1.  Introduction to Business 1 BUS-101 Instructor: Erlan Bakiev, Ph.D.

2.  Producing Quality Goods and Services © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 2

3. What Is Production? © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 3LeadingPlanning Organizing Production Operations Management(POM) Management(POM) Controlling

4. The Conversion Process © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 4 Transformation Outputs Inputs Analytic Systems The Value Chain Synthetic Systems Tangible Goods Intangible Services

5. Input-Transformation-Output Relationships for Typical Systems © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 5 Department Store Shoppers, stock of goods Displays, sales clerks Attract customers, promote products, fill orders Sales to satisfied customers College or University High School graduates, books Teachers, classrooms Impart knowledge & skills Educated individuals Automobile Factory Sheet steel, engine parts Tools, equipment, workers Fabrication & assembly of cars High-quality cars Restaurant Hungry customers, food Chef, waitress, environment Well-prepared & well-served food Satisfied customers Hospital Patients, medical supplies MDs, nurses, equipment Health care Healthy individuals Typical Desired Output Transformation Function Transformation Components InputsSystem

6. Challenges of the Service Industry © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 6 People-IntensiveActivitiesPeople-IntensiveActivitiesProduction and Location Production SubjectiveQualitySubjectiveQuality CustomerInvolvementCustomerInvolvementDeliveryTimingDeliveryTiming

7. Manufacturing Goods © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 7 Mass Customization Mass Production Customized Production

8. Outsourcing the Manufacturing Function © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 8 DisadvantagesDisadvantagesAdvantagesAdvantages Capital and Resources Economies of Scale Quality and Cost Privacy Issues

9. Production Process Design © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 9 Forecast Demand Plan for Capacity Identify Supply Chain

10. Production Process Design © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 10 Choose Facility Site Design Facility Layout Schedule Work

11. Establish the Supply Chain © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 11 Suppliers Manufacturers Distributors Retailers

12. Forecast Demand © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 12 CustomerFeedbackMarketResearchSalesFiguresIndustryAnalysesEducatedGuesses BusinessResources PlanningBudgetingScheduling

13. Capacity Planning © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 13 CustomerDemand Level of Resources

14. Facility Location © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 14EnergyTransportation Land LivingStandardsConstructionRawMaterials Local Taxes Labor

15. Facility Layout © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 15 Product Cellular Fixed-Position Process

16. Process Layout © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 16

17. Product Layout © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 17

18. Cellular Layout © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 18

19. Fixed-Position Layout © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 19

20. Production Schedule © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 20 Scheduling Dispatching Contingencies

21. The Gantt Chart © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 21 IDTask NameStart DateEnd DateDuration AugustSeptember 2006 1Make legs8/1/068/28/0620d 2Cut tops8/22/068/28/065d 3Drill8/29/069/4/065d 4Sand9/5/069/11/065d 5Assemble9/12/069/25/0610d 6Paint9/19/069/25/065d

22. Program Evaluation and Review Technique (PERT) © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 22 1. Identify activities 2. Determine sequence 3. Establish time frame 4. Diagram activity network 5. Calculate longest completion path 6. Refine timing

23. PERT Time Estimates © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 23 Optimistic Pessimistic Most Likely Expected

24. Simplified PERT Diagram for Store Opening © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 24 15 Days 24 Days 3 Days 4 Days 21 Days Training Completed Training Completed Merchandise Received Merchandise Received Staffing Completed Staffing Completed Merchandise Ordered Merchandise Ordered Staffing Plan Merchandise Plan Merchandise Plan Ads Placed Ads Created Promotion Plan Promotion Plan Project Launch Project Launch 5 Days 14 Days 7 Days Opening Day Opening Day

25. Industrial Robotics © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 25 StaminaStamina DiligenceDiligence SpeedSpeed PrecisionPrecision

26. Computerized Production © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 26 Computer-Aided Manufacturing (CAM) Computer-Aided Computer-Integrated Manufacturing (CIM) Computer-Integrated Product Lifecycle Management (PLM) Product Lifecycle Management (PLM) Computer-Aided Design (CAD) Computer-Aided Computer-Aided Engineering (CAE) Computer-Aided

27. Manufacturing Systems © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 27 TraditionalFlexible Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

28. Supply Chain Data Interchange © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 28 Electronic Data Interchange (EDI) Extensible Markup Language (XML)

29. The Production Process © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 29 Transformation Outputs Inputs Operations Managers Coordinating The Supply Chain Assuring Product Quality

30. Supply Chain Coordination © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 30 InventoryInventory PurchasingPurchasing Lead Time Inventory Control

31. © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 31 Just-In-Time (JIT) Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP)

32. Supply Chain Management © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 32 ImprovedQuality Manage Risks Manage Relationships Manage Trade-Offs IncreasedSalesCostSavingsReducedInventoryFasterDelivery ImprovedService

33. Assuring Product Quality © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 33 Quality Assurance Quality Control Establishing Standards Measuring Quality Minimizing Defects Statistical Quality Control Statistical Process Control Continuous Improvement

34. Total Quality Management  Management commitment to TQM  Clear customer focus  Employee involvement  Continuous improvement  Partnering with suppliers  Meaningful performance standards © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 34

35. The Six Sigma Approach © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 35 Define the Problem Measure Performance Analyze Root Causes Improve the Process Control the Process

36. Global Quality Standards © Prentice Hall, 2007Excellence in Business, 3e Chap ter 9 - 36 ISO 9000 ISO 14000