Chapter 6: Production Flashcards
What is production?
- Transforms input resources into goods or services
- Uses equipment and personnel
Describe some differences between the marketing perspective and the production perspectives for a company`s production strategy.
Marketing: Focuses on customer needs and market demand.
Production: Focuses on efficiency and cost-effectiveness in manufacturing
Why is the difference between independent demand and dependent demand important for a company`s production strategy?
ndependent Demand: For final products. Needs flexibility.
Dependent Demand: For components of final products. Benefits from standardization and efficient planning.
What issues should be covered by a production strategy?
- Address investments in processes.
- Consider infrastructure needs.
- Plan resource allocation.
In what ways are the strategic competitive factors of production conflicting? What are the consequences of this?
- Factors: Price, delivery, quality, flexibility.
- Conflict: Can’t fully meet all factors at once.
- Solution: Balance based on value proposition and business strategy.
Why is it important to identify so called qualifiers and order winners when designing a production strategy?
- Production Strategy: How a company operates production to achieve goals.
- Qualifiers: Factors that allow market competition.
- Order Winners: Factors that determine customer choice.
- Importance: Aligns production with goals, positions within value chains, and designs processes to match value proposition
Describe the relationship between product variety and production volume as well as the consequences this relationship has on the production system.
High Variation & Low Volume:
Focus: Flexibility, complex processes, exclusivity
Outcome: High customer value
Low Variation & High Volume:
Focus: Specialization, capital intensity, cost efficiency
Outcome: Low prices
Describe the 5 typical process types in goods manufacturing and how these are related to different production layouts.
Project Production: Custom work tailored to individual projects, often with high production costs.
One-Off Production: Creating and customizing each product for specific customers, such as in restaurants where products are marketed before development.
Batch Production: Producing products in batches or series, common in both goods and service industries, such as fast food restaurants.
Mass Production: Large volumes of identical products produced efficiently, usually against inventory, like in the automotive industry.
Continuous Production: Very large volumes of a single product are produced in a continuous flow, with significant fixed costs and constant supervision, such as in paper mills.
Explain the differences between professional services, service shops and standard services.
Professional Services: Customized by experts (e.g., consultants, lawyers).
Service Workshops: Moderate variation (e.g., auto repair, medical clinics).
Standard Services: High volume, low variation (e.g., banks, security).
Describe the 4 different logics of production flow.
- Convergent Production: Many inputs are turned into a few outputs, like making an airplane.
- Divergent Production: A few inputs create many different products, like in a steel mill.
- Hourglass-Shaped Production: Combines many parts into fewer modules that can be assembled in different ways, like engines or cabins.
- T-Shaped Production: The base product is the same, but it’s customized at the final step before delivery, like a car being tailored with specific features for the customer.
What is the effect of the customer order decoupling point on a production system?
- Definition: The point in the supply chain where production switches from being driven by forecasts to actual customer orders.
- Impact:
- Inventory Levels: Determines how much stock is kept.
- Lead Times: Affects how quickly orders are fulfilled.
- Production Flexibility: Influences the ability to adapt to changes in demand
What are the differences between stock and made to order?
- stock involves producing and storing goods in advance for immediate sale
-made-to-order produces goods only after receiving a customer order, minimizing inventory but potentially increasing lead times.
Why is capacity a crucial concept in a production strategy?
- The maximum amount a production system can produce in a given times.
- Why it matters:
- Meeting Demand: Ensures the system can handle customer orders.
- Setting Limits: Defines the boundaries for all other operations.
- Production Level: Represents the highest production achievable.
What does “bottleneck” mean when designing production processes? How does a bottleneck affect a production flow?
A “bottleneck” in production design is a stage that limits overall process capacity and slows down production flow, causing delays and reducing efficiency.
Describe some typical supply chains in the production of goods and in the production of services.
- goods: include raw materials, manufacturing, distribution, and retail.
- services: customer interaction, delivery of the service.
