1. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 1 Production of Quality Goods and Services

2. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 2 What is Production? Production Operations Management –Planning –Leading –Organizing –Controlling

3. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 3 What is the Conversion Process? Core process –Inputs –Transformation –Outputs Conversion types –Analytic –Synthetic

4. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 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, 2005Excellence in Business, Revised Edition Chapter 9 - 5 Production Process Design Forecasting demand Planning for capacity Choosing facility location Designing facility layout Scheduling work

6. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 6 Forecasting Demand Customer feedback Market research Sales figures Industry analyses Educated guesses

7. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 7 Capacity Planning Expanding facilities Contracting facilities Risks –Long-term capacity decisions –Shifts in customer demand

8. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 8 Facility Location LandLand ConstructionConstruction LaborLabor Local taxesLocal taxes EnergyEnergy Living standardsLiving standards TransportationTransportation Raw materialsRaw materials

9. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 9 Types of Facility Layout Process Product Cellular Fixed-position

10. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 10 Process Layout Made-to-order products Process arrangement –Specialized employees –Specialized materials

11. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 11 Product Layout Mass production of few items Process arrangement –Continuous sequence

12. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 12 Cellular Layout Mass customization Process arrangement –Work centers –Teamwork

13. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 13 Fixed-Position Layout Immovable product Process arrangement –Employee go to the site –Materials are brought to the site

14. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 14 Production Schedule Scheduling Dispatching Contingencies

15. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 15 The Gantt Chart ID Number Task name Start date End date Duration

16. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 16 Program Evaluation and Review Technique (PERT) Identify activities Sequence activities Establish time frame Diagram activity network Identify critical path Refine timing

17. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 17 PERT Time Estimates Optimistic Pessimistic Most likely Expected

18. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 18 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

19. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 19 Improving Production Through Technology Robots Computer-aided design Computer-aided engineering Computer-aided manufacturing Computer-integrated manufacturing

20. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 20 Manufacturing Systems TraditionalManufacturingFlexibleManufacturing Mass Production Resistant to Change High Set-Up Costs Mass Customization Conducive to Change Minimal Set-Up Costs

21. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 21 The Production Process Operations management –Inputs –Transformation –Outputs

22. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 22 Inventory Management Purchasing Lead time Inventory control

23. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 23 Inventory Control Just-in-time (JIT) Materials requirements planning (MRP) Manufacturing resource planning (MRP)

24. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 24 Manufacturing Resource Planning Input of data Computer processing Output of data

25. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 25 Maintaining Quality Quality control Quality assurance

26. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 26 What is Total Quality Management? Employee involvement Customer focus Benchmarking Continuous improvement

27. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 27 Quality Initiatives Six Sigma –Cost control –Process improvement –Cycle-time reduction ISO Certification –Customer satisfaction –User needs –Continuous improvement

28. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 28 Supply Chain Management Suppliers Manufacturers Distributors Retailers

29. © Prentice Hall, 2005Excellence in Business, Revised Edition Chapter 9 - 29 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