Business Copyright 2005 Prentice- Hall, Inc. 14-1

14-2 Chapter 14 Producing Goods And Services

Business Copyright 2005 Prentice- Hall, Inc Chapter Outline What Does “Production” Mean Today What Does “Production” Mean Today Creating Value Through Operations Creating Value Through Operations Operations Planning Operations Planning Operations Scheduling Operations Scheduling Operations Control Operations Control

Business Copyright 2005 Prentice- Hall, Inc Operations & Production Growth DefinitionsDefinitions –Service Operation –Goods Production Global OperationsGlobal Operations Technology/InternetTechnology/Internet Quality PlanningQuality Planning

Business Copyright 2005 Prentice- Hall, Inc Goods/Services Employment

Business Copyright 2005 Prentice- Hall, Inc Goods/Services GDP

Business Copyright 2005 Prentice- Hall, Inc Top 5 U.S. Manufacturing States California New York Illinois Ohio Pennsylvania Texas

Business Copyright 2005 Prentice- Hall, Inc Utility Product’s Ability To Satisfy WantProduct’s Ability To Satisfy Want TypesTypes –Time –Place –Possession –Form

Business Copyright 2005 Prentice- Hall, Inc Operations (Production) Management- Systematic Direction/Control Of Processes That Transform Resources Into Finished Goods Creating ValueManagement- Systematic Direction/Control Of Processes That Transform Resources Into Finished Goods Creating Value Managers- Ensure Processes Create Value/BenefitsManagers- Ensure Processes Create Value/Benefits

Business Copyright 2005 Prentice- Hall, Inc Transformation Process

Business Copyright 2005 Prentice- Hall, Inc Goods Manufacturing AnalyticAnalytic SyntheticSynthetic

Business Copyright 2005 Prentice- Hall, Inc Service Processes Service: Extent Of Customer ContactService: Extent Of Customer Contact High-ContactHigh-Contact Low-ContactLow-Contact

Business Copyright 2005 Prentice- Hall, Inc Focus of Service vs. Manufacturing PerformancePerformance Process & OutcomeProcess & Outcome Service CharacteristicsService Characteristics Customer-Service LinkCustomer-Service Link E-Commerce- “Virtual” Presence Of CustomerE-Commerce- “Virtual” Presence Of Customer Service Quality ConsiderationsService Quality Considerations

Business Copyright 2005 Prentice- Hall, Inc Operations Planning CapacityCapacity For ProducingFor Producing –Goods –Services LocationLocation –Goods –Services

Business Copyright 2005 Prentice- Hall, Inc Operations Planning/Control

Business Copyright 2005 Prentice- Hall, Inc Service Characteristics IntangibilityIntangibility CustomizationCustomization UnstorabilityUnstorability

Business Copyright 2005 Prentice- Hall, Inc Layout Planning Producing GoodsProducing Goods –Productive Facilities –Nonproductive Facilities –Support Facilities Product LayoutsProduct Layouts –Process –Cellular –Product –Others For Flexibility Service LayoutService Layout

Business Copyright 2005 Prentice- Hall, Inc Process Layout

Business Copyright 2005 Prentice- Hall, Inc Cellular Layout

Business Copyright 2005 Prentice- Hall, Inc Goods Producing Layout

Business Copyright 2005 Prentice- Hall, Inc Cafeteria Layout

Business Copyright 2005 Prentice- Hall, Inc Other Layout Developments U-Shaped Production LinesU-Shaped Production Lines Flexible Manufacturing SystemFlexible Manufacturing System

Business Copyright 2005 Prentice- Hall, Inc Quality “…characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” –American Society for Quality

Business Copyright 2005 Prentice- Hall, Inc Methods Planning Methods ImprovementMethods Improvement –Goods –Services Service Flow AnalysisService Flow Analysis Designing To Control Employee DiscretionDesigning To Control Employee Discretion Design For Customer ContactDesign For Customer Contact

Business Copyright 2005 Prentice- Hall, Inc Service Flow Analysis

Business Copyright 2005 Prentice- Hall, Inc Operations Scheduling Master Production ScheduleMaster Production Schedule Tools for SchedulingTools for Scheduling –Gantt Chart –PERT Chart SCHEDULE

Business Copyright 2005 Prentice- Hall, Inc Gantt Chart

Business Copyright 2005 Prentice- Hall, Inc PERT Chart

Business Copyright 2005 Prentice- Hall, Inc Operations Control Material ManagementMaterial Management Operations Process ControlOperations Process Control FollowupFollowup

Business Copyright 2005 Prentice- Hall, Inc Materials Management Plan/Organize Material FlowPlan/Organize Material Flow Emphasizes StandardizationEmphasizes Standardization Areas Of Material ManagementAreas Of Material Management –Transportation –Warehousing –Inventory Control –Purchasing

Business Copyright 2005 Prentice- Hall, Inc Purchasing Processes Forward BuyingForward Buying Holding CostsHolding Costs Opportunity CostsOpportunity Costs Hand-To-Mouth PatternHand-To-Mouth Pattern Lead TimesLead Times

Business Copyright 2005 Prentice- Hall, Inc Supplier Selection InvestigateInvestigate Evaluate/IsolateEvaluate/Isolate NegotiateNegotiate MaintainMaintain

Business Copyright 2005 Prentice- Hall, Inc Tools For Process Control Worker TrainingWorker Training Lean Production Systems: JITLean Production Systems: JIT Materials Requirement PlanningMaterials Requirement Planning –Bill Of Materials –Manufacturing Resource Planning Quality ControlQuality Control