MGM 10 - 16 OCT - What Firms sell? MGT 101H Introduction to...

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MGT 101H Introduction to Management Functions Operations Management Session 1: October 14 th , 2008 Session 2: October 16 th , 2008 Key Questions • What is operations management? • How is value to the customer impacted by operations? • What are the attributes of quality? • How do organizations plan and produce? • How does the operations manager approach their job? • Roles for operations managers What is Operations Management? • Operations Management (OM): Efficient and effective activities that create valuable goods and services by transforming inputs into outputs • Foundations of OM – Customers (external & internal) – Processes (inputs -> activities -> outputs) – Capacity (level and type of outputs) • The Value Equation: Customers value goods and services according to the following equation: – (Quality + Speed + Flexibility) / cost What Firms sell? • The four main companies I’ve worked for all sell both goods and services: General Motors • Build and sell cars • Finance cars and sell residential mortgages • Provide OnStar to drivers Deloitte • Deliver audits, give tax advice, and consult • Sell various proprietary software packages Carillion • Build hospitals, deliver food to patients, maintain facilities • Dig ditches, move earth, pave roads • Plow snow, patrol highways • Manage projects Wasteco • Pick up, haul & ship garbage, recyclables, and organic waste • Transfer station services, product destruction, secure shredding Value-Added Activities of an Operating Manager Operations managers make decisions related to: Where to Operate? – Location of plants, head offices, service sites, cyberspace, etc. Plant/Facility Layout & Design – Unique arrangement of activities, equipment, and people to drive efficiencies, increase safety, reduce bottlenecks, and maximize flexibility How to Maximize Quality? – Monitoring and manipulating the operational processes to “build-in” quality from the start How to Produce? – Production method impact on competitiveness (attractiveness to customers) of output Quality Initiatives • Lofty goals like “zero defects” require an integrated system of quality control that utilizes some or all of these approaches: Six Sigma is an approach, made famous by Jack Welsh of GE, of setting and regularly measuring against near-perfect performance targets for all key processes Total Quality Management is an initiative based on the tenants of commitment to quality, total involvement (teamwork), use of statistics, and continuous improvement (a.k.a. Kaizen ) – International Organization for Standardization (ISO) designations (9000 / 14000) prescribe process and documentation standards, and enhance compliance through periodic auditing
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Quality Initiatives (Cont’d) • Other methods to achieve superior quality include: Outsourcing parts of/whole processes reduces costs and streamlines operations, as non-core activities are eliminated, allowing focus on what the company is best at Supply Chain Management
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This note was uploaded on 04/25/2010 for the course MANAGEMENT MGM 100 taught by Professor Appleyard during the Fall '10 term at University of Toronto- Toronto.

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MGM 10 - 16 OCT - What Firms sell? MGT 101H Introduction to...

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