1. Business Copyright 2005 Prentice- Hall, Inc. 14-1

2. 14-2 Chapter 14 Producing Goods And Services

3. Business Copyright 2005 Prentice- Hall, Inc. 14-3 Chapter Outline What Does “Production” Mean Today What Does “Production” Mean Today Creating Value Through Operations Creating Value Through Operations Operations Planning Operations Planning Operations Scheduling Operations Scheduling Operations Control Operations Control

4. Business Copyright 2005 Prentice- Hall, Inc. 14-4 Operations & Production Growth DefinitionsDefinitions –Service Operation –Goods Production Global OperationsGlobal Operations Technology/InternetTechnology/Internet Quality PlanningQuality Planning

5. Business Copyright 2005 Prentice- Hall, Inc. 14-5 Goods/Services Employment

6. Business Copyright 2005 Prentice- Hall, Inc. 14-6 Goods/Services GDP

7. Business Copyright 2005 Prentice- Hall, Inc. 14-7 Top 5 U.S. Manufacturing States California New York Illinois Ohio Pennsylvania Texas

8. Business Copyright 2005 Prentice- Hall, Inc. 14-8 Utility Product’s Ability To Satisfy WantProduct’s Ability To Satisfy Want TypesTypes –Time –Place –Possession –Form

9. Business Copyright 2005 Prentice- Hall, Inc. 14-9 Operations (Production) Management- Systematic Direction/Control Of Processes That Transform Resources Into Finished Goods Creating ValueManagement- Systematic Direction/Control Of Processes That Transform Resources Into Finished Goods Creating Value Managers- Ensure Processes Create Value/BenefitsManagers- Ensure Processes Create Value/Benefits

10. Business Copyright 2005 Prentice- Hall, Inc. 14-10 Transformation Process

11. Business Copyright 2005 Prentice- Hall, Inc. 14-11 Goods Manufacturing AnalyticAnalytic SyntheticSynthetic

12. Business Copyright 2005 Prentice- Hall, Inc. 14-12 Service Processes Service: Extent Of Customer ContactService: Extent Of Customer Contact High-ContactHigh-Contact Low-ContactLow-Contact

13. Business Copyright 2005 Prentice- Hall, Inc. 14-13 Focus of Service vs. Manufacturing PerformancePerformance Process & OutcomeProcess & Outcome Service CharacteristicsService Characteristics Customer-Service LinkCustomer-Service Link E-Commerce- “Virtual” Presence Of CustomerE-Commerce- “Virtual” Presence Of Customer Service Quality ConsiderationsService Quality Considerations

14. Business Copyright 2005 Prentice- Hall, Inc. 14-14 Operations Planning CapacityCapacity For ProducingFor Producing –Goods –Services LocationLocation –Goods –Services

15. Business Copyright 2005 Prentice- Hall, Inc. 14-15 Operations Planning/Control

16. Business Copyright 2005 Prentice- Hall, Inc. 14-16 Service Characteristics IntangibilityIntangibility CustomizationCustomization UnstorabilityUnstorability

17. Business Copyright 2005 Prentice- Hall, Inc. 14-17 Layout Planning Producing GoodsProducing Goods –Productive Facilities –Nonproductive Facilities –Support Facilities Product LayoutsProduct Layouts –Process –Cellular –Product –Others For Flexibility Service LayoutService Layout

18. Business Copyright 2005 Prentice- Hall, Inc. 14-18 Process Layout

19. Business Copyright 2005 Prentice- Hall, Inc. 14-19 Cellular Layout

20. Business Copyright 2005 Prentice- Hall, Inc. 14-20 Goods Producing Layout

21. Business Copyright 2005 Prentice- Hall, Inc. 14-21 Cafeteria Layout

22. Business Copyright 2005 Prentice- Hall, Inc. 14-22 Other Layout Developments U-Shaped Production LinesU-Shaped Production Lines Flexible Manufacturing SystemFlexible Manufacturing System

23. Business Copyright 2005 Prentice- Hall, Inc. 14-23 Quality “…characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” –American Society for Quality

24. Business Copyright 2005 Prentice- Hall, Inc. 14-24 Methods Planning Methods ImprovementMethods Improvement –Goods –Services Service Flow AnalysisService Flow Analysis Designing To Control Employee DiscretionDesigning To Control Employee Discretion Design For Customer ContactDesign For Customer Contact

25. Business Copyright 2005 Prentice- Hall, Inc. 14-25 Service Flow Analysis

26. Business Copyright 2005 Prentice- Hall, Inc. 14-26 Operations Scheduling Master Production ScheduleMaster Production Schedule Tools for SchedulingTools for Scheduling –Gantt Chart –PERT Chart SCHEDULE

27. Business Copyright 2005 Prentice- Hall, Inc. 14-27 Gantt Chart

28. Business Copyright 2005 Prentice- Hall, Inc. 14-28 PERT Chart

29. Business Copyright 2005 Prentice- Hall, Inc. 14-29 Operations Control Material ManagementMaterial Management Operations Process ControlOperations Process Control FollowupFollowup

30. Business Copyright 2005 Prentice- Hall, Inc. 14-30 Materials Management Plan/Organize Material FlowPlan/Organize Material Flow Emphasizes StandardizationEmphasizes Standardization Areas Of Material ManagementAreas Of Material Management –Transportation –Warehousing –Inventory Control –Purchasing

31. Business Copyright 2005 Prentice- Hall, Inc. 14-31 Purchasing Processes Forward BuyingForward Buying Holding CostsHolding Costs Opportunity CostsOpportunity Costs Hand-To-Mouth PatternHand-To-Mouth Pattern Lead TimesLead Times

32. Business Copyright 2005 Prentice- Hall, Inc. 14-32 Supplier Selection InvestigateInvestigate Evaluate/IsolateEvaluate/Isolate NegotiateNegotiate MaintainMaintain

33. Business Copyright 2005 Prentice- Hall, Inc. 14-33 Tools For Process Control Worker TrainingWorker Training Lean Production Systems: JITLean Production Systems: JIT Materials Requirement PlanningMaterials Requirement Planning –Bill Of Materials –Manufacturing Resource Planning Quality ControlQuality Control