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Chapter-08 Producing Quality Goods and Services . Dr. Gehan Dhameeth , DBA. Nestle plans ahead for quality production . Nestle plans ahead for quality production . Produces all the products its own Focus is on the suppliers New Ohio production plant High quality production methods - PowerPoint PPT Presentation
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CHAPTER-08
PRODUCING QUALITY GOODS AND SERVICES
Dr. Gehan Dhameeth, DBA
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NESTLE PLANS AHEAD FOR QUALITY PRODUCTION
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NESTLE PLANS AHEAD FOR QUALITY PRODUCTION
Produces all the products its own Focus is on the suppliers New Ohio production plant
High quality production methods Sustainability under the guidelines of “Ohio
Green House Council”
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LEARNING OBJECTIVES
LEARNING OBJECTIVES1. Explain the nature of production.2. Outline how the conversion process transforms raw
materials, labor, and other resources into finished products or services.
3. Describe how research and development lead to new products and services.
4. Discuss the components involved in planning the production process.
5. Explain how purchasing, inventory control, scheduling, and quality control affect production
6. Summarizes how productivity and technology are related
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WHAT IS PRODUCTION?
WHAT IS PRODUCTION?
Operations management – all activities managers engage in to produce goods and services
Operations manager- responsible for conversion process
Planning- before, during, and after
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COMPETITION IN THE GLOBAL MARKETPLACE
COMPETITION IN THE GLOBAL MARKETPLACE
The U.S. was the most productive country after World War II Competitors in European and Asian countries eventually recovered
and began to compete with the U.S. firms U.S. firms have had to refocus on quality and customer needs The most successful U.S. firms have focused on:
Motivating employees to improve productivity Reducing production costs by carefully selecting suppliers Revamping their facilities with state-of-the-art equipment Using computer-aided and flexible manufacturing systems Improving control procedures to lower manufacturing costs
(economies of scale) Building foreign manufacturing facilities where labor costs are
lower
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CAREERS IN OPERATIONS MANAGEMENT
CAREERS IN OPERATIONS MANAGEMENT
Operations managers must appreciate the manufacturing process Mass and customized production processes
Successful operations managers must:1. Be able to motivate and lead people 2. Understand how technology can make a manufacturer
more productive and efficient 3. Appreciate the control processes that help lower
production cost and improve quality
4. Understand the relationship among customer, marketing, and production
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THE CONVERSION PROCESS
THE CONVERSION PROCESS
The purpose of the resources conversion process is to provide utility to customers
Utility- ability of the product to satisfy a human need
Four types of utility: form, place, time, and possession
Form utility: is created by people converting raw materials, finances, and information into finished products
THE NATURE OF CONVERSION
Focus- the resource that makes most important input.
Magnitude of change- the degree to which the resources are physically changed. Here the original resources are totally unrecognizable in the finished product
Number of production processes- single or multiple production process based on number of products
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THE INCREASING IMPORTANCE OF SERVICES
THE INCREASING IMPORTANCE OF SERVICES
%
%
%
Employees involvement in service industry over years in USA
THE INCREASING IMPORTANCE OF SERVICES
Service economy An economy in which more effort is devoted to services
than to the production of goods The production of services varies from
the production of goods1. Services are consumed immediately and cannot be stored2. Services are provided when and where the customer desires3. Services are usually labor intensive4. Services are intangible, making it difficult to evaluate
customer satisfaction
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WHERE DO NEW PRODUCTS AND SERVICES COME FROM?
WHERE DO NEW PRODUCTS AND SERVICES COME FROM?
Research and DevelopmentBasic research- to uncover new knowledgeApplied research- new knowledge with
potential useCustomers Competitors Suppliers Employees
WHERE DO NEW PRODUCTS AND SERVICES COME FROM? (CONT’D)
Product extension and refinement
Product life cycle
Product refinement- new additions (black & white TV to color)
Product extension- new models (Gillette Zero)
WHERE DO NEW PRODUCTS AND SERVICES COME FROM? (CONT’D)
WHERE DO NEW PRODUCTS AND SERVICES COME FROM? (CONT’D)
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NEW PRODUCT DEVELOPMENT PROCESS
NEW PRODUCT DEVELOPMENT PROCESS Idea generation Screening (market, production, and financial
feasibility) Concept development (prototype development) Financial implications (break even, cost, GP, and NP) Sample development Sample testing (market research/ test marketing) Production Commercialization
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PLANNING FOR PRODUCTION
PLANNING FOR PRODUCTION Design planning
Product line
Product design
Capacity
Use of technology
Labor-intensive technology: Capital-intensive technology:
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PLANNING FOR PRODUCTION (CONT’D)
Facilities planning and site selection
Factors influencing the location decision for a production facility
Human resources
Plant layout
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OPERATIONAL PLANNING
OPERATIONAL PLANNING
Four steps in operational planning Step 1: Selecting a planning horizon (time period
for the plan) Step 2: Estimating market demand
Step 3: Comparing market demand with capacity
Step 4: Adjusting products or services to meet demand
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OPERATIONS CONTROL
OPERATIONS CONTROL
Purchasing
Inventory control Types of inventory Costs of inventory
Inventory control methods Materials requirements planning (MRP) Manufacturing resource planning (MRP II) Enterprise resource planning (ERP) Just-in-time inventory system
OPERATIONS CONTROL (CONT’D)
Scheduling (right place at the right time)
Quality control
Statistical process control (SPC)
Statistical quality control (SQC)
Inspection
OPERATIONS CONTROL (CONT’D)
Quality control (cont’d) Improving quality through employee participation
Total Quality Management (TQM) Six Sigma (identify and remove causes of defects) Quality circles
World quality standards: International Organization for Standardization (ISO) ISO 9000 ISO 14000
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MANAGEMENT OF PRODUCTIVITY AND TECHNOLOGY
MANAGEMENT OF PRODUCTIVITY AND TECHNOLOGY Productivity (average level of output per
worker per hour)
Productivity trends
THE IMPACT OF COMPUTERS AND ROBOTICS ON PRODUCTION
Automation
Robotics
THE IMPACT OF COMPUTERS AND ROBOTICS ON PRODUCTION (CONT’D) Computer manufacturing systems
Computer-aided design (CAD)
Computer-aided manufacturing (CAM)
Computer-integrated manufacturing (CIM)
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WRITE FIVE KEY THINGS (AREAS) THAT YOU CAN CRITICALLY REMEMBER IN TODAY’S DISCUSSION
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WHAT WE DISCUSSED TODAY..
LEARNING OBJECTIVES1. Explain the nature of production.2. Outline how the conversion process transforms raw
materials, labor, and other resources into finished products or services.
3. Describe how research and development lead to new products and services.
4. Discuss the components involved in planning the production process.
5. Explain how purchasing, inventory control, scheduling, and quality control affect production
6. Summarizes how productivity and technology are related
