Chapter 9 Production and Operations Management The United States economy is no longer manufacturing based it is service based Almost 80 of U S jobs are service based How can U S manufacturing and services organizations maintain their competitive edge A focusing more on the customer B maintaining closer relationships with suppliers to satisfy customer needs C practicing continuous improvement D focusing on quality E saving on costs through site selection F relying on the Internet to unite companies that work together G adapting production techniques Production creation of nished goods and services using the factors of production land labor capital entrepreneurship and knowledge Production Management management activities that helps rms create goods Operations Management helps convert or transform resources including human resources into goods and services This includes inventory management quality control production scheduling follow up services and more Operations management in the service sector is all about create a good experience for those who use the service The objective output The Production Process taking the factors of production and using those inputs to produce goods or services Form Utility the value producers add to materials in the creation of goods or services such as transforming silicon into computer chips time utility getting things places on time place utility getting things to the right places Process Manufacturing physical or chemical changes to a material Assembly Process puts together all components Continuous Process long production runs turn out nished goods over time Intermittent Process production run is short and machines are changed frequently to make new products Computer aided design the use of computers in the design process Computer aided manufacturing the use of computers in manufacturing goods Computer integrated manufacturing computer aided design computer aided manufacturing Flexible manufacturing designing machines to do multiple tasks so they can produce a range of products Lean manufacturing the production of goods using less of everything than in mass production less human effort less manufacturing space fewer investments in tools and less engineering time to develop a new product Mass customization tailoring goods to meet the needs of individual customers Operations Management Planning helps plan manufacturing of goods and services Facility Location the process of selecting a location for a rm s operations close to consumers easy for customers to use a company s services and communicate their needs convenience in manufacturing consider labor costs available resources access to transportation proximity to suppliers proximity to customers crime rates quality of life for employees and cost of living telecommunicating working from home via the Internet Facility Layout is the physical arrangement of resources to most ef ciently produce goods or provide services to customers Many companies are moving from an assembly line layout in which a few workers do only a few tasks at a time to a modular layout in which teams of workers combine to create more complex units of the nal product Fixed position layout enables workers to surround an object like a plane so that everyone can work on it at once A process layout allows similar equipment and functions to be grouped together by process Materials Requirement Planning MRP Computer based Operations Management system that uses sales forecasts to make sure parts and resources are available at the right time and place Enterprise Resource Planning ERP a newer version of MRP that combines the computerized functions all divisions and subsidiaries within the rm such as nance human resources and order ful llment into a single integrated software program that uses a single database This results in a shorter time between order and payment less staff reduced inventories and far better customer service Purchasing the function that searches for high quality material resources nds the best suppliers and negotiates the best price Just in time Inventory Control a minimum of inventory is kept on the premises and parts suppliers and other needs are delivered just in time to go on the assembly line minimize mistakes Quality consistently producing what the customer wants while reducing errors before and after delivery to the customer Six Sigma Quality just 3 4 defects per million opportunities detects potential problems to reduce reoccurrence Statistical Quality Control continually monitoring all phases of production to ensure top quality Statistical Process Control the process of testing statistical samples of product components at each stage of production and plotting the results ISO9000 common name given to quality control and assurance standards ISO14000 a collection of the best practices for managing a rm s impact on the environment PERT Program Evaluation and Review Technique analyzing and sequencing tasks that need to be done estimating the time needed for each task drawing a PERT network illustrating the information from steps 1 and 2 identifying the critical path The critical path is the sequences of tasks that takes the longest time to complete Gantt Chart Bar graph showing what projects are being worked on and what stage they are in at any given time Chapter 13 Marketing Marketing the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients and society at large This creates mutual satisfaction between buyers and sellers The Evolution of Marketing a Production Era until the 1920s b Selling Era mass production production capacity exceeded demand 1920 s to 1970 s c Marketing Concept 1950 to 2000 customer orientation nd out what customers want a give it to them service orientation customer satisfaction through good service pro t orientation focusing on goods that will generate the most pro t d Customer Relationship 1990 2015 learning as much as possible about customers and doing everything possible to make them happy This enhances long term satisfaction and customer loyalty The digital age has increased customer knowledge leads to more on demand marketing With this emergence customers want things now with more technological advances tailored for them and simple The Marketing Mix PPPP 1 Product designing a want satisfying product 2 Price setting a fair price 3 Place putting it in a place where people will buy it 4 Promotion
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