1. Production and Operations
International Business
Production and Operations
Presented By
Mrs. Bowden

2. Today we will:
Identify the relationship of international business and the operations function
Discuss the various activities included in the operations function including quality control

3. Recap: FOUR MAIN FUNCTIONS OF BUSINESS
Production: Planning and Operations
Management: Strategy and human resources
Finance
Marketing

4. Operations Permit businesses to deliver on their promises
A set of actions that produce goods & services
Operating efficiency is critical to business success. - Discuss how efficiency generates profit…

5. Operations Manufacturing/Production Suppliers and Supply Chain
Inventory
Monitor Quality – Quality assurance/TQM
Technology
Organizational Chart – who reports to who (HR and management)

6. Operations Manual operations manual employee handbook
contains all the rules, policies, and procedures that a business should follow to function effectively
employee handbook
details the rules, policies, and procedures that apply to employees

7. Customer Service Policies
Operating policies
set daily operating hours that are convenient for customers
Customer Service Policies
Customer satisfaction is the goal.
returns
follow-up service

8. Safety Policies Delivery Policies
Employees should be trained in emergency procedures.
Delivery Policies
often offered for customer convenience
The policy should cover:
delivery radius
delivery fee
delivery timeframe

9. Production Decisions Quality vs. value Standardization vs. adaptation
Make vs. Buy
Export/Import vs. direct investment

10. Production Factors Culture Technology Trading barriers
Labels and Packaging
Exchange rates
Location
Political/Legal
National Resources

11. The Location Decision

12. Production & Operations Management
Production: Use of resources, such as workers and machinery, to convert materials into finished goods and services.
Production and Operations Management: Oversee the production
Three methods of production – manual, automated, computerized
Production includes inputs, a transformation process, and outputs

13. Production Systems

14. Strategic Importance of the Production Function
Efficiency
Utilizing all resources with no wastes and generating profit
Effective production and operations management can:
boost the quality of its goods and services.
allow it to respond dependably to customer demands.

15. The Job of Production Managers
Oversee the work of people and machinery to convert inputs (materials and resources) into finished goods and services.

16. Production Layouts
Production layouts create efficiency by grouping, people, processes, machinery, equipment, and products according to their functions.

17. Process Layout
Process Layout allows companies to layout efficient steps to produce a specific product.
Facilitates production of a variety of nonstandard items in relatively small batches

18. Product Layout
Product layout sets up production equipment along a product-flow line, and the work in process moves along this line past workstations.
Efficiently produces large numbers of similar items.

19. Fixed-Position Layout
A fixed-position layout places the product in one spot, and workers, materials, and equipment come to it.

20. Customer-Oriented Layout
Customer-oriented layout arranges facilities to enhance the interactions between customers and a service.

21. Controlling the Production Process
Production control creates a well-defined set of procedures for coordinating people, materials, and machinery to provide maximum production efficiency.
1. Planning
2. Routing
3. Scheduling
4. Dispatching
5. Follow-up

22. Elements of Project Management
Project Scheduling
Project schedule evolves from planning documents, with focus on timely completion.
Critical element in project management – source of most conflicts and problems.
Schedule development steps:
1. Define activities, Sequence activities,
3. Estimate activity times, 4. Develop schedule.
Gantt chart and CPM/PERT techniques can be useful.
Computer software packages available, e.g. QM for Windows, Microsoft Project.

23. Pert Charts Program Evaluation and Review Technique
Items are listed in blocks
What it is
Duration
Who is responsible
Used to determine what tasks can be done in parallel and what have to be done in series
Pert charts are a good collaborative tool for the team leader and the advisor for planning. Tasks are listed in blocks along with duration and who is responsible for getting it completed. The strength of this strategy is that it helps visualize multitasking. Students can easily see what needs to be done sequentially and what can be done in parallel.

24. PERT Diagram

25. Critical path Longest string of dependent task in the project.
Tasks on the critical path will hold up the completion of the overall project if they are delayed.
Example: mathematics sequence in an engineering or science curriculum.
Delaying a semester of calculus class typically delays graduation for one semester.
Critical path is a string of dependent tasks in the project

26. Popular, traditional technique, also known as a bar chart -developed by Henry Gantt (1914).
Direct precursor of CPM/PERT for monitoring work progress.
A visual display of project schedule showing activity start and finish times and where extra time is available.
Suitable for projects with few activities and precedence relationships.
Drawback: precedence relationships are not always discernible which limits chart’s use for smaller projects
Gantt Chart

27. Gantt Charts Visual scheduling tool
Graphical representation of information
Show dependencies between tasks, personnel, and other resources allocations
Track progress towards completion

28. Gantt Charts Establish a time-phased network
Can be used as a tracking tool
Benefits of Gantt charts
Easy to create and comprehend
Identify the schedule baseline network
Allow for updating and control
Identify resource needs

29. Gantt Chart

30. Sequence of Activities of The Project - House Building
Number
Activity
Predecessor
Duration 1
Design house and obtain financing --
3 months 2
Lay foundation
2 months 3
Order and receive materials
1 month 4
Build house
2,3 5
Select paint
2, 3 6
Select carper 7
Finish work
4, 6

32. Supply Chain Management
Management of sourcing, procurement, production, & logistics to go from raw materials to end consumers across multiple intermediate steps
Addresses models & relations
Partners work together to use tools & techniques for increased efficiency

33. Sources of Suppliers Trade shows or conferences
Trade catalogs or journals
The Yellow Pages
Internet search engines
Wholesale supply houses & brokers
Newspapers & magazines
Competitors
Firms like yours that are outside of your trading area
Sales representatives
Customers

34. Supplier Considerations
Conformance of products to your quality standards
Certification—either from an official organization or via a process that you employ
Timely delivery
Lead times
Minimum-order quantities
Extension of trade credit
The value added to your business (i.e., training, promotion, customer leads)
Flexibility & responsiveness

35. Safety stock & reorder points (ROP)
Inventory Management
Visual control
Safety stock & reorder points (ROP)
ROP = (Average demand per unit of lead time x lead time) + safety stock
Economic order quantity (EOQ)
EOQ = the square root of ((2 x the annual demand in units x the ordering cost per order)/carrying cost per unit)

36. Inventory Control Inventory Control Just-in-Time Systems
function requiring production and operations managers to balance the need to keep stock on hand to meet demand against the costs of carrying inventory
Perpetual inventory
Vendor-managed inventory
Just-in-Time Systems
broad management philosophy that reaches beyond the narrow activity of inventory control to influence the entire system of production and operations management.
Materials Requirement Planning
computer-based production planning system that lets a firm ensure that it has all the parts and materials it needs to produce its output at the right time and place and in the right amounts.

37. JIT “Just in Time” manufacturing Developed in Japanese factories
Focuses on making smallest amount of product needed, quickly & efficiently
Good method for small business
Principles
Run smallest batches necessary
Reduce setup time/cost to minimum
Schedule production so products are finished “just in time” to ship
Stay flexible

38. Importance of Quality A good or service free of deficiencies.
Poor quality can account for 20% loss in revenue.
Benchmarking is the process of analyzing other firms’ best practices.
Quality control is measuring goods and services against established quality standards.
Many companies evaluate quality using the Six Sigma concept.
A company tries to make error-free products % of the time, a tiny 3.4 errors per million opportunities.

39. Quality Assurance
The concept of quality is used broadly & has multiple definitions, including to determine degrees of excellence, & conformance to specifications or standards.
Quality products or services will be largely defined by your market positioning strategy.
Profits follow quality according to W. Edwards Deming.

40. Organization-Wide Quality Initiatives
Benchmarking
ISO9000
Six Sigma
Total Quality Management (TQM)
Malcolm Baldrige National Quality Award

41. ISO Standards
International Organization for Standardization (ISO)- mission is to promote the development of standardized products to facilitate trade and cooperation across national borders.
Representatives from more than 146 nations.
ISO series of standards sets requirements for quality processes.
Nearly half a million ISO 9000 certificates have been awarded to companies around the world.
ISO series also sets standards for operations that minimize harm to the environment.

42. ISO 9000
The family of standards for quality management systems established by the International Organization for Standardization (ISO)
Certified by independent companies to document that consistent business procedures are being used & that the organization has been independently audited for compliance.
Organizations sometimes market their ISO certification, although it is not guarantee of excellence by itself.

43. ISO9000 Quality Management Principles for Organizational Improvement
Customer focus
Leadership
Involvement of people
Process approach
System approach to management
Continual improvement
Factual approach to decision making
Mutually beneficial supplier relationships

44. Six Sigma Originated in the 1980s by Motorola engineers
The use of statistical methods to eliminate defects to a failure rate of 3.4 defects per one million opportunities, or a % success rate
A rigorous process-improvement program that aims to achieve near perfection
May be overwhelming for a new enterprise

45. Total Quality Management
Strategic advantage through quality
Developed in the 1950s, but many of the principles are valid & valued
Continuous improvement = always identifying & implementing changes to focus on the requirements of internal & external customers
Constant monitoring & improvement of processes with measures of quality, such as compliance with product specifications & operating standards, volume of production, on-time delivery, & return rates.
Success depends upon the commitment of all employees toward treating one another as customers & working together