Chapter 5 - Producing the Goods/Operations Mgmt. Flashcards
Operations/Production/Manufacturing Management
Creates value for customers by transforming capital, technology, labor, and materials into more highly valued products and services.
- Drives productivity growth
- Wellspring of innovation
- Higher living standards
Roles That Influence the Role of Production Management
- Industrial Revolution (machine power)
- Personal wealth = consumer society = demanded better operations to please customers
- Frederick Taylor = scientific method = observation, improvement, training, & monitoring
- Quantitative Analysis
Prerequisite to Success
Operational Excellence
Design Decisions
INFRASTRUCTURE, PRODUCT, AND PROCESS
- Facility Location
- Facility Layout
- Product Design
- Process Design
Facility Location
- Affect access to factor inputs & customer markets.
- Focus on labor costs and resource proximity
- Service focus on customer location
Facility Layout
- Determine the positioning of equipment
- Flow of materials
- Number of times each item should be handled
- Minimizes movement and handling
Product Design
- Represent the company’s ability to profitably capture future market share.
- Fewer than 1 in 10 ideas make it
Process Design
Technology selection and work design.
- Work design = increased worker motivation and process efficiency.
Control Decisions
Day-to-Day basis and define how materials move.
- Forecasting
- Scheduling
- Inventory
- Quality Control
Forecasting
Provides an estimate of what products need to be produced and when they need to be produced.
- Plan production
- Determine capacity Needs
- Refine workforce plans
- Determine inventory levels
- FORECASTS ARE ALMOST ALWAYS WRONG.
Inventory Control
Determines how much and when to make specific products.
- Economic Order Quantity (how much)
- Reorder Point
Scheduling - Aggregate Planning
Aggregate Planning
- Determines what needs to be produced with a rough idea of the timing
- Inputs = measure of production capacity, a demand forecast, and cost data.
Scheduling - Work to be done
Work to be done at each station must be defined.
- Assign priorities to each job.
Quality control
Focuses on designing, building, and inspecting quality into both the process and the product.
- Goal = to make it right the first time, every time.
Toyota & Lean Production
- Just-in-time
- Inv. reduced to small levels
- As 1 item moves out, another comes in.
Learning Curve
Expresses the cost relationship between the number of items produced and the cost per item.
Waste Elimination
Goal of lean = identify and eliminate waste
- 5S
- Inventory Reduction
5S
- Sort
- Set in Order
- Shine
- Standardize
- Sustain
Workforce Participation - Jidoka
- Allows workers to stop the production line when a quality problem occurs
- Man and machine system = jidoka
- Everyone is trains, takes responsibility, and participate in all aspects of the process.
Managerial Responsibility
Managers take on the role of teacher, team facilitator, and motivator when workers take responsibility.
Process Development
- Toyota reduced changeover time from 4 hrs. to 12 min.
- Time buffers
Time buffers
- Slack time
- Built into a process to allow process engineers to experiment with new tools or techniques to perform the work.
Network Orientation
- Upstream suppliers for Toyota need to become an extension of Toyota’s Supply Chain.
Synchronization
- Pull or Kaban system
- Driven by Customer Demand
- Items arrive just in time
- “little card”
Continual Imrpovement = Kaizen
- High level of workforce training
- Organizational attitude that everyone is responsible for the organizations success.
- Keep a long-term perspective.
Operations Mgmt. in the Service Setting
- Many SC processes are services.
- Services dominate economic activity.
- Customers want to buy solutions.
Tangibility
- Production outputs are tangible (stored)
- Services are intangible
Customer Contact
- Customers of manufactured products have little contact with the production process.
- Services = customers involved in the delivery
Ability to Inventory
- Physical goods stored so manufacturers can produce now to meet future demand.
- Services - produced and consumed simultaneously
Economies of Scale
- Production operations tend to produce greater revenues and profits per hour than service operations.
Objectivity of Control
- Product dimensions and characteristics can be measure to determine if it is fit for use.
- Customer Experience with services is seldom measured directly. (quality of feedback is limited)
Transportability
- Physical goods are transported so manufacturers can locate production anywhere as long as their landed cost is competitive.
- Services are difficult to transport.
Operations Skills for a SC World
- Careful outsourcing mgmt.
- Supplier Integrated Manufacturing
- Dissemination (sharing) of Best Practices
Supplier Integrated Manufacturing
- What needs to be done and who should do it.
