© Prentice Hall, 2007Excellence in Business, 3eChapter Producing Quality Goods and Services

© Prentice Hall, 2007Excellence in Business, 3eChapter What Is Production? LeadingPlanning Organizing Production Operations Management(POM) Management(POM) Controlling

© Prentice Hall, 2007Excellence in Business, 3eChapter The Conversion Process Transformation Outputs Inputs Analytic Systems The Value Chain Synthetic Systems Tangible Goods Intangible Services

© Prentice Hall, 2007Excellence in Business, 3eChapter Input-Transformation-Output Relationships for Typical Systems Department Store Shoppers, stock of goods Displays, sales clerks Attract customers, promote products, fill orders Sales to satisfied customers College or University High School graduates, books Teachers, classrooms Impart knowledge & skills Educated individuals Automobile Factory Sheet steel, engine parts Tools, equipment, workers Fabrication & assembly of cars High-quality cars Restaurant Hungry customers, food Chef, waitress, environment Well-prepared & well-served food Satisfied customers Hospital Patients, medical supplies MDs, nurses, equipment Health care Healthy individuals Typical Desired Output Transformation Function Transformation Components InputsSystem

© Prentice Hall, 2007Excellence in Business, 3eChapter Challenges of the Service Industry People-IntensiveActivitiesPeople-IntensiveActivitiesProduction and Location Production SubjectiveQualitySubjectiveQuality CustomerInvolvementCustomerInvolvementDeliveryTimingDeliveryTiming

© Prentice Hall, 2007Excellence in Business, 3eChapter Manufacturing Goods Mass Customization Mass Production Customized Production

© Prentice Hall, 2007Excellence in Business, 3eChapter DisadvantagesDisadvantagesAdvantagesAdvantages Outsourcing the Manufacturing Function Capital and Resources Economies of Scale Quality and Cost Privacy Issues

© Prentice Hall, 2007Excellence in Business, 3eChapter Production Process Design Forecast Demand Plan for Capacity Identify Supply Chain

© Prentice Hall, 2007Excellence in Business, 3eChapter Production Process Design Choose Facility Site Design Facility Layout Schedule Work

© Prentice Hall, 2007Excellence in Business, 3eChapter Establish the Supply Chain Suppliers Manufacturers Distributors Retailers

© Prentice Hall, 2007Excellence in Business, 3eChapter Forecast Demand CustomerFeedbackMarketResearchSalesFiguresIndustryAnalysesEducatedGuesses BusinessResources PlanningBudgetingScheduling

© Prentice Hall, 2007Excellence in Business, 3eChapter Capacity Planning CustomerDemand Level of Resources

© Prentice Hall, 2007Excellence in Business, 3eChapter Facility Location EnergyTransportation Land LivingStandardsConstructionRawMaterials Local Taxes Labor

© Prentice Hall, 2007Excellence in Business, 3eChapter Facility Layout Product Cellular Fixed-Position Process

© Prentice Hall, 2007Excellence in Business, 3eChapter Process Layout

© Prentice Hall, 2007Excellence in Business, 3eChapter Product Layout

© Prentice Hall, 2007Excellence in Business, 3eChapter Cellular Layout

© Prentice Hall, 2007Excellence in Business, 3eChapter Fixed-Position Layout

© Prentice Hall, 2007Excellence in Business, 3eChapter Production Schedule Scheduling Dispatching Contingencies

© Prentice Hall, 2007Excellence in Business, 3eChapter The Gantt Chart IDTask NameStart DateEnd DateDuration AugustSeptember Make legs8/1/068/28/0620d 2Cut tops8/22/068/28/065d 3Drill8/29/069/4/065d 4Sand9/5/069/11/065d 5Assemble9/12/069/25/0610d 6Paint9/19/069/25/065d

© Prentice Hall, 2007Excellence in Business, 3eChapter Program Evaluation and Review Technique (PERT) 1.Identify activities 2.Determine sequence 3.Establish time frame 4.Diagram activity network 5.Calculate longest completion path 6.Refine timing

© Prentice Hall, 2007Excellence in Business, 3eChapter PERT Time Estimates Optimistic Pessimistic Most Likely Expected

© Prentice Hall, 2007Excellence in Business, 3eChapter Simplified PERT Diagram for Store Opening 15 Days 24 Days 3 Days 4 Days 21 Days Training Completed Training Completed Merchandise Received Merchandise Received Staffing Completed Staffing Completed Merchandise Ordered Merchandise Ordered Staffing Plan Merchandise Plan Merchandise Plan Ads Placed Ads Created Promotion Plan Promotion Plan Project Launch Project Launch 5 Days 14 Days 7 Days Opening Day Opening Day

© Prentice Hall, 2007Excellence in Business, 3eChapter Industrial Robotics StaminaStamina DiligenceDiligence SpeedSpeed PrecisionPrecision

© Prentice Hall, 2007Excellence in Business, 3eChapter Computerized Production Computer-Aided Manufacturing (CAM) Computer-Aided Computer-Integrated Manufacturing (CIM) Computer-Integrated Product Lifecycle Management (PLM) Product Lifecycle Management (PLM) Computer-Aided Design (CAD) Computer-Aided Computer-Aided Engineering (CAE) Computer-Aided

© Prentice Hall, 2007Excellence in Business, 3eChapter Manufacturing Systems TraditionalFlexible Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

© Prentice Hall, 2007Excellence in Business, 3eChapter Supply Chain Data Interchange Electronic Data Interchange (EDI) Extensible Markup Language (XML)

© Prentice Hall, 2007Excellence in Business, 3eChapter The Production Process Transformation Outputs Inputs Operations Managers Coordinating The Supply Chain Assuring Product Quality

© Prentice Hall, 2007Excellence in Business, 3eChapter Supply Chain Coordination InventoryInventoryPurchasingPurchasing Lead Time Inventory Control

© Prentice Hall, 2007Excellence in Business, 3eChapter Inventory Control Just-In-Time (JIT) Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP)

© Prentice Hall, 2007Excellence in Business, 3eChapter Supply Chain Management ImprovedQuality Manage Risks Manage Relationships Manage Trade-Offs IncreasedSalesCostSavingsReducedInventoryFasterDelivery ImprovedService

© Prentice Hall, 2007Excellence in Business, 3eChapter Assuring Product Quality Quality Assurance Quality Control Establishing Standards Measuring Quality Minimizing Defects Statistical Quality Control Statistical Process Control Continuous Improvement

© Prentice Hall, 2007Excellence in Business, 3eChapter Total Quality Management Management commitment to TQM Clear customer focus Employee involvement Continuous improvement Partnering with suppliers Meaningful performance standards

© Prentice Hall, 2007Excellence in Business, 3eChapter The Six Sigma Approach Define the Problem Measure Performance Analyze Root Causes Improve the Process Control the Process

© Prentice Hall, 2007Excellence in Business, 3eChapter Global Quality Standards ISO 9000 ISO 14000