Exam 18: Managing Service and Manufacturing Operations

Why is productivity important to countries?

Which of the following is continuous improvement typically associated with?

Connie is the president of a gift baskets company.She is quite happy with the sales manager she hired earlier in the year.Connie has noticed more customers calling to say how happy they are with the baskets prepared for them.She has also noticed many customers placing subsequent orders.What has the new sales manager brought to Connie's company?

One key assumption in the service business is that success depends on how well employees deliver their services to customers.However,which of the following does the service-profit chain assume success depends on?

Robin Subaru centrifugal pumps combine a powerful overhead-cam engine,heavy-duty construction,and reliable performance for dewatering in light construction,flood control,homeowner,firefighting,and irrigation applications.The pumps are also designed for durability.Which statement best describes these pumps?

What is a requirement for ISO 9000 certification?

ISO 9000 standards describe how to make better products.

The purpose of service recovery is to restore customer satisfaction to strongly dissatisfied customers.

What may cause ISO 9000 suspension or cancellation?

Which inventory management situation involves independent demand systems?

What does service recover restore for the company?

Narrative 18-2 Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J.D. Power initial car quality survey. With $6.6 billion in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company's first-ever loss, Hyundai's new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company. The challenge for Chung was to get his managers to put quality, not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colours-a tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant chief to paint all bolts and screws black and ordered workers not to release any car unless all was orderly under the hood. He then publicly declared that Hyundai would produce higher-quality cars than Toyota by 2008, and that Hyundai would produce the best quality cars in the auto industry. Today, each workweek starts with a demanding three-hour meeting attended by managers, engineers, designers, and suppliers. In his large boardroom, Chung displays Hyundai cars on rotating turntables or mechanical lifts-whatever is required for those in attendance to see up close what problems need to be fixed. Hyundai managers now measure everything. Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The quality department at Hyundai has grown from 100 to 1,000 people, who now report directly to CEO Chung. All employees share their ideas about how to improve quality because Chung communicated to workers that their ideas were critical and welcomed. To prove it, he rewarded them with bonuses averaging $150 per employee. At one Hyundai factory, workers have suggested 25,000 ideas for improving quality, 30 percent of which have been implemented in the factory. For instance, a worker noticed that the Hyundai Sonata and SG 350 sedans had identically sized spare tires, but different-sized spare tire covers. Though it may sound trivial, using the same spare tire cover for both cars saves Hyundai $100,000 a year. Hyundai addresses customer complaints as quickly as possible, and these quick responses to customer complaints have had dramatic results, such as reducing Hyundai Santa Fe's score in J.D. Power's initial car quality survey from 149 problems per 100 cars to 93 problems per 100 cars in just one year. Finally, if the greatly improved quality isn't enough to convince prospective buyers to buy a Hyundai, the company believes that its 5-year/100,000 km warranty may be enough. The longest, most comprehensive warranty in the auto industry shows the confidence the company has in its cars. And those extensive warranties probably won't cost Hyundai much either, as the improved quality of its cars has cut the cost of warranty repairs, which are paid for by headquarters, by 35 percent over the last three years. -Refer to the Narrative 18-2.Which type of manufacturing operation are North Americans who manufacture NEC,Fujitsu,and Sony products using?

A relatively large Swiss population lives in northern London,England.The Swiss newspaper Neue Zurcher Zeitung has recently begun publishing the paper in London (instead of having copies flown in from Zurich).The paper contains many of the items that are in the Swiss-published paper as well as information that is important to the Swiss living in England.Which type of operation does the newspaper publisher use,in terms of the amount of processing?

What is the term for restoring customer satisfaction to strongly dissatisfied customers?

What types of companies can apply for ISO 9000 certification?

At their core,companies are production systems that combine inputs,such as labour,raw materials,capital,and knowledge,to produce outputs,such as finished goods or services.

Many organizations rely on teaming as a key to their productivity and credit their use of teams with performance improvements,such as increased efficiency,improved participation and innovation,error reduction,quality improvement,increased responsiveness,cost-effectiveness,better customer service,and improved employee satisfaction.Which of the following is this statement illustrating?

Narrative 18-1 In recent years, Japanese companies such as Mitsubishi, NEC, Fujitsu, and Sony began turning to North America to manufacture Japanese products. While Sony, Panasonic, and other Japanese giants still excel at cranking out high-quality consumer electronics products-such as camcorders and TVs-by the millions, it's a different story in industries with short product cycles and factories that must build what customers order instead of churning out products in anticipation of demand. Japan's great strength-repetitive manufacturing-is becoming its greatest weakness. This production-on-demand form of management cannot depend on JIT. Instead, the North American companies rely on raw-in-process inventory, or RIP. RIP calls for keeping a reasonable quantity of varied raw materials or components on hand to meet changing customer demand. -Refer to the Narrative 18-1.When Chung Mong Koo,as Hyundai's new chairman and CEO,visited a Hyundai plant,he strode onto the factory floor and demanded to look under the hood of a Sonata sedan.He didn't like it when he saw loose wires,tangled hoses,and bolts painted four different colours.This car was not being built the way it was designed,and its manufacturing flaws resulted in it not working as it was supposed to.Therefore,which of the following did Hyundai have a problem with?

Define productivity.Provide an everyday example of a measure of productivity that consumers sometimes use in deciding which car to purchase.

Which of the following recognizes companies that follow the management system put in place to improve quality?