1. PRODUCTION AND OPERATIONS MANAGEMENT
– Ford Trucks
– Ford promo production video.

2. OBJECTIVES
Introduction to Production Function and Operations Management
Mass Production Approach
Toyota Production System (TPS) Approach
Just in Time approach.
Supply Chain Management

3. MASS PRODUCTION Labor Specialization Mechanization Standardization
Mass Production: Makes Outputs available in Large Quantities at Lower Unit Costs than Individually- Crafted Items
Characteristics of Mass Production
Labor Specialization
Mechanization
Standardization
First Model T’s were produced one per worker for a 12 hour day. The assembly line technique slashed the number of work hours to 1.5

4. ASSEMBLY LINES
Used Ideas of Specialized Labor and Engineering Standards (Tolerances)

5. HENRY FORD
Introduced Moving Assembly Line: Dramatically Reduced Manufacturing Costs While Delivering Consistent, Low-Priced Product

6. FORD MODEL “T” First Produced: October 1908
By 1927, 15,000,000 Produced
Any Color so long as it’s Black…

7. ASSEMBLY LINE BENEFITS
Initially, took 14 hours to Assemble Model T - Mass Production reduced Time to 1 Hour and 33 Minutes
Model T’s Price dropped from $1,000 in 1908 to $360 in 1916
Assembly line became dominant production method.

8. FORD ASSEMBLY LINES
Assembly Line pulled by Ropes

9. MASS PRODUCTION
“PUSH” Strategy – Driven by Inputs and Objectives Control of Raw Materials and Labor plus Profit Goals = Production Rate -Not driven by customer demand. Performance measured by Quantitative Results (Defects or Unit Costs per Day/week/month), not Quality Standards

10. MASS PRODUCTION Low Product Variety; Small Orders Not Feasible
Specialized Machinery and Centralized Manufacturing
“Economies of Scale” – High-Speed Sequential Production
i.e the Pringles “How its made” show.
Development Costs Spread Over Large Volume: Low Cost per Unit Produced
Low-Skill/Low-Wage Work Force
Large Advertising and Marketing Budgets

11. MASS PRODUCTION Flaws of Mass Production Approach
Production Levels cannot Stop or Slow: Defects resolved outside Production (Added Costs of Rework)

12. TOYOTA’S ORIGINS
1956 – Taiichi Ohno went to US to study Ford’s Manufacturing Facilities
Found Mass Production Principles not Applicable because of:
Scale of Japanese Markets
Desire for Product Variety
Unable to Afford Resources and Inventories

13. TOYOTA’S ORIGINS
Before returning to Japan, Ohno went to an American Grocery Store
Discovered Production and Operation Methods that
Were Linked to Customer Actions: Inventories Replenished by Sales (“PULL” Strategy)
Delivered Product Variety and Scale
Minimized Waste**

14. TOYOTA PRODUCTION SYSTEM
In 1961, Toyota adopts “Systems Perspective”
–Adopted a Continuous Improvement Attitude that Minimizes Waste and Emphasizes High Quality
Processes are analyzed to eliminate flaws rather than fixing defective products
Waste Eliminated – Comprehensive View that includes Time, Resources and Materials
Over-Production
Time Spent Waiting
Unnecessary Movements of Items

15. TOYOTA PRODUCTION SYSTEM
Waste is anything other than the minimum amount of equipment, materials, parts, space, and workers’ time which are absolutely essential to add value to the product.
- Shoichiro Toyoda President, Toyota Motor Co.

16. TOYOTA PRODUCTION SYSTEM
- Downstream (Consumer) Demand drives Upstream (Business) Activity (“Pull Strategy”)
Orders flow “Up” System, not from Top-down
Only what is Needed is Ordered and Produced

17. TOYOTA PRODUCTION SYSTEM
– Work Stops when Problem Encountered
Counter-measures taken to Cure Cause, Not re-work Defective Result. -Authority delegated to Production Team
Production and Problem-solving Functions combined.
-Employees are empowered to help in the development and improvement process.

18. TOYOTA PRODUCTION SYSTEM
Result of TPS is “Just-in-Time” Inventory System
JIT relies on Supplier Relationships that Integrate Inventory Arrivals and Production Needs
JIT depends on Mutual Commitment of Toyota Loyalty and Supplier Performance

19. TOYOTA PRODUCTION SYSTEM
Why Hasn’t TPS Been Universally Adopted?
Equipment Transition Costs: If you want to change your product it can take a long time to change machine’s.
Different Management Paradigm: To empower or not to empower?

20. World’s Second Largest Manufacturer of Automobiles
About 240,000 Employees
Produces a Vehicle about every Six Seconds
Consistently Profitable GM: $1.1 Billion Quarter Loss

21. SUPPLY CHAIN MANAGEMENT
A supply chain is a system through which organizations deliver their products and services to their customers." (Poirier and Reiter, 1996)
"A supply chain is an integrated process wherein raw materials are manufactured into final products, then delivered to customers (via distribution, retail, or both)."
(Benita, 1999)

22. SUPPLY CHAIN MANAGEMENT