© Prentice Hall, 2005Business In Action 3eChapter Producing Quality Goods and Services

© Prentice Hall, 2005Business In Action 3eChapter What Is Production? Production Operations Management –Planning –Leading –Organizing –Controlling

© Prentice Hall, 2005Business In Action 3eChapter What Is the Conversion Process? Inputs Transformation Outputs

© Prentice Hall, 2005Business In Action 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, 2005Business In Action 3eChapter Challenges of the Service Industry Customer involvement Delivery timing People-intensive activities Production and location Subjective quality

© Prentice Hall, 2005Business In Action 3eChapter Manufacturing Goods Mass production Mass customization

© Prentice Hall, 2005Business In Action 3eChapter Outsourcing the Manufacturing Function Advantages –Capital and resources –Economies of scale Disadvantages –Job displacement –Lost wages

© Prentice Hall, 2005Business In Action 3eChapter Production Process Design Forecast demand Plan for capacity Choose facility site Design facility layout Schedule work

© Prentice Hall, 2005Business In Action 3eChapter The Supply Chain Suppliers Manufacturers Distributors Retailers

© Prentice Hall, 2005Business In Action 3eChapter Forecasting Demand Customer feedback Market research Sales figures Industry analyses Educated guesses

© Prentice Hall, 2005Business In Action 3eChapter Capacity Planning Level of resources Customer demand

© Prentice Hall, 2005Business In Action 3eChapter Facility Location Land Construction Labor Local taxes Energy Living standards Transportation Raw materials

© Prentice Hall, 2005Business In Action 3eChapter Types of Facility Layout Process Product Cellular Fixed-position

© Prentice Hall, 2005Business In Action 3eChapter Process Layout Made-to-order products Process arrangement –Specialized employees –Specialized materials

© Prentice Hall, 2005Business In Action 3eChapter Product Layout Mass production of few items Process arrangement –Continuous sequence

© Prentice Hall, 2005Business In Action 3eChapter Cellular Layout Mass customization Process arrangement –Work centers –Teamwork

© Prentice Hall, 2005Business In Action 3eChapter Fixed-Position Layout Immovable product Process arrangement –Employee go to the site –Materials are brought to the site

© Prentice Hall, 2005Business In Action 3eChapter Production Schedule Scheduling Dispatching Contingencies

© Prentice Hall, 2005Business In Action 3eChapter The Gantt Chart ID Number Task name Start date End date Duration

© Prentice Hall, 2005Business In Action 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, 2005Business In Action 3eChapter PERT Time Estimates Optimistic Pessimistic Most likely Expected

© Prentice Hall, 2005Business In Action 3eChapter PERT Diagram for Manufacturing Shoes Critical path –Receiving –Cutting the pattern –Dyeing the leather –Sewing the tops –Sewing tops to soles and heels –Finishing –Packaging –Shipping

© Prentice Hall, 2005Business In Action 3eChapter Production Robotics Precision functions Repetitive tasks Hazardous jobs

© Prentice Hall, 2005Business In Action 3eChapter Computerized Production Computer-aided design (CAD) Computer-aided engineering (CAE) Computer-aided manufacturing (CAM) Computer-integrated manufacturing (CIM)

© Prentice Hall, 2005Business In Action 3eChapter Manufacturing Systems TraditionalFlexible Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

© Prentice Hall, 2005Business In Action 3eChapter Supply Chain Data Interchange Electronic Data Interchange (EDI) Extensible Markup Language (XML)

© Prentice Hall, 2005Business In Action 3eChapter The Production Process Inventory management Quality assurance

© Prentice Hall, 2005Business In Action 3eChapter Inventory Management Inventory Purchasing Lead time Inventory control

© Prentice Hall, 2005Business In Action 3eChapter Inventory Control Just-in-time (JIT) Materials requirements planning (MRP)

© Prentice Hall, 2005Business In Action 3eChapter Manufacturing Resource Planning Input of data Computer processing Output of data

© Prentice Hall, 2005Business In Action 3eChapter Supply Chain Management Manage risks Manage relationships Manage trade-offs

© Prentice Hall, 2005Business In Action 3eChapter Maintaining Quality Quality control Quality assurance

© Prentice Hall, 2005Business In Action 3eChapter Global Quality Standards ISO Certification Deming Prize Malcolm Baldrige Award