Chapter Eight. Learning Objectives

Transcription

1 Chapter Eight Production Management 8 1 Learning Objectives 1. 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. 8 2

2 Learning Objectives (cont d) 5. Explain how purchasing, inventory control, scheduling, and quality control affect production. 6. Summarize how productivity and technology are related. 8 3 Chapter 8 Outline What Is Production? Competition in the Global Marketplace Careers in Operations Management The Conversion Process Manufacturing Using a Conversion Process The Increasing Importance of Services Where Do New Products and Services Come From? Research and Development Product Extension and Refinement

3 Chapter 8 Outline (cont.) Planning for Production Design Planning Facilities Planning and Site Selection Operational Planning Operations Control Purchasing Inventory Control Scheduling Quality Control Management of Productivity and Technology Productivity Trends Improving Productivity Growth Rates The Impact of Computers and Robotics in Production Operations management What Is Production? Operations manager Planning 8 6

4 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 Building foreign manufacturing facilities where labor costs are lower 8 7 Careers in Operations Management Operations managers must appreciate the manufacturing process Successful operations managers must: 8 8

5 The Conversion Process The purpose of the resources conversion process is to provide utility to customers Utility Four types of utility: Form utility: 8 9 Focus The Nature of Conversion Magnitude of change Number of production processes 8 10

6 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 goods 1. Services are consumed immediately and cannot be stored 2. Services are provided when and where the customer desires 3. Services are usually labor intensive 4. Services are intangible, making it difficult to evaluate customer satisfaction 8 11 Where Do New Products and Services Come From? Research and Development Basic research Applied research Development and implementation 8 12

7 Where Do New Products and Services Come From? (cont d) Product extension and refinement Product life cycle Product refinement Product extension 8 13 Design planning Product line Product design Capacity Use of technology Planning for Production Labor intensive technology: Capital intensive technology: 8 14

8 Planning for Production (cont d) Facilities planning and site selection Factors influencing the location decision for a production facility Human resources Plant layout 8 15 Operational Planning Four steps in operational planning Step 1: Selecting a planning horizon Step 2: Estimating market demand Step 3: Comparing market demand with capacity Step 4: Adjusting products or services to meet demand 8 16

9 Purchasing Operations Control 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 8 17 Scheduling Operations Control (cont d) Quality control Statistical process control (SPC) Statistical quality control (SQC) Inspection 8 18

10 Operations Control (cont d) Quality control (cont d) Improving quality through employee participation Total Quality Management (TQM) Six Sigma Quality circles World quality standards: International Organization for Standardization (ISO) ISO 9000 ISO Management of Productivity and Technology Productivity Productivity trends Causes of U.S. productivity declines 8 20

11 Management of Productivity and Technology (cont d) Improving productivity 8 21 The Impact of Computers and Robotics on Production Automation Robotics 8 22

12 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) 8 23 The Impact of Computers and Robotics on Production (cont d) Continuous process Flexible manufacturing systems (FMS) Intermittent process Technological displacement 8 24

13 Figure 8.1 The Conversion Process The Conversion Process 100 INPUTS Concept for a new good or service Financial, material, human, and information resources CONVERSION Develop specifications to convert an idea to a good or service Planning for production Actual production OUTPUTS Completed good or service 3768X_08_ch08_p indd 100 3/6/09 7:34:59 PM

14 Figure 8.2 Service Industries 101 Service Industries Percent of American workers employed by service industries % 76% 80% 83% 84% Source: U.S. Bureau of Labor Statistics website: accessed September 20, X_08_ch08_p indd 101 3/6/09 7:35:00 PM

15 Figure 8.4 Facilities Planning 102 Facilities Planning PROCESS LAYOUT Lincoln repair shop Wheel alignment Body work Car in need of repairs Repaired car Safety inspection Engine repair PRODUCT LAYOUT Electronic components Maxim Integrated Products assembly line Workstation Workstation Workstation Finished circuit boards FIXED-POSITION LAYOUT Boeing assembly site for a 787 Dreamliner jet aircraft Workstation Workstation Resources and components Workstation Finished plane Workstation Workstation 3768X_08_ch08_p indd 102 3/6/09 7:35:01 PM

16 Figure 8.5 Four Aspects of Operations Control 103 Four Aspects of Operations Control OPERATIONS CONTROL Purchasing Inventory Scheduling control Quality control 3768X_08_ch08_p indd 103 3/6/09 7:35:01 PM

17 Figure 8.6 A Gantt Chart 104 Completed Planned 1. Design on computer 2. Purchase parts 3. Fabricate fiberglass bodies 4. Fabricate frames 5. Build drive trains 6. Assemble carts 7. Test carts A Gantt Chart Week 1 Week 2 Week 3 Week 4 Source: Robert Kreitner, Management, 10th ed. Copyright 2007 by Houghton Mifflin Company. Reprinted with permission. 3768X_08_ch08_p indd 104 3/6/09 7:35:01 PM

18 Figure 8.7 Simplified PERT Diagram for Producing This Book 105 START Simplified PERT Diagram for Producing This Book Design the book (6) Edit manuscript (10) Obtain design sample (1) 2 3 Obtain cost estimates (3) Mark manuscript for typesetting (2) Set type (4) Prepare cover (1) Obtain and approve cover proof (3) Prepare pages for printing (5) Print and bind (6) FINISH Make up pages (5) 7 8 Activity Event Critical path ( ) Number of weeks to complete activity 3768X_08_ch08_p indd 105 3/6/09 7:35:02 PM

19 Figure 8.A Chapter Outline 106 Chapter 8 Outline Producing Quality Goods and Services What Is Production? Competition in the Global Marketplace Careers in Operations Management The Conversion Process Manufacturing Using a Conversion Process The Increasing Importance of Services Where Do New Products and Services Come From? Research and Development Product Extension and Refinement Planning for Production Design Planning Facilities Planning and Site Selection Operational Planning Operations Control Purchasing Inventory Control Scheduling Quality Control Management of Productivity and Technology Productivity Trends Improving Productivity Growth Rates The Impact of Computers and Robotics in Production 3768X_08_ch08_p indd 106 3/6/09 7:35:02 PM

20 Figure 8.B Class Exercise 107 Class Exercise Assume you are in charge of product development for a small manufacturing firm that produces three different sizes of paper clips. 1. What types of purchasing decisions would you need to make in order to manufacture these products? 2. How would you balance the problems of excessive holding costs and potential stock-out costs? 3. What specific steps would be used to manufacture a paper clip? 4. Should you be concerned with quality control for inexpensive products like paper clips? 3768X_08_ch08_p indd 107 3/6/09 7:35:02 PM

21 Figure 8.C Debate Issue 108 Debate Issue Should the just-in-time inventory system be used to reduce inventory costs? YES Just-in-time ensures that materials or supplies arrive at a facility when they are needed. Just-in-time reduces a firm s inventory storage costs because suppliers must deliver goods when they are needed. Storage space that was used for inventory can be diverted to other more productive activities, like manufacturing. NO A firm using just-intime can encounter stock-out costs if a supplier doesn t deliver. If the supplier stores the goods the supplier just passes on the cost of storage in the form of higher prices. If suppliers don t deliver goods on time, the manufacturer may have to shut down the assembly line. 3768X_08_ch08_p indd 108 3/6/09 7:35:02 PM

22 Figure 8.D Chapter Quiz 109 Chapter Quiz 1. A(n) process breaks raw materials into different component parts. a. mechanical b. analytic c. synthetic d. technological e. productive 2. In the manufacturing process, the resource or resources that comprise the major or most important input is referred to as the a. number of technologies. b. magnitude of change. c. focus of the conversion process. d. resource utilization process. e. resource manufacturing process. 3. Today, approximately percent of American workers are employed by service industries. a. 92 b. 83 c. 76 d. 40 e A layout is used when different operations are required for creating small batches of different products or working on different parts of a product. a. labor intensive b. capital intensive c. process d. product e. fixed 5. The average level of output per worker per hour a. is the definition for productivity. b. is the focus of the production process. c. only applies to a synthetic manufacturing process. d. only applies to an analytic manufacturing process. e. can be improved if the magnitude of the change is eliminated. 3768X_08_ch08_p indd 109 3/6/09 7:35:02 PM

23 Figure 8.E Design Planning 110 Design planning is the development of a plan for converting a product idea into an actual product. Major decisions involved in design planning include: Product Line Required Production Capacity Use of Technology 3768X_08_ch08_p indd 110 3/6/09 7:35:02 PM

24 Figure 8.F Terms Associated with Product Quality Terms Associated with Product Quality 111 QUALITY CONTROL The process of ensuring that goods and services are produced in accordance with design specifications STATISTICAL PROCESS CONTROL A system that uses sampling to obtain data that are plotted on control charts and graphs to identify and pinpoint problem areas STATISTICAL QUALITY CONTROL A set of statistical techniques used to monitor both work in progress and finished goods QUALITY CIRCLES Groups of employees who meet on company time to solve problems of product quality 3768X_08_ch08_p indd 111 3/6/09 7:35:02 PM

25 Figure 8.G Productivity PRODUCTIVITY A measure of the average level of output per worker per hour The following can be used to improve productivity: Elimination of government policies that reduce productivity Increased cooperation between labor and management Increased employee motivation and participation Reward systems based on what the employee contributes Increased investment in facilities, equipment, and employee training X_08_ch08_p indd 112 3/6/09 7:35:02 PM