Why Manufacturing Matters (in Thailand)

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Why Manufacturing Matters (in Thailand)
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How to improve the productivity (???????) of an
Organization
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Operations Management (supplement topic)

• APICS defines operations management as "the field
  of study that focuses on the effective planning,
  scheduling, use and control of a manufacturing or
  service organization through the study of
  concepts from design engineering, industrial
  engineering, management information systems,
  quality management, production management,
  inventory management, accounting, and other
  functions as they affect the organization" (APICS
  Dictionary, 11th edition)
• APICS was founded in 1957 as the American
  Production and Inventory Control Society
• Currently, APICS becomes The Association for
  operations management , a not-for-profit
  international education organization, offering
  certification programs, training tools and
  networking opportunities to increase workplace
  performance.

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Scope of Operations Management

• Operations Management includes
• Forecasting
• Capacity planning (?????????????????????)
• Scheduling (?????????????????)
• Managing inventories
• Assuring quality
• Motivating employees
• Deciding where to locate facilities
• Supply chain management
• And more . . .

Production planning and control
(current topic)
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Supply Chain Management
Managing supply and demand, sourcing raw
materials and parts, manufacturing and assembly,
warehousing and inventory tracking, order entry
and order management, distribution across all
channels, and delivery to the customer (Supply
Chain Council) ?????????????????????????
??????????????????????????????????
??????????????????????????????????????????????????
????????????? ???????????????????????????????????
??????????????????? SCM ????????????????????????
??????????????????????????????????????????????????
??????????????????? ??????????? ????????????????
??????????????????????????????????????????????????
??????????????????????????????????????????????????
?? ?????????????????????? (???? ???????? 2549)
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Production Planning and Control

• Production control is
• the task of predicting, planning and scheduling
  work, taking into account manpower, materials
  availability and other capacity restrictions, and
  cost so as to achieve proper quality and quantity
  at the time it is needed and then following up
  the schedule to see that the plan is carried out,
  using whatever systems have proven satisfactory
  for the purpose. 1

Man Machine Materials Capital Information
Production planning and control systems
Quality Quantity Delivery time
Inventory management MRP, ERP, JIT
1Reinfeld, N.V., 1959. Production Control. ,
Prentice-Hall, Englewood Cliffs, NJ.
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Scope of production control and the flow of
information
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Scope of production control and the flow of
information (extended version)
Marketing and sales
Production engineering
Production engineering
Human resource (work force)
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purchasing
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Aggregation planning (long-rang planning)
Master production schedule (short-rang planning)
Forecasting
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Shop scheduling Monitoring Control
Inventory control
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Raw materials
Testing and inspecting
assembling
machining
Shipping finished goods
Inventory
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Production planning and control

• Pond draining/re-order point system
• Push System/ Material Requirement Planning System
  (MRP)
• Pull System/ Just In Time (JIT)

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Pond draining/re-order point system
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Push System/ Material Requirement Planning System
(MRP)
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Pull System/ Just In Time (JIT)
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Productivity

• Partial measures
• output/(single input)
• Multi-factor measures
• output/(multiple inputs)
• Total measure
• output/(total inputs)

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Productivity Growth
Productivity Growth
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Measures of Productivity
Partial Output Output Output
Outputmeasures Labor Machine
Capital Energy Multifactor
Output
Output measures Labor Machine
Labor Capital Energy Total
Goods or Services Produced measure
All inputs used to produce them
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Examples of Partial Productivity Measures
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Example 3
7040 Units Produced Cost of labor of
1,000 Cost of materials 520 Cost of
overhead 2000
What is the multifactor productivity?
Ans. 2.0 units per dollar of input
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Example 3 Solution
MFP Output Labor Materials Overhead
MFP (7040 units) 1000 520 2000
MFP 2.0 units per dollar of input
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Productivity
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Productivity
Example 1.1a
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Productivity
Example 1.1a
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Productivity
Labor productivity 5 policies/hour
Example 1.1a
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Productivity
Labor productivity 5 policies/hour
Example 1.1b
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Productivity
Labor productivity 5 policies/hour
Multifactor productivity
Example 1.1b
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Productivity Measures
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Productivity Measures

• OM Explorer
• Tutor 1.1Productivity Measures
• The state ferry service charges 18 per ticket
  plus a 3 surcharge to fund planned equipment
  upgrades. It expects to sell 4,700 tickets during
  the eight-week summer season. During that period,
  the ferry service will experience 110,000 in
  labor costs. Materials required for each passage
  sold (tickets, a tourist-information sheet, and
  the like) cost 1.30. Overhead during the period
  comes to 79,000.
• a. What is the multifactor productivity ratio?
• b. If ferry-support staff work an average of 310
  person-hours per week for the 8 weeks of the
  summer season, what is the labor productivity
  ratio? Calculate labor productivity on an hourly
  basis.
• Click here to continue.

Figure 1.5a
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Productivity Measures

• Tutor 1.1Productivity Measures
• Enter data in yellow areas. Use Tab to advance
  from one input cell to the next.
• a. Multifactor productivity is the ratio of the
  value of output to the value of input.
• Step 1. Enter the number of tickets sold during a
  season, the price per ticket, and the surcharge
  per ticket. To compute value of output, multiply
  tickets sold by the sum of price and surcharge.
• Tickets sold 4,700 Value of output
• Price 18
• Surcharge 3
• Step 2. Enter labor costs, materials costs per
  passenger, and overhead cost. For value of input,
  add together labor costs, materials costs times
  number of passengers, and overhead costs.
• Labor costs 110,000 Materials
  costs 1.30 Overhead 79,000
• Value of input
• Step 3. To calculate multifactor productivity,
  divide value of output by value of input.

Figure 1.5b
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Productivity Measures

• Tutor 1.1Productivity Measures
• Enter data in yellow areas. Use Tab to advance
  from one input cell to the next.
• b. Labor productivity is the ratio of the value
  of output to labor hours The value of output is
  computed in part a, step 1.
• Step 1. Enter person-hours per week and the
  number of weeks in the season multiply the two
  together to calculate labor hours of input.
• Hours per week 310 Weeks 8
• Labor hours of input
• Step 2. To calculate labor productivity, divide
  value of output by labor hours of input.
• Labor productivity

Figure 1.5b
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Productivity Measures

• Tutor 1.1Productivity Measures
• Place cell pointer on green shaded areas to
  examine formulas.
• a. Multifactor productivity is the ratio of the
  value of output to the value of input.
• Step 1. Enter the number of tickets sold during a
  season, the price per ticket, and the surcharge
  per ticket. To compute value of output, multiply
  tickets sold by the sum of price and surcharge.
• Tickets sold 4,700 Value of output 98,700
• Price 18
• Surcharge 3
• Step 2. Enter labor costs, materials costs per
  passenger, and overhead cost. For value of input,
  add together labor costs, materials costs times
  number of passengers, and overhead costs.
• Labor costs 110,000 Materials
  costs 1.30 Overhead 79,000
• Value of input 195,110
• Step 3. To calculate multifactor productivity,
  divide value of output by value of input.

Figure 1.5c
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Productivity Measures

• Tutor 1.1Productivity Measures
• Place cell pointer on green shaded areas to
  examine formulas.
• b. Labor productivity is the ratio of the value
  of output to labor hours The value of output is
  computed in part a, step 1.
• Step 1. Enter person-hours per week and the
  number of weeks in the season multiply the two
  together to calculate labor hours of input.
• Hours per week 310 Weeks 8
• Labor hours of input 2,480
• Step 2. To calculate labor productivity, divide
  value of output by labor hours of input.
• Labor productivity 39.80

Figure 1.5c