The document discusses various topics in production and operations management. It covers how manufacturing is declining while services are growing. It then defines key terms like production, operations management, and different production processes. The rest of the document discusses strategies to improve competitiveness like CAD/CAM, lean manufacturing and mass customization. It also covers facilities management topics such as location, layout, inventory control and quality management tools.

1. * * Chapter Nine Production and Operations Management of Goods and Services Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. WHERE ARE WE IN MFG SECTOR ?? 1. MANUFACTURING IS AT AN ALL TIME LOW 2. UNEMP IS AT LOWEST POINT IN YEARS **this chapter focuses on what manufacturers and service providers can do to revive economy

3. Services are replacing true manufacturing Service sector is growing Managers will become more occupied with service productivity Focus will become on blending services and true manufacturing

4. PRODUCTION and PRODUCTION MANAGEMENT * * From Production to Operations Management Production -- The creation of goods using land, labor, capital, entrepreneurship and knowledge (the factors of production). LG2 Production Management -- All the activities managers do to help firms create goods. 9-

5. PRODUCTION PROCESS RAW MATERIALS ---WORK IN PROCESS---FINISHED GOODS ****** IF production historically meant this manufacturing process then production mgt would help firms make goods Transitional time : NOW production includes goods and services

6. OPERATIONS MANAGEMENT * * From Production to Operations Management Operations Management -- A specialized area in management that converts or transforms resources into goods and services. Operations management includes: Inventory management Quality control Production scheduling Follow-up services LG2 9-

7. The PRODUCTION PROCESS * * Production Processes LG3 9-

8. FORM UTILITY * * Production Processes Form Utility -- The value producers add to materials in the creation of finished goods and services. LG3 9-

9. PROCESS and ASSEMBLY in PRODUCTION * * Process Manufacturing -- The part of production that physically or chemically changes materials. Assembly Process -- The part of the production process that puts together components. LG3 Production Processes 9-

10. KEY PRODUCTION PROCESSES * * Production processes are either continuous or intermittent. Continuous Process -- Long production runs turn out finished goods over time . Intermittent Process -- Production runs are short and the producer adjusts machines frequently to make different products. LG3 Production Processes 9-

11. DEVELOPMENTS MAKING U.S. COMPANIES MORE COMPETITIVE * * The Need to Improve Production Techniques and Cut Costs LG3 Computer-aided design and manufacturing Flexible manufacturing Lean manufacturing Mass customization 9-

12. COMPUTER-AIDED DESIGN and MANUFACTURING * * Computer-Aided Design and Manufacturing LG3 Computer-Aided Design (CAD) -- The use of computers in the design of products. Computer-Aided Manufacturing (CAM) -- The use of computers in the manufacturing of products. 9-

13. FLEXIBLE MANUFACTURING * * Flexible Manufacturing LG3 Flexible Manufacturing -- Designing machines to do multiple tasks so they can produce a variety of products. 9-

14. LEAN MANUFACTURING * * Lean Manufacturing LG3 Lean Manufacturing -- Using less of everything than in mass production. Compared to others, lean companies: Take half the human effort. Have half the defects in finished products. Require one-third the engineering effort. Use half the floor space. Carry 90% less inventory. 9-

15. MASS CUSTOMIZATION * * Mass Customization LG3 Mass Customization -- Tailoring products to meet the needs of a large number of individual customers. More manufacturers are learning to customize. Mass customization exists in the service sector too. 9-

16. OPERATIONS MANAGEMENT * * Operations Management Planning Operations management planning helps solve problems like: Facility location Facility layout Materials requirement planning Purchasing Inventory control Quality control LG4 9-

17. FACILITY LOCATION * * Facility Location Facility Location -- The process of selecting a geographic location for a company’s operations. LG4 Rising numbers of Internet businesses means brick-and-mortar retailers must find great locations. 9-

18. FUTURE FACILITY LOCATION * * Facility Location in the Future Information technology gives firms increased flexibility in terms of location. Telecommuting -- Working from home via computer and modem. LG4 9-

19. SETTING UP the FACILITY * * Facility Layout Facility Layout -- The physical arrangement of resources, including people, to most efficiently produce goods and provide services. Facility layout depends on the processes performed: Service: Help customers find products Manufacturing: Improve efficiency LG4 9-

20. FACILITY LAYOUT OPTIONS * * Facility Layout Assembly Line Layout – Workers do only a few tasks at a time. Modular Layout – Teams of workers produce more complex units of the final product. Fixed-Position Layout – Allows workers to congregate around the product. Process Layout – Similar equipment and functions are grouped together. LG4 9-

21. MRP and ERP * * Materials Requirement Planning Materials Requirement Planning (MRP) -- A computer-based operations management system that uses sales forecasts to make sure parts and materials are available when needed. Enterprise Resource Planning (ERP) -- A newer version of MRP, combines computerized functions into a single integrated software program using a single database. LG4 9-

22. PURCHASING * * Purchasing Purchasing -- The function that searches for high-quality material resources, finds the best suppliers and negotiates the best price for goods and services. LG4 The Internet has transformed purchasing. 9-

23. INVENTORY CONTROL * * Just-in-Time Inventory Control Just-in-Time (JIT) Inventory Control -- The production process in which a minimum of inventory is kept and parts, supplies and other needs are delivered just in time to go on the assembly line. To work effectively, the process requires excellent coordination with suppliers. LG4 9-

24. QUALITY CONTROL * * Quality Control Quality -- Consistently producing what the customer wants while reducing errors before and after delivery. Six Sigma Quality -- A quality measure that allows only 3.4 defects per million opportunities. LG4 9-

25. WHAT is the ISO? * * ISO 9000 and ISO 14000 Standards The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies. ISO 9000 -- The common name given to quality management and assurance standards. ISO 14000 -- A collection of the best practices for managing an organization’s impact on the environment. LG4 9-

26. PERT * * Control Procedures: PERT and GANTT Charts Program Evaluation and Review Technique (PERT) -- A method for analyzing the tasks involved in completing a given project and estimating the time needed. LG5 9-

27. STEPS INVOLVED in PERT * * Control Procedures: PERT and GANTT Charts Analyzing and sequencing tasks Estimating the time needed to complete each task Drawing a PERT network illustrating the first two steps Identifying the critical path Critical Path -- The sequence of tasks that takes the longest time to complete. LG5 9-

28. GANTT CHARTS * * Control Procedures: PERT and GANTT Charts Gantt Chart – A bar graph that shows what projects are being worked on and how much has been completed. LG5 9-