© Prentice Hall, 2004Business In Action 2eChapter 8 - 1 Producing Quality Goods and Services

© Prentice Hall, 2004 Business In Action 2e Chapter 8 - 1

Producing Quality Producing Quality Goods and Goods and ServicesServices


What Is Production?What Is Production?

• Production Operations Management

–Planning

–Leading

–Organizing

–Controlling


What Is the Conversion What Is the Conversion Process?Process?

• Inputs

• Transformation

• Outputs


Input-Transformation-Output Input-Transformation-Output Relationships for Typical SystemsRelationships for Typical Systems

Department Store

Shoppers, stock of goods

Displays, sales clerks

Attract customers, promote products,

fill orders

Sales to satisfied customers

College or University

High School graduates, books

Teachers, classrooms

Impart knowledge & skills

Educated individuals

Automobile Factory

Sheet steel, engine parts

Tools, equipment, workers

Fabrication & assembly of cars High-quality cars

Restaurant Hungry customers, food

Chef, waitress, environment

Well-prepared & well-served food

Satisfied customers

Hospital Patients, medical supplies

MDs, nurses, equipment Health care Healthy

individuals

Typical Desired Output

Transformation Function

Transformation Components

InputsSystem


Manufacturing GoodsManufacturing Goods

• Mass production

• Mass customization


Production Process Production Process DesignDesign

• Forecast demand

• Plan for capacity

• Choose facility site

• Design facility layout

• Schedule work


Forecasting DemandForecasting Demand

• Customer feedback

• Market research

• Sales figures

• Industry analyses

• Educated guesses


Capacity PlanningCapacity Planning

• Level of resources

• Customer demand


Facility LocationFacility Location

• Land

• Construction

• Labor

• Local taxes

• Energy

• Living standards

• Transportation

• Raw materials


Types of Facility LayoutTypes of Facility Layout

• Process

• Product

• Cellular

• Fixed-position


Process LayoutProcess Layout

• Made-to-order products

• Process arrangement

–Specialized employees

–Specialized materials


Product LayoutProduct Layout

• Mass production of few items


–Continuous sequence


Cellular LayoutCellular Layout

• Mass customization


–Work centers

–Teamwork


Fixed-Position LayoutFixed-Position Layout

• Immovable product


–Employee go to the site

–Materials are brought to the site


Production ScheduleProduction Schedule

• Scheduling

• Dispatching

• Contingencies


The Gantt ChartThe Gantt Chart

• ID Number

• Task name

• Start date

• End date

• Duration


Program Evaluation and Program Evaluation and Review Technique (PERT)Review Technique (PERT)

• Identify activities

• Determine sequence

• Establish time frame

• Diagram activity network

• Calculate longest completion path

• Refine timing


PERT Time EstimatesPERT Time Estimates

• Optimistic

• Pessimistic

• Most likely

• Expected


PERT Diagram for PERT Diagram for Manufacturing ShoesManufacturing Shoes

• Critical path– Receiving– Cutting the pattern– Dyeing the leather– Sewing the tops– Sewing tops to soles and heels– Finishing– Packaging– Shipping


Improving Production Improving Production Through TechnologyThrough Technology

• Robots

• Computer-aided design

• Computer-aided engineering

• Computer-aided manufacturing

• Computer-integrated manufacturing


Electronic Information Electronic Information SystemsSystems

• Responsiveness

• Service

• Communication


Manufacturing Manufacturing SystemsSystems

TraditionalTraditionalManufacturingManufacturing

FlexibleFlexibleManufacturingManufacturing

Mass Production

Resistant to Change

High Set-Up Costs

Specialty Operations

Conducive to Change

Minimal Set-Up Costs


The Production ProcessThe Production Process

• Inventory management

• Quality assurance


Inventory ManagementInventory Management

• Inventory

• Purchasing

• Lead time

• Inventory control


Inventory ControlInventory Control

• Just-in-time (JIT)

• Materials requirements planning (MRP)

• Manufacturing resource planning (MRP)


Manufacturing Resource Manufacturing Resource PlanningPlanning

• Input of data

• Computer processing

• Output of data


Maintaining QualityMaintaining Quality

• Quality control

• Quality assurance


Global Quality StandardsGlobal Quality Standards

• ISO Certification

• Deming Prize

• Malcolm Baldrige Award


Supply Chain Supply Chain ManagementManagement

• Suppliers

• Manufacturers

• Distributors

• Retailers


Manufacturing Manufacturing TrendsTrends

OutsourcingOutsourcing Supplier InvolvementSupplier Involvement

Redirect Resourcesand Capital

Increase ProductionEfficiencies

Access State-of-the-ArtFacilities

Improve Overall Quality

Maximize the Use of Time

Reduce Work-in-ProcessInventory

Documents

© Prentice Hall, 2004Business In Action 2eChapter 8 - 1 Producing Quality Goods and Services