PRODUCTION AND OPERATION MANAGEMENT

THE STORY OF INDUSTRIAL REVOLUTION

We can find 4 industrial revolutions that happened in history. The first one used water
and steam (vapore) to produce. The second one used electricity and steel for mass
production. The third one used electronics and information technology for production
automation.

Today we use smart machines, storage systems and production facilities capable of
exchanging information (autonomous). This allowed to improve the industrial
process involved in manufacturing and engineering.

TECHNOLOGY AND THE PRODUCTION PROCESS (CONT)

3D printing is a process to produce objects by adding materials together where
necessary and is used to print product prototypes. This technology is being adapted to
deposit layers of other materials such as plastic.

PRODUCTION AND OPERATION MANAGEMENT

The production is a process in which workers and machinery are used to convert
materials into finished goods and services.
The production and operations management consist in:
- managing people and machinery
- converting materials into finished goods and services.

We start from INPUTS such as resources and raw materials, then we move to the
conversion process where we add value and then we end up with goods and services
also known as OUTPUTS.

A SUPPLY CHAIN is a set of connected systems that move the goods or services from
the suppliers to the customers. Critical perspectives on supply chain management are:
● Managing risks
● Responding to customers’ needs
● Managing business relationship
● Promoting sustainability
INPUTS
● Purchasing raw materials, supplies or finished products to produce goods and
services.
● Inventory control
● Planning system
● Tracking methods

Production is an important activity and it’s necessary for generating money to pay the
employees and stockholders.

An effective production and operation management can:

● Lower a firm’s production costs
● Boost the quality of its goods and services
● Provide new products
● Respond to customer demands

MASS PRODUCTION → a system to produce in large quantities by combining

employees with specialized skills, mechanization and standardization.

FLEXIBLE PRODUCTION → more cost-effective to produce smaller batches

using information, technology and communication.

CUSTOMER-DRIVEN PRODUCTION → considering the customer demands in order

to make the connection between products manufactured and products bought

The production managers need to

- plan the production process
- determine the layout
- implement the production plan
- control the manufacturing process for quality.

Planning the production means

- choosing what goods or services to offer in order to satisfy customers
- purchase machines and decide price
- convert original product ideas into a product
- design facilities to produce those products.
Implementing the production plan means:
- choosing whether to make, buy or lease a product. (consider: cost, supplier
availability and duration of supply needs).
- choosing the best vendors (compare quality, pricing and delivery reliability)
- Controlling the stock

A process layout facilitates the production of a variety of items by function

A product layout sets up production equipment along a product-flow line. With this
process large numbers of similar items can be produced.

A fixed position layout places the product in one spot and workers, materials and
equipment are brought to it.
Customer-oriented layout arranges facilities to enhance the interactions between
customers and a service.

TYPES OF PRODUCTION PROCESSES

 ● ANALYTIC PRODUCTION SYSTEM: reduces a raw material to its component
part in order to extract a marketable product
● SYNTHETIC PRODUCTION SYSTEM: combines a number of raw materials to
produce finished products
● INTERMITTENT PRODUCTION PROCESS: generates products in short
production runs, shutting down machines frequently to produce different
products

TECHNOLOGY AND THE PRODUCTION PROCESS

● GREEN MANUFACTURING → manufacturing focused on reducing waste,

energy and pollution
● COMPUTER-AIDED DESIGN (CAD) → allows engineers to design
components and products on computer
● COMPUTER-AIDED MANUFACTURING → computer tools to analyze CAD
output and the steps that a machine does to produce a product
● FLEXIBLE MANUFACTURING SYSTEMS → a production facility that can
be modified to produce different goods
● COMPUTER-INTEGRATED MANUFACTURING → a production system where
computers assist in the design of products

CONTROLLING THE PRODUCTION PROCESS

Production control creates a set of procedures to coordinate people, materials and
machinery for production efficiency.
There are 5 steps:

PLANNING → ROUTING → SCHEDULING → DISPATCHING → FOLLOW-UP

Quality is when goods and services are free of deficiencies in fact replacing and
redesigning a deficient product is costly. The cost of poor quality can be equal 20% of
revenues.

Benchmarking is the process of analyzing other firms’ best practices.

QUALITY CONTROL is measuring goods and services against established quality standards.

INTERNATIONAL ORGANIZATION FOR STANDARDIZATION (ISO) mission is to

promote the development of standardized products to facilitate trade
Inbound logistics brings supplies or materials into a business while outbound logistic
deals with moving goods and products out to customers.

A picking list is a document containing the instructions a warehouse operator needs

to follow to prepare an order. Includes shipping data, location of the products in the
warehouse and so much more.