Production%20and%20Operations%20Management

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Production and Operations Management
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Chapter
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Learning Objectives
Explain the strategic importance of the
production function. Identify and describe the
four main categories of production
processes. Explain the role of technology in the
production process. Identify the factors involved
in a plant location decision.
Explain the major tasks of production and
operations managers and outline the three
activities involved in implementing the
production plan. List the steps in the purchasing
process. Discuss the importance of quality
control.
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Production Operations Management

• 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.

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Production Systems
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Strategic Importance of the Production Function

• A vital function is necessary for generating
  money to pay employees, lenders, and
  stockholders.
• Production is a vital function.
• Effective production and operations management
  can
• lower a firms costs of production.
• boost the quality of its goods and services.
• allow it to respond dependably to customer
  demands.
• enable it to renew itself by providing new
  products.

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Mass, Flexible, and Customer-Driven Production

• 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

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Production Processes

• 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.

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Technology and the Production Process

• Robot- 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.
• Flexible Manufacturing Systems a production
  facility that workers can quickly modify to
  manufacture different products.
• Computer-Integrated Manufacturing production
  system in which computers help workers design
  products, control machines, handle materials, and
  control the production function in an integrated
  fashion.

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The Location Decision
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The Job of Production Managers

• Oversee the work of people and machinery to
  convert inputs (materials and resources) into
  finished goods and services.

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Planning the Production Process

• Choose what goods or services to offer customers.
• Convert original product ideas into final
  specifications.
• Design the most efficient facilities to produce
  those products.

Planning the Production Process
Implementing the Production Plan
Selecting the Most Appropriate Layout
Controlling the Production Process
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Process Layout

• Process layout groups machinery and equipment
  according to their functions.
• Facilitates production of a variety of
  nonstandard items in relatively small batches.

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Product Layout

• 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.

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Fixed-Position Layout

• A fixed-position layout places the product in one
  spot, and workers, materials, and equipment come
  to it.

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Customer-Oriented Layout

• Customer-oriented layout arranges facilities to
  enhance the interactions between customers and a
  service.

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Implementing the Production Plan

• 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 firms supply needs, and the need
  for confidentiality.
• Selection of Suppliers
• Based on comparison of quality, prices,
  dependability of delivery, and services offered
  by competing companies.

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Inventory Control

• 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
• Perpetual inventory
• Vendor-managed 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.

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Controlling the Production Process

• Production control creates a well-defined set of
  procedures for coordinating people, materials,
  and machinery to provide maximum production
  efficiency.
• 1. Planning
• 2. Routing
• 3. Scheduling
• 4. Dispatching
• 5. Follow-up

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Gantt Chart
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PERT Diagram
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Importance of Quality

• 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.

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ISO Standards

• 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.

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