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The Production function, Garazi García Antruejo - Coggle Diagram

- - - - type of company (service/industrial)
      - production method (make-to-order, continuous, …)
  - - - Cost Reduction
        
        Productivity= value of output/ value of input
        
        Goal: increase ratio
        
        Higher efficiency
      - Flexibility
        
        ability to adapt quickly with minimal cost/time loss
        
        Types
        
        Product flexibility: customization, new designs
        
        Volume felxibility: react to demand changes
        
        Process flexibility
        
        mix flexibility (wide product range)
        
        Input flexibility (use alternative materials)
      - Delivery
        
        time-based competition relies on
        
        fast deliveries
        
        on-time deliveries
        
        additional requirements
        
        accuracy (correct spec/quantity)
        
        condition upon arrival
        
        ease of ordering
      - Innovation
        
        Importance of R&D&i
        
        can be
        
        radical
        
        incremental
      - Services/solutions
        
        companies shift from selling products to selling solutions
      - Quality
        
        Dimensions of quality
        
        Durability
        
        maintenance
        
        Reliability
        
        Aesthetics
        
        compliance with standards
        
        2 types
        
        Perceived quality: brand, reputation, external factors
        
        Technical quality: intrinsic features
    - - company must prioritize
- - - - define functions of the product
      - determine how the product will meet needs
      - establish
        
        types
        
        quantities
        
        quality levels
      - includes
        
        flow diagrams
        
        identify value-added steps
      - make or buy decisions for components (affects costs + capacity)
    - - criteria
        
        market related
        
        distance to costumers: transport & distribution costs
        
        Production-process related
        
        availability/cost of
        
        Raw materials
        
        labor
        
        supporting industries
        
        Installation cost-related
        
        land price
        
        Local regulations
        
        tax incentives & subsidies
    - - Capacity= max output per time unit
      - Capacity= available time / time per unit
      - Key concepts
        
        limiting resources determine capacity
        
        production capacity is not actual production volume
      - Idle capacity
        
        capacity not being used
      - Factors to consider
        
        economies of scale
        
        forecasted slaes volume
      - Cost structure
        
        unit cost= fixed cost/unit + variable cost/ unit
        
        Higher fixed cost
        
        lower unit cost at high production
        
        but increase in berak-even point
        
        Break-even= FC/P-VC
    - - 3 main alternatives
        
        Porject-based production
        
        unique, non-repetitive products
        
        low FC, high VC
        
        E.g. Guggenheim museum
      - Batch production
        
        small series of similar products
        
        E.g. Cars
        
        High FC, low VC
      - Continuous produciton
        
        standarized, large volume, uninterrupted flow
        
        very high FC, very low VC
        
        Choice depends on
        
        product standarization
        
        variety
        
        demand volume
        
        required felxibility
- - - - Aggregate Produciton Plan (APP)
        
        medium-term
        
        by product families
        
        sets global production levels
      - Master Production Schedule (MPS)
        
        short-term
        
        time buckets: weeks or bi-weeks
        
        by individual products
        
        Must be compatible with APP
      - Detailed Production Schedule (Job Scheduling)
        
        very short term
        
        Specifies exact start tiems for production orders
  - - - raw materials
      - work in progress
      - finished goods
    - - ensure continuity of production
      - avoid delays for customers
    - - sotrage
      - capital tied up
      - handling
      - transportation
      - obsolesence/deterioration
    - - demand fluctuations
      - mismatched production stages
      - irregular supply delveries
      - reduce risk stopping machines
    - - Just in Time philosophy
        
        Inventories=high water level
        
        Problems=rocks
        
        High inventory hides the rocks
        
        JIT lowers inventory
        
        exposes and eliminates problems
  - - - value-adding
      - non-value adding but necessary
      - non-value-adding and unecessary (waste)
    - - overproduction
      - excess inventory
      - overprocessing
      - unnecessary transportation
      - waiting
      - unnecessary movements
      - Defects & rework
      - Underutilized human talent
  - - - large batches, inventories, specialized tasks
      - Lean: small batches, on-demand, multi-skilled, preventive maintenance