© 2006 Pearson Education Canada Inc.Chapter Chapter 8 Producing Quality Goods and Services

© 2006 Pearson Education Canada Inc.Chapter What Is Production? Leading Planning Organizing Production Operations Management(POM) Controlling

© 2006 Pearson Education Canada Inc.Chapter What Is the Conversion Process? Transformation Outputs Inputs Analytic Systems Synthetic Systems

© 2006 Pearson Education Canada Inc.Chapter Input-Transformation-Output Relationships for Typical Systems 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

© 2006 Pearson Education Canada Inc.Chapter Manufacturing Goods MassProductionMassCustomization

© 2006 Pearson Education Canada Inc.Chapter Production Process Design Plan for Capacity Choose Facility Site Design Facility Layout Forecast Demand Schedule Work

© 2006 Pearson Education Canada Inc.Chapter Forecasting Demand CustomerFeedbackMarketResearchSalesFiguresIndustryAnalysesEducatedGuesses BusinessResources PlanningBudgetingScheduling

© 2006 Pearson Education Canada Inc.Chapter Capacity Planning Level of Resources ResourcesCustomerDemandCustomerDemand

© 2006 Pearson Education Canada Inc.Chapter LabourLabourLandLand TransportationTransportationEnergyEnergy Local Taxes RawMaterialsRawMaterials ConstructionConstruction LivingStandardsLivingStandards FacilityLocationFacilityLocation

© 2006 Pearson Education Canada Inc.Chapter Types of Facility Layout Process (functional) –concentrates everything needed to complete one phase of the production process in one place Product (assembly line) –the production process occurs along a line –products move from one workstation to the next Cellular –groups dissimilar machines into work centers (or cells) to process parts that have similar shapes and processing requirements Fixed-Position –labour, materials, and equipment are brought to the location where the good is being produced or the customer is being served –i.e.: buildings, roads, bridges, airplanes

© 2006 Pearson Education Canada Inc.Chapter Process Layout

© 2006 Pearson Education Canada Inc.Chapter Product Layout

© 2006 Pearson Education Canada Inc.Chapter Cellular Layout

© 2006 Pearson Education Canada Inc.Chapter Fixed-Position Layout

© 2006 Pearson Education Canada Inc.Chapter Production Schedule Scheduling Dispatching Contingencies

© 2006 Pearson Education Canada Inc.Chapter The Gantt Chart IDTask NameStart DateEnd DateDuration AugustSeptember Make 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

© 2006 Pearson Education Canada Inc.Chapter Program Evaluation and Review Technique (PERT) Identify activities Determine sequence Establish time frame Diagram activity network Calculate longest completion path Refine timing

© 2006 Pearson Education Canada Inc.Chapter PERT Time Estimates Optimistic Pessimistic Most Likely Expected

© 2006 Pearson Education Canada Inc.Chapter PERT Diagram for Manufacturing Shoes

© 2006 Pearson Education Canada Inc.Chapter Improving Production Through Technology Robots Computer-aided design Computer-aided engineering Computer-aided manufacturing Computer-integrated manufacturing

© 2006 Pearson Education Canada Inc.Chapter Electronic Information Systems Responsiveness Service Communication

© 2006 Pearson Education Canada Inc.Chapter Manufacturing Systems TraditionalManufacturingFlexibleManufacturing Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

© 2006 Pearson Education Canada Inc.Chapter The Production Process InventoryManagementQualityAssurance

© 2006 Pearson Education Canada Inc.Chapter Inventory Management Inventory InventoryControl Lead Time Purchasing

© 2006 Pearson Education Canada Inc.Chapter Inventory Control Just-In-Time (JIT) Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP II)

© 2006 Pearson Education Canada Inc.Chapter Manufacturing Resource Planning

© 2006 Pearson Education Canada Inc.Chapter Maintaining Quality Statistical Quality Control Statistical Process Control Continuous Improvement Quality Control Quality Assurance

© 2006 Pearson Education Canada Inc.Chapter Global Quality Standards ISO Certification CAE Quality Awards Malcolm Baldrige Award

© 2006 Pearson Education Canada Inc.Chapter Supply Chain Management SuppliersManufacturersDistributorsRetailers The Supply Chain Production of Goods and Services FacilitiesFunctionsActivities

© 2006 Pearson Education Canada Inc.Chapter Manufacturing Trends Outsourcing Supplier Involvement Redirect Resources and Capital Increase Production Efficiencies Access State-of-the-Art Facilities Improve Overall Quality Maximize the Use of Time Reduce Work-in-Process Inventory