Учебно-методический комплекс дисциплины «иностранный язык (профессиональный)»
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Activities
Theme VIII: Resources in Production/Operations Systems Lecture 8. Learning Objectives: An understanding of the material in this lecture should enable the student to 1. Describe the functions of production/operations managers 2. Know different types of direct sales 3. Give definitions of who are brokers, distributors, what are private labels , industry trade show Managers in production and operations functions practice production/operations management. They do not practice behavioral science, quantitative methods or systems analysis, although they utilize these underlying disciplines. Likewise doctors do not practice biology, although they know how to use biological methods. While methodologies are certainly important, they are not essence of POM. Production/operations managers are principally concerned with the use of physical resources; therefore we shall take a physical view of production/operations systems and concentrate on the physical resources used by the system, which for convenience will be categorized as follows: 1. Materials, i.e. the physical items consumed or converted by the system, e.g. raw materials, fuel, indirect materials. 2. Capital, i.e. the physical items equipment and facilities, used by the system, e.g. plant, tools, vehicles, buildings. 3. Human Resources, i.e. the people, workers and managers, who provide or contribute to the operation of the system, without which neither machine nor materials are effectively used. "External Information" may be added as input of a production/operations system in addition to physical resources. The production/operations manager's job is to manage the process of converting inputs into desired outputs. Our definition of production/operations management is, then, the management of conversion process, which converts land, labor, capital and management input into desired output of goods and/or services. In conjunction with other functional areas, it also deals with the management of resources (inputs) and the distribution of finished goods and services to customers (outputs). In conjunction with other functional areas, it also deals with the management of resources (inputs) and the distribution of finished goods and services to customers (outputs). Production/Operations Management is the systematic direction and control of the process that transforms inputs into finished goods or services. As mentioned before, the term "Production/Operations Management" evolved from factory oriented terms like "manufacturing management", "production management" and "production operations", but its present meaning has been broadened to embrace service industries and non-profit activities as well. The underlying theory of production/operations management is common to both goods and services production. Forecasting, scheduling, quality control and other managerial activities have much in common from one type of operation to the next. Thus most of the theory is as applicable to the management of university hospital or airline operations as it is to the manufacture of televisions. Fig.1 represents operations where resources are utilized and transformations occur. The heart of POM is the management of production systems. A “Production/Operations System”, as defined above, uses operations resources to transform inputs into desired output. An “Input” may be a raw material, a customer, or a finished product from another system. Operations resources consist of what we term the “Five P’s of POM”: people, plants, parts, processes, and planning and control systems. “People” are direct and indirect workforce. “Plants” include factories or service branches where production is carried out. “Parts” include the materials (or, in the case of services the supplies) that go through the system. “Processes” include the equipment and steps by which production is accomplished. “Planning and Control Systems” are the procedures and information management uses to operate the system. Often a product passes through several such operations before being finished. An operation can be a machine centre in a manufacturing plant, a teller station in a bank or a department in an office. The types of transformation vary widely and include physical or chemical (a factory), locational (an airline), attitudinal (a theatre), educational (a school), physiological (an emergency room), informational (a computer centre), exchange (a store) and storage (a distribution centre). Customer may come in direct contact with the production system and sometimes is an active participant in the transformation e.g. the student at the university. The essence of the operations function is to add value during the transformation process: “value-added” is the term used to describe the difference between the costs of inputs and the value or price of outputs. In addition to this if the focus of the firm is the customer; everything the firm does should improve matters for the customers. This gives rise to the concept of the value-added. This concept applies not only to essential manufacturing steps, but also managerial, administrative and service activities as well. An improved design process, for example, adds value. Here are some examples to describe the inputs, the transformation and outputs of the productive system: University Library Inputs……. Librarians, staff, library facilities and equipment, energy, capital. Transformation Process…Organizing information, arranging materials for access, interacting with library users. Outputs… … Students and faculty provided with research and study materials. Hotel Inputs… … Facilities, staff, materials for housekeeping and food preparation, communications equipment, energy, capital. Transformation Process…Taking reservations, check-in and checkout procedures, providing other services. Outputs… … Customers satisfied with lodging and related services. Small Manufacturing Firm Inputs… … Raw materials, workers, supervisors, management, warehouse, manufacturing facilities and equipment, energy, capital. Transformation Process…Ordering raw materials, transforming and assembling raw materials into final product, packaging product, taking supply orders. Outputs… … Customers satisfied with the way the product appears and operates. Distribution is the means of getting your product into the hands of consumers. Although distribution methods and strategies vary depending on the individual company, its product, business plan and target market, there are six basic ways to get products distributed. These include: direct sales to the consumer direct sales to retailers direct sales to food service contracting with a distributor contracting with a broker co-packing for private labels industry trade shows A key factor in developing your distribution plan is the availability of your product. Because small producers often are not equipped for large scale production, they often begin by introducing their product into a small geographic area. Your five-year plan could call for you to introduce your product locally, then expand the market to include the whole region and ultimately make the product available nationally. When developing this plan, consider your potential customers, the shelf stability of your product and shipping costs. Also consider using brokers and distributors or filling orders by mail as alternate ways of penetrating distant markets. You probably will not be able to call on retailers and distributors nationwide. Of course, if your product is a regional specialty, you will have limited markets beyond your home territory and may not be able to expand to national distribution. The growth of your production capability should not be rushed. Do not overextend yourself by selling to too many outlets, too soon. Grow the business gradually so that you can fulfill orders in a timely fashion, without straining your systems. Do not contract with distributors, brokers or retailers until you are confident you can fill your orders on time, both now and in the near future. Many new companies sell product directly to the retailer. Competition for shelf space is fierce and until you can demonstrate that your product will sell, distributors and brokers may be skeptical about trying your product. You need to make the rounds, pitching your product to retailers at gift shops, specialty food stores and retail locations. That is another reason to introduce your product in a small area at first. Direct Sales to the Consumer There are several avenues available to companies wanting to sell their products directly to the consumer. Selling direct is suited to specialized products or a small number of customers. While it eliminates the middleman, the processor takes on most of the marketing and distribution functions. Companies can sell direct by using: farmers’ markets special events craft shows mail order the internet Direct Sales to Retailers The available markets for food products are expanding. There are many more options and outlets than in the past. Primary markets include specialty food stores, independent and chain grocery stores, delicatessens, bed and breakfast establishments, kitchen and cookware stores, retail shops, gift shops, gift basket businesses and buyers’ clubs. The demand for shelf space is fierce, therefore marketing programs geared to retailers and consumers are critical. Direct Sales to Food Service The variety of food service establishments vary from snack bars to white tablecloth restaurants and the need for products and services are equally as diverse. Products are sold in bulk and therefore will usually reduce your labeling and packaging requirements. Distributors A distributor buys your product and resells it, at a profit, to his accounts. The benefit of using a distributor is that they do the job of selling your product. Distributors offer experience, contacts and market segments such as gift stores, grocery chains, delicatessens, food service or specialty food stores. They have existing accounts and work to increase their market share. Brokers While distributors buy product from you, brokers do not. They represent your product in return for a commission on sales. They sell directly to retailers and distributors. In some respects, brokers act in much the same way as a company salesperson by selling, maintaining accounts and representing your product directly to the buyer. A broker is useful when you are attempting to market a product into a new outlet or region. Private Label Private label products are made for retail buyers, wholesalers or brokers who exclusively own and utilize the label name. Superstore’s President’s Choice is an example. The manufacturer is under contract to produce the product according to the specifications of the label owner. The owner promotes and advertises the product. Industry Trade Shows Most industries hold trade shows or exhibitions to display the latest products and services offered by suppliers to the industry. Trade shows provide a forum to discuss new products, services and technological developments. They are also an opportunity to increase client contacts and sales. Activities: 1. Why does a corporation need capital? 2. What are the two basic types of financing used by a corporation? 3. From whom are funds acquired for each type of financing? 4. What does planning involve?
Why does one share of stock entitle the purchaser to? Review Questions according to lectures (6-8). 1. What is marketing? 3. What are the four main elements of marketing? 4. What is involved in the production element of marketing? 5. What are the three pricing options that a company may take? 6. What does placement involve? 7. Do you think McDonald’s provide food on a wholesale or retail basis? 8. What are some advertising media besides magazines and newspapers? 9. If you were to specialize in one of the marketing elements, which one would you choose – product, price, placement, or promotion? Why? 10. What is the target mix? 11. What do the elements of the marketing mix focus on? 12. What is the group of customers who will probably buy the product known as? 13. What does a successful marketing mix depend on? 14. Why are the consumers who make up the target market for a product referred to as “potential” customers? 15. In a successful marketing operation, do the four elements of product, price, placement, and promotion work together or in isolation? Give a reason to support your answer. Self Test Questions Circle the letter of the answer that best completes each of the sentences below. 1. The four main elements of marketing are popularly known as: A. the movement of goods and services. B. the four P’s. C. the four M’s. D. buying, selling, market research, and storage. 2. The product element refers to: A. the four P’s. B. testing of a product to insure quality. C. the good or service that a company wants to sell. D. getting the product to the customer. 3. Most companies price: A. with the market. B. below the market. C. beyond the market. D. above the market. 4. A common channel of distribution is: A. wholesaler – retailer – manufacturer – customer. B. manufacturer – retailer - wholesaler –– customer. C. retailer - manufacturer - wholesaler – customer. D. manufacturer - wholesaler - retailer - – customer 5. The two major forms of promotion are: A. radio and television. B. personal selling and advertising. C. personal selling and newspapers. D. selling advertising. 6. Nations import goods they: A. produce efficiently. B. specialize in. C. lack or cannot produce efficiently. D. do not need or desire. 7. Specialization often results in: A. increases output. B. decreased costs. C. higher standard of living. D. all of the above. 8. The United States is able specialize in the computer industry because of its _____ recourses. A. natural. B. technical. |
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