Chapter 11 Production and Operating Management Overview Strategic Importance of the Production Function Mass Production production application of resources such as people and machinery to convert materials into goods services production and operations management managing people and machinery in converting materials into goods services mass production system of manufacturing products in large amounts thru combo of employees mechanization and standardization specialization of labor dividing work into its simplest components so each worker can concentrate on performing one task mechanization machines perform much of the work previously done by people standardization producing uniform interchangeable goods and parts assembly line manufacturing technique that carries the product on a conveyor system past several workstations where workers perform specialized tasks mass production is highly inefficient when producing small batchtes of different goods labor specialization can lead to boring jobs Flexible Production Customer Driven Production Production Process flexible production using info technology to share details of customer orders programmable equipment to fulfill the orders and skilled people to carry our tasks needed to fill order customer driven production evaluates customer demands to link what a manufacturer makes with what consumers want to buy establish computer links between factories and retail scanners o o not to make the product until a customer orders analytic production system reduces a raw material to its component parts in order to extract one or more marketable products synthetic production system combines a number of raw materials to produce finished products refining crude oil for gasoline heating oil fuel o o ford s assembly line continuous production process generates finished products over a lengthy period of time intermittent production process generates products in short production runs changing machines for different products Technology and the Production Process Robots Computer Aided Design and Manufacturing robot reprogrammable machine capable of performing numerous tasks that require manipulation of materials tools pick and place robot moves in only two or three directions as it picks up something from one spot and place it in another field robots assist people in nonmanufacturing environments power plants space station battlefields computer aided design CAD system for interactions between a designer and a computer to create a product facility or part that meets predetermined specs computer aided manufacturing CAM electronic tools to analyze CAD output and determine necessary steps to implement the design followed by electronic transmission of instructions to guide the activities of production equipment flexible manufacturing system FMS production facility that workers can quickly modify to manufacture different products computer integrated manufacturing CIM production system in which computers help workers design products control machines handle materials control production Flexible Manufacturing Systems Computer Integrated Manufacturing Location Decision transportation factors proximity to markets and raw materials availability of alternative modes for transporting inputs outputs physical variables weather water supplies available energy disposing waste o environmental impact study analyzes how a proposed plant would affect the quality of life in the surrounding area human factors area s labor supply local regulations living conditions Job of Production Managers Planning the Production Process Choosing what goods or services to offer to customers Production departments focus on planning the production process when 1 convert original product ideas into final specs and 2 design the most efficient facilities to produce those products Determining the Facility Layout An efficient facility layout can reduce material handling decrease costs and improve product flow thru the facility Three Common Layout Designs o Process layout groups machinery and equipment according to their functions purpose it to process goods services that have a variety of functions numbers of similar items o Product layout assembly line sets up production equipment along a product flow line efficiently produces large o Fixed position layout places the product in one spot workers come to it construction shipbuilding oil drilling o Customer oriented layout service firm arrange its facilities to enhance interactions between customers and services Implementing the Production Plan Make Buy or Lease Decision o Make buy or lease decision choosing whether to manufacture a needed product in house purchase it from outside supplier or lease it factors that affect decision costs to lease purchase parts cared to costs of producing in house o o Production managers compare the quality price dependability of delivery and services offered by competing Selection of Suppliers companies Inventory Control Just In Time Systems o Managers inventory control requires them to balance the need to keep stocks on hand to meet demand against the costs of carrying inventory o Perpetual inventory systems continuously monitor the amount and locations of their stocks o Vendor managed inventory companies hand over their inventory control function to suppliers o JIT System management philosophy aimed at improving profits and return on investment by minimizing costs and eliminating waste thru cutting inventory on hand o Production using JIT shifts much of the responsibility for carrying inventory to vendors Materials Requirement Planning Controlling the Production Process o Material requirement planning MRP computer based production planning system by which a firm can ensure that it has needed parts and materials available at the right time and place in the correct amounts production control creates a well defined set of procedures for coordinating people materials machinery to provide max efficiency Production planning determines the amount of resources an organization needs to produce a certain output Routing determines the sequence of work throughout the facility and specifies who will perform each aspect of the work at what location Scheduling development of timetables specify how long each operation in the production process takes and when workers should perform it PERT Program Evaluation and Review Technique chart which seeks to minimize delays by coordinating all aspects of the production process Critical path
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