1. 1 Chapter 18 Managing Service and Manufacturing Operations Designed & Prepared by B-books, Ltd. MGMT Chuck Williams

2. 2 Operations Management Managing the daily production of goods and services.

3. 3 Why Productivity Matters Higher Productivity Higher Productivity Lower Costs Lower Costs Lower Prices Lower Prices Higher Market Share Higher Market Share Higher Profits Higher Profits Higher Standard of Living Higher Standard of Living 1.1

4. 4 Kinds of Productivity Partial productivity = Outputs Single Kind of Input Multifactor productivity = Outputs Labor + Capital + Materials + Energy 1.2

5. 5 Quality Baldrige National Quality Award Baldrige National Quality Award Total Quality Management Total Quality Management ISO 9000 & 14000 Quality-Related Product Characteristics Quality-Related Service Characteristics 2 2

6. 6 Meanings for Quality …A product or service free of deficiencies …The characteristics of a product or service that satisfy customer needs …The characteristics of a product or service that satisfy customer needs Quality 2 2

7. 7 Service Operations Services… are performed are intangible are unstorable 57.2% of GDP Goods… are made are tangible are storable 32.7% of GDP 3 3

8. 8 Service Operations Service-Profit Chain Service Recovery and Empowerment Service Recovery and Empowerment 3 3

9. 9 Manufacturing Operations Amount of Processing Flexibility of Manufacturing 4 4

10. 10 Inventory Costs of Maintaining Inventory Systems for Managing Inventory Types of Inventory Measuring Inventory Levels 5 5

11. 11 Managing Inventory Economic Order Quantity Just-in-Time Inventory Materials Requirement Planning EOQ JIT MRP 5.4