Transcript Document
CHAPTER
NINE
Operations Management
(Production)
Manufacturing
Service
What’s Had The Biggest
Effect on Productivity?
Downsizing
Hiring Part-Time Workers
Empowering Workers
Quality & Customer Satisfaction
Computers & Technology
0
20
40
60
Percentage of Workforce
80
Leading U.S.
Manufacturing States
New York
WASHINGTON
MONTANA
MAINE
NORTH DAKOTA
Illinois
OREGON
MICHIGAN
VT
MINNESOTA
IDAHO
SOUTH DAKOTA
WISCONSIN
NEW YORK
NH
MASS
CONN
RI
MICHIGAN
WYOMING
PENNSYLVANIA
IOWA
NEW
JERSEY
NEVADA
NEBRASKA
OHIO
DELAWARE
UTAH
ILLINOIS
DC
INDIANA
MARYLAND
COLORADO
WEST
VIRGINIA
KANSAS
CALIFORNIA
VIRGINIA
MISSOURI
KENTUCKY
Ohio
NORTH CAROLINA
TENNESSEE
OKLAHOMA
ARIZONA
SOUTH
CAROLINA
ARKANSAS
NEW MEXICO
California
ALABAMA
LOUISIANA
GEORGIA
Pennsylvania
MISSISSIPPI
TEXAS
ALASKA
FLORIDA
HAWAII
0
600 Miles
0
0
100
200 Miles
200 Miles
Texas
The Americans and the Japanese decided to
engage in a competitive boat race.
Both teams practiced hard and long to reach
their peak performance.
On the big day they felt
they were ready
The Japanese won by a mile.
Afterwards the American team was
discouraged by the loss. Morale sagged.
Corporate management decided that the
reason for the crushing defeat had to be
found, so a consulting firm was hired to
investigate the problem and recommend
corrective action
The consultants finding:
The Japanese team had eight people rowing
and one person steering;
the American team had one person rowing
and eight people steering..
After a year of study and millions
spent analyzing the problem,
the consultant firm concluded that too many
people were steering and not enough were
rowing on the American team
So as race day neared again the following
year, the American team’s management
structure was completely reorganized.
The new structure:
Four steering managers, three area steering
managers, and a new performance review system for
the person rowing the boat to provide work
incentive.
The next year, the Japanese won by TWO miles
Humiliated, the American corporation laid off the
rower for poor performance and gave the
managers a bonus for discovering the problem.
What has the US done to
regain a competitive edge?
Customer focus
Cost savings through site selection
New manufacturing techniques
Reliance on the Internet
Total Quality Management
ISO 9000/ISO 140000
Using land, labor, capital, entrepreneurship,
knowledge to produce goods and services.
Transforms resources into goods and services.
inventory management production scheduling
quality control
follow-up services
The Production
& Operations Process
Inputs
Conversion Process
Manufacturing
UB’s Dry
Cleaners
Service
Output
1. Facility location
a. Near resources
b. Near markets
2. Facility layout
a. For services: customer friendly
b. For manufacturing
- customer focused work cells
- away from assembly lines
c. Outsourcing
3. Quality Control
a. Measurement of products and services
against set requirements
b. Often at the end of the line
c. Now quality becomes everyone’s
concern
Quality Control Standards
Six Sigma () Quality (3.4)
Statistical Quality Control (SQC)
Statistical Process Control (SPC)
Deming Cycle (Plan, Do, Check,
(Eliminate mistakes)
Act)
Quality Function Deployment (QFD)
(maximize customer satisfaction)
Baldridge Award
ISO 9000/14000/9001:2002
1. Baldridge Awards: quality in
a.
b.
c.
d.
e.
f.
g.
leadership
Strategic planning
Customer and market focus
Information and analysis
Human resource focus
Process management
Business results
2. ISO 9000
- Sets global measures for the quality of
individual products
- Provides a common denominator of business
quality accepted around the world
3. ISO 14000
- Concerns managing an
organization’s environmental impact
- Requires targets, policies and
reviews of environmental programs
1. Measuring quality
- Productivity strong in manufacturing, but weak
in services
- Quality versus quantity issues
2.
-
Technological improvements
ATMs improve banking
Universal Price Codes make checkout faster
Computerized airline reservations, meal
selection, and luggage handling
(finger printing foreigners)
Interactive services from banks, stockbrokers,
travel agents
1. Form Utility
- the value added by the creation of finished
goods and services
2. Types of Production Processes
a. Process manufacturing
- physically or chemically changing materials
- making steel, or cooking eggs
b. Assembly process
-putting together components
- TV, cars
X
X
X
X
X
X
X
X
X
X
X
2. Types of Production Processes
a. Continuous
1) one long production run turns out finished
goods
2) like an assembly line
b. Intermittent
1) short production runs where machines are
changed to make different products
2) custom made furniture
3) easier to respond to customer requests.
1. Materials Requirement Planning (MRP)
a. Uses sales forecasts to make sure required
parts are available when needed
b. Now outdated
2. MRPII – Manufacturing resource planning
a. involved more than just materials
b. also has been updated
3. ERP Enterprise resource planning
a. Links multiple firms.
b. Monitors quality and satisfaction as it’s
happening.
c. IT has had a major influence
Modern
Production Techniques
Mass Customizing
(JIT) Inventory Competing in Time
Technology
Purchasing
Assisted
Flexible
Computer-Aided
Manufacturing
Design (CAD)
Lean
Computer-Aided
Manufacturing
Manufacturing
Just-In-Time
(CAM)
1. Just in time inventory control (JIT)
a. Parts and supplies are delivered just
as needed in the production process
b. Avoids storage charges and damages
2. Internet purchasing
a. Reduces purchasing costs
b. 3 types
1) trading exchange platforms
- assist companies in several markets
2) industry-sponsored exchanges
3) Net market makers
-host electronic marketplaces
3. Flexible Manufacturing
a. Designing machines to do multiple tasks
b. Ford makes both V-8 and V-6 engines
4. Lean Manufacturing
a. Increasing capacity to produce high-quality
goods while decreasing need for resources
b. Workers perform a cluster of tasks, not one
assembly line job.
5. Mass customization
- Flexible machines can produce a good as fast
as mass-produced goods once could.
6. Competing in Time
a. Being as fast or faster than all
competition in responding to customer
want and needs
b. Essential in global marketplace
7. CAD and CAM
a. CAD – 3D designing
b. CAM – direct computer involvement in
production process
c. CIM Computer Integrated Manufacturing
1) software that unites CAD and CAM
2) currently expensive
3) cuts 80% of the time needed to
program machines to make parts
Just in time inventory control
Flexible manufacturing
Mass customization Lean manufacturing
Competing in time
The Daimler-Chrysler plant in Fenton, MO receives shipments about every 4
hours from its seat supplier, and literally hundreds of other parts
continually. There is virtually no storage.
Volvo uses modular construction in their plants, where workers are grouped into
autonomous teams working on mobile assembly platforms that carry the cars to
the workers. Each worker has been trained to do a whole cluster of tasks.
This system enabled Volvo to build quality cars with fewer workers in more
space efficient plants and has reduced the number of hours to assemble a car.
Because of the increases competition from its Japanese counter-parts Xerox
implemented a program designed to cut its new product development time in
half
Levis markets a service which enables any customer to order a custom-made
pair of jeans from any retailer at any time. The jeans cost $10 more than an
“off-the-rack” pair.
At Dynalink Industries, 15 machines are used to make, test and package
component parts for stereo and quadraphonic sound systems. The parts are
never touched by human hands.
Control Procedures
Program Evaluation
& Review Techniques
(PERT)
Critical Path Method
(CPM)
Gantt Chart
Program Evaluation & Review Techniques (PERT)
Designing a PERT Chart
1.
Analyze and sequence task that need to be done
2.
Estimate the time needed to complete each task
3.
Draw a PERT network illustrating the two previous
steps
4. Identify the critical path
- the sequence that takes the longest
brew coffee
6 min
Start
Start
cook eggs
(3 min)
make toast
(2 min)
pour coffee
(1 min)
assemble eggs and
toast (1 min)
butter toast
(1 min)
serve