OM Flashcards
describes in detail how a company’s products and services will be manufactured
Production Plan
Production Plan spells out?
production targets, required resources, processes and overall schedule
The plan also maps all of the operational steps involved and their dependencies.
Production Plan
What is the goal of Production Plan?
to design the most efficient way to make and deliver the company’s products at the desired level of quality.
can help companies increase output and save money by developing a smoother workflow and reducing waste.
well-designed production plan
involves developing a comprehensive strategy for making the company’s products and services.
Production planning
Initially adopted by _________, production planning has since become more popular among small and midsize businesses in multiple industries
large manufacturers,
largely because ____________ has made it easier to plan and track production processes with less effort
technology
Production planning covers many different aspects of production, from?
forecasting demand to determining the raw materials, workforce, equipment and steps needed to make the company’s products.
Types of Production Planning
Batch production planning.
Job- or project-based planning.
Flow production planning.
The design of a product plan depends on the ______ that the company uses
production method
The design of a product plan depends on the production method that the company uses, as well as other factors, such as ________
product type,
equipment capabilities and
order size.
Refers to manufacturing identical items in groups rather than one at a time or in a continuous process.
Batch production planning.
For some businesses, ______ can greatly increase efficiency
batch production
A good production plan for batch processing should look out for ___________ when switching between batches.
potential bottlenecks or delays
Used by many small- and medium-sized businesses, job production planning focuses on the creation of a single item by one person or team.
Job- or project-based planning.
is typically used where the specificity of each client’s requirements means it is difficult to make products in bulk.
Job-based planning
Many construction businesses use this method.
Job- or project-based planning.
Makers of __________ are other examples of businesses that may use job production planning.
custom jewelry and dresses
also known as continuous production
flow production
standardized items are continuously mass-produced on an assembly line.
flow production
Large manufacturers use this method to create a constant stream of finished goods.
Flow production planning.
In Flow production planning, during production, each item should _________ from one step along the assembly line to the next.
move seamlessly
is most effective at reducing costs and delays when there’s steady demand for the company’s products.
Flow production
_________ can then readily determine their needs for equipment, materials and labor at each stage along the assembly line to help streamline production and avoid delays.
Manufacturers
Flow Production.
The __________ are among the companies that use this method.
automotive industry and makers of canned foods and drinks
Production Planning Tools
Gantt charts.
Spreadsheets
Production planning software.
is a detailed visual timeline of all the tasks scheduled for a particular job
Gantt chart
More than 100 years since its invention by mechanical engineer ________? , this chart remains integral to manufacturing and many other industries. Gantt Charts.
Henry Laurence Gantt
visually represents when each task will take place and how long it will last.
Gantt chart
Manually creating and updating Gantt charts to reflect complex, ever-changing production schedules can be a _____ and ____
time-consuming and error-prone job
Small companies sometimes start out by tracking simple production plans using
spreadsheets.
However, for most companies, the inherent complexity of production planning quickly outstrips the capabilities of _____
spreadsheet software.
involves a wide range of activities, including forecasting, managing the supply chain, tracking inventory and scheduling jobs.
Production planning.
is integral to business operations and is used by other groups within the company, including finance.
Production planning information
That’s a key reason many companies use __________that include production planning software and provide a single solution for managing the entire business.
enterprise resource planning (ERP) application suites
includes planning, coordination, and control of all aspects of the production process, right from the processing of raw materials to testing the finished products.
production management system
the role of _________ is to ensure that the production process runs smoothly and efficiently, with the least possible bottlenecks.
production management
ensures completion of various activities to streamline the production process of a company, in order to produce goods in an efficient and timely manner.
Production and operations management
can rely on a production management system to ensure production runs smoothly, by digitally collaborating with other departments within the company.
Production managers
Production Managers includes collaborating with departments such as ___________ to ensure that the production process is aligned with the company’s overall objectives.
purchases, inventory, material planning, and sales,
_______________ is a system that ensures all production processes and production cycles within a company are running efficiently, without interruptions, so that the finished goods meet customers’ quality expectations.
Production management
The adoption of ____________ enables businesses to strike a balance between the right quantity, quality, costs, and time factors within their procurement and production processes.
production management
Manufacturing process management helps ______ to organize production processes and optimize daily operations with increased productivity.
SMEs
include the use of adequate materials, manpower, and resources at the required time to produce goods, for utmost customer satisfaction.
Production management techniques
Apart from handling production processes and coordinating with order management and inventory modules, functions of production management also involve the management of certain ______ and _____
administrative and factory-level activities.
is a computerized system used to optimize the production line with automated and data-driven manufacturing processes
production management system
Production Management System. This system is used to track production data, such as
Bill of Material, production scheduling, production forecasting, strategy, and production costs.
is also responsible to monitor and control production planning and other activities.
production management system
By _____ the progress of production operations, the system can identify potential manufacturing issues and correct them in a timely manner.
auto-tracking
Additionally, the system can also ensure that the correct amount of materials is available for the production process, by connecting with ____ and _____
inventory and Material Requirements Planning (MRP) modules.
The process of production management is a key factor in the
manufacturing, testing, and distribution of goods.
It is responsible for ensuring that the production process is efficient, free of errors, and is utilizing the production capacity of an organization to the fullest, to meet the demands of the customers.
Production Management
We have listed additional factors that draw light on the importance of production management, in the following section:
Production management plays an important role in ensuring that the organization’s resources are used optimally to produce goods as per the demand.
It ensures that production managers have all the information and resources required to plan, organize, and control production cycles on a day-to-day basis for seamless delivery.
It also provides the production team with the abilities required to adapt to evolving changes in the marketplace. And to respond to changes in customer demand or new technology developments quickly.
Thereby, effective production management empowers organizations to stay ahead of the competition by building flexibility and agility.
Production management techniques strive to achieve the organization’s growth objectives while ensuring health and safety regulatory compliance for employees.
Types of Production Management
Batch Production:
Mass Production:
Continuous Production:
Production Management. These techniques _____
optimize production management, reduce costs and
lead to an increase in production outputs.
is the process of manufacturing products in small, discrete batches
Batch production
This type of production is often used in the food and beverage industry, where products are made in large quantities and then packaged and sold in smaller batches.
Batch Production:
can also be leveraged to manufacture other products in industries such as pharmaceuticals, chemicals, and electronics.
Batch production
The ______ is the most commonly known form of mass production.
assembly line
It is a process in which a product is assembled by moving it from one workstation to another. This type of production is often used when products need to be mass-produced to meet customer demand.
Mass Production:
is a technique in the management production system wherein products are produced without interruption.
Continuous production
The main advantage of _____ is that it is very efficient, and there is no need to set up and break down production equipment for each batch of products.
continuous production
Hence, this type of production can be carried out more quickly and with less waste of resources and time.
continuous production
Key Features of Production Management System
Planning and Scheduling
Inventory Control
Quality Control
Cost Control
Reporting and Analytics
Scheduling and Planning
The system generates production plans and schedules based on customer orders and available resources.
Planning and Scheduling
A production system in production management connects with the inventory functions, to track and manage inventory movements. This ensures that the team has all the required materials to produce finished goods.
Inventory Control
It provides quality monitoring and control throughout production to maintain the business reputation and ensure customer satisfaction.
Quality Control
An important feature of a management production system is to optimize production operations in a way that costs are in control and profitability is maximized.
Cost Control
The system should provide accurate reporting and analytics tools to help managers make informed decisions about production.
Reporting and Analytics
The production and operations management system should help managers plan and schedule production in an efficient manner.
Scheduling and Planning
is a planning methodology, Companies use it to forecast and plan how to meet demand for services and products.
Demand management
Demand management improves connections between ___ and ____.
operations and marketing.
Demand Management. The result is tighter coordination of ____, ____, and _____
strategy, capacity and customer needs.
identifies and captures all potential demands, interprets them and communicates them to relevant departments within the organization.
Modern demand management
An example of external demand is
assessment based on customer inquiries or booked orders
example of internal demand assessment may
calculate the raw materials needed to produce a new product and the promotional activities required to support the launch of that same product.
The demand management process is intrinsic to ____ in that it balances supply with demand.
supply chain management
This component requires the business’s demand planning team to acquire from other groups data linked to sales and demand drivers such as innovation, social media strategy and market trends.
Modeling
forecasts product or service demand to ensure you can satisfy customers. ,aims to strike a balance — sufficient inventory levels to meet orders without a surplus.
Demand planning
is the part of the demand management process handled by supply or inventory management. The goal is to identify and address the most critical problems, plan across multitier locations and simulate potential responses to optimize inventory and customer service costs.
Supply planning
Components of demand management
Modeling
Demand Planning
Supply Planning
Demand Management Activities
Demand capacity
Demand chain
Demand communication
Demand modeling
Demand shaping
Demand sensing
Demand prioritizing
Demand management helps you coordinate capacity demands, such as production time, inventory and resources.
Demand capacity
is critical because it directly impacts cost centers.
Capacity planning
are impacted when demand and capacity are out of sync, so coordination is essential to achieve alignment.
Operating expenses
relates to the customer demanding products or services as and when required, referred to as pull.
demand chain
In the internet economy, the _________ condenses time, is pull-oriented from the customer and is based on real-time event monitoring, inventory and information for forecasting and planning — in other words, the end consumer is king.
demand chain-based e-fulfillment model
In the collaborative demand management model, you communicate forecast demand to all stakeholders, business areas and teams affected by the forecast. Everyone then works in a spirit of transparency to a common goal.
Demand communication
works from the bottom up. This activity breaks demand components into external and internal factors and the demand stream, and it examines how each factor influences purchases to ascertain future demand.
Demand modeling
is an operational supply chain management strategy where a company uses price drops, incentives and other tactics to induce customers to purchase specific items. helps the business match demand for a specific product to the planned supply.
Demand shaping
This predictive tool is a game-changer in high-demand ecommerce scenarios.
Demand sensing
depends on data sent in near-real-time. New mathematical techniques to sense demand make it possible to quickly understand what is selling, who is buying and how the product or service impacts market demand.
Demand sensing
Identifying and prioritizing projects is the basis of demand management. By examining potential risk factors, organizational capacity, financial value and implications, you can form policies based on priority items.
Demand prioritizing
refers to the analysis of current and historical business data to discover trends and make educated predictions about future data. It’s useful in planning and decision-making and helps SMBs plan the production of goods and provision of services in advance, helping to cut down on unnecessary resources, time spent, and money wasted.
Forecasting
Types of Forecasting
forecasting type, forecasting method, and forecasting model
Qualitative, quantitative, time series, causal, etc.
Forecasting method
Economic, technological, demand, etc.
Forecasting type
Visionary forecast, panel consensus, Delphi, linear, etc.
Forecasting model
simply use calculations to forecast from data, but don’t tell you what is actually happening with the data.
forecasting methods
on the other hand, break down the data used in the forecasting method to elaborate on the data’s meaning and help you further understand how the forecasting method arrived at its calculation.
Forecasting models
The factors of production are
land, labor, entrepreneurship, and capital
These inputs are needed for the creation of goods and services.
land, labor, entrepreneurship, and capital
In capitalism, the factors of production are most often controlled by _____and _________
business owners and investors.
In socialist systems, the ____ exerts greater control over the factors of production.
government
is an economic term that describes the inputs used in the production of goods or services to make an economic profit.
- Factors of production
The _____ can influence the total factors of production and account for any efficiencies not related to the four typical factors.
state of technological progress
as a factor of production can mean agriculture and farming as well as the use of natural resources, and even land to construct buildings on.
Land
has a broad definition as a factor of production and can take on various forms, from agricultural land to commercial real estate to the resources available
Land
Natural resources, such as ____ and ______ can be extracted and refined for human consumption from the land.
oil and gold,
For a group of early French economists called ________ who predated the classical political economists, land was responsible for generating economic value.
“the physiocrats,”
While ____ is an essential component of most ventures, its importance can diminish, or increase based on industry.
land
refers to the effort expended by an individual to bring a product or service to the market.
Labor
Skilled and trained workers are called _______ and are paid higher wages because they bring more than their physical capacity to the task.
“human capital”
In economics, capital typically refers to ____
money.
However, ____ is not considered part of the capital factor of production because it is not directly involved in producing a good or service.
money
are items that allow a person or business to produce goods and services.
Capital goods
is the secret sauce that combines all the other factors of production into a product or service for the consumer market.
Entrepreneurship
is a software-based integrated inventory and supply management system designed for businesses.
Material requirements planning (MRP)
Companies use ___ to estimate quantities of raw materials, maintain inventory levels, and schedule production and deliveries.
Material requirements planning (MRP)
manage the types and quantities of materials they purchase strategically and cost-effectively to ensure that they can meet current and future customer demand
Manufacturers
helps companies maintain appropriate levels of inventory so that manufacturers can better align their production with rising and falling demand.
Material requirements planning (MRP)
Advantages of MRP
- Materials and components are available when needed
- Minimized inventory levels and associated costs
- Reduced customer lead times
- Increased manufacturing efficiency
- Increased labor productivity
Disadvantages of MRP
- Heavy reliance on input data accuracy
- Expensive to implement
- Lack of flexibility in the production schedule
- Tendency to hold more inventory than needed
- Less capable than an overall ERP system
is an extension of MRP systems.
Enterprise resource planning (ERP)
a planning and control system for the resources in a company,
MRP or Material Requirements Planning
a solution for the enterprise as a whole and it includes advanced functionality in the areas of financial, customer relationships, and sales order management.
ERP
can be a stand-alone application or a piece of an ERP
MRP or Material Requirement Planning
a single solution that addresses all business needs, not just the scheduling of resources. It decreases any information redundancies and adds elements, like user-level security.
ERP or Enterprise Resource Planning
What Are the 3 Main Inputs for MRP?
- Master Production Schedule (MPS),
- Inventory Status File (ISF), and
- Bill of Materials (BOM).
ensures that materials and components are available when they’re needed, inventory levels are optimized, manufacturing efficiency is improved, and customer satisfaction increases.
MRP
calculates what materials are needed, how much is needed to complete a build, and exactly when materials are needed in the build process.
MRP
This allows businesses to use just-in-time ______, scheduling production based on material availability. This minimizes inventory levels and businesses can move materials through the manufacturing process efficiently.
(JIT) production
is an extensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.
bill of materials (BOM)
usually appears in a hierarchical format, with the highest level displaying the finished product and the bottom level showing individual components and materials.
bill of materials
different types of bills of materials
Engineering BOMs
manufacturing BOMs
are specific to engineering used in the design process
Engineering BOMs
are specific to the manufacturing used in the assembly process.
manufacturing BOMs
is a centralized source of information used to manufacture a product. It is a list of the items needed to create a product as well as the instructions on how to assemble that product. Manufacturers that build products start the assembly process by creating this
bill of materials (BOM)
Common functions that utilize BOMs are?
engineering, design, operations, and manufacturing
shows the relationship between the finished product and its components.
bill of materials
Bill of materials is useful for?
estimating the cost of materials, planning purchases, ensuring availability of parts, and avoiding delays in production.
The advantage of using a bill of materials is ?
streamlining and improving the efficiency of the manufacturing process by enabling detailed planning.
can also help to reduce waste, identify vulnerabilities in a product’s components, and stay ahead of materials shortages or supply chain disruptions.
bill of materials
How Do You Create a Bill of Materials?
- Name of product or assembly
- BOM level
- Raw materials used, including quantity and unit of measure
- Sub-assemblies used
- Part number, name, and description for each part
- Unit cost
- Quantity
is an important part of the engineering and manufacturing process. It’s a comprehensive list of all parts and materials required to build a product, and an accurate ____ is vital to reducing waste, streamlining production, and ensuring the availability of necessary parts. _____ facilitate efficiency and help companies manage their operations costs.
Bill of materials
determines what products are manufactured, when they are produced, and in what quantities.
master production schedule
forms the basis of communication between sales and manufacturing.
master production schedule
becomes a contract between sales and production, allowing sales to make promises that production can keep.
MPS or Master Production Schedule
is a dynamic plan and can be adjusted when there are changes in demand or capacity.
master production schedule
So, when should you create a master production schedule?
It is usually made anywhere from three months to two years out.
It takes into account the following factors for each product: Master Production Schedule
- What is the starting inventory, or inventory in stock?
- How many orders are expected for the time period based on the sales forecast?
- How many orders are already planned?
- How much must be produced to balance supply and demand?
- How much do you want to keep for safety stock to ensure you don’t run out of inventory?
What Are the Functions of a Master Production Scheduling Software?
- Keeps production flowing smoothly
- Reduces the lead time for products
- Improves communication within your organization
- Helps you establish priorities and adhere to them
- Helps you create a manufacturing plan that makes sense
- Enables you to achieve desired customer service levels
- Makes the most efficient use of resources
- Maintains an effective level of inventory
Before a master production schedule can be produced, you need to create a
Demand Plan
This uses historical data from sales to forecast customer orders over the coming months or years. The ______ must also include a set amount of safety stock – in case an unexpectedly large order is generated – to protect against stock outs.
demand plan
What Are the Parts of a Master Production Schedule?
Product List
Product Sub Lists
Time Frames
Production Quantities
consists of all the types of products you manufacture. The products that are most frequently ordered should be at the top.
Product List
Include a field for each product variation or SKU. For example, if you manufacture chairs, you can separate them out by stain color, leg type, fabric, etc.
Product Sub Lists
Have your schedule broken into months and weeks. You should schedule at least a few months out and check to see if any changes are needed every so often. If demand changes beforehand, you can adjust it as needed.
Time Frames
You’ll need to determine raw material consumption based on the quantities of each type of product, including variations or SKUs.
Production Quantities
What Does the Master Production Schedule Help to Identify?
- The quantity of each product to manufacture
- The production staff needed to stay on schedule
- How many of each product can be promised to customers
- The projected product balance after order fulfillment
- How to better control manufacturing operations
- How to better tie business planning with manufacturing operations
- How to increase production efficiency and minimize errors
What Are the Different Master Production Scheduling Techniques?
make-to-stock
make-to-order
Assemble-to-order
a limited number of items are assembled from a larger number of components, for example, video recorders or computers. The MPS should in this case be a schedule of finished goods items.
make-to-stock environments
many different finished goods can be produced from a relatively small number of raw materials. A great example of this process would be how cars are manufactured. The sub assemblies for many cars will be the same but the different models of cars manufactured differ in specific options such as color, stereo, sunroof, and electric windows.
make-to-order environment
make use of raw materials to form basic components and complete sub assemblies. These components and sub assemblies make up a variety of finished products. The master production schedule should therefore take place at the subassembly level.
Assemble-to-order environments
