Professional Documents
Culture Documents
Date: 6/17/06
Class: Intro to Business
Professor: McNamara
Chapter 7
Questions on page 214
Chapter 8
Questions from page 244
What are some reasons for having a narrow span of control in an organization?
In some organizations that have subordinates that need close supervision it would be
good to have a narrow span of control also the more coordination needed the more
narrow the span of control will have to be. When there are high planning demands and
functional complexity there needs to be a narrow span of control to ensure things run
smoothly.
What is reengineering?
Reengineering is the fundamental rethinking and radical redesign of organizational
processes to achieve dramatic improvements in critical measures of performance. Note
the words radical redesign and dramatic improvements. At IBM/s credit organization for
example, the process for handling a customer’s request for credit once went through a
five-step process that took an average of six days. By completely reengineering the
customer-request process, IGM cut it credit request processing time form six days to four
hours. In reengineering, narrow, task-oriented jobs become multidimensional.
Employees who once did what they were told now made their own decisions.
Chapter 9
Questions from page 281
Can you name and define three functions that are common to operations management in
both the service and manufacturing sectors?
Three functions that are common in operations management to the service and
manufacturing industries are Facility location which is the process of selecting a
geographic location for a company’s operations. In keeping with the need to focus on
customers, one strategy in facility location is to find a site that makes it easy for
consumers to access the company’s service and to maintain a dialogue about their needs.
Today you will see flower shops, banks and even McDonalds in supermarkets so that
their services and products are more accessible to the public. A major issue of the recent
past has been the shift of manufacturing organization from one city or state to another in
unemployment in some geographic areas and lead to tremendous economic growth in
others. One of the most common reasons for a business move is the availability of
inexpensive labor to the right kind of skilled labor. Even though labor cost is becoming a
smaller percentage of total cost in some highly automated industries, the low cost of labor
remains a key reason many producers move their plants. Inexpensive resources are
another major reason firms may relocate or choose a certain location for production.
Facility layout is the next common function. Facility layout is the physical arrangement
of resources (including people) in the production process. The idea is to have offices,
machines, storage areas, and other items in the best possible position to enable workers to
produce goods and provide services for customers. Facility layout depends greatly on the
processes that are to be performed. For services, the layout is usually designed to help
the consumer find and buy things. More and more, that means helping consumers find
and buy things on the internet. For manufacturing plants, facilities layout has become
critical because the possible cost savings are enormous. The Delphi Automotive Systems
plant in Oak Creek, Wisconsin, is huge – a walk around the outside would be more than a
mile. Delphi makes catalytic converters for 40 different automobile manufacturers.
Product delivery once took 21 days, but with today’s more modern layout, delivery takes
less than a week. The plant was redesigned to reduce cost, to increase productivity, to
simplify the process, and to speed thins up. Compared to the old plant, the new plant
uses only half of the space, 2 percent of its powered conveyor system and 230 fewer
processes. Productivity increased by over 25 percent, and the plant is now more
profitable. Quality control is the third common function. Quality is consistently
producing what the customer wants while reducing errors before and after delivery to the
customer. Earlier in the United Sates, quality control was often done by quality control
departments at the end of the production line. Products were completed and then tested.
This resulted in several problems: there was a need to inspect other people’s work; this
took extra people and resources. If an error was found, someone would have to correct
the mistake or scrap the product. This of course was costly. IF the customer found the
mistake, he or she might be dissatisfied and might even buy form someone else thereafter.
Companies have turned to the use of modern quality control standards, such as six sigma.
Six sigma qualities (just 3.4 defects per million opportunities) detect potential problems
to prevent their occurrence. Statistical quality control (SQC) is the process some
managers use to continually monitor all phases of the production process to assure that
quality is being built into the product from the beginning. Statistical process control
(SPC) is the process of taking statistical samples of product components at each stage of
the production process and plotting those results on a graph. Holiday Inn authorized its
hotel staff to do almost anything to satisfy an unhappy customer, from handing out gift
certificates to eliminating charges for certain services. Empowerment gives managers
and employees the authority to waive charges for the night’s stay if the customer is still
unhappy.
What is involved in the implementing each of the following: six sigma, SQC, SPC, QFD,
ISO 9000 and ISO 14000?
Six sigma involves a firm to have their quality at a level of just 3.4 defects per million
opportunities this will help them to detect problems before they occur. SQC (Statistical
Quality Control) is the process some managers use to continually monitor all phases of
the production process to assure that quality is being built into the product from the
beginning. SPC (Statistical Process Control) is the process of taking statistical samples
of product components at each stage of the production process and plotting those results
on a graph. Any variances from quality standards are recognized and can be corrected if
beyond the set standards. Making sure product meet standards all along the production
process eliminates or minimized the need for having a quality control inspection at the
end. QFD (Quality function deployment) is a process of linking the needs of end users
(customers) to design, develop, engineering, manufacturing, and service functions. The
goal is to go beyond not making mistakes to maximizing customer satisfaction. One way
to do that is to identify customer’s spoken and unspoken needs and to meet as many of
those needs as possible by constantly improving. QFD came out of Japan but is now
used in many leading companies. ISO 9000 is the common name give to quality
management and assurance standards. The latest standards, called ISO 9001: 2002, were
published in 2002. The new standards require that a company must determine what
customer needs are, including regulatory and legal requirements. The company must also
make communication arrangements to handle issues such as complaints. SIO 14000 is a
collection of the best practices for managing an organization’s impact on t environment.
It does not prescribe a performance level. ISO 14000 is an environmental management
system (EMS). The requirements for certification include having an environmental
policy, having specific improvement targets and maintaining top management review.
Questions from page 284
Can you define and differentiate the following: process manufacturing, assembly process,
continuous process, and intermittent process?
Process manufacturing physically or chemically changes materials. For example, boiling
physically changes and egg (similarily, process manufacturing turns sand into glass or
computer chips.) The assembly process puts together components (eggs, toast, and
coffee) to make a product (breakfast) cars are made through an assembly process. A
continuous process is one in which long production runs turn out finished goods over
time. As the chef in our diner, you could have a conveyor belt that lowers eggs into
boiling water for three minutes and then lifts them out on a continuous basis. A three—
minute egg would be available whenever you wanted one. (A chemical plant for example
runs a continuous basis) it usually makes more sense when responding to specific
customer orders to use intermittent process This is an operation where the production run
is short (one or two eggs) and the machines are changed frequently to make different
products.
Draw a PERT chart for making a breakfast of three-minute eggs, buttered toast and
coffee. Define the critical path. How could you use a Gantt chart to keep track of
production?