1. Production and operations management involves managing the processes that convert inputs such as materials, labor, and capital equipment into finished goods and services. This includes planning production, controlling resources, and improving efficiency. 2. Firms must decide on production processes, facility locations, and layout designs. They consider factors like labor, transportation costs, taxes, and resource availability. Inventory management and supplier relations are also critical to coordinate resources. 3. Emerging technologies like robotics, 3D printing, and automation are transforming manufacturing. They allow for flexible, customized production but also risk job losses. Quality management techniques and lean principles help optimize operations.

1. PowerPoint Image Slideshow
Introduction to Business
Chapter 10 ACHIEVING WORLD-CLASS OPERATIONS MANAGEMENT

2. Learning Outcomes
1. Why is production and operations management important in both
manufacturing and service firms?
2. What types of production processes do manufacturers and service firms use?
3. How do organizations decide where to put their production facilities? What
choices must be made in designing the facility?
4. Why are resource-planning tasks such as inventory management and supplier
relations critical to production?
5. How do operations managers schedule and control production?
6. How can quality-management and lean-manufacturing techniques help firms
improve production and operations management?
7. What roles do technology and automation play in manufacturing and service-
industry operations management?
8. What key trends are affecting the way companies manage production and
operations?

3. How Toyota Changed The Way We Make Things

4. Production
Creation of products and services
Turns inputs into outputs
• Natural resources,
• Raw materials,
• Human resources
• Capital
Operations Management
Managing and supervising the conversion
process
Production planning Production control Improving production and
operations.
Planning Stage
• Where?
• When
• How
• Site locations and
obtain the necessary
resources.
Decision Making Stage
• Controlling quality
• Costs
• Scheduling
• Day-to-day operations
Final Stage
• Developing more
efficient methods of
producing the firm’s
goods or services.
Decisions that must be made in production planning

5. Exhibit 10.3 Production Process for Products and Services

6. 1. Why is production and operations management
important in both manufacturing and service
firms?
• CONCEPT CHECK
1. What are the three types of decisions that
must be made in production planning?
2. What are the three phases of production
planning?

7. Exhibit 10.5 Classification of Production Types
Job Shop

8. What are the
pros and cons
of mass
customization?
• Pros:
• Higher customer retention
• Fewer unfinished goods
need to be stored
• Higher price point resulting
in higher profit.
• Cons:
• Impossible to build up
stock
• Difficult to forecast trends
• Wait time
• Increased manufacturing
costs.

9. Converting Inputs to Outputs
Process
manufacturing
Assembly process
Basic input is
broken down into
one or more
outputs.
Basic inputs are
either combined to
create the output
or transformed into
the output.
Production Timing
Continuous
processes
Intermittent
processes
• long production
runs
• Last days, weeks,
or months
without
equipment
shutdowns.
• Short
production runs
• Batches of
different
products.

10. Harley-Davidson Factory Tour

11. Harley-Davidson Factory Tour
• Were inputs combined to create the output or transformed into the output?
• Or perhaps did you notice inputs were transformed and combined?
• What else did you learn about manufacturing in a factory setting?
• Did you notice how some processes were totally automated with robots
doing the work, while some parts of the production process necessitated
human intervention?

12. Table 10.1 Converting Inputs to Outputs

13. 2. What types of production processes do
manufacturers and service firms use?
• CONCEPT CHECK
1. Describe the different types of production
processes.
2. How are inputs transformed into outputs in
a variety of industries?

14. Location, Location, Location: Where Do We Make It?
• Service organizations
• Locate where their target market
is large and sustainable
• Manufacturing facilities
• Infrastructure, labor availability,
proximity of suppliers
• Taxes and regulations
Availability of
Production
Inputs
Local
Incentives
Manufacturing
Environment
Marketing
Factors
International
Location
Considerations

15. Exhibit 10.7 Types of Facility Layouts

16. Cost Factors and Non-Cost Factors
• Labor costs
• Transportation costs,
• Construction costs
• Utility costs
• Taxes
• Environmental conditions,
living conditions, availability
of resources, and availability
of skilled labor

17. 3. How do organizations decide where to put their
production facilities? What choices must be made in
designing the facility?
• CONCEPT CHECK
1. What factors does a firm consider when
making a site-selection decision?
2. What should be considered when deciding
on a production approach?

18. • Make-or-buy decision.
• Purchasing items from an outside source instead of making them internally is
called outsourcing.
• Inventory Management: Not Just Parts
• Inventory is the supply of goods it holds for use in production or for sale to
customers.
• Inventory management involves deciding how much of each type of
inventory to keep on hand and the ordering, receiving, storing, and tracking
of it.
• Perpetual inventory, a continuously updated list of inventory levels, orders,
sales, and receipts, for all major items.
Approaches to Inventory

19. Computerized
Resource
Planning
Computerized
Resource
Planning

20. Supply Chain Management
• Securing inputs, producing goods, and delivering goods to
customers

21. E-Procurement,
Electronic Data
Interchange, and
Blockchain
• E-procurement
• Process of purchasing materials
online.
• Electronic data interchange (EDI)
• Two trading partners exchange
information electronically.
• Blockchain technology
• Automate processes to cover
multiple transactions with a variety
of participating organizations.

22. 4. Why are resource-planning tasks such as inventory
management and supplier relations critical to
production?
• CONCEPT CHECK
1. What are the approaches to inventory that
businesses can consider?
2. How is technology being used in resource
planning?

23. Production and Operations Control
Routing: Where to Next?
• First step in controlling
production.
• It sets out a work-flow
• Sequence of machines and
operations
• Product or service progresses
from start to finish.
Scheduling: When Do We Do It?
• Specifying and controlling the
time required for each step in
the production process.

24. Exhibit 10.9 A Typical Gantt Chart
Relationship
between
scheduled and
actual
production

25. Exhibit 10.10 A CPM Network for Building a House
Critical Path – longest path
Program evaluation and review technique (PERT)
• Identify critical tasks
• Assess how delays will affect operations or production

26. 5. How do operations managers schedule and control
production?
• CONCEPT CHECK
1. What is production control, and what are its
key aspects?
2. How can value-stream mapping improve
routing efficiency?
3. Identify and describe three commonly used
scheduling tools.

27. Looking for a Better Way: Improving Production
and Operations
Putting Quality First
• Quality control involves creating those quality standards and
measuring finished products and services against them.
• Total quality management (TQM) refers to the use of quality
principles in all aspects of a company’s production and operations.
• LEED Certification
• Globally recognized green building rating system
• Green construction boosts a company's public image
• Tangible incentives such as tax rebates and zoning allowances

28. Lean Manufacturing
• Streamlines production by
eliminating steps known as non-
value-added production
processes that do not add
benefits customers want.
• Just-in-time (JIT)
• Belief that materials should
arrive exactly when they
are needed for production,
rather than being stored on
site.

29. 6. How can quality-management and lean-
manufacturing techniques help firms improve
production and operations management?
• CONCEPT CHECK
1. How can managers use techniques to
improve efficiency?
2. Define Six Sigma.
3. What was Edward Demming’s contribution
to operations management?

30. Computer-Aided Design
and Manufacturing
Systems
Robotics Adaptable Factories:
Flexible and Computer
Integrated Manufacturing
Systems.
Quick Change with
Computer-Integrated
Manufacturing.
Computer-integrated
manufacturing (CIM)
• Design and test new
products and modify
existing ones
• Integrate design,
testing,
manufacturing
control into one
linked computer
system
• Technology involved in
designing, constructing,
and operating robots
• Blends computers,
robots, machine tools,
and materials- and
parts-handling
machinery
Flexible manufacturing
system (FMS)
• Combine automated
workstations with
computer-controlled
transportation devices
• Combines computerized
manufacturing
processes with other
computerized systems
• Control design,
inventory, production,
and purchasing
Transforming the Factory Floor with Technology

31. DaVinci Robotic Surgery
• Sutter Health shows how
computer-aided surgery
improves outcomes for hernia
surgery, demonstrating how
robotics can be a positive force
for humanity.

32. Robot Revolution
• Self-driving vehicles, where
automation will likely improve
some aspects of life, but will
also most probably cause
serious disruptions in the
workforce of the near future.

33. Better Than Us
• Better Than Us
• Shows imagines a not-too-
distant future where lifelike
robots will be commonplace in
the world, but where there are
also militant groups who wish
to destroy them as threat to
workers and others in society.

34. Transforming the Factory Floor
Through technology
1. After viewing all these videos, think about the future. Is automatic
inevitable?
2. Will robots continue to replace people in the workforce, perhaps even
lifelike versions made to resemble human beings?
3. Is robotics a good thing when it comes to factories, surgery, or
performing dangerous or dirty jobs?
4. But what about job losses? What do you think are the pros and cons of
the growth of intelligent machines?

35. 7. What roles do technology and automation play in
manufacturing and service-industry operations
management?
• CONCEPT CHECK
1. Describe total quality management and the
role that Six Sigma, ISO 9000, and ISO14000
play in it.
2. How can lean manufacturing and just-in-time
inventory management help a firm improve its
production and operations?
3. How are both manufacturing and
nonmanufacturing firms using technology and
automation to improve operations?

36. Trends in Production and
Operations Management
Looming Workforce Crisis Threatens
U.S. Competitiveness
Finding qualified workers is a
major concern in U.S. industry.
Competition with lower-paid
workers in less developed
countries is getting stronger.
American Innovation Leadership at
Risk
To maintain its position as the
world’s leading innovator, it is
essential that more federal
investment is needed for
science and research.
Business Process Management
(BPM) – The Next Big Thing?
Integrate and optimize a
company’s functions by
automating what it does.

37. 8. What key trends are affecting the way
companies manage production and operations?
• CONCEPT CHECK
1. Describe the impact of the anticipated worker
shortage on U.S. business.
2. How are today’s educational trends affecting the
future of manufacturing?
3. What is business process management (BPM), and
how do businesses use it to improve operations
management?