1. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 1 Creating Value: Producing Quality Goods and Services

2. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 2 What Is Production? Production Operations Management –Planning –Leading –Organizing –Controlling

3. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 3 What Is the Conversion Process? Inputs Transformation Outputs

4. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 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, 2007Excellence in Business, 3eChapter 9 - 5 Challenges of the Service Industry Customer involvement Delivery timing People-intensive activities Production and location Subjective quality

6. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 6 Manufacturing Goods Mass production Mass customization

7. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 7 Outsourcing the Manufacturing Function Advantages –Capital and resources –Economies of scale Disadvantages –Job displacement –Lost wages

8. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 8 Production Process Design Forecast demand Plan for capacity Choose facility site Design facility layout Schedule work

9. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 9 The Supply Chain Suppliers Manufacturers Distributors Retailers

10. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 10 Forecasting Demand Customer feedback Market research Sales figures Industry analyses Educated guesses

11. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 11 Capacity Planning Level of resources Customer demand

12. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 12 Facility Location Land Construction Labor Local taxes Energy Living standards Transportation Raw materials

13. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 13 Types of Facility Layout Process Product Cellular Fixed-position

14. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 14 Process Layout Made-to-order products Process arrangement –Specialized employees –Specialized materials

15. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 15 Product Layout Mass production of few items Process arrangement –Continuous sequence

16. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 16 Cellular Layout Mass customization Process arrangement –Work centers –Teamwork

17. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 17 Fixed-Position Layout Immovable product Process arrangement –Employee go to the site –Materials are brought to the site

18. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 18 Production Schedule Scheduling Dispatching Contingencies

19. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 19 The Gantt Chart ID Number Task name Start date End date Duration

20. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 20 Program Evaluation and Review Technique (PERT) 1.Identify activities 2.Determine sequence 3.Establish time frame 4.Diagram activity network 5.Calculate longest completion path 6.Refine timing

21. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 21 PERT Time Estimates Optimistic Pessimistic Most likely Expected

22. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 22 Industrial Robotics Precision Diligence Stamina Speed

23. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 23 Computerized Production Computer-aided design (CAD) Computer-aided engineering (CAE) Computer-aided manufacturing (CAM) Computer-integrated manufacturing (CIM)

24. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 24 Manufacturing Systems TraditionalFlexible Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

25. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 25 Supply Chain Data Interchange Electronic Data Interchange (EDI) Extensible Markup Language (XML)

26. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 26 The Production Process Inventory management Quality assurance

27. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 27 Supply Chain Coordination Inventory Purchasing Lead time Inventory control

28. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 28 Inventory Control Just-in-time (JIT) Materials requirements planning (MRP)

29. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 29 Supply Chain Management Manage risks Manage relationships Manage trade-offs

30. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 30 Maintaining Quality Quality control Quality assurance

31. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 31 Total Quality Management Management commitment to TQM Clear customer focus Employee employment Commitment to continuous improvement Partner with suppliers Meaningful performance measurements

32. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 32 Six-Sigma Approach Define the problem Measure performance Analyze root causes Improve the process Control the process

33. © Prentice Hall, 2007Excellence in Business, 3eChapter 9 - 33 Global Quality Standards ISO 9000 ISO 14000