Chapter 8

1
Chapter 8 Achieving World Class Operations
Management
2
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?

3
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?

4
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

5
Production Operations Management, cont.

• 3 Main types of decisions
• Production Planning
• Production Control
• Improving Production Operations

6
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

7
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

8
Production Process, cont.

• What should the timing of the process be?
• Continuous Process
• Intermittent Process

9
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

10
Good Labor Locations in the US

• States with above average labor quality and below
  average labor cost
• Alabama
• Alaska
• Georgia
• Hawaii
• Virginia
• Wyoming

Source Corporate Location, www.corporatelocation.
com
11
Facility Layout

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

12
Resource Planning

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

13
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)

14
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)

15
Typical Gantt Chart
September October
8
Symbols scheduled start completed work time not
avail. scheduled end review date
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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

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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

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• Review
• Production Planning
• Processes, Site selection, Facility layout,
  Resource planning, Supply Chain Management
• Production Operations Control
• Routing Scheduling
• Improving Production Operations
• Total Quality Management, Lean Manufacturing,
  Automation
• Trends
• Looking Ahead
• Exam Chapters 6 - 8