Creating Value: Producing Quality Goods and Services

Creating Value: Producing Quality Goods and Services

Creating Value: Producing Quality Goods and Services Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 1 What Is Production? Production Operations Management Planning Leading Organizing Controlling

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 2 What Is the Conversion Process? Inputs Transformation Outputs Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 3

Input-Transformation-Output Relationships for Typical Systems System Inputs Transformation Components Transformation Function Typical Desired Output Hospital

Patients, medical supplies MDs, nurses, equipment Health care Healthy individuals Restaurant Hungry customers, food

Chef, waitress, environment Well-prepared & well-served food Satisfied customers Automobile Factory Sheet steel, engine parts Tools, equipment, workers

Fabrication & assembly of cars High-quality cars College or University High School graduates, books Teachers, classrooms Impart knowledge & skills

Educated individuals Department Store Shoppers, stock of goods Displays, sales clerks Attract customers, promote products, fill orders

Sales to satisfied customers Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 4 Challenges of the Service Industry

Customer involvement Delivery timing People-intensive activities Production and location Subjective quality Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 5 Manufacturing Goods Mass production Mass customization Prentice Hall, 2007

Excellence in Business, 3e Chapter 9 - 6 Outsourcing the Manufacturing Function Advantages Capital and resources Economies of scale Disadvantages Job displacement Lost wages Prentice Hall, 2007 Excellence in Business, 3e

Chapter 9 - 7 Production Process Design Forecast demand Plan for capacity Choose facility site Design facility layout Schedule work Prentice Hall, 2007

Excellence in Business, 3e Chapter 9 - 8 The Supply Chain Suppliers Manufacturers Distributors Retailers Prentice Hall, 2007

Excellence in Business, 3e Chapter 9 - 9 Forecasting Demand Customer feedback Market research Sales figures Industry analyses Educated guesses

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 10 Capacity Planning Level of resources Customer demand Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 11

Facility Location Land Energy Construction Living standards Labor Transportation Local taxes Raw materials

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 12 Types of Facility Layout Process Product Cellular Fixed-position

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 13 Process Layout Made-to-order products Process arrangement Specialized employees Specialized materials Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 14

Product Layout Mass production of few items Process arrangement Continuous sequence Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 15 Cellular Layout Mass customization Process arrangement Work centers Teamwork

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 16 Fixed-Position Layout Immovable product Process arrangement Employee go to the site Materials are brought to the site Prentice Hall, 2007 Excellence in Business, 3e

Chapter 9 - 17 Production Schedule Scheduling Dispatching Contingencies Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 18 The Gantt Chart

ID Number Task name Start date End date Duration Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 19 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 Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 20 PERT Time Estimates

Optimistic Pessimistic Most likely Expected Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 21 Industrial Robotics

Precision Diligence Stamina Speed Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 22 Computerized Production Computer-aided design (CAD) Computer-aided engineering (CAE) Computer-aided manufacturing (CAM) Computer-integrated manufacturing (CIM)

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 23 Manufacturing Systems Traditional Flexible Mass Production Specialty Operations

Resistant to Change Conducive to Change High Set-Up Costs Minimal Set-Up Costs Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 24 Supply Chain Data Interchange Electronic Data Interchange (EDI)

Extensible Markup Language (XML) Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 25 The Production Process Inventory management Quality assurance Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 26

Supply Chain Coordination Inventory Purchasing Lead time Inventory control Prentice Hall, 2007 Excellence in Business, 3e

Chapter 9 - 27 Inventory Control Just-in-time (JIT) Materials requirements planning (MRP) Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 28 Supply Chain Management Manage risks Manage relationships Manage trade-offs

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 29 Maintaining Quality Quality control Quality assurance Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 30

Total Quality Management Management commitment to TQM Clear customer focus Employee employment Commitment to continuous improvement Partner with suppliers Meaningful performance measurements Prentice Hall, 2007

Excellence in Business, 3e Chapter 9 - 31 Six-Sigma Approach Define the problem Measure performance Analyze root causes Improve the process Control the process

Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 32 Global Quality Standards ISO 9000 ISO 14000 Prentice Hall, 2007 Excellence in Business, 3e Chapter 9 - 33

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