1. Copyright © 2009 Pearson Education Canada8-1 Chapter 8 Producing Quality Goods and Services

2. Copyright © 2009 Pearson Education Canada8-2 What Is Production? Leading Planning Organizing Production Operations Management(POM) Controlling

3. Copyright © 2009 Pearson Education Canada8-3 What Is the Conversion Process? Transformation Outputs Inputs Analytic Systems Synthetic Systems

4. Copyright © 2009 Pearson Education Canada8-4 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. Copyright © 2009 Pearson Education Canada8-5 Manufacturing Goods MassProductionMassCustomization

6. Copyright © 2009 Pearson Education Canada8-6 Production Process Design Plan for capacity Choose facility location Design facility layout Identify the supply chain Forecast demand Schedule work

7. Copyright © 2009 Pearson Education Canada8-7 Forecasting Demand CustomerFeedbackMarketResearchSalesFiguresIndustryAnalysesEducatedGuesses BusinessResources PlanningBudgetingScheduling

8. Copyright © 2009 Pearson Education Canada8-8 Capacity Planning Level of resources resourcesCustomerdemandCustomerdemand

9. Copyright © 2009 Pearson Education Canada8-9 LabourLabourLandLand TransportationTransportationEnergyEnergy Local taxes RawmaterialsRawmaterials ConstructionConstruction LivingstandardsLivingstandards FacilityLocationFacilityLocation

10. Copyright © 2009 Pearson Education Canada8-10 Types of Facility Layout Process (functional) –concentrates everything needed to complete one phase of the production process in one place Product (assembly line) –the production process occurs along a line –products move from one workstation to the next Cellular –groups dissimilar machines into work centers (or cells) to process parts that have similar shapes and processing requirements Fixed-Position –labour, materials, and equipment are brought to the location where the good is being produced or the customer is being served –i.e.: buildings, roads, bridges, airplanes

11. Copyright © 2009 Pearson Education Canada8-11 Process Layout

12. Copyright © 2009 Pearson Education Canada8-12 Product Layout

13. Copyright © 2009 Pearson Education Canada8-13 Cellular Layout

14. Copyright © 2009 Pearson Education Canada8-14 Fixed-Position Layout

15. Copyright © 2009 Pearson Education Canada8-15 Production Schedule Scheduling Dispatching Contingencies

16. Copyright © 2009 Pearson Education Canada8-16

17. Copyright © 2009 Pearson Education Canada8-17 Program Evaluation and Review Technique (PERT) Identify activities Determine sequence Establish time frame Diagram activity network Calculate longest completion path Refine timing

18. Copyright © 2009 Pearson Education Canada8-18 PERT Time Estimates Optimistic Pessimistic Most likely Expected

19. Copyright © 2009 Pearson Education Canada8-19 PERT Diagram for Manufacturing Shoes

20. Copyright © 2009 Pearson Education Canada8-20 Improving Production Through Technology Robots Computer-aided design (CAD) Computer-aided engineering (CAE) Computer-aided manufacturing (CAM) Computer-integrated manufacturing (CIM) Flexible Manufacturing Systems (FMS)

21. Copyright © 2009 Pearson Education Canada8-21 Electronic Information Systems Responsiveness Service Communication

22. Copyright © 2009 Pearson Education Canada8-22 Manufacturing Systems TraditionalManufacturingFlexibleManufacturing Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

23. Copyright © 2009 Pearson Education Canada8-23 The Production Process InventorymanagementQualityassurance

24. Copyright © 2009 Pearson Education Canada8-24 Inventory Management Inventory Inventorycontrol Lead time Purchasing

25. Copyright © 2009 Pearson Education Canada8-25 Inventory Control Just-In-Time (JIT) Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP II)

26. Copyright © 2009 Pearson Education Canada8-26 Manufacturing Resource Planning

27. Copyright © 2009 Pearson Education Canada8-27 Maintaining Quality Statistical Quality Control Statistical Process Control Continuous Improvement Quality Control Quality Assurance

28. Copyright © 2009 Pearson Education Canada8-28 Global Quality Standards ISO Certification CAE Quality Awards Malcolm Baldrige Award

29. Copyright © 2009 Pearson Education Canada8-29 Supply Chain Management SuppliersManufacturersDistributorsRetailers The Supply Chain Production of Goods and Services FacilitiesFunctionsActivities

30. Copyright © 2009 Pearson Education Canada8-30 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