1. Producing World-Class Goods
and
Services
1-1

2. Leading U.S. Manufacturing States
Michigan
New York
Illinois
Ohio
Also available on a Transparency Acetate
See Learning Goal 1: Describe the evolution of production in the United States.
Leading US Manufacturing States
This slide identifies the seven leading manufacturing states in the U.S. Ask the students if they are surprised these states represent the largest in manufacturing.
Students may be interested in the following statistics of the approximate number of manufacturers in each state:
California – 48,500 companies
Texas – 21,450 companies
New York – 21,100
Ohio – 17,500
Illinois – 16,860
Pennsylvania – 16,700
Michigan – 15,200
(Source: U.S. census.gov)
California
Pennsylvania
Texas

3. Top Ten US Manufacturers
ExxonMobil
Chevron
General Motors
ConocoPhillips
Ford Motor
General Electric
Altria Group
IBM Corp.
Hewlett-Packard
Valero Energy
Also available on a Transparency Acetate
See Learning Goal 1: Describe the evolution of production in the United States.
Top Ten Manufacturers
This slide presents the top ten manufacturers according to the 2006 Industry Week’s US 500 largest publicly held manufacturing companies based on revenues.
The list represents companies from 33 industries, 40 states, and boasts a combined revenue of nearly $4.9 trillion.
One quick observation from this slide – it is dominated by the oil and energy companies. Ask the students: How much do you pay per gallon of gas? Does that have any impact on this listing? (Answer is obvious – higher the gas price, more money the oil companies are making in both revenues and profits.)
On this list, ExxonMobil had revenue of $363 billion whereas Valero Energy had revenue of $82 billion.
(Source: Industry Week, June 1, 2006.)

4. 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
See Learning Goal 1: Describe the evolution of production in the United States.
See text pages: 235

5. Labor Hours / Vehicle Ford – 35.79 hours
Daimler/Chrysler – hours
GM – hours
Honda – hours
Toyota – 29.4 hours
Nissan – hours
Also available on a Transparency Acetate
See Learning Goal 1: Describe the evolution of production in the United States.
Labor Hours / Vehicle
This slide presents the production efficiency of the top six automakers – how many labor hours does each take to manufacture a vehicle.
The three Japanese automakers lead the industry in efficiency with Nissan leading at hours per vehicle.
The two American automakers lag behind the Japanese automakers. However, GM is closing the gap fast with less than one labor hour per vehicle behind Honda.
Ask the students: Why is this productivity efficiency important? (Simple answer is profits. Nissan’s productivity lead translates into $ cost advantage per vehicle.)
Since 1998, GM has made a 75% gain on Toyota in production efficiency.
(Source: Detroit Free Press, June 2, 2006)

6. From Production to Operations Management
Production Management
Operations Management (OM)
See Learning Goal 2: Define operations management.
See text pages:

7. 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
Also available on a Transparency Acetate
See Learning Goal 2: Define operations management.
Comparing Asian Giants
This slide compares the two Asian giants: China and India.
The two most populated countries (combined population represents 37% of the world population) have some similarities and stark differences.
While China’s driving force is its manufacturing base, India’s driving force in the world market is its service industry. Ask the students: Where were many of your clothes, etc. manufactured? (China) Where do the calls go to when you call to complain about your credit card or need help with your computer, etc.? (More likely it will go to India.)
The two shipping towns – Shanghai and Mumbai – share a common heritage: British imperialism. Yet one is in the largest communist country while the other is in the largest democracy.
Ask the students: Looking at these two countries, what are some of the challenges facing American businesses as they compete in global markets? Why?
(Source: Kiplinger.com December 19, 2005, BBC News, In Depth, accessed July 15, 2006)

8. Production Processes Form Utility Process Manufacturing
Assembly Process
Continuous Process
Intermittent Process
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See text pages:

9. Three Requirements For Production
Build and deliver products in response to the demands of the customer at a scheduled delivery time
Provide an acceptable quality level
Provide everything at the lowest possible cost
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See text page: 239

10. 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
Also available on a Transparency Acetate
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Production Efficiency
This slide presents the production efficiency of various products.
Before introducing this slide, it would be interesting to ask the students to take a guess: How many Krispy Kreme Doughnuts or Twinkies are made every minute?
Again it is important to reinforce the point that production efficiency directly translates into cost savings and therefore profits.
Source: World Features Syndicate

11. What Is Increasing Productivity?
Also available on a Transparency Acetate
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
What is Increasing Productivity?
This slide presents the factors fueling the productivity gain.
The leading factor influencing the gains in productivity is innovation followed by capital improvement.
Ask the students: How can innovation influence productivity gains? (Innovation in technology and/or processes can help save time, energy, and investment into the production of goods/services. To elaborate use a simple example of handouts for a class of 30 students: handwritten handouts versus typed on a typewriter handouts versus typed on a word processor on a computer and duplicated on a Xerox machine. Each succeeding one is more efficient then the preceding one as the innovation in technology kicks in.)
(The numbers in this chart do not add up to 100% due to non-responses.)
Source: 2005 National Innovation Survey, Council on Competitiveness

12. Product Improvements With Computer Technology
Computer-Aided Design - CAD
Computer-Aided Manufacturing - CAM
Computer-Integrated Manufacturing - CIM
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See text page: 240

13. Top Ten Tech Spenders STATE $ in Billions California 38.9
New York
Texas
Illinois
Florida
Pennsylvania
Ohio
New Jersey
North Carolina
Georgia
Also available on a Transparency Acetate
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Top Ten Tech Spenders
This slide presents the tech spending in 2005 by the top ten States.
Two coastal states – California and New York – lead the country in tech spending.
Also, an interesting note: most of the leading manufacturing states of the country are also the leading tech spenders.
Ask the students: Why would states want to spend money on technology? (Some of the possible answers would be: to attract businesses, investments, qualified/skilled workforce, etc.)
Source: Business Week Online, December 5, 2005

14. Production Techniques
Flexible Manufacturing
Lean Manufacturing
Mass Customization
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
See text page:

15. Operations Management Planning
Facility Location
Facility Layout
Materials Requirement Planning
Purchasing
J-I-T Inventory Control
Quality Control
See Learning Goal 4: Describe the operations management planning issues involved in both the manufacturing and service sectors, including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See text pages:

16. Quality Control Six Sigma Quality Statistical Quality Control (SQC)
Statistical Process Control (SPC)
The Baldrige Award
ISO 9000
ISO 14000
See Learning Goal 4: Describe the operations management planning issues involved in both the manufacturing and service sectors, including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
See text pages:

17. Baldrige Award Recipients
Sunny Fresh Foods, Inc., Monticello, MN (Manufacturing)
DynMcDermott Petroleum Operations, New Orleans, LA (Service)
Park Place Lexus, Plano, TX (Small Business)
Richland College, Dallas, TX (Education)
Jenks Public Schools, Jenks, OK (Education)
Bronson Methodist Hospital, Kalamazoo, MI, (Health care)
Also available on a Transparency Acetate
See Learning Goal 4: Describe the operations management planning issues involved in both the manufacturing and service sectors, including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
Baldrige Award Recipients
This slide presents 2005 Baldrige National Quality Award recipients.
Awardees for 2005 included one manufacturer, one service, one small business, one health care, and two educational institutions.
This was the first time that a community college, an automotive dealership, and an oil industry business have been named as Baldrige award recipients.
Sunny Fresh Foods received the Baldrige award two times – 1999 (small business category) and 2005 (manufacturing).
The 2005 Baldrige award recipients were selected from 64 applicants and evaluated in seven areas: leadership; strategic planning; customer and market focus; measurement, analysis and knowledge management; human resource focus; process management; and results.
(Source: NIST News Release, November 22, 2005)
Source: NIST News Release, November 22, 2005

18. 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
Also available on a Transparency Acetate
See Learning Goal 4: Describe the operations management planning issues involved in both the manufacturing and service sectors, including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
ISO
This slide presents the worldwide certificates issued for ISO 9000 and ISO series of standards.
Even though it was founded in 1947, it became popular “boardroom name” in 1987 with the launching of its ISO 9000 series of standards. Until that time, ISO standards were considered to be very technical and primary domain of engineers.
Ask the students: Why are such standards of any importance? It is technical, process-driven, and time and resource consuming. So why would any company want to acquire this standard? (It is an external seal of approval. Such seals are demanded by many companies if you want to do business with them. EU is demanding that any company that wants to do business with the EU be ISO certified.)
(Source: Business Week Online, March 17, 2006)
Source: Business Week Online, March 17, 2006

19. Control Procedures Program Evaluation & Review Techniques (PERT)
Gantt Chart
See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
See text pages:

20. PERT Steps Analyzing and sequencing tasks that need to be done
Estimating the time needed to complete each task
Drawing a PERT network illustrating the information from steps 1 and 2
Identifying the critical path
See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
See text page: 251

21. 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
See Learning Goal 5: Explain the use of PERT and Gantt charts to control manufacturing processes.
See text pages:

22. Learning from Failure Formalize forums for analyzing failure
Move the goalposts
Share personal stories
Bring in outsiders
Prove yourself wrong, not right
Celebrate smart failures
Also available on a Transparency Acetate
See Learning Goal 3: Distinguish between the various production processes and describe several of the production techniques that have improved the productivity of U.S. companies, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, and mass customization.
Lessons from Failure
This slide presents suggestions on how to make teams in organizations familiar with taking risks, comfortable with failures, and continue to innovate and produce world-class goods and services.
Six suggestions:
Formalizing failure forums keeps mistakes from being swept under the rug.
Innovation requires flexible goals, so the initial goals should not be carved in stone.
If managers and leaders share their failure stories, employees will be comfortable talking about their own failures and continue to take risks.
Outsiders can help neutralize the emotions of failures.
Identify more ways not to do things which may impede innovation.
Managers should celebrate failures that teach something new.
Ask the students: How often have you learned from failure?
3M’s Post-It Notes exhibits a good example of how a failed product became such a successful innovation.
(Source: Business Week Online, July 10, 2006)