Prepared by Department of Management UMN | | PRODUCING WORLD-CLASS GOODS & SERVICES Week 10

How Manufacturers Have Become More Effective  Focus on customers  Maintain close relationships  Continuous improvement  Focus on quality  Save costs  Rely on the Internet  New production techniques

From Production to Operations Management  Production  Production Management  Operations Management (OM)

Resource Transformation Process

Comparing Asian Giants CHINA  Driving Force: Manufacturing  Largest Communist Country  Population: 1.3 Billion  Economic Growth Rate: 9%  Financial/Commercial Capital: Shanghai INDIA  Driving Force: Services  Largest Democracy  Population: 1.1 Billion  Economic Growth Rate: 7%  Financial/Commercial Capital: Mumbai Source: Kiplinger.com December 19, 2005, BBC News, In Depth, accessed July 15, 2006

Production Processes  Form Utility  Process Manufacturing  Assembly Process  Continuous Process  Intermittent Process

Three Requirements For Production 1.Build and deliver products in response to the demands of the customer at a scheduled delivery time 2.Provide an acceptable quality level 3.Provide everything at the lowest possible cost

Production Efficiency  Krispy Kreme Doughnuts – 5,208 a minute  Twinkies – 972 a minute  LifeSavers 5 Flavor Roll – 100 rolls a minute  Jell-O Gelatin Boxes – 764 a minute  Chips Ahoy! – 4,000 a minute Source: World Features Syndicate

What Is Increasing Productivity? Source: 2005 National Innovation Survey, Council on Competitiveness

Product Improvements With Computer Technology  Computer-Aided Design - CAD  Computer-Aided Manufacturing - CAM  Computer-Integrated Manufacturing - CIM

Production Techniques  Flexible Manufacturing  Lean Manufacturing  Mass Customization

 Flexible Manufacturing... Designing machines to do multiple tasks so that they can produce a variety of products.

 Lean Manufacturing... The Production of Goods using less of everything compared to mass production.

 Mass Customization... Tailoring products to meet the needs of individual customers.

Operations Management Planning 1. Facility Location 2. Facility Layout 3. Materials Requirement Planning 4. Purchasing 5. J-I-T Inventory Control 6. Quality Control

Layout Product, process, cellular

Quality Control  Six Sigma Quality  Statistical Quality Control (SQC)  Statistical Process Control (SPC)  The Baldrige Award  ISO 9000  ISO 14000

ISO  ISO was founded in 1947  At the end of 2004, the worldwide total of certificates: ISO 9000 – 670,000 in 154 countries ISO – 90,000 in 127 countries Source: Business Week Online, March 17, 2006

Control Procedures  Program Evaluation & Review Techniques (PERT)  Gantt Chart

PERT

PERT Steps 1.Analyzing and sequencing tasks that need to be done. 2.Estimating the time needed to complete each task. 3.Drawing a PERT network illustrating the information from steps 1 and 2. 4.Identifying the critical path.

GANT CHART

Gantt Chart  Named for its developer, Henry Gantt  A bar graph that clearly shows what projects are being worked on and how much has been completed at any given time

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