© 2006 Pearson Education Canada Inc.Chapter 8 - 1 Chapter 8 Producing Quality Goods and Services

© 2006 Pearson Education Canada Inc. Chapter 8 - 1

Chapter 8Chapter 8

Producing Quality Producing Quality Goods and Goods and ServicesServices


What Is Production?What Is Production?

LeadingLeading

Plan

ning

Plan

ning

Organizing

Organizing

Production OperationsProduction OperationsManagement Management

(POM)(POM)

Production OperationsProduction OperationsManagement Management

(POM)(POM)

ControllingControlling


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

TransformationTransformation OutputsOutputsInputsInputs

Analytic Systems

Synthetic Systems


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 Manufacturing GoodsGoods

MassMassProductionProduction

MassMassCustomizationCustomization


Production Process Production Process DesignDesign

Plan for Capacity

Choose Facility Site

Design Facility Layout

Forecast Demand

Schedule Work


Forecasting DemandForecasting Demand

CustomerCustomerFeedbackFeedback

MarketMarketResearchResearch

SalesSalesFiguresFigures

IndustryIndustryAnalysesAnalyses

EducatedEducatedGuessesGuesses

BusinessBusinessResourcesResources

PlanningPlanning BudgetingBudgetingSchedulingScheduling


Capacity PlanningCapacity Planning

Level ofLevel ofResourcesResourcesLevel ofLevel of

ResourcesResourcesCustomerCustomerDemandDemand

CustomerCustomerDemandDemand


LabourLabourLabourLabourLandLandLandLand

TransportationTransportationTransportationTransportation EnergyEnergyEnergyEnergy

Local TaxesLocal TaxesLocal TaxesLocal TaxesRawRawMaterialsMaterials

RawRawMaterialsMaterials

ConstructionConstructionConstructionConstruction

LivingLivingStandardsStandards

LivingLivingStandardsStandards

FacilityFacilityLocationLocationFacilityFacility

LocationLocation


Types of Facility Types of Facility LayoutLayout

• Process (functional)– concentrates everything needed to complete one phase of the

production process in one place

• Product (assembly line)– the production process occurs along a line– products move from one workstation to the next

• Cellular – groups dissimilar machines into work centers (or cells) to process

parts that have similar shapes and processing requirements

• Fixed-Position– labour, materials, and equipment are brought to the location where the good

is being produced or the customer is being served– i.e.: buildings, roads, bridges, airplanes


Process LayoutProcess Layout


Product LayoutProduct Layout


Cellular LayoutCellular Layout


Fixed-Position LayoutFixed-Position Layout


Production Production ScheduleSchedule

SchedulingScheduling

DispatchingDispatching

ContingenciesContingencies


The Gantt ChartThe Gantt Chart

ID Task Name Start Date End Date DurationAugust September

2006

1 Make legs 8/1/06 8/28/06 20d

2 Cut tops 8/22/06 8/28/06 5d

3 Drill 8/29/06 9/4/06 5d

4 Sand 9/5/06 9/11/06 5d

5 Assemble 9/12/06 9/25/06 10d

6 Paint 9/19/06 9/25/06 5d


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 PERT Time EstimatesEstimates

OptimisticOptimistic

PessimisticPessimistic

Most LikelyMost Likely

ExpectedExpected


PERT Diagram PERT Diagram for Manufacturing Shoesfor Manufacturing Shoes


Improving Production Improving Production Through TechnologyThrough Technology

• Robots

• Computer-aided design

• Computer-aided engineering

• Computer-aided manufacturing

• Computer-integrated manufacturing


Electronic Electronic Information Information

SystemsSystemsResponsiveness

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 The Production ProcessProcess

InventoryInventoryManagementManagement

QualityQualityAssuranceAssurance


Inventory Inventory ManagementManagement

InventoryInventory

InventoryInventoryControlControl

InventoryInventoryControlControlLead TimeLead TimeLead TimeLead Time

PurchasingPurchasingPurchasingPurchasing


Inventory ControlInventory Control

Just-In-Time (JIT)

Material RequirementsPlanning (MRP)

ManufacturingResource Planning (MRP II)


Manufacturing Resource Manufacturing Resource Planning Planning


Maintaining QualityMaintaining Quality

Statistical Quality ControlStatistical Quality Control

Statistical Process ControlStatistical Process Control

Continuous ImprovementContinuous Improvement

Quality ControlQuality Control Quality AssuranceQuality Assurance


Global Quality Global Quality StandardsStandards

ISO CertificationISO Certification

CAE Quality AwardsCAE Quality Awards

Malcolm Malcolm Baldrige AwardBaldrige Award


Supply Chain Supply Chain ManagementManagement

Suppliers Manufacturers Distributors Retailers

The Supply Chain

Production of Goods and Services

Facilities Functions Activities


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

© 2006 Pearson Education Canada Inc.Chapter 8 - 1 Chapter 8 Producing Quality Goods and Services