1. ****** 9-1 1-1 McGraw-Hill/Irwin Understanding Business, 8e © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Nickels McHugh McHugh ** Producing World-Class Goods and Services 9 CHAPTER * **

2. ****** 9-2 Leading U.S. Manufacturing States California New York Illinois Ohio Pennsylvania Texas Michigan Source: Britannica Student Encyclopedia, 2006

3. ****** 9-3 Top Ten US Manufacturers 1.ExxonMobil 2.Chevron 3.General Motors 4.ConocoPhillips 5.Ford Motor 6.General Electric 7.Altria Group 8.IBM Corp. 9.Hewlett-Packard 10.Valero Energy Source: Industry Week, June 1, 2006

4. ****** 9-4 How Manufacturers Have Become More Effective Focus on customersFocus on customers Maintain close relationshipsMaintain close relationships Continuous improvementContinuous improvement Focus on qualityFocus on quality Save costsSave costs Rely on the InternetRely on the Internet New production techniquesNew production techniques

5. ****** 9-5 Labor Hours / Vehicle Ford – 35.79 hoursFord – 35.79 hours Daimler/Chrysler – 33.71 hoursDaimler/Chrysler – 33.71 hours GM – 33.19 hoursGM – 33.19 hours Honda – 32.51 hoursHonda – 32.51 hours Toyota – 29.4 hoursToyota – 29.4 hours Nissan – 28.46 hoursNissan – 28.46 hours Source: Detroit Free Press, June 2, 2006

6. ****** 9-6 From Production to Operations Management ProductionProduction Production ManagementProduction Management Operations Management (OM)Operations Management (OM)

7. ****** 9-7 Comparing Asian Giants CHINA Driving Force: ManufacturingDriving Force: Manufacturing Largest Communist CountryLargest Communist Country Population: 1.3 BillionPopulation: 1.3 Billion Economic Growth Rate: 9%Economic Growth Rate: 9% Financial/Commercial Capital: ShanghaiFinancial/Commercial Capital: ShanghaiINDIA Driving Force: ServicesDriving Force: Services Largest DemocracyLargest Democracy Population: 1.1 BillionPopulation: 1.1 Billion Economic Growth Rate: 7%Economic Growth Rate: 7% Financial/Commercial Capital: MumbaiFinancial/Commercial Capital: Mumbai Source: Kiplinger.com December 19, 2005, BBC News, In Depth, accessed July 15, 2006

8. ****** 9-8 Production Processes Form UtilityForm Utility Process ManufacturingProcess Manufacturing Assembly ProcessAssembly Process Continuous ProcessContinuous Process Intermittent ProcessIntermittent Process

9. ****** 9-9 Three Requirements For Production 1.Build and deliver products in response to the demands of the customer at a scheduled delivery time 2.Provide an acceptable quality level 3.Provide everything at the lowest possible cost

10. ****** 9-10 Production Efficiency Krispy Kreme Doughnuts – 5,208 a minuteKrispy Kreme Doughnuts – 5,208 a minute Twinkies – 972 a minuteTwinkies – 972 a minute LifeSavers 5 Flavor Roll – 100 rolls a minuteLifeSavers 5 Flavor Roll – 100 rolls a minute Jell-O Gelatin Boxes – 764 a minuteJell-O Gelatin Boxes – 764 a minute Chips Ahoy! – 4,000 a minuteChips Ahoy! – 4,000 a minute Source: World Features Syndicate

11. ****** 9-11 What Is Increasing Productivity? Source: 2005 National Innovation Survey, Council on Competitiveness

12. ****** 9-12 Product Improvements With Computer Technology Computer-Aided Design - CADComputer-Aided Design - CAD Computer-Aided Manufacturing - CAMComputer-Aided Manufacturing - CAM Computer-Integrated Manufacturing - CIMComputer-Integrated Manufacturing - CIM

13. ****** 9-13 Top Ten Tech Spenders STATE $ in Billions California38.9California38.9 New York29.8New York29.8 Texas24.6Texas24.6 Illinois15.1Illinois15.1 Florida13.9Florida13.9 Pennsylvania12.8Pennsylvania12.8 Ohio11.8Ohio11.8 New Jersey11.3New Jersey11.3 North Carolina 9.4North Carolina 9.4 Georgia 9.3Georgia 9.3 Source: Business Week Online, December 5, 2005

14. ****** 9-14 Production Techniques Flexible ManufacturingFlexible Manufacturing Lean ManufacturingLean Manufacturing Mass CustomizationMass Customization

15. ****** 9-15 Operations Management Planning Facility LocationFacility Location Facility LayoutFacility Layout Materials Requirement PlanningMaterials Requirement Planning PurchasingPurchasing J-I-T Inventory ControlJ-I-T Inventory Control Quality ControlQuality Control

16. ****** 9-16 Quality Control Six Sigma QualitySix Sigma Quality Statistical Quality Control (SQC)Statistical Quality Control (SQC) Statistical Process Control (SPC)Statistical Process Control (SPC) The Baldrige AwardThe Baldrige Award ISO 9000ISO 9000 ISO 14000ISO 14000

17. ****** 9-17 Baldrige Award Recipients Sunny Fresh Foods, Inc., Monticello, MN (Manufacturing)Sunny Fresh Foods, Inc., Monticello, MN (Manufacturing) DynMcDermott Petroleum Operations, New Orleans, LA (Service)DynMcDermott Petroleum Operations, New Orleans, LA (Service) Park Place Lexus, Plano, TX (Small Business)Park Place Lexus, Plano, TX (Small Business) Richland College, Dallas, TX (Education)Richland College, Dallas, TX (Education) Jenks Public Schools, Jenks, OK (Education)Jenks Public Schools, Jenks, OK (Education) Bronson Methodist Hospital, Kalamazoo, MI, (Health care)Bronson Methodist Hospital, Kalamazoo, MI, (Health care) Source: NIST News Release, November 22, 2005

18. ****** 9-18 ISO ISO was founded in 1947ISO was founded in 1947 At the end of 2004, the worldwide total of certificates:At the end of 2004, the worldwide total of certificates: ISO 9000 – 670,000 in 154 countriesISO 9000 – 670,000 in 154 countries ISO 14000 – 90,000 in 127 countriesISO 14000 – 90,000 in 127 countries Source: Business Week Online, March 17, 2006

19. ****** 9-19 Control Procedures Program Evaluation & Review Techniques (PERT) Gantt Chart

20. ****** 9-20 PERT Steps 1.Analyzing and sequencing tasks that need to be done 2.Estimating the time needed to complete each task 3.Drawing a PERT network illustrating the information from steps 1 and 2 4.Identifying the critical path

21. ****** 9-21 Gantt Chart Named for its developer, Henry GanttNamed 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 timeA bar graph that clearly shows what projects are being worked on and how much has been completed at any given time

22. ****** 9-22 Learning from Failure Formalize forums for analyzing failureFormalize forums for analyzing failure Move the goalpostsMove the goalposts Share personal storiesShare personal stories Bring in outsidersBring in outsiders Prove yourself wrong, not rightProve yourself wrong, not right Celebrate smart failuresCelebrate smart failures Source: Business Week Online, July 10, 2006