Chapter 8 Achieving World Class Operations Management

Chapter 8 Learning Goals

Why is production and operations management important in both manufacturing and service firms? What types of production processes are used by manufacturers and service firms? How do organizations decide where to put their production facilities? What choices must be made in designing the facility? Why are resource planning tasks like inventory management and supplier relations critical to production?

Chapter 8 Learning Goals (contd.)

How do operations managers schedule and control production? How can quality management and lean manufacturing techniques help firms improve production and operations management? What roles do technology and automation play in manufacturing and service industry operations management? What key trends are affecting the way companies manage production and operations?

Production & Operations Management

Production & Operations Management are important because

Consumers demand quality products/services at reasonable prices in a timely fashion Consumers also demand better service and individualized attention

Production & Operations Management, cont.

3 Main types of decisions

Production Planning Production Control Improving Production & Operations

Production Planning

Find the best production methods to meet and balance company goals 3 phases
Long term Medium term Short term

Important decisions/elements
Production Process Site Selection Facility Layout Resource Planning Supply Chain Management

Production Process

How should the goods be made?

Mass Production Mass Customization Customization

Job shop

How should the inputs be converted into outputs?

Process manufacturing Assembly process

Production Process, cont.

What should the timing of the process be?

Continuous Process Intermittent Process

Site Selection

Affects operating cost, price of the product/service, ability to compete Factors to consider
Availability of inputs Marketing factors Local incentives Manufacturing environment International considerations

States with above average labor quality and below average labor cost:

Good Labor Locations in the US

Alabama Alaska Georgia Hawaii Virginia Wyoming

Source: Corporate Location, www.corporatelocation.com

Facility Layout

Determine what the most efficient & effective design is for the production process Types
Process layout Product layout Fixed Position layout

Resource Planning

Make sure resources are available when needed Steps of resource planning
1. Determine which resources are needed and when 2. Decide if the production materials should be made or bought 3. Determine how much inventory to have & how it should be managed 4. Decide if a computerized resource planning system is needed

Supply Chain Management

Supply Chain
Secure Inputs Produce Goods Deliver Goods

Want a smooth transition along the supply chain Strategies

Create tight bonds with suppliers Improve supplier communications

Internet, Electronic Data Interchange (EDI)

Production & Operations Control

Gaining efficiencies through the coordination of materials, equipment, and human resources Key aspects
Routing determines workflow Scheduling sets time needed for each step

Gantt Charts Critical Path Method Program Evaluation & Review Technique (PERT)

Typical Gantt Chart

September Scheduling October 8

Designing Ordering
Delivering materials

Machining components Assembling

Inspecting

Shipping Symbols: scheduled start scheduled end

completed work review date

time not avail.

Improving Production & Operations

Improving Quality
Quality Control Total Quality Management (TQM)

Lean Manufacturing
Just-in-time

Automation
Computer-aided systems Robotics Flexible Manufacturing Systems Computer-Integrated Manufacturing Others

Trends in Production

Modular Production
Decrease cost of design & development Increases ability to meet rapidly changing conditions

Agile Manufacturing
Increases flexibility and speed

Work Cell Design

Improves quality & efficiency

Review
Production Planning

Processes, Site selection, Facility layout, Resource planning, Supply Chain Management Routing & Scheduling Total Quality Management, Lean Manufacturing, Automation

Production & Operations Control

Improving Production & Operations

Trends

Looking Ahead
Exam Chapters 6 - 8