1. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-1 NickelsMcHughMcHugh Nickels Cover

2. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 99 Producing World-Class Goods and Services 9-2

3. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-3 What’s Had The Biggest Effect on Productivity? Percentage of Workforce

4. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-4 Leading U.S. Manufacturing States California New York Illinois Ohio Pennsylvania Texas

5. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-5 The Production & Operations Process Inputs Conversion Process Output Manufacturing Service UB’s Dry Cleaners

6. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-6 Operations Management Functions  Facility Location  Facility Layout  Quality Control  Baldridge Award  ISO 9000/ISO 140000

7. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-7 Emerging Asian Industrial Producers Source: J.P. Morgan, Business Week, Bureau of Economic AnalysisSource: J.P. Morgan, Business Week, Bureau of Economic Analysis ChinaKoreaTaiwanThailandMalaysiaPhilippines

8. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-8 Dimensions of Quality PerformancePerformance FeaturesFeatures ReliabilityReliability ConformanceConformance DurabilityDurability ServiceabilityServiceability AestheticsAesthetics Perceived QualityPerceived Quality

9. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-9 Quality Control Standards Six Sigma (  ) Quality Six Sigma (  ) Quality Statistical Quality Control (SQC) Statistical Quality Control (SQC) Statistical Process Control (SPC) Statistical Process Control (SPC) Deming Cycle Deming Cycle Quality Function Deployment (QFD) Quality Function Deployment (QFD) Baldridge Award Baldridge Award ISO 9000/14000/19011:2002 ISO 9000/14000/19011:2002

10. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-10 Service Sector Operations Management Measuring Quality Measuring Quality Interactivity Interactivity

11. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-11 Manufacturing Sector Operations Management Form Utility Manufacturing Processes Assembly Process Continuous Process Intermittent Process Materials Requirement Planning Enterprise Resource Planning IT/Customer-Relationship Marketing

12. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-12 Modern Production Techniques  Just-In-Time (JIT) Inventory  Internet Purchasing  Flexible Manufacturing  Lean Manufacturing  Mass Customization  Competing in Time  Technology Assisted  Computer-Aided Design (CAD)  Computer-Aided Manufacturing (CAM)

13. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-13 Productivity Challenge in the Automobile Industry PRODUCERLABOR HOURS PER CAR PRODUCERLABOR HOURS PER CAR Toyota 21 Hours Toyota 21 Hours Honda22 Hours General Motors26 Hours Ford27 Hours Daimler/Chrysler31 Hours Source: Harbour & Associates, Center for Automotive Research

14. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-14 Where did Productivity Rise? Source: BusinessWeek, May 27, 2002 Growth Rate Of Output Per Hour 1990 - 2000

15. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-15 U.S. Productivity Champions 1999-2003 Industry Productivity Gain Industry Productivity Gain Consumer Electronics14.1% Computers12.6% Software 5.3% Insurance 5.0% Metals & Machinery 4.5% Banking & Finance 3.9% Source: Economy.com Inc.

16. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 9-16 Control Procedures   Program Evaluation & Review Techniques (PERT)   Critical Path Method (CPM)   Gantt Chart