PowerPoint assignment - due in 36 hours ch 7 to 12
combs
Chap009_powerpoint.ppt
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Chapter Nine
Production and Operations Management of Goods and Services
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
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Profile
- Current CEO and President of IBM, he started in the company in 1973.
- The company invested $16 billion in acquiring 60 other companies.
- Switching the company’s focus from production to service, Palmisano has led IBM to enter the emerging global market.
SAMUEL J. PALMISANO
IBM
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Manufacturing and Services in Perspective
- From 2001 to 2009, manufacturing output in the U.S. rose 4% each year.
- The U.S. is still the world’s leading manufacturer.
MANUFACTURING in the U.S.
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- Almost 25% of all goods produced each year come from the U.S.
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Students are often surprised to read that the United States is the world’s leading manufacturer, producing 25 percent of all goods produced worldwide. To start a discussion ask students: What items do companies in the United States produce?
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Source: Parade Magazine, www.parade.com/intel, April 19, 2009.
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Manufacturing and Services in Perspective
WHAT’S MADE in the USA?
Leading U.S. Manufactured Goods
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| Products | Value | Number of Employees |
| Chemicals – Pharmaceuticals, cosmetics, soaps, paints, fertilizers | $250 Billion | 830,000 Americans |
| Transportation Equipment – Cars, planes, trains, ships | $195 Billion | Over 1.4 Million Americans |
| Processed Foods, Beverages and Tobacco – Cookies, coffee, cigarettes, prepared meals | $175 Billion | 1.7 Million Americans |
| Computers and Electronics – Computers and communication equipment | $146 Billion | 1.2 Million Americans |
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
What’s Made in the USA?
- This slide presents the leading goods manufactured in the United States.
- Ask students: Why are the goods on the slide manufactured in the United States? (Student’s answers will vary but should focus on the abundance of certain factors of production and the United States’ comparative advantage in the production of capital intensive products, topics that were covered earlier in the text)
- To determine what goods are manufactured in a particular state use the Bureau of Economic Analysis website (www.bea.gov).
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Source: BusinessWeek, www.businessweek.com, November 12, 2007.
Exporters Extraordinaire
Top Ten States that Manufacture Goods for Export
Manufacturing and Services in Perspective
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| State | Thousands of Workers |
| California | 206.1 |
| Texas | 108.9 |
| Ohio | 95.6 |
| Michigan | 79.8 |
| New York | 77.2 |
| Illinois | 76.6 |
| Pennsylvania | 71.8 |
| Washington | 71.3 |
| North Carolina | 60.1 |
| Indiana | 59.6 |
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Leading US Manufacturing States
- This slide identifies the ten leading manufacturing states in terms of jobs created in the U.S for exports.
- Ask the students if they are surprised about any of the states listed being among the largest employers in manufacturing.
3. As mentioned in the previous slide it might be useful to explore what items are being produced in each of the states mentioned in this slide by visiting www.bea.gov.
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Source: Industry Week, www.industryweek.com.
MASSIVE MANUFACTURERS
The Top Ten U.S. Manufacturers
Manufacturing and Services in Perspective
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| Rank | Company |
| 1 | Exxon-Mobil |
| 2 | Chevron |
| 3 | ConocoPhillips |
| 4 | General Electric |
| 5 | General Motors |
| 6 | Ford Motor |
| 7 | Valero Energy |
| 8 | Hewlett-Packard |
| 9 | IBM |
| 10 | Procter & Gamble |
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Top Ten Manufacturers
- This slide presents the top ten manufacturers according to the 2009 Industry Week’s US 500 largest publicly held manufacturing companies based on revenues.
- The list represents companies from 33 industries, 40 states, and boasts a combined revenue of nearly $4.9 trillion.
- One quick observation from this slide – it is dominated by oil and energy companies. Ask the students: How much do you pay per gallon of gas? Does that have any impact on this listing? (Answer is obvious – higher the gas price, more money the oil companies are making in both revenues and profits.)
- On this list, ExxonMobil had revenue of $466 billion, Chevron had revenue of $267billion, ConocoPhillips revenue was $241 billion whereas Valero Energy had revenue of $119billion.
(Source: Industry Week, May 20, 2009.)
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- The Green Economy is worth more than $200 billion annually and is expected to reach $1 trillion by 2020.
- Consumers like products that say “all natural,” “locally grown,” “energy efficient,” etc.
- The market for new green products and services is almost endless.
- The Green Movement, however, is only beginning.
The “GREEN” MOVEMENT
IMPROVES the ECONOMY
(Thinking Green)
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
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- The U.S. economy is no longer manufacturing based.
- 85% of jobs are in the service sector.
- The top-paying service jobs in the U.S. are in:
- Legal services
- Medical services
- Entertainment
- Accounting
- Finance
- Management consulting
TOP PAYING SERVICE JOBS
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Manufacturing and Services in Perspective
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
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Manufacturers
and Service Organizations Become More Competitive
- U.S. is still the leader in nanotechnology and biotechnology.
- How can U.S. businesses maintain a competitive edge?
- Focusing on customers
- Practicing continuous improvement
- Focusing on quality
- Relying on the Internet to unite companies
- Adopting new production techniques.
REMAINING COMPETITIVE in
GLOBAL MARKETS
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
The famous economist Joseph Schumpeter believed in continuous improvement and discussed capitalism as a force for creative destruction. If the United States is to remain competitive the nation as a whole must continually innovate eschewing old inefficient industries in favor of capital intensive knowledge driven industries.
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From Production to Operations Management
- Production -- The creation of goods using land, labor, capital, entrepreneurship and knowledge (the factors of production).
PRODUCTION and
PRODUCTION MANAGEMENT
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- Production Management -- All the activities managers do to help firms create goods.
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See Learning Goal 2: Describe the evolution from production to operations management.
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From Production to Operations Management
- Operations Management -- A specialized area in management that converts or transforms resources into goods and services.
- Operations management includes:
- Inventory management
- Quality control
- Production scheduling
- Follow-up services
OPERATIONS MANAGEMENT
LG2
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See Learning Goal 2: Describe the evolution from production to operations management.
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Progress Assessment
- What have U.S. manufacturers done to regain a competitive edge?
- What must U.S. companies do to continue to strengthen the country’s manufacturing base?
- What led companies to focus on operations management rather than production?
PROGRESS ASSESSMENT
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- What have U.S. manufacturers done to regain a competitive edge? Manufacturers have regained a competitive advantage by focusing on the following: he needs of customers, maintaining a close relationship with suppliers to make sure they are meeting customer needs, practicing continuous improvement, focusing on quality, saving on costs through better site selection, using new technologies such as the internet, adopting new production techniques.
- What must U.S. companies do to continue to strengthen the country’s manufacturing base? To strengthen the nation’s manufacturing base will require an adjustment and recognition of the new realities in manufacturing. This will require focusing on new technologies such as the green ventures discussed in your textbook.
- What led companies to focus on operations management rather than production? The nature of business has changed dramatically in the past twenty years forcing companies to focus on operations management. One change is the shift from a manufacturing economy to one dominated by the service industry. Operations management is a more specialized area of management that converts resources into useful outputs.
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Production Processes
The PRODUCTION PROCESS
LG3
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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Production Processes
- Form Utility -- The value producers add to materials in the creation of finished goods and services.
FORM UTILITY
LG3
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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- To build and deliver products in response to the demands of the customer.
- To provide an acceptable quality level.
- To provide everything at the lowest possible cost.
GROVE’S BASIC PRODUCTION REQUIREMENTS
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Production Processes
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Andrew Grove is the former chairman of computer chip manufacturer Intel.
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- Process Manufacturing -- The part of production that physically or chemically changes materials.
- Assembly Process -- The part of the production process that puts together components.
PROCESS and ASSEMBLY in PRODUCTION
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Production Processes
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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- Production processes are either continuous or intermittent.
- Continuous Process -- Long production runs turn out finished goods over time.
- Intermittent Process -- Production runs are short and the producer adjusts machines frequently to make different products.
KEY PRODUCTION PROCESSES
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Production Processes
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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MADE in a MINUTE
Production of Some of America’s Favorite Products
Production Processes
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| Product | Number of Items Made in a Minute |
| Krispy Kreme Doughnuts | 5,208 |
| Chips Ahoy! Cookies | 4,000 |
| Twinkies | 972 |
| Jello Boxes | 764 |
| LifeSavers | 100 rolls |
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Production Efficiency
- This slide presents the production efficiency of various products.
- Before introducing this slide, it would be interesting to ask the students to take a guess: How many Krispy Kreme Doughnuts or Chips Ahoy! Cookies are made every minute?
- Again it is important to reinforce the point that production efficiency directly translates into cost savings and therefore profits.
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The Need to Improve Production Techniques and Cut Costs
DEVELOPMENTS MAKING U.S. COMPANIES MORE COMPETITIVE
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- Computer-aided design and manufacturing
- Flexible manufacturing
- Lean manufacturing
- Mass customization
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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Computer-Aided Design and Manufacturing
COMPUTER-AIDED DESIGN and MANUFACTURING
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- Computer-Aided Design (CAD) -- The use of computers in the design of products.
- Computer-Aided Manufacturing (CAM) -- The use of computers in the manufacturing of products.
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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Flexible Manufacturing
FLEXIBLE MANUFACTURING
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- Flexible Manufacturing -- Designing machines to do multiple tasks so they can produce a variety of products.
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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Lean Manufacturing
LEAN MANUFACTURING
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- Lean Manufacturing -- Using less of everything than in mass production.
- Compared to others, lean companies:
- Take half the human effort.
- Have half the defects in finished products.
- Require one-third the engineering effort.
- Use half the floor space.
- Carry 90% less inventory.
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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Mass Customization
MASS CUSTOMIZATION
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- Mass Customization -- Tailoring products to meet the needs of a large number of individual customers.
- More manufacturers are learning to customize.
- Mass customization exists in the service sector too.
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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Progress Assessment
- What’s form utility?
- Define and differentiate the following: process manufacturing, assembly process, continuous process and intermittent process.
- What do you call the integration of CAD and CAM?
- What’s mass customization?
PROGRESS ASSESSMENT
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- What’s form utility? Form utility is the value producers add to materials in the creation of finished goods and services. For example, when a company transforms raw steel into the body of an automobile they are creating form utility.
- Define and differentiate the following: process manufacturing, assembly process, continuous process and intermittent process. Process manufacturing physically or chemically changes materials such as turning sand into glass or computer chips. The assembly process puts together components to create a product. For example, cars are made through an assembly process that puts together the frame, engine and other parts. Continuous process involves long production runs turning out finished goods over time. For example, a plant that makes plastic cups is run on a continuous process. Rather than using long runs, an intermittent process involves short runs that respond directly to specific customer orders. An example of this process would include manufacturers of men’s custom business suits.
- What do you call the integration of CAD and CAM? The integration of CAD and CAM is referred to computer-integrated manufacturing or CIM.
- What’s mass customization? Mass customization is the process of tailoring products to meet the demands of a large number of individual customers. One example of this process is NIKEiD which allows customers to design athletic shoes by choosing from a variety of colors and designs. For more information on this process go to www.nike.com.
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Operations Management Planning
- Operations management planning helps solve problems like:
- Facility location
- Facility layout
- Materials requirement planning
- Purchasing
- Inventory control
- Quality control
OPERATIONS MANAGEMENT
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Location
- Facility Location -- The process of selecting a geographic location for a company’s operations.
FACILITY LOCATION
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- Rising numbers of Internet businesses means brick-and-mortar retailers must find great locations.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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- Potential of low-cost labor is very attractive to companies hoping to remain competitive.
- However, shuttering operations and moving can often cause severe economic problems in dependent areas.
- What would you do if you were the CEO of ChildrenWear Industries faced with this problem?
STAY or LEAVE
(Making Ethical Decisions)
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Taking Operations Management to the Internet
- Sometimes businesses outsource engineering, design and manufacturing to other companies.
- Often these relationships are managed through the Internet.
- Many companies are developing Internet-focused strategies.
OPERATIONS MANAGEMENT
on the INTERNET
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Location in the Future
- Information technology gives firms increased flexibility in terms of location.
- Telecommuting -- Working from home via computer and modem.
FUTURE FACILITY LOCATION
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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- Dain Hancock of Lockheed Martin had the formidable task of uniting 80 companies into a single production unit.
PARTNERING BEYOND
COUNTRY BORDERS
(Reaching Beyond Our Borders)
- Using the Internet and tech tools, like electronic white boards, kept the companies in touch in real time.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Layout
- Facility Layout -- The physical arrangement of resources, including people, to most efficiently produce goods and provide services.
- Facility layout depends on the processes performed:
- Service: Help customers find products
- Manufacturing: Improve efficiency
SETTING UP the FACILITY
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Layout
- Assembly Line Layout – Workers do only a few tasks at a time.
- Modular Layout – Teams of workers produce more complex units of the final product.
- Fixed-Position Layout – Allows workers to congregate around the product.
- Process Layout – Similar equipment and functions are grouped together.
FACILITY LAYOUT OPTIONS
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Layout
ASSEMBLY LINE LAYOUT
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Layout
MODULAR LAYOUT
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Layout
PROCESS LAYOUT
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Facility Layout
FIXED-POSITION LAYOUT
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Materials Requirement Planning
- Materials Requirement Planning (MRP) -- A computer-based operations management system that uses sales forecasts to make sure parts and materials are available when needed.
- Enterprise Resource Planning (ERP) -- A newer version of MRP, combines computerized functions into a single integrated software program using a single database.
MRP and ERP
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Purchasing
- Purchasing -- The function that searches for high-quality material resources, finds the best suppliers and negotiates the best price for goods and services.
PURCHASING
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- The Internet has transformed purchasing.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Just-in-Time Inventory Control
- Just-in-Time (JIT) Inventory Control -- The production process in which a minimum of inventory is kept and parts, supplies and other needs are delivered just in time to go on the assembly line.
- To work effectively, the process requires excellent coordination with suppliers.
INVENTORY CONTROL
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
A JIT system makes sure the right materials are at the right place at the right time at the cheapest cost to meet both customer and production needs. To start a discussion with students ask the following question: While the benefits of the JIT system are obvious what are some of the drawbacks?
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Quality Control
- Quality -- Consistently producing what the customer wants while reducing errors before and after delivery.
- Six Sigma Quality -- A quality measure that allows only 3.4 defects per million opportunities.
QUALITY CONTROL
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Quality Control
- Statistical Quality Control -- A process used to continually monitor all phases of the production process.
- Statistical Process Control -- A process of testing statistical samples of product components at each stage of production.
- Measuring quality along the production process reduces the need for quality-control at the end.
STATISTICAL QUALITY CONTROL & STATISTICAL PROCESS CONTROL
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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The Baldrige Awards
- Companies can apply for awards in these areas:
- Manufacturing
- Services
- Small Businesses
- Education
- Healthcare
The BALDRIGE AWARDS
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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Source: National Institute of Standards and Technology, www.quality.nist.gov.
- Cargill Corn Milling North America
Wayzata, Minnesota (Manufacturing)
- Poudre Valley Health System
Fort Collins, Colorado (Healthcare)
- Iredell-Statesville Schools
Statesville, North Carolina (Education)
THE WINNERS ARE…
2008 Baldrige Award Recipients
The Baldrige Awards
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
Baldrige Award Recipients
- This slide presents 2008 Baldrige National Quality Award recipients.
- Awardees included one manufacturer, one health care system, and one educational institution.
- The 2008 Baldrige award recipients were selected from a pool of 85 applicants and evaluated in seven areas: leadership; strategic planning; customer and market focus; measurement, analysis and knowledge management; human resource focus; process management; and results.
(Source: NIST News Release, November 25, 2008)
4. To better understand the process have students spend time reviewing the www.nist.gov website.
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ISO 9000 and ISO 14000 Standards
- The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies.
- ISO 9000 -- The common name given to quality management and assurance standards.
- ISO 14000 -- A collection of the best practices for managing an organization’s impact on the environment.
WHAT is the ISO?
LG4
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
The ISO is the world’s largest developer and publisher of international standards. The purpose of the the ISO is to form a bridge between the public and private sectors. The ISO is based in Switzerland.
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Progress Assessment
- What are the major criteria for facility location?
- What’s the difference between MRP and ERP?
- What’s just-in-time inventory control?
- What are Six Sigma quality, the Baldrige Award, ISO 9000 and ISO 14000?
PROGRESS ASSESSMENT
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- What are the major criteria for facility location? Like most business related decisions managers must always consider the customer and the impact on customers ability to use the company’s services and to communicate about their needs. Other criteria that need to be considered include: labor costs, availability of resources, access to transportation, proximity to customers, suppliers, crime rates, quality of life for employees and the cost of living to mention but a few.
- What’s the difference between MRP and ERP? Materials requirement planning or (MRP) is a computer-based operations management system that uses sales forecasts to make sure needed parts and materials are available at the right time and place. Enterprise resource planning (ERP), a newer version of MRP, combines the computerized functions of all the divisions and subsidiaries of the firm into a single integrated software program that uses a single database.
- What’s just-in-time inventory control? One major expense in the production process is the holding of parts. The goal of just-in-time inventory is to eliminate or reduce that cost. Just-in-time inventory system keepss a minimum of inventory on the premises and only delivers parts just as they are needed on the factory floor.
- What are Six Sigma quality, the Baldrige Award, ISO 9000 and ISO 14000? Six Sigma is a quality-control standard which sets a benchmark of no more than 3.4 defects per million opportunities. The Baldrige Award was created in 1987 to promote a standard for overall quality in the following areas: manufacturing, services, small business, education, and health care. The award was named after Malcolm Baldrige the late U.S. secretary of commerce. The International Organization for Standardization or ISO is a worldwide federation of national standards bodies from more than 140 countries. This nongovernmental organization establishes global measures for the quality of individual products. ISO 9000 is the common name given to quality management and assurance standards, while ISO 14000 is a collection of the best practices for managing an organization’s environmental impact.
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Control Procedures: PERT and GANTT Charts
- Program Evaluation and Review Technique (PERT) -- A method for analyzing the tasks involved in completing a given project and estimating the time needed.
PERT
LG5
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
The modern version of the Gantt Chart the Program Evaluation and Review Technique or PERT came about in the 1950 with the construction of the Navy’s Polaris submarine project.
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Control Procedures: PERT and GANTT Charts
- Analyzing and sequencing tasks
- Estimating the time needed to complete each task
- Drawing a PERT network illustrating the first two steps
- Identifying the critical path
- Critical Path -- The sequence of tasks that takes the longest time to complete.
STEPS INVOLVED in PERT
LG5
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
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LG5
Control Procedures: PERT and GANTT Charts
PERT CHART for a MUSIC VIDEO
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
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Control Procedures: PERT and GANTT Charts
- Gantt Chart – A bar graph that shows what projects are being worked on and how much has been completed.
GANTT CHARTS
LG5
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
Henri Gantt created the Gantt Chart which allows management to chart workflow and improve worker productivity. The Gantt Chat is the forerunner to the modern PERT Chart.
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LG5
Control Procedures: PERT and GANTT Charts
GANTT CHART for a
DOLL FACTORY
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
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Progress Assessment
- Draw a PERT chart for making 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.
PROGRESS ASSESSMENT
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- Draw a PERT chart for making breakfast of three minute, buttered toast and coffee. Define the critical path. To answer this question please refer to figure 9.3 in the textbook.
- How could you use a Gantt chart to keep track of production? A Gantt chart is a scheduling mechanism used by manufacturers for measuring production progress. This chart will give management a clear idea as to the status of the project and how much has been completed at any given time.
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Students are often surprised to read that the United States is the world’s leading manufacturer, producing 25 percent of all goods produced worldwide. To start a discussion ask students: What items do companies in the United States produce?
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
What’s Made in the USA?
- This slide presents the leading goods manufactured in the United States.
- Ask students: Why are the goods on the slide manufactured in the United States? (Student’s answers will vary but should focus on the abundance of certain factors of production and the United States’ comparative advantage in the production of capital intensive products, topics that were covered earlier in the text)
- To determine what goods are manufactured in a particular state use the Bureau of Economic Analysis website (www.bea.gov).
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Leading US Manufacturing States
- This slide identifies the ten leading manufacturing states in terms of jobs created in the U.S for exports.
- Ask the students if they are surprised about any of the states listed being among the largest employers in manufacturing.
3. As mentioned in the previous slide it might be useful to explore what items are being produced in each of the states mentioned in this slide by visiting www.bea.gov.
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Top Ten Manufacturers
- This slide presents the top ten manufacturers according to the 2009 Industry Week’s US 500 largest publicly held manufacturing companies based on revenues.
- The list represents companies from 33 industries, 40 states, and boasts a combined revenue of nearly $4.9 trillion.
- One quick observation from this slide – it is dominated by oil and energy companies. Ask the students: How much do you pay per gallon of gas? Does that have any impact on this listing? (Answer is obvious – higher the gas price, more money the oil companies are making in both revenues and profits.)
- On this list, ExxonMobil had revenue of $466 billion, Chevron had revenue of $267billion, ConocoPhillips revenue was $241 billion whereas Valero Energy had revenue of $119billion.
(Source: Industry Week, May 20, 2009.)
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
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See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
See Learning Goal 1: Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
The famous economist Joseph Schumpeter believed in continuous improvement and discussed capitalism as a force for creative destruction. If the United States is to remain competitive the nation as a whole must continually innovate eschewing old inefficient industries in favor of capital intensive knowledge driven industries.
See Learning Goal 2: Describe the evolution from production to operations management.
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See Learning Goal 2: Describe the evolution from production to operations management.
- What have U.S. manufacturers done to regain a competitive edge? Manufacturers have regained a competitive advantage by focusing on the following: he needs of customers, maintaining a close relationship with suppliers to make sure they are meeting customer needs, practicing continuous improvement, focusing on quality, saving on costs through better site selection, using new technologies such as the internet, adopting new production techniques.
- What must U.S. companies do to continue to strengthen the country’s manufacturing base? To strengthen the nation’s manufacturing base will require an adjustment and recognition of the new realities in manufacturing. This will require focusing on new technologies such as the green ventures discussed in your textbook.
- What led companies to focus on operations management rather than production? The nature of business has changed dramatically in the past twenty years forcing companies to focus on operations management. One change is the shift from a manufacturing economy to one dominated by the service industry. Operations management is a more specialized area of management that converts resources into useful outputs.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Andrew Grove is the former chairman of computer chip manufacturer Intel.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Production Efficiency
- This slide presents the production efficiency of various products.
- Before introducing this slide, it would be interesting to ask the students to take a guess: How many Krispy Kreme Doughnuts or Chips Ahoy! Cookies are made every minute?
- Again it is important to reinforce the point that production efficiency directly translates into cost savings and therefore profits.
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
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See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See Learning Goal 3: Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
- What’s form utility? Form utility is the value producers add to materials in the creation of finished goods and services. For example, when a company transforms raw steel into the body of an automobile they are creating form utility.
- Define and differentiate the following: process manufacturing, assembly process, continuous process and intermittent process. Process manufacturing physically or chemically changes materials such as turning sand into glass or computer chips. The assembly process puts together components to create a product. For example, cars are made through an assembly process that puts together the frame, engine and other parts. Continuous process involves long production runs turning out finished goods over time. For example, a plant that makes plastic cups is run on a continuous process. Rather than using long runs, an intermittent process involves short runs that respond directly to specific customer orders. An example of this process would include manufacturers of men’s custom business suits.
- What do you call the integration of CAD and CAM? The integration of CAD and CAM is referred to computer-integrated manufacturing or CIM.
- What’s mass customization? Mass customization is the process of tailoring products to meet the demands of a large number of individual customers. One example of this process is NIKEiD which allows customers to design athletic shoes by choosing from a variety of colors and designs. For more information on this process go to www.nike.com.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
A JIT system makes sure the right materials are at the right place at the right time at the cheapest cost to meet both customer and production needs. To start a discussion with students ask the following question: While the benefits of the JIT system are obvious what are some of the drawbacks?
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
Baldrige Award Recipients
- This slide presents 2008 Baldrige National Quality Award recipients.
- Awardees included one manufacturer, one health care system, and one educational institution.
- The 2008 Baldrige award recipients were selected from a pool of 85 applicants and evaluated in seven areas: leadership; strategic planning; customer and market focus; measurement, analysis and knowledge management; human resource focus; process management; and results.
(Source: NIST News Release, November 25, 2008)
4. To better understand the process have students spend time reviewing the www.nist.gov website.
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See Learning Goal 4: Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
The ISO is the world’s largest developer and publisher of international standards. The purpose of the the ISO is to form a bridge between the public and private sectors. The ISO is based in Switzerland.
- What are the major criteria for facility location? Like most business related decisions managers must always consider the customer and the impact on customers ability to use the company’s services and to communicate about their needs. Other criteria that need to be considered include: labor costs, availability of resources, access to transportation, proximity to customers, suppliers, crime rates, quality of life for employees and the cost of living to mention but a few.
- What’s the difference between MRP and ERP? Materials requirement planning or (MRP) is a computer-based operations management system that uses sales forecasts to make sure needed parts and materials are available at the right time and place. Enterprise resource planning (ERP), a newer version of MRP, combines the computerized functions of all the divisions and subsidiaries of the firm into a single integrated software program that uses a single database.
- What’s just-in-time inventory control? One major expense in the production process is the holding of parts. The goal of just-in-time inventory is to eliminate or reduce that cost. Just-in-time inventory system keepss a minimum of inventory on the premises and only delivers parts just as they are needed on the factory floor.
- What are Six Sigma quality, the Baldrige Award, ISO 9000 and ISO 14000? Six Sigma is a quality-control standard which sets a benchmark of no more than 3.4 defects per million opportunities. The Baldrige Award was created in 1987 to promote a standard for overall quality in the following areas: manufacturing, services, small business, education, and health care. The award was named after Malcolm Baldrige the late U.S. secretary of commerce. The International Organization for Standardization or ISO is a worldwide federation of national standards bodies from more than 140 countries. This nongovernmental organization establishes global measures for the quality of individual products. ISO 9000 is the common name given to quality management and assurance standards, while ISO 14000 is a collection of the best practices for managing an organization’s environmental impact.
See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
The modern version of the Gantt Chart the Program Evaluation and Review Technique or PERT came about in the 1950 with the construction of the Navy’s Polaris submarine project.
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
Henri Gantt created the Gantt Chart which allows management to chart workflow and improve worker productivity. The Gantt Chat is the forerunner to the modern PERT Chart.
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See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
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- Draw a PERT chart for making breakfast of three minute, buttered toast and coffee. Define the critical path. To answer this question please refer to figure 9.3 in the textbook.
- How could you use a Gantt chart to keep track of production? A Gantt chart is a scheduling mechanism used by manufacturers for measuring production progress. This chart will give management a clear idea as to the status of the project and how much has been completed at any given time.
