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Production and Operations Management


Mass Production a system for manufacturing products in large quantities through effective combinations of employees, with specialized skills, mechanization, and ... – PowerPoint PPT presentation

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Title: Production and Operations Management

Production and Operations Management http//www.w
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
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.

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

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

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

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
  • 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

The Location Decision
The Job of Production Managers
  • Oversee the work of people and machinery to
    convert inputs (materials and resources) into
    finished goods and services.

Planning the Production Process
  • Choose what goods or services to offer customers.
  • Convert original product ideas into final
  • 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
Process Layout
  • Process layout groups machinery and equipment
    according to their functions.
  • Facilitates production of a variety of
    nonstandard items in relatively small batches.

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

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

Customer-Oriented Layout
  • Customer-oriented layout arranges facilities to
    enhance the interactions between customers and a

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.

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
  • 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.

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

Gantt Chart
PERT Diagram
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.

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.