Ch. 11: Production, Operations, and Supply Chain Management

Flexible Manufacturing System (FMS)

A system in which machines are programmed to process different part types simultaneously, Enables manufacturers to produce large quantities of customized products

Materials Requirement Planning (MRP)

Computer-based program used for inventory control and production planning

Operations Management

Consists of managing the activities & processes to produce & distribute goods and services as efficiently as possible Focus on: acquisition, development, & utilization of the resources needed to create and deliver goods and services successfully to customer

Statistical Quality Control (SQC)

Continual monitoring of the entire production process to ensure that quality standards are being met at every stage

Make-or-Buy Decision

Decide what needs to be manufactured & what needs to be purchased from outside suppliers

International Organization for Standardization (ISO)

Dedicated to creating worldwide standards of quality for goods and services ISO 9001: Standards are international quality management standards ISO 14001: Standards are international environmental management standards

Intermittent Processes

Flexible processes with shorter runs, so machinery can be changed over btn them to accommodate product changes

Backward Scheduling

Given a shipping or due date, and determine the start date and the most efficient production schedule based on what must be finished

Inventory Control

Includes the receiving, string, handling, and tracking of everything in a company's stock

Total Quality Management (TQM)

Integrated approach that focuses on quality from the beginning of the production process up through managerial involvement to detect and correct problems

Simultaneous Engineering

Integration of CAD & CAM systems in aspects of a production process

How does the manufacturing industry use social media?

It connects consumers to manufacturers - B2C and manufacturers w/ others in their industry - B2B

How important is manufacturing in the US?

It's a key component of the US economy and has been the largest contributor to US GDP. The reason for the latter half is that manufacturing requires many other services like transportation and marketing.

Tools available to help with scheduling

Loading: Assigning a job to a specific machine or an entire work center Sequencing: Assigning the order in which jobs are processed

PERT Chart (Program evaluation and review technique)

Maps out the various steps involved in a project, differentiating tasks that must be completed in a certain order from tasks that may be completed simultaneously - Like a flowchart - TO a greater extent emphasizes the relationships btn tasks rather than the time line of the tasks - Identifies the critical path - path of sequential tasks that will take the most time to complete, but limited in ability to predict completion times bc of delays

Continuous Flow Production

Method that produces discrete units of products in large numbers one by one continuously and rapidly

How does manufacturing affect the global economy?

Offshoring production takes advantage of lower wage rates. It increases unemployment, but improves standards of living in third world countries.

Cellular Layout

Places small teams of workers who handle all aspects of assembly, so each station is equipped w/ the parts and tools necessary to produce a product from start to finish, and the worker moves through the workstation as he or she conducts the assembly process

Supply Chain

Process by which products, information, and money move between supplier and consumer - Consists of all of the suppliers, business partners, service providers, sourced manufacturers, distributers, retailers, and transporters; Also the major depts w/i an organization & customers - Part of every business - service, manufacturing, profit, & not-for-profit

Why is production a critical component of any business?

Production is critical because attaining the most efficient production process means maximizing profits and paying the least amount possible for production, without compromising quality. Also, being on top of things helps businesses build closer relationships with suppliers.

Process Layout

Production layout in which similar tasks are grouped together, & the partially assembled product moves from 1 workstation to the next

Product Layout

Production layout used mostly for high-volume, standardized products that can be produced in a sequential fashion

Mass Customization

Production of goods and services tailored to meet customers' individual needs cost effectively - Bulk customization - industrial supplies like switches - Individual customization - like in clothing, shoes, glasses

4 Types of Stock

Raw materials, unfinished goods, finished products, and consumables (pens, paper, etc)

Radio Frequency Identification (RDIF)

Refers to electronic systems that allow computers to keep track of the status and quantity of tagged inventory as it moves through the supply chain

Scheduling

Refers to the efficient organization of equipment, facilities, labor, and materials

Facility Layout

Refers to the physical arrangement of resources & people in the production process and how they interact - Crucial to maximize efficiency and depends greatly on the processes or tasks to be performed

Production Management

Refers to the planning, implementation, and control measures used in the process to convert resources into finished products

Quality Control

Refers to the techniques, activities, and processes used to guarantee that a good or service meets a specified level of quality

Computer-Aided Design (CAD)

Refers to using a computer and software to create 2-D or 3-D models of physical parts

Lean Production

Set of principles concerned w/ reducing waste and improving flow

How does facility layout affect production?

Should be designed for smooth production and efficient flow of employees

Forward Scheduling

Start with the date that materials are available, create the most efficient production schedule, & then determine a shipping date based on the schedule

Six Sigma

Statistically based, proactive, longterm process designed to examine the overall business process and prevent problems Method that seeks to virtually eliminate defects by implementing a quality focus in every aspect of the organization - Strives for continuous improvement for achieving near perfection

Enterprise Resource Planning (ERP)

System that can do the same inventory control and process scheduling that MRP can do, but integrates those functions with other functions of the business like finance, marketing, and human resources

Computer-Integrated Manufacturing (CIM)

Systems combine design & manufacturing functions w/ other automated function, such as order taking, shipment, & billing for the complete automation of a manufacturing plant

Supply Chain Management

The entire process of getting products out the door and eventually into hands of final customers * For service organizations, they manage time and actions of the labor force required to perform the service Goal is to maximize value and achieve a sustainable competitive advantage & help reduce carbon footprints

Mass Production

The method of producing large quantities of goods at a low cost - Machinery is main component = goods are identical & little need to skilled laborers, but it's inflexible

Capacity Planning

The process of determine how much of a product can be produced to meet demand - Requires balancing max amount of product a facility can produce w/ demands of customers - Capacity can be increased - new tech and/or equipment - Warehousing goods

Production

The process of getting a good or a service to the customer; it's a series of related activities, with value being added at each stage

Purchasing

The task of acquiring the materials & services needed in the production process

How does a company decide which suppliers to use?

Through defining and understanding its needs relative to its competitive strategy - Cost is always a factor, but not only

How does US manufacturing compete globally?

US is world's largest importer, but also the 3rd largest exporter. Almost half of the exported goods are things like aircraft, computers, and motor vehicle parts.

Fixed-Position Layout

Used for manufacturing large items; the product stays in one place, and the workers move around the product to complete its assembly

Gantt Charts

Used to lay out each task in a project, the order in which these tasks must be complete, and how long each task should take

Statistical Process Control (SPC)

Uses statistical sampling of products at every phase of production and displays the results on a graph to show potential variations that need to be corrected

Computer-Aided Manufacturing (CAM)

Uses the design data to control the machinery used in the manufacturing process

Assembly/ Production Line

When partially complete products are moved from 1 worker to the next on a conveyor belt

How important are services to the US economy?

- Almost 3/4 of US GDP - More than 75% of jobs are in the service sector Service includes health care, utility companies, Disney, Home Depot, American Express

What changes in production will keep the US competitive?

- Bringing manufacturing operations and jobs back - Using practices like enterprise resource planning, computer integrated manufacturing, flexible manufacturing & lean manufacturing - Quality management programs

What methods are used to manage inventory?

- Visual assessment - Stock book solution - for accurate count - record of what's been ordered and sold - Reserve stock system - certain amount of stock is set aside in reserve so it can't be used, if company dips into reserves = reordering time - Just-in-time (JIT) inventory management - enables firm to maintain smallest amount of inventory possible, with inventory being ordered as needed