Chapter 10

Outsourcing

A decision by a corporation to turn over much of the responsibility for production to independent suppliers. save companies money by using lower cost, specialized labor, located domestically or abroad.

Hunter is a first time manager who wants to be sure everyone on her team is doing their job well, so she tends to tell people what to do with no input

Autocratic

Forecasting & Capacity Requirements

Like forecasting, capacity planning is difficult. Unfortunately, failing to balance capacity and projected demand can be seriously detrimental to your bottom line. If you set capacity too low (and so produce less than you should), you won't be able to meet demand, and you'll lose sales and customers. If you set capacity too high (and turn out more units than you should), you'll waste resources and inflate operating costs.

Sam makes high-end, custom bicycle frames for pro riders. His business uses what production process?

Make to order

Each item Diana's company makes is designed specifically to the requirements of a unique customer. What production method does her company employ?

Make-to-order

For around $220, you can buy the Oakley Jawbreaker. You can choose the color frame, lens, jaw, etc., all of which are produced in quantity and assembled to your design. What production method is described?

Mass customization

Bailey utilizes _____which uses sales forecasts and ordering lead time to calculate the quantity of each part needed and when they should be ordered or made

Material requirements planning (MRP)

Diana's company is about to launch a new product. She is tasked with deciding which factory will make the product and how the production lines will be organized. She works in what aspect of operations management?

Production planning

purchasing

The process of acquiring the materials and services to be used in production Can the vendor supply the needed quantity of materials at a reasonable price? Is the quality good? Is the vendor reliable (will materials be delivered on time)? Does the vendor have a favorable reputation? Is the company easy to work with?

operations management (OM)

consists of all the activities involved in transforming a product idea into a finished product. In addition, operations managers are involved in planning and controlling the systems that produce goods and services. In other words, operations managers manage the process that transforms inputs into outputs. oversees the process of transforming resources into goods and services.

If the lead time on frames, lens, and jaw was 5 days, 7 says, and 3 days respectively, then on a PERT chart the lends would represent what

critical path

PERT charts

diagram the activities and time required and identify the critical path—the sequence of activities that will require the greatest amount of time.

Gantt chart

helps operations managers determine the status of projects.

Selecting production process

make-to-order Products are made exactly how the buyer wants. Ex. Shirts with logo and designs. Longer production and delivery cycle than other approaches mass production the practice of producing high volumes of identical goods at a cost low enough to price them for large numbers of customers. Goods are made in anticipation of future demand (based on forecasts) and kept in inventory for later sale. Ex. Processed food, wrist bands, flash lights shorter cycle times than a make-to-order process. mass customization combines the advantages of customized products with those of mass production. Naturally, mass customization doesn't work for all types of goods. Most people don't care about customized detergents or paper products. And while many of us like the idea of customized clothes, footwear, or sunglasses, we often aren't willing to pay the higher prices they command.

production planning

managers determine how goods will be produced, where production will take place, and how manufacturing facilities will be laid out.

site selection for a company's manufacturing operations

managers look for locations that minimize shipping costs, have an ample supply of skilled workers, provide a favorable community for workers and their families, offer resources at low cost, and have a favorable business climate.

Estimating capacity needs for a service business

more difficult than for a manufacturer because service providers can't store their services for later use.

Service firms provide intangible products

often customized to satisfy specific needs. Unlike manufactured goods, many services are bought and consumed at the same time.

Production control

planning, routing, scheduling, dispatching, follow-up Once the production process is under way, managers must continually schedule and monitor the activities that make up that process. They must solicit and respond to feedback and make adjustments where needed. At this stage, they also oversee the purchasing of raw materials and the handling of inventories.term-13

e-procurement

purchasing by using electronic support

material requirements planning (MRP)

software tool to determine material needs.

Total quality management (TQM)

the philosophy that everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs deliver quality goods and services

Quality control

the strategy for minimizing errors by managing each stage of production The operations manager is directly involved in efforts to ensure that goods are produced according to specifications and that quality standards are maintained.

just-in-time (JIT) production

which materials arrive just in time to enter the manufacturing process