Business Discussion 5
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Chapter10.pptxProduction and Operations Management http://www.wileybusinessupdates.com
Chapter
10
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Identify and describe the four main characteristics of production processes.
Identify and describe the three major production methods.
Describe the strategic decisions made by production and operations managers.
Identify the steps in the production control process.
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Learning Objectives
Discuss the importance of quality control.
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Utility: a measure of the value of a good or service to a consumer.
Production: Use of resources, such as workers and machinery, to convert materials into finished goods and services.
Production and Operations Management: Oversee the production process by managing people and machinery in converting materials and resources into finished goods and services.
Production & Operations Management
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Production Systems
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Analytic production system
reduces a raw material to its component parts in order to extract one or more marketable products.
Synthetic production system
Is the reverse of an analytic system. It combines a number of raw materials or parts or transforms raw materials to produce finished products.
Continuous production process
generates finished products over a lengthy period of time.
An intermittent production process
generates products in short production runs, shutting down machines frequently or changing their configurations to produce different products.
Production Processes
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Mass Production– a system for manufacturing products in large quantities through effective combinations of employees, with specialized skills, mechanization, and standardization
Flexible Production– more cost-effective for producing smaller batches using information technology, communication, and cooperation
Customer-Driven Production– evaluating customer demands in order to make the connection between products manufactured and products bought
Three Major Production Methods
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Make, Buy, or Lease Decision
Choosing whether to manufacture a needed product or component in-house, purchase it from an outside supplier, or lease it.
Factors in the decision include cost, availability of reliable outside suppliers, duration of the firm’s supply needs, and the need for confidentiality.
The Strategic Decisions Made by Production and Operations Managers
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The Location Decision
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Process layout groups machinery and equipment according to their functions.
Facilitates production of a variety of nonstandard items in relatively small batches.
Process Layout
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Product layout sets up production equipment along a product-flow line, and the work in process moves along this line past workstations.
Efficiently produces large numbers of similar items.
Product Layout
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A fixed-position layout places the product in one spot, and workers, materials, and equipment come to it.
Fixed-Position Layout
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Selection of Suppliers
Based on comparison of quality, prices, dependability of delivery, and services offered by competing companies.
Selection of Suppliers
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Inventory Control
function requiring production and operations managers to balance the need to keep stock on hand to meet demand against the costs of carrying inventory
Just-in-Time Systems
broad management philosophy that reaches beyond the narrow activity of inventory control to influence the entire system of production and operations management.
Materials Requirement Planning
computer-based production planning system that lets a firm ensure that it has all the parts and materials it needs to produce its output at the right time and place and in the right amounts.
Approach to Inventory Control
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Production control creates a well-defined set of procedures for coordinating people, materials, and machinery to provide maximum production efficiency.
1. Planning Details
2. Scheduling
3. Routing and Dispatching
4. Metrics and Measures
Steps in the Production Control Process
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Gantt Chart
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PERT Diagram
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Automation- a robot is a reprogrammable machine capable of performing a variety of tasks that require the repeated manipulation of materials and tools.
Computer-Aided Design– allows engineers to design components as well as entire products on computer screens faster and with fewer mistakes than they could achieve working with traditional drafting systems.
Computer-Aided Manufacturing- computer tools to analyze CAD output and enable a manufacturer to analyze the steps that a machine must take to produce a needed product or part.
Automation and Computer-Aided Design and Manufacturing
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A good or service free of deficiencies.
Poor quality can account for 20% loss in revenue.
Benchmarking is the process of analyzing other firms’ best practices.
Quality control is measuring goods and services against established quality standards.
Many companies evaluate quality using the Six Sigma concept.
A company tries to make error-free products 99.9997% of the time, a tiny 3.4 errors per million opportunities.
The Importance of Quality Control
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International Organization for Standardization (ISO)- mission is to promote the development of standardized products to facilitate trade and cooperation across national borders.
Representatives from more than 146 nations.
ISO 9000 series of standards sets requirements for quality processes.
Nearly half a million ISO 9000 certificates have been awarded to companies around the world.
ISO 14000 series also sets standards for operations that minimize harm to the environment.
ISO Standards
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