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Producing Quality and Goods and Services (how do managers plan production…
Producing Quality and Goods and Services
what is production 8-1
a- how American manufacturers compete in the global marketplace
b- careers in operations management
reshoring- a situation in which U.S. manufacturers bring manufacturing jobs back to the United States
mass production- a manufacturing process that lowers the cost required to produce a large number of identical or similar products over a long period of time
analytical process- a process in operation management in which raw materials are broken into different component parts
synthetic process- a process in operation management in which raw material or components are combined to create a finish product
operations management- all the activities required to produce goods and services
operations manager- a person who manages systems that convert resources into goods and services
planning- takes place before anything is produced and during the production process
successful operations managers
be able to motivate and lead people
understand how technology can make a manufacturer more productive
appreciate the cost-control processes that help lower production costs and improve product quality
understand the relationship between the customer, the marketing of a product and the production of a product
the increasing importance of services 8-3
service economy-an economy in which more effort is devoted to the production of services than to the production of goods
a- planning quality services
begin with determining who the customer is and what they need
develop a plan that will enable the firm to deliver the services that their customers want or need
evaluate the way they operate and measure customer satisfaction
redesign their services to improve the customer's experience
b- evaluating the quality of a firms services
the production of services varies from the production of manufactured goods
customers are much more involved in obtaining the service they want or need
services are consumed immediately and cannot be stored
services are provided when and where the customer desires
services are usually labor intensive
services are intangible, making it difficult to evaluate customer satisfaction
the conversion process 8-2
utility- the ability of a good or service to satisfy a human need
4 types of utility- form, place, time, and possession
form utility- utility created by people converting raw materials, finances, and information into finished products
focus- finanicial- material- information- people
magnitude of change- degree to which the resources are physically changed
how do managers plan production 8-5
3 steps for planning
design planning develops a plan to convert the idea into a new good or service
facilities planning identifies a site where the good or service can be produced
operational planning decides on the amount of goods or services that will be produced within a specific time period
design planning- the development of a plan for converting an idea into an actual product or service
product line- a group of similar products that differ only in relatively minor characteristics
product design- the process of creating a set of specifications from which a product can be produced
capacity- the amount of products or services that an organization can produce in a given time
b- site selection and facilities planning
labor intensive technology-a process in which people must do most of the work
capital intensive technology- a process in which machines and equipment do most of work of the work
site selection and facilities planning
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 regulation, zoning laws
financial incentives from local and state governents
special requirments for resources
plant layout- the arrangement of machinery, equipment, and personnel within a production facility
process layout- used when small batches of different products are created or worked on in a different operating sequence
product layout- used when all products undergo the same operations in the same sequence
fixed-position layout- used in producing a product that is too large to move
four steps in operational 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 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 products or services to meet demand
increasing capacity to meet demand
ignore excess demand
eliminate excess capacity
where do new products and services come from 8-4
basic research- uncovering new knowledge; scientific advancement without regard for its potential use
applied research- discovering new knowledge with some potential use
development and implementation- activities undertaken to put new or existing knowledge to use in producing good and services
product refinement- improving a product's performance characteristics to increase its utility to consumers
product extension- improving and adding additional performance features that extend the want-satisfying capability of the product and its life cycle in the market
operations control 8-6
purchasing- all the activities involved in obtaining required materials, supplies, components, and parts from other time
objective- to ensure that the required materials are available when needed, in the proper amounts, and at minimum cost
factors affecting the choice of suppliers: price, quality, reliability, credit terms, shipping costs
price- comparing prices offered by different suppliers is always an essential part of selecting a supplier
quality- purchasing specialist always try to buy materials at a level of quality in keeping with the type of product being manufactured. The lowest acceptable quality is usually specified by product designers
credit terms- purchasing specialists should determine if the supplier demands immediate payment or will extend credit
reliability- an agreement to purchase high-quality material at a low price is the purchaser's dream. However, the dream becomes a nightmare if the supplier does not deliver.
shipping costs- the question of who pay the shipping costs should be answered before any supplier is chosen
inventory control- the process of managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stock-out costs
types in inventory
raw materials- materials that will become part of the product during the production process
work-in-process- partially completed products
finished goods- completed goods
costs of inventory
holding costs- the investment and storage costs of inventory
stock-out costs: the costs of not having inventory available when needed
materials requirement planning- a computerized system that integrate production planning and inventory control
just in time inventory system- a system that ensure that materials or supplies arrive at the facility just when they are needed so that storage and holding costs are minimized
scheduling
routing of materials: the sequence of work stations that the materials will follow
timing of materials: when the materials will arrive at each work station and how long they will stay there
follow-up: monitoring by manager to ensure timely work flows
quality control- the process of ensuring that goods and services are produced in accordance with specifications
statistical process control- a system that uses sampling to obtain date that are plotted on controls charts and graphs to identify and pinpoint problems in the production process
statistical quality control- a set of techniques used to monitor all aspects of the production process to ensure that both work in progress and finished products meet the firm's quality standards
improving productivity with technology 8-7
lean manufacturing- a concept built on the idea of eliminating waste from all of the activities required to produced a product or service
automation- the total or near-total use of machines to do work
robotics- the use of programmable machines to performs a variety of tasks by manipulating materials and tools
computer aided design- the use of computers to aid in the development of products
computer aided manufacturing- the use of computer to plan and control manufacturing processes
computer integrated manufacturing- a computer system that not only helps to design products but also controls the machinery needed to produce the finished product
continuous process- a manufacturing process in which a firm produces the same product over a long period of time
flexible manufacturing system- a single production system that combines electronic machines and CIM
intermittent process- a manufacturing process in which firm's manufacturing machines and equipment