Chapter 8 Producing Quality Goods and Services Copyright

Chapter 8 Producing Quality Goods and Services Copyright © 2009 Pearson Education Canada 1

What Is Production? Production Operations Management (POM) Organizing Planning Leading Controlling Copyright © 2009 Pearson Education Canada 2

What Is the Conversion Process? Synthetic Systems Inputs Transformation Outputs Analytic Systems Copyright © 2009 Pearson Education Canada 3

Input-Transformation-Output Relationships for Typical Systems Transformatio n System Inputs n Function Components Patients, MDs, nurses, medical Hospital Health care equipment supplies Hungry Well-prepared Chef, waitress, customers, & well-served Restaurant environment food Tools, Fabrication & Automobile Sheet steel, equipment, assembly of Factory engine parts workers cars High School Impart College or Teachers, graduates, knowledge & University classrooms books skills Attract customers, Department Shoppers, Displays, sales promote Store stock of goods clerks products, fill orders Copyright © 2009 Pearson Education Canada Typical Desired Output Healthy individuals Satisfied customers High-quality cars Educated individuals Sales to satisfied customers 4

Manufacturing Goods Mass Production Copyright © 2009 Pearson Education Canada Mass Customization 5

Production Process Design Identify the supply chain Forecast demand Plan for capacity Choose facility location Design facility layout Schedule work Copyright © 2009 Pearson Education Canada 6

Forecasting Demand Customer Feedback Market Research Sales Figures Industry Analyses Educated Guesses Business Resources Planning Scheduling Copyright © 2009 Pearson Education Canada Budgeting 7

Capacity Planning Level of resources Copyright © 2009 Pearson Education Canada Customer demand 8

Land Construction Labour Raw materials Facility Location Local taxes Transportation Living standards Energy Copyright © 2009 Pearson Education Canada 9

Types of Facility Layout • Process (functional) – concentrates everything needed to complete one phase of the production process in one place • Product (assembly line) – the production process occurs along a line – products move from one workstation to the next • Cellular – groups dissimilar machines into work centers (or cells) to process parts that have similar shapes and processing requirements • Fixed-Position – labour, materials, and equipment are brought to the location where the good is being produced or the customer is being served – i. e. : buildings, roads, bridges, airplanes Copyright © 2009 Pearson Education Canada 10

Process Layout Copyright © 2009 Pearson Education Canada 11

Product Layout Copyright © 2009 Pearson Education Canada 12

Cellular Layout Copyright © 2009 Pearson Education Canada 13

Fixed-Position Layout Copyright © 2009 Pearson Education Canada 14

Production Schedule Scheduling Dispatching Contingencies Copyright © 2009 Pearson Education Canada 15

Copyright © 2009 Pearson Education Canada 16

Program Evaluation and Review Technique (PERT) • Identify activities • Determine sequence • Establish time frame • Diagram activity network • Calculate longest completion path • Refine timing Copyright © 2009 Pearson Education Canada 17

PERT Time Estimates Optimistic Pessimistic Most likely Expected Copyright © 2009 Pearson Education Canada 18

PERT Diagram for Manufacturing Shoes Copyright © 2009 Pearson Education Canada 19

Improving Production Through Technology • Robots • Computer-aided design (CAD) • Computer-aided engineering (CAE) • Computer-aided manufacturing (CAM) • Computer-integrated manufacturing (CIM) • Flexible Manufacturing Systems (FMS) Copyright © 2009 Pearson Education Canada 20

Electronic Information Systems Responsiveness Service Communication Copyright © 2009 Pearson Education Canada 21

Manufacturing Systems Traditional Manufacturing Flexible Manufacturing Mass Production Specialty Operations Resistant to Change Conducive to Change High Set-Up Costs Minimal Set-Up Costs Copyright © 2009 Pearson Education Canada 22

The Production Process Inventory management Copyright © 2009 Pearson Education Canada Quality assurance 23

Inventory Management Inventory Purchasing Lead time Inventory control Copyright © 2009 Pearson Education Canada 24

Inventory Control Just-In-Time (JIT) Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP II) Copyright © 2009 Pearson Education Canada 25

Manufacturing Resource Planning Copyright © 2009 Pearson Education Canada 26

Maintaining Quality Control Quality Assurance Statistical Quality Control Statistical Process Control Continuous Improvement Copyright © 2009 Pearson Education Canada 27

Global Quality Standards ISO Certification CAE Quality Awards Malcolm Baldrige Award Copyright © 2009 Pearson Education Canada 28

Supply Chain Management The Supply Chain Suppliers Manufacturers Facilities Functions Distributors Retailers Activities Production of Goods and Services Copyright © 2009 Pearson Education Canada 29

Manufacturing Trends Outsourcing Supplier Involvement Redirect resources and capital Improve overall quality Increase production efficiencies Maximize the use of time Access state-of-the-art facilities Reduce work-in-process inventory Copyright © 2009 Pearson Education Canada 30