1. © Prentice Hall, 2004Business In Action 2eChapter 8 - 1 Producing Quality Goods and Services

2. © Prentice Hall, 2004Business In Action 2eChapter 8 - 2 What Is Production? Production Operations Management –Planning –Leading –Organizing –Controlling

3. © Prentice Hall, 2004Business In Action 2eChapter 8 - 3 What Is the Conversion Process? Inputs Transformation Outputs

4. © Prentice Hall, 2004Business In Action 2eChapter 8 - 4 Input-Transformation-Output Relationships for Typical Systems Department Store Shoppers, stock of goods Displays, sales clerks Attract customers, promote products, fill orders Sales to satisfied customers College or University High School graduates, books Teachers, classrooms Impart knowledge & skills Educated individuals Automobile Factory Sheet steel, engine parts Tools, equipment, workers Fabrication & assembly of cars High-quality cars Restaurant Hungry customers, food Chef, waitress, environment Well-prepared & well-served food Satisfied customers Hospital Patients, medical supplies MDs, nurses, equipment Health care Healthy individuals Typical Desired Output Transformation Function Transformation Components InputsSystem

5. © Prentice Hall, 2004Business In Action 2eChapter 8 - 5 Manufacturing Goods Mass production Mass customization

6. © Prentice Hall, 2004Business In Action 2eChapter 8 - 6 Production Process Design Forecast demand Plan for capacity Choose facility site Design facility layout Schedule work

7. © Prentice Hall, 2004Business In Action 2eChapter 8 - 7 Forecasting Demand Customer feedback Market research Sales figures Industry analyses Educated guesses

8. © Prentice Hall, 2004Business In Action 2eChapter 8 - 8 Capacity Planning Level of resources Customer demand

9. © Prentice Hall, 2004Business In Action 2eChapter 8 - 9 Facility Location Land Construction Labor Local taxes Energy Living standards Transportation Raw materials

10. © Prentice Hall, 2004Business In Action 2eChapter 8 - 10 Types of Facility Layout Process Product Cellular Fixed-position

11. © Prentice Hall, 2004Business In Action 2eChapter 8 - 11 Process Layout Made-to-order products Process arrangement –Specialized employees –Specialized materials

12. © Prentice Hall, 2004Business In Action 2eChapter 8 - 12 Product Layout Mass production of few items Process arrangement –Continuous sequence

13. © Prentice Hall, 2004Business In Action 2eChapter 8 - 13 Cellular Layout Mass customization Process arrangement –Work centers –Teamwork

14. © Prentice Hall, 2004Business In Action 2eChapter 8 - 14 Fixed-Position Layout Immovable product Process arrangement –Employee go to the site –Materials are brought to the site

15. © Prentice Hall, 2004Business In Action 2eChapter 8 - 15 Production Schedule Scheduling Dispatching Contingencies

16. © Prentice Hall, 2004Business In Action 2eChapter 8 - 16 The Gantt Chart ID Number Task name Start date End date Duration

17. © Prentice Hall, 2004Business In Action 2eChapter 8 - 17 Program Evaluation and Review Technique (PERT) Identify activities Determine sequence Establish time frame Diagram activity network Calculate longest completion path Refine timing

18. © Prentice Hall, 2004Business In Action 2eChapter 8 - 18 PERT Time Estimates Optimistic Pessimistic Most likely Expected

19. © Prentice Hall, 2004Business In Action 2eChapter 8 - 19 PERT Diagram for Manufacturing Shoes Critical path –Receiving –Cutting the pattern –Dyeing the leather –Sewing the tops –Sewing tops to soles and heels –Finishing –Packaging –Shipping

20. © Prentice Hall, 2004Business In Action 2eChapter 8 - 20 Improving Production Through Technology Robots Computer-aided design Computer-aided engineering Computer-aided manufacturing Computer-integrated manufacturing

21. © Prentice Hall, 2004Business In Action 2eChapter 8 - 21 Electronic Information Systems Responsiveness Service Communication

22. © Prentice Hall, 2004Business In Action 2eChapter 8 - 22 Manufacturing Systems TraditionalManufacturingFlexibleManufacturing Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

23. © Prentice Hall, 2004Business In Action 2eChapter 8 - 23 The Production Process Inventory management Quality assurance

24. © Prentice Hall, 2004Business In Action 2eChapter 8 - 24 Inventory Management Inventory Purchasing Lead time Inventory control

25. © Prentice Hall, 2004Business In Action 2eChapter 8 - 25 Inventory Control Just-in-time (JIT) Materials requirements planning (MRP) Manufacturing resource planning (MRP)

26. © Prentice Hall, 2004Business In Action 2eChapter 8 - 26 Manufacturing Resource Planning Input of data Computer processing Output of data

27. © Prentice Hall, 2004Business In Action 2eChapter 8 - 27 Maintaining Quality Quality control Quality assurance

28. © Prentice Hall, 2004Business In Action 2eChapter 8 - 28 Global Quality Standards ISO Certification Deming Prize Malcolm Baldrige Award

29. © Prentice Hall, 2004Business In Action 2eChapter 8 - 29 Supply Chain Management Suppliers Manufacturers Distributors Retailers

30. © Prentice Hall, 2004Business In Action 2eChapter 8 - 30 Manufacturing Trends Outsourcing Supplier Involvement Redirect Resources and Capital Increase Production Efficiencies Access State-of-the-Art Facilities Improve Overall Quality Maximize the Use of Time Reduce Work-in-Process Inventory