processes that transform resources into finished services and goods that create value for and provide benefits to customers. Operation production managers – responsible for ensuring operations create what customers want/need. Managers draw up plans to transform resources into products. They bring together basic resources (knowledge, physical materials, info, equipment, customer, human skills) – put them into effective use in production facility and schedule/control work to produce required amt to meet demands. They control costs, quality level, inventory, equipment. May work in factories or offices, or even be farmers (create utility by using soil, seeds, fuel, etc) c. Differences b/n service goods/manuf operations i. Service operations – finished product = people w/needs met and possessions serviced. Services are preformed, goods are produced. 4 aspects of service operations 1. Interacting w/customers: service operations are combo of goods and services – make pizza and deliver it. Service workers need different skills, like repair pipes and calm customers 2. Services can be Intangible and Unstorable a. Intangibility: services can’t be touched, tasted, smelled- customers receive pleasure, gratification, feeling of safety (hiring an attorney) b. Unstorability: services can’t be produced ahead of time and stored for higher demand purposes. If a service isn’t used when aval, then it’s usu wasted 3. Customer’s presence in operations process: customer is often present in operations process b/c service operations transform customers or their possessions. Ex = haircut – expect good location, times, safety, and good prices. Also need to be able to cater to customer’s specific needs 4. Intangibles count for service quality: customers use diff measures to judge services/goods b/c services incl intangibles not just physical objects. Car may be well repaired (quality of work)
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Mod 5 Reading Notes - Module 5: Production & Quality...

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