CH. 8 PRODUCING QUALITY GOODS AND SERVICES (8.6 Operations Control…
CH. 8 PRODUCING QUALITY GOODS AND SERVICES
8.1 What is Production?
How American Manufacturers Compete in the Global Marketplace
-Because of the WW2 the U.S. became the most productive country in manufacturing in the world
-Today, the U.S. is considered a service economy.
-Reshoring: a situation in which U.S. manufacturers bring manufacturing jobs back to the United Sates
Careers in Operations Management
is a manufacturing process that lowers the cost required to produce a large number of identical or similar products over a long period.
breaks raw materials into different component parts.
combines raw materials or components to create a finished product.
consists of all the activities required to produce goods and services.
A person manages systems that convert resources into goods and services.
Managers concern themselves with the control of operations to ensure that the organization's goals are achieved.
takes place before anything is produced and during the production process.
purpose of manufacturing
is to provide utility to customers.
the ability of a good or service to satisfy a human need.
Four types of utility:
-Form (Shoe is the right size)
-Place (Near where I live)
-Time (I'll get it the time I need it)
-Possession (When I'll have it)
8.2 The Conversion Process
Manufacturing Using a conversation Process
8.3 The Increasing Importance of Services
Planning Quality Services
Evaluating the Quality of a Firm's Services~
8.4 Where do New Products and Services Come From?
Research and Development
Product Extension and Refinement
8.5 How do Managers Plan production?
: a process in which people must do most of the work.
: a process in which machines and equipment do most of the work
Site Selection and Facilities Planning
Factors influencing the location decision for a production facility:
-Locations of customers and suppliers
-Availability of skilled and unskilled labor
-Quality of life for employees and management
-Cost of land and construction
-Taxes, environmental regulations, zoning laws
-Financial incentives from local and state governments
-Special requirement for resources
Human Resource and Plant Layout
is the arrangement of machinery, equipment, and personnel within a production facility
is used when small batches of different products are created or worked on in a different operating sequence.
(assembly line) is used when all products undergo the same operations in the same sequence.
if used in producing a product that is too large to move.
Four Steps In Operations Planning
Step 1: Selecting a planning horizon
The period during which a plan will be in effect; commonly one year.
Step 2: Estimating market demand
-The quantity that customers will purchase at the going price.
-Demand is estimated for the planning horizon.
Step 3: Comparing market demand with capacity
If market demand and the facility's capacity are not equal, adjustments may be necessary
Step 4: Adjusting product or services to meet demand
-Increase capacity to meet demand
-Ignore excess demand
-Eliminate excess capacity
8.6 Operations Control
Implementing the operations control system in any business requires the effectiveness use of:
Types of inventory
-Raw materials: materials that will become part of the product during the production process
-Work-in-process: partially completed products
-Finished-goods: completed good
Costs of inventory
-Holding costs: the investment and storage costs of inventory
-Stock-out costs: the costs of not having inventory available when needed
Inventory Control Methods
Materials requirements planning (MRP)
-A computerized system that integrates production planning and inventory control
A system that ensures that materials or supplies arrive at the facility just when they are needed so that storage and holding costs are minimized
: A team of employees who meet on company time to solve quality problems
Inspection: The examination of the quality of a work-in-progress
A disciplined approach that relies on statistical data and improved methods to eliminate defects for a firm's products and services.
Production Planning: A Summary
8.7 Improving Productivity with Technology
Improving Productivity Growth
The Impact of Automation, Robotics, and Computers on Productivity
Sustainability and Technological Displacement
Automation cuts manufacturing time, reduces errors, and simplifies retooling procedures
many robots work with humans to make jobs safer and easier
Automation will bring change to many jobs; many workers will have to retrain or seek jobs in other sectors of the economy