1. BCEN 1400 Introduction to Business
Chapter 9
Production and Operations Management

2. The U.S. Economy Hit by the recession
Housing and manufacturing hit hard
US still the largest manufacturer in the world
25% of the world’s goods!
US producers still have much to learn about efficiency
No longer majority-comprised of manufacturing
70% of US GDP and 85% of US jobs are in the service sector
US services: legal, medical, entertainment, broadcasting, business services

3. Operations Management
Developed out of production
Focused on manufacturing activities
Converts or transforms resources into goods and services
Includes inventory management, quality control, production scheduling, follow-up services, etc.

4. The Production Concept
Adds form utility: the difference in value between raw materials and a finished product
INPUTS
Land
Labor
Capital
Entrepreneurship
Knowledge
PROCESSES
Planning
Routing
Scheduling
Dispatching
Follow-Up
OUTPUTS
Goods
Services
Ideas

5. Types of Production Process Manufacturing versus Assembly
Process: physically or chemically changing a material
Assembly: putting together pieces to make a product
Intermittent versus Continuous Production
Intermittent: production stops and starts to make different variations of product
Continuous: production continually runs to make large batches

6. Using Technology in Production
Computer-Aided Design (CAD)
Allows innovators to design products on computer (architectural designs for new buildings)
Computer-Aided Manufacturing (CAM)
Allows companies to produce using computer software and equipment (robots that make steel parts)
Computer Integrated Manufacturing (CIM)
CAD programs tell CAM programs and equipment what to make (prototypes from waterjets)

7. Using Technology in Production
Flexible manufacturing – using machinery that can be switched out in short time to product new product on the same production line
Nissan’s Flexible Manufacturing Plant
In Canton, MS

8. Using Technology in Production
Mass Customization
Tailoring an assembly process to customize for individuals
Custom M&Ms
Dell Computers
Custom Nikes

9. Locating Your Production Facility
Critical Issues:
Convenience for those doing business with you
Customers
Suppliers
Availability of Resources
Labor Costs
Access to Transportation

10. Facility Layout
Layout refers to the physical arrangement of resources and equipment to most efficiently produce the product or service
Assembly line layout
Modular layout
Process layout
Fixed layout

11. Enterprise Resource Planning (ERP)
Seamless software system that moves an order through all of a company’s departments at once
Finance, production, purchasing (very important), customer service can all know the status of an order as it moves through to being produced.
Quicker invoicing (billing)
Less “dropping the ball”

12. Quality: A Critical Part of the Process
Six Sigma programs
Extreme dedication to working out the opportunities for defects within the process of production itself (BEFORE output is made)
Malcolm Baldrige award
Given to organizations who have worked quality into their culture and procedures.
High customer satisfaction is a criterion.
ISO 9000 and standards for quality and environmental impact

13. Production and Project Management
PERT Charts
Program Evaluation and Review Technique
Consists of outline a project in task squares and estimating the time for completion
Gantt Chart
A series of bard representing tasks and their length for completion, as well as their estimated start dates.