1. © 2006 Pearson Education Canada Inc.Chapter 8 - 1 Chapter 8 Producing Quality Goods and Services

2. © 2006 Pearson Education Canada Inc.Chapter 8 - 2 What Is Production? Leading Planning Organizing Production Operations Management(POM) Controlling

3. © 2006 Pearson Education Canada Inc.Chapter 8 - 3 What Is the Conversion Process? Transformation Outputs Inputs Analytic Systems Synthetic Systems

4. © 2006 Pearson Education Canada Inc.Chapter 8 - 4 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

5. © 2006 Pearson Education Canada Inc.Chapter 8 - 5 Manufacturing Goods MassProductionMassCustomization

6. © 2006 Pearson Education Canada Inc.Chapter 8 - 6 Production Process Design Plan for Capacity Choose Facility Site Design Facility Layout Forecast Demand Schedule Work

7. © 2006 Pearson Education Canada Inc.Chapter 8 - 7 Forecasting Demand CustomerFeedbackMarketResearchSalesFiguresIndustryAnalysesEducatedGuesses BusinessResources PlanningBudgetingScheduling

8. © 2006 Pearson Education Canada Inc.Chapter 8 - 8 Capacity Planning Level of Resources ResourcesCustomerDemandCustomerDemand

9. © 2006 Pearson Education Canada Inc.Chapter 8 - 9 LabourLabourLandLand TransportationTransportationEnergyEnergy Local Taxes RawMaterialsRawMaterials ConstructionConstruction LivingStandardsLivingStandards FacilityLocationFacilityLocation

10. © 2006 Pearson Education Canada Inc.Chapter 8 - 10 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

11. © 2006 Pearson Education Canada Inc.Chapter 8 - 11 Process Layout

12. © 2006 Pearson Education Canada Inc.Chapter 8 - 12 Product Layout

13. © 2006 Pearson Education Canada Inc.Chapter 8 - 13 Cellular Layout

14. © 2006 Pearson Education Canada Inc.Chapter 8 - 14 Fixed-Position Layout

15. © 2006 Pearson Education Canada Inc.Chapter 8 - 15 Production Schedule Scheduling Dispatching Contingencies

16. © 2006 Pearson Education Canada Inc.Chapter 8 - 16 The Gantt Chart 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

17. © 2006 Pearson Education Canada Inc.Chapter 8 - 17 Program Evaluation and Review Technique (PERT) Identify activities Determine sequence Establish time frame Diagram activity network Calculate longest completion path Refine timing

18. © 2006 Pearson Education Canada Inc.Chapter 8 - 18 PERT Time Estimates Optimistic Pessimistic Most Likely Expected

19. © 2006 Pearson Education Canada Inc.Chapter 8 - 19 PERT Diagram for Manufacturing Shoes

20. © 2006 Pearson Education Canada Inc.Chapter 8 - 20 Improving Production Through Technology Robots Computer-aided design Computer-aided engineering Computer-aided manufacturing Computer-integrated manufacturing

21. © 2006 Pearson Education Canada Inc.Chapter 8 - 21 Electronic Information Systems Responsiveness Service Communication

22. © 2006 Pearson Education Canada Inc.Chapter 8 - 22 Manufacturing Systems TraditionalManufacturingFlexibleManufacturing Mass Production Resistant to Change High Set-Up Costs Specialty Operations Conducive to Change Minimal Set-Up Costs

23. © 2006 Pearson Education Canada Inc.Chapter 8 - 23 The Production Process InventoryManagementQualityAssurance

24. © 2006 Pearson Education Canada Inc.Chapter 8 - 24 Inventory Management Inventory InventoryControl Lead Time Purchasing

25. © 2006 Pearson Education Canada Inc.Chapter 8 - 25 Inventory Control Just-In-Time (JIT) Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP II)

26. © 2006 Pearson Education Canada Inc.Chapter 8 - 26 Manufacturing Resource Planning

27. © 2006 Pearson Education Canada Inc.Chapter 8 - 27 Maintaining Quality Statistical Quality Control Statistical Process Control Continuous Improvement Quality Control Quality Assurance

28. © 2006 Pearson Education Canada Inc.Chapter 8 - 28 Global Quality Standards ISO Certification CAE Quality Awards Malcolm Baldrige Award

29. © 2006 Pearson Education Canada Inc.Chapter 8 - 29 Supply Chain Management SuppliersManufacturersDistributorsRetailers The Supply Chain Production of Goods and Services FacilitiesFunctionsActivities

30. © 2006 Pearson Education Canada Inc.Chapter 8 - 30 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