LESSON 9: THE PRODUCTION OF FUNCTION

Definition of production: +Value (Land,Work, Capital)-> Semi-produced goods, finished

goods, services.

Goods/Services:

GOODS
Can be stored in a warehouse
If demand decreases, they can be
stocked
There are quality standards, so quality
can be easily measured
Great distance between producer and
consumer
Production and distribution do not need
to be close
SERVICES
Cannot be stored
Knowing the demand is compulsory
Quality is more difficult to be measured
Closer relationship between producer
and consumer
Production must be located where there
is demand

Production projects:

 High cost per unit

 Highly qualified and versatile workers
 Little automatization
 Difficult to plan and control
 Long-term: many changes from the initial project
 Fixed position layout

Flexible production: craft and batch

 Convenient for small number of products

 Customization
 Professional labor
 Good administration
 Technology that enables the minimization of production time
 Low fixed costs
 Process layout (or function-based)
Mass production

ADVANTAGES
Time economy
Reinforcement of the quality control
Better materials requirement planning
Reduction of the transport of materials
Self-control
DISADVANTAGES
Risk of obsolescente of technology
Routine
Negative effects on the accumulation of
many people and machinery

Continous production

Just in time production

Producing the elements needed, in the amounts needed, just when they are needed

Mass production: producing large quantities of a small range of products ---> just in
time: manufacturing small batches of a great variety of products.

-Eliminate stock (concept).

Just in time: Quality control

Jidoka: A sensor is installed in the machines to detect errors and even stop production
if it is not able to correct the defects.
 Problems are detected
 Line production is stopped momentarily
 Quick solution are applied to correct the effects of the problem
 The root causes of the problem are searched for and then a definitive solution
is implanted.

Poka yoke: A mechanism that helps operators to avoid mistakes

 Risk of making mistakes in the repetitive activities (chain production) or in
activities where operators can make mistakes due to ignorance or confusion
are eliminated.
 Operators can focus on more sophisticated tasks, instead of devoting their
efforts to prevent or correct mistakes

Just in time: Elements for visual inspection

Design of the productive system: Dimension and capacity

Competitiveness problems
Lack of capacity
Lack of supplies
Overused facilities: greater possibilities
of breakdowns and fatigue
Excess capacity
Sub-activitiy costs: stimulating demand
by reducing prices
Price reduction to stimulate demand. If
prices are reduced, costs have to be
reviewed as well. Otherwise, margins
would decrease and it would be a loss of
competitveness.
Factory location

Strategic decision
Factors

 Input related: cost of the raw materials, energy, labor, financial and taxes,
among others.
 Output related: transportation costs, demand, etc.
 Environment related: infrastructures, public policy, population demographics,
opinion of the community, etc.

Plant layout:
 Fixed-position layout
 Function-based(process oriented) layout
 Product oriented layout
 U-shaped layout

Project planning
PERT method

Objectives:
 Compute the minimum execution time of the project
 Find the critical tasks (tasks that cannot be delayed)
 Slack of the noncritical tasks (how much I can delay non-critical tasks)

1st step: Represent the project in a PERT graph

•Nodes: Stages, when one or several tasks are finished and/or one or several
tasks can start
•Arrows: Tasks or activities in which the project is divided

PERT method, how-to

Unicity of the initial and final stage:

 Every task that does not have a precedent originates from the initial stage.
 Every task that does not have any successor arrives to the final stage.
Successive numeration:
 We never number a stage if a tasks arrives to it from an unnumbered stage.
Univocal designation of tasks:
 No two tasks can originate from the same origin stage and arrive to the same
end stage.