Chapter 9: Production and Operations Management

What are the steps used in PERT

1. Analyzing the sequencing tasks that need to be done 2. Estimating the time needed to complete each task 3. Drawing a PERT network illustration the info from steps 1 and 2 4. Identifying the critical path

What are the three basic requirements of production

1. Build and deliver products in response to the demands of the customer at a scheduled delivery time 2. To provide and acceptable quality level 3. To provide everything at the lowest possible cost

What allowed the US companies to be more competitive?

1. Computer aided designs and manufacturing 2. Flexible manufacturing 3. Lean manufacturing 4. Mass customization 5. Robotics 6. 3D printing

What problems arise from competing products first then testing for quality?

1. The need to inspect work required extra people and resources 2. If error was found, someone had to correct the mistake or scrap the product= costly 3. If customer found the mistake, they might be dissatisfied and might even buy from competitor after

What are the benefits of robotics?

24 hours a day, great precision, mass customization with no complaint Does reduce jobs of humans

What is a Gantt chart?

A bar graph, now also prepared by computer, that clearly shows what projects are being worked on and how much has been completed at any given time

What is ISO 14001?

A collection of the best practices for managing an org's impact on the environment Does not prescribe a performance level Requirements for certification include: having an evnir. Policy, specific improvement targets, conducting audits of envir. Programs, maintaining top management reviews of the process

What is materials requirement planning (MRP)?

A computer-based operations management system that uses sales forecasts to make sure needed parts and materials are available at the right time and place

What does having a certification of ISO 9001 and ISO 14001 show?

A firm has a world-class management system in both quality and environmental standards

What is enterprise resource planning (ERP)?

A newer version of MRP; combines the computerized functions of all the divisions and subsidiaries of the firm- like finance, HR, and order fulfilment into a single integrated software program that uses a single database Short time between orders and payment; less staff needed to do ordering and order processing, reduce inventories, and better customer service Anyone in the company can see the new order and when one department finishes its portion the order automatically routed

What is a fixed position layout?

Allows workers to congregate around the product to be completed A major feature of planning is scheduling work operations

What is the importance in time to market?

As manufacturers attempt to compete globally, they need sites that allow products to move quickly, at the lowest costs, so they can be delivered to customers fast Include access to highways, rail lines, waterways, and airports is critical IT is also important in quickening response time

What is ISO 9001?

Common name given to quality management and assurance standards Standards require that a co determine what customer needs are, including regulatory and legal requirements, and make communication arrangements to handle issues like complaints, process control, product testing, storage and delivery

What is an interfirm process?

Companies work closely together to design, produce, and ship products to customers

What does maintaining quality mean?

Consistently producing what the customers want while reducing errors before and after delivery Quality is not an outcome; it is a never ending process of continually improving what a company produces

What is the difference between a continuous process and an intermittent process?

Continuous: is one in which long production runs turn out finished goods over time; like conveyor belt Intermittent: production run ish short and the producer adjusts machines frequently to make different products

What is a major cost of production?

Cost of holding parts, motors, and other items in storage for later use Could be stolen, damage requires construction and maintenance of costly warehouses

What is operations management all about in the service sector?

Creating a good experience for those who use the service

What is flexible manufacturing?

Designing machines to do multiple tasks so they can produce a variety of products

What do modern factories depend on now when they used to be low-skill assembly-line workers?

Engineers and software developers to operate their cutting edge equipment

What is operations management planning?

Helps solve many of the problems in the service and manufacturing sectors like facility location, facility layout, materials requirement planning, purchasing, inventory control, and quality control

What is Just-in-time inventory control? (JIT)

Keep a minimum of inventory on the premises and deliver parts, supplies, and other needs just in time to go on the assembly line Requires an accurate production schedule using ERP and excellent coordination with select suppliers who are usually connected electronically Problematic when there are weather delays, suppliers farther away

What do companies consider when moving facilities from one location to another?

Labor costs; availability of resources, including labor; access to transportation that can reduce time to market; [proximity to suppliers; proximity to customers; crime rates; quality of life for employees; cost of living; and the need to train or retrain the local workforce

What is taken into consideration when determining quality of life of a location?

Life for the workers and managers; are there schools nearby, what's the weather like, is the crime rate low; does the local community welcome new businesses High quality of life could also mean ex[ensive

What is the program evaluation and review technique? (PERT)

Method for analyzing the tasks involved in completing a given project, estimating the time needed to complete the task, and identifying the minimum time needed to complete the total project

What is ISO?

Non gov't org established to promote the development of world standards to facilitate the international exchange of g/s

What is a process layout?

One in which similar e equipment and functions are grouped together Order of where the product goes depends on the design of the item Allows for flexibility Frequently used in operations that serve diff customers needs

What is process manufacturing?

Physically or chemically changes materials

What do geographic shifts in production sometimes result in?

Pockets of unemployment in some geographic areas and tremendous growth in others

What is statistical process control (SPC)?

Process of testing statistical samples of product components at each stage of production and plotting the test results on a graph Managers can see and correct any deviations from quality standards

What was the idea behind mass production?

Produce a large number of limited variety of products at a very low cost

What must companies in the service sector focus on?

Providing customers with quality care and attention Maintain close relationships with their suppliers and other companies to satisfy customer needs Continuously improve if they want to maintain their competitive edge

What is the assembly process?

Puts together the components to make a product Either continuous or intermittent

Is customization easier in service or goods and why?

Service because each customer can specify what they want within the limits of the service org, instead of adjusting a fixed tangible good to adapt

What is Six Sigma quality?

Set of benchmark of just 3.4 defects per million opportunities, detects potential problems to prevent their occurrence

What is operations management?

Specialized area in management that converts or transforms resources, including human resources like technical skills and innovation, into goods and services Include inventory management, quality control, production scheduling, follow-up services, and more Applies to both manufacturing and service organizations

What is mass customization?

Tailoring products to meet the needs of a large number of individual costumes, now practiced widely

What is a modular layout? Aka cellular

Teams or workers combine to produce more complex units of the final product Can accommodate changes in design customers demand

What is production management (manufacturing)?

The activities that help firms create goods

What is operations management the bridge for?

The concepts of knowing customer needs and satisfying them Allowing companies to turn their ideas into actual g/s

What is production?

The creation of finished goods and services using the factors of production: land labor, capital, entrepreneurship, and knowledge

What is purchasing>?

The function that searches for high-quality material resources, finds the best suppliers and negotiates the best price for quality of goods and services Either purchase from many suppliers so that if one can't deliver, the firm can get materials from someone else OR develop close relationship with just a few suppliers so that they can secure affordable prices long term

What is the facility layout?

The physical arrangement of resources including people, to most efficiently produce goods and provide services for customers Depends greatly on the processes that are to be performed; the right facility layout can greatly reduce factory costs in long term

What is facility location?

The process of selecting a geographic location for a co's operations Focus on finding a site that makes it easy for customers to use the company's services and to communicate about their needs

What is statistical quality control (SQC)?

The process some managers use to continually monitor all phases of the production process and ensure quality is being build into the product from the beginning

What is lean manufacturing?

The production of goods using less of everything than in mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop new products A company must continuously increase its capacity to produce high-quality goods while decreasing its need for resource to be lean

What is the critical path?

The sequence of tasks that takes the longest time to complete A delay anywhere along this path will cause the project production run to be late

What is computer-integrated manufacturing (CIM)?

The uniting of computer aided design (CAD) with computer aided manufacturing (CAM) Software is expensive, but can drastically reduce TIME needed to program machines to make parts

What is computer aided manufacturing (CAM)?

The use of computers directly into the production process

What is computer aided design (CAD)?

The use of computers in the design products

What is form utility?

The value producers add to materials in the creation of finished goods and services Can also be on the retail level as well

What does using CAD and CAM allow a company to do?

To custom-design products to meet the needs of small markets with very little increase in cost Can make simple design change, and that is readily incorporated into production

What is customization?

To make a unique product or provide a specific service to specific individuals

What is an assembly line layout? Aka product layout

Workers do only a few tasks at a time Used to produce large quantities of a few types of products

What is telecommunication?

Working from home via computer and modem; giving firms and employees increased flexibility to choose locations while staying in the competitive mainstream No longer need to locate near sources of labor will be able to move to areas where land is less expensive and the quality of life may be higher; also tax reduction and other support