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Ch 8-5 (3 Phases of Planning for Production:
1. Design Planning
2.…
Ch 8-5
3 Phases of Planning for Production:
1. Design Planning
2. Facilities Planning
- Operational Planning
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Required Capacity: the amount of products or services an organization can produce in a given period of time to meet demand.
Too little capacity, might be more expensive to be added later
Too much capacity: resources like plant, equipment, and money will be at a stand sill
Capacity is the same thing to service businesses.
Ex. the capacity for a restaurant will be the # of customers it can serve at one time.
1st Phase: Design Planning..
is the development of a plan for converting an idea into an actual product or service.
Decisions have to do with: PRODUCT LINE, REQUIRED CAPACITY, and USE OF TECHNOLOGY.
Ex: Samsung touch screen, WiFi Refrigerator
a lot of time and energy was invested to determine the design, where/how to produce it, and what options to include.
Product Line: a group of similar products that differ only in relatively minor characteristics. During design-planning stage manufacturer needs to determine
- How many different models
*what major options to offer
Usually, Marketing Personnel want a long product line with more options.
But, Operations Managers and Production want "Short" product line with fewer options...easier to produce.
Product Design is the Process of creating a set of specifications from which a product can be produced.
2nd Phase: Site Selection and FACILITIES PLANNING:
Products will be produced in existing factory as long as:
- existing factory has enough capacity to handle increased customer demand for established and new products, and
- the cost or refurbishing existing factory is less than the cost of a new building
Before final decision on new Location and how it will be organized, *Human resource and plant layout* should be examined.
HR: whether building own manufacturing facility in a foreign country or outsourcing production to local firms, HR needs to make sure the firm is adequately staffed to meet production needs and to ensure everyone is trained and that local suppliers are complying with U.S. policies on human rights and wage/hour laws.
Plant Layout: is the arrangement of machinery, equipment, and personnel within a production facility. There are 3 types of plant layout.
3 General Types of Plant Layout
*Process Layout: used when different operations are required for creating small batches of diff. products or parts of product.
Product Layout (assembly line):
used when all products undergo the same operations in the same sequence.
Fixed-position Layout: used when a very large product is produced
Variables that must be considered when deciding to build a new production facility:
Locations of major consumers/suppliers.
Availability and cost of skilled/unskilled labor.
Quality of life for employees and mgmt. in the proposed location.
The cost of land and building costs.
Local and state taxes, environmental regulations, and zoning laws.
The amount of financial support and subsidies, if any, offered by local and state governments.
Special requirements, such as great amounts of energy or water used in the production process.
USE OF TECHNOLOGY:
The degree of automation & technology that will be used to produce good/service must be determined by management.
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Ex: Process Layout:
Car shop: there's wheel alignment, body work, engine repair, safety inspection.
Ex Fixed-position layout
Aircraft manufacturers, shipbuilders manufacture large products