Embed Size (px)
Citation preview
www.wileybusinessupdates.com
Copyright 2015 John Wiley & Sons, Inc.
Copyright © 2013 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter 10
Production and Operations
Management
Learning Objectives
2
1
2
3
4
5
6
7
Copyright 2015 John Wiley & Sons, Inc.
Explain the strategic importance of production.
Identify and describe the production processes.
Explain the role of technology in the production process.
Identify the factors involved in a location decision.
Explain the job of production managers.
Discuss controlling the production process.
Determine the importance of quality.
Production & Operations Management
3
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.
Copyright 2015 John Wiley & Sons, Inc.
Typical Production Systems
4
Copyright 2015 John Wiley & Sons, Inc.
Strategic Importance of Production
Production is a vital business activity and function necessary for
generating money to pay employees, lenders, and stockholders.
Effective production and operations management can:
Lower a firm’s production costs
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
Copyright 2015 John Wiley & Sons, Inc.
5
Mass, Flexible, and Customer-Driven Production
Mass Production - a system for manufacturing products in large
quantities by combining 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
6
Copyright 2015 John Wiley & Sons, Inc.
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.
An intermittent production process
Generates products in short production runs, shutting down machines
frequently or changing their configurations to produce different products.
7
Copyright 2015 John Wiley & Sons, Inc.
Technology and the Production Process
Green Manufacturing – manufacturing focused on reducing waste,
energy use, and pollution.
Robot - a reprogrammable machine capable of performing tasks
requiring the repeated manipulation of materials and tools.
Computer-Aided Design - allows engineers to design components and
entire products on computer screens more efficiently than traditional
drafting systems.
Copyright 2015 John Wiley & Sons, Inc.
8
Technology and the Production Process
(continued)
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 product or
part.
Flexible Manufacturing Systems - a production facility that can be modified to
manufacture different products.
Computer-Integrated Manufacturing - production system in which computers assist ,
in an integrated function, in the design of products, control machines, handle
materials, and control the production function.
Copyright 2015 John Wiley & Sons, Inc.
9
Copyright 2015 John Wiley & Sons, Inc.
The Location Decision
10
The Job of Production Managers
Plan the overall production process
Determine the most appropriate layout
Implement the production plan
Control the manufacturing process for quality
11
Copyright 2015 John Wiley & Sons, Inc.
Copyright 2015 John Wiley & Sons, Inc.
Planning the Production Process
Choose what goods or services to offer in order to satisfy
customers.
Other decisions include: machinery purchases, pricing
decisions, and selection of retail outlets
Convert original product ideas into final specifications
Design the most efficient facilities to produce those
products.
12
Determining the Facility Layout
13
Copyright 2015 John Wiley & Sons, Inc.
Process Layout
Process layout groups machinery and equipment by function
Facilitates production of a variety of nonstandard items in
relatively small batches
Work-in-process moves around the plant to reach different
workstations.
Copyright 2015 John Wiley & Sons, Inc.
14
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
15
Copyright 2015 John Wiley & Sons, Inc.
Fixed-Position Layout
Places the product in one spot, and workers, materials, and
equipment are brought to it.
16
Copyright 2015 John Wiley & Sons, Inc.
Customer Oriented Layout
Customer-oriented layout arranges facilities to enhance the
interactions between customers and a service.
17
Copyright 2015 John Wiley & Sons, Inc.
Implementing the Production Plan
Make, Buy, or Lease Decision
Choosing whether to manufacture a needed product or component in-house,
purchase, or lease.
Decision factors: cost, supplier availability, duration of supply needs, and
confidentiality.
Selection of Suppliers
Choosing the best vendors by comparing quality, pricing, delivery
reliability, and services.
Inventory Control
Balancing stock-on-hand against carrying costs.
18
Copyright 2015 John Wiley & Sons, Inc.
Implementing the Production Plan
(continued)
Just-in-Time Systems
Providing the right part, at the right place, at the right time.
Materials Requirement Planning
Computer-based production planning system to track parts and
materials needed for production
19
Copyright 2015 John Wiley & Sons, Inc.
Controlling the Production Process
Production control creates a well-defined set of procedures for coordinating
people, materials, and machinery for production efficiency. A five-step
process:
Planning
Routing
Scheduling
Dispatching
Follow-up
20
Copyright 2015 John Wiley & Sons, Inc.
Gantt Chart and PERT Diagram
Copyright 2015 John Wiley & Sons, Inc.
21
The Importance of Quality
Quality - goods and services free of deficiencies
Fixing, replacing, redesigning deficient products is costly.
The costs of poor quality can equal 20 percent of revenues.
Benchmarking - A process used by companies to ensure high quality
products are produced
Involves determining how well other companies perform business
functions and tasks
22
Copyright 2015 John Wiley & Sons, Inc.
Quality Control
A good or service free of deficiencies
Poor quality can account for loss in revenue
Benchmarking is the process of analyzing other firms’ best practices
Quality control is measuring goods and services against established
quality standards.
Six Sigma concept
A company tries to make error-free products 99.9997% of the time, a tiny 3.4 errors per million opportunities.
Copyright 2015 John Wiley & Sons, Inc.
23
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.
Copyright 2015 John Wiley & Sons, Inc.
24
