Chapter 9: Production & Operations Management
List the steps in the production process with the first step at the top.
1. Inputs 2. Production Control 3. Outputs
An additive manufacturing process that creates a product one layer at a time using a nozzle similar to those in inkjet printers is:
3D printing
What is the current state of U.S. manufacturing and what manufacturers have done to become more competitive?
Activity in the nation's manufacturing sector has declined since its height. The result has been fewer jobs in manufacturing. Even though manufacturing companies offer fewer jobs, they have become more productive, meaning that they need fewer employees to do the same amount of work. Today many manufacturing jobs are coming back to the United States as labor costs increase in other countries. Much of this chapter is devoted to showing you what manufacturers and service providers can do to revive and reinforce the U.S. economy to continue as world-class competitors.
What must American companies do to remain competitive?
American manufacturers must keep up with the latest production techniques, no matter if they are developed in the U.S. or in another country. In the service sector, companies will need to focus on providing customers with quality care and attention and will need to maintain close relationships with suppliers.
Choose the answer that refers to a production process that puts components together.
Assembly
___________________ process is when long production runs turn out finished goods over time.
Continuous
How do robotics help make manufacturers more competitive?
Industrial robotics can work 24 hours a day, seven days a week, with great precision. Many of the jobs they replace are dirty or so repetitive that robots are necessary, or at least helpful. However, robots are beginning to encroach on white-collar jobs in many professions.
Choose the correct order of steps in the production process.
Inputs, production control, outputs
What are two characteristics of lean manufacturing?
It takes less time. It uses less resources.
What is mass customization?
Mass customization means making custom-designed goods and services for a large number of individual customers. Flexible manufacturing makes mass customization possible. Given the exact needs of a customer, flexible machines can produce a customized good as fast as mass-produced goods were once made. Mass customization is also important in service industries.
LO 9-3 Identify various production processes and describe techniques that improve productivity, including computer-aided design and manufacturing, flexible manufacturing, lean manufacturing, mass customization, robotics, and 3D printing.
Production adds value, or utility, to materials or processes. •Form utility — The value producers add to materials in the creation of finished goods and services. •Process manufacturing — The part of the production process that physically or chemically changes materials. •Assembly process — The part of the production process that puts together components. The production process consists of taking the factors of production (land, etc.) and using those inputs to produce goods, services, and ideas. Planning, routing, scheduling, and the other activities are the means to accomplish the objective—output. •Computer-aided design (CAD) — The use of computers in the design of products. •Computer-aided manufacturing (CAM) — The use of computers in the manufacturing of products. •Computer-integrated manufacturing (CIM) — The uniting of computer-aided design with computer-aided manufacturing. •CIM is expensive, but it drastically reduces the time needed to program machines to increase production.
What is production management?
Production management consists of all the activities managers do to help their firms create goods. To reflect the change in importance from manufacturing to services, the term production is often replaced by the term operations.
What do you call the integration of CAD and CAM?
The integration of CAD and CAM is referred to as computer-integrated manufacturing or CIM.
Mass production focuses on producing:
a limited variety of products
Because of , more flexibility in choice of business location has increased while allowing firms to remain competitive.
information technology
The birth of information technology such as texting and email is giving firms and employees increased flexibility to choose ______________ while staying competitive.
locations
Uses of sensors to control manufacturing processes include:
measuring humidity the measurement of the thickness of material
The basic premise of just-in-time inventory is:
minimum inventory is kept on hand
The role of the operations manager is to ensure products are delivered:
on budget on time to specifications
Industrial robots can work 24 hours a day, seven days a week with great
precision
Using factors like land, labor, and capital to create goods and services is referred to as
production
What is lean manufacturing?
the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product.
Converting and transforming resources into goods and services in business is referred to as ___________ ______________________
Blank 1: operations Blank 2: management
What process requires long production runs that turn out finished goods over time?
Continuous process
What is form utility?
Form utility is the value producers add to materials in the creation of finished goods and services. For example, when a company transforms raw steel into the body of an automobile they are creating form utility.
The process exemplified when production runs are short and machines are changed frequently to make different products is the _________________ process.
Intermittent
__________________ is the creation of finished goods and services using land, labor, capital, entrepreneurship, and knowledge.
Production
Overall company quality is outlined by the standards set by the ______ National Quality Award
Malcolm Baldrige
Companies sometimes spend millions to move location:
for proximity to customers
An example of _____________ utility is when a butcher produces a specific cut of beef.
form
The value producers add to materials in the creation of goods and services is the definition of ___________ utility.
form
If a company has a goal of ______, it might choose to locate its facilities to an area that has access to major highways, ports, railways, and airports.
reducing time to market
The term _____________ ___________________ means selecting a geographic location for a firm's operations.
Blank 1: facility Blank 2: location
When machines are programmed to do multiple tasks in order to produce a variety of products, a firm is said to be employing ________________ ________________________
Blank 1: flexible Blank 2: manufacturing
The acronym for using computers to design products is referred to as
CAD
How do CAD/CAM systems work?
Design changes made in computer-aided design (CAD) are instantly incorporated into the computer-aided manufacturing (CAM) process. The linking of CAD and CAM is computer-integrated manufacturing (CIM).
ISO is a governmental body.
False
What is process manufacturing and how does it differ from assembly processes?
Process manufacturing physically or chemically changes materials. Assembly processes put together components.
3D printing is a production process also known as _________ manufacturing.
additive
Putting together components is the _____________ process.
assembly
The process of __ __ is significant because, once the decision has been made and implemented, the firm must live with it due to the high costs of moving.
facility location
A short production run with frequent adjustments to machines is considered a(n) ____________________ process of production.
intermittent
Maintaining ______ refers to consistently producing what the customer wants while reducing errors before and after delivery to the customer.
quality
Which of the following are outputs in the production process?
- Services - Goods
The production process should be a sequence of steps starting with inputs, followed by production control, and ending with:
- finished products - outputs
Select outputs of the production process.
- goods - services
The goal of operations management is to:
- keep operations running efficiently - create a good experience for the customer
How has the manufacturing industry changed in the United States over the last few decades?
By 1979, nearly 20 million people worked in manufacturing. However, the number of Americans employed by factories has steadily dropped year after year since then. By 2019, the number dropped to 12.8 million people. However, the value of products made in the United States have reached a record high due to advancements in technology and automation.
What is facility location and how does it differ from facility layout?
Facility location is the process of selecting a geographic location for a company's operations. Facility layout is the physical arrangement of resources, including people, to produce goods and services effectively and efficiently.
Using machines designed to do multiple tasks so they can produce a variety of products is called computer-aided design.
False
What kind of firms use operations managers?
Firms in both the manufacturing and service sectors use operations managers.
What are the major criteria for facility location?
Managers must always consider the customer and the impact on customers' ability to use the company's services and to communicate about their needs. Other criteria that need to be considered include labor costs, availability of resources, access to transportation, proximity to customers, suppliers, crime rates, quality of life for employees, and the cost of living, to mention but a few.
LO 9-5 Explain the use of PERT and Gantt charts to control manufacturing processes.
Program Evaluation and Review Technique (PERT) •A method for analyzing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project. •Developed in the 1950s for constructing nuclear submarines. Steps Involved in PERT 1.Analyzing and sequencing tasks. 2.Estimating the time needed to complete each task. 3.Drawing a PERT network illustrating the first two steps. 4.Identifying the critical path. •Critical path — The sequence of tasks that takes the longest time to complete. Gantt Chart •Bar graph showing production managers what projects are being worked on and what stage they are in at any given time. •Allows managers to determine which tasks are on time and which are behind, so that adjustments can be made to stay on schedule.
Which term describes the act of buying of all materials needed by the organization?
Purchasing
Computers are used to design products when CAD is employed.
True
Facility layout depends greatly on the processes that are to be performed.
True
The Malcolm Baldrige National Quality Award is to honor companies that show quality in seven key areas and have customer satisfaction ratings higher than competitors.
True
The type of production that puts components together is referred to as a(n) ________________________ process.
assembly
Industrial robots have completely changed manufacturing because they:
can work 24/7 with great precision reduce costs improve productivity
Tremendous career opportunities exist in operations management as manufacturing and service companies attempt to remain ________________ in the global market.
competitive
Jordan added racing stripes and high quality speakers to his new car to ___________ it.
customize
To _______________ is to make a unique product or service for a specific individual.
customize
What is flexible manufacturing?
designing machines to produce a variety of products
Arrangement of resources, including people, to most efficiently produce goods and services is referred to as
facility layout
A type of problem that operations management planning helps to solve as it relates to manufacturing is:
facility layout
Using an Internet-focused strategy, operations managers are outsourcing design, production, and shipping to other firms. This process is called a(n):
inter-firm process
Many rapidly growing firms are outsourcing areas like engineering, design, and manufacturing with the use of the Internet, thus, developing a(n) ______ approach to operations management.
interfirm
The process exemplified when production runs are short and machines are changed frequently to make different products is the _____________ process.
intermittent
Examples of a problem solved by operations management planning as it relates to manufacturing include:
inventory control facility location
The _____________ - ____________________-_______________ inventory method is designed to keep a minimum of parts, supplies, and other materials on hand just in time to go on the assembly line.
just or J in or I time or T
Using less human effort, less manufacturing space, less investment in tools, and less engineering time is the basic premise of Blank______.
lean manufacturing
Technological changes have had such a great impact on the Blank______ that this segment of the American economy will likely never employ as many people as it did in the 1950s.
manufacturing industry
The type of production that does not concern itself with customer preferences, but instead focuses on making a large number of a few products is called _____________ production.
mass
A specialized area in management that converts or transforms resources, including human resources, into goods and services is ___________________ management.
operations
Ensuring that products are manufactured and delivered on time, on budget, and to specifications is the role of which manager in an organization?
operations
Global competition grows stronger each year making the future of ____________ __________________ robust with career opportunities.
operations management
In his job, Manuel finds the highest quality material resources, the best suppliers, and then negotiates the best prices. Manuel works in the Blank______ department.
purchasing
When a firm reduces errors before and after delivery to the customer and thus delivers what the customer wants, the firm is said to exemplify the definition of ______.
quality
The purpose of the Malcolm Baldrige National Quality Award is that it sets a(n) ________________ for overall company quality using several key areas for measurement.
standard
ISO is not part of the government, but is a federation of national ______________________ bodies.
standards
What is the goal of operations management in service industries?
to provide good experiences for those who use the service
Which sector has lost more jobs due to technological changes?
Manufacturing
What is the difference between MRP & ERP?
Materials requirement planning (MRP) is 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. Enterprise resource planning (ERP), a newer version of MRP, combines the computerized functions of all the divisions and subsidiaries of the firm into a single integrated software program that uses a single database.
What are Six-Sigma quality, the Baldrige Award, ISO 9001, and ISO 14001?
Six Sigma is a quality-control standard that sets a benchmark of no more than 3.4 defects per million opportunities. The Baldrige Award was created in 1987 to promote a standard for overall quality in the following areas: manufacturing, services, small business, education, and health care. The award was named after Malcolm Baldrige, the late U.S. secretary of commerce. The International Organization for Standardization, or ISO, is a worldwide federation of national standards bodies from more than 140 countries. This nongovernmental organization establishes global measures for the quality of individual products. ISO 9001 is the common name given to quality management and assurance standards, while ISO 14001 is a collection of the best practices for managing an organization's environmental impact.
What have U.S. manufacturers done to achieve increased output?
U.S. manufacturers have increased output by emphasizing close relationships with suppliers and other companies to satisfy customer needs; continuous improvement; quality; site selection; use of the Internet to unite companies; and production techniques such as enterprise resource planning, computer-integrated manufacturing, flexible manufacturing, lean manufacturing, robotics, and 3D printing.
LO 9-2 Describe the evolution from production to operations management
•The creation of finished goods and services using the factors of production: •Land, labor, capital, entrepreneurship, and knowledge. •Production management — Describes all the activities managers do to help firms create goods. •A specialized area in management that converts or transforms resources (including human resources) into goods and services. •Includes: •Inventory management. •Quality control. •Production scheduling. •Follow-up services.
How does operations management differ between the manufacturing and service sectors?
In manufacturing, operations management transforms raw materials, human resources, parts, supplies, tools, and other resources into goods. In the service sector, operations management focuses on creating a good experience for those who use the service.
How do managers evaluate different sites?
Labor costs and land costs are two major criteria for selecting the right sites. Other criteria include whether resources are plentiful and inexpensive, skilled workers are available or are trainable, taxes are low and the local government offers support, energy and water are available, transportation costs are low, and the quality of life and of education are high.
A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place is referred to as ______.
MRP
LO 9-1 Describe the current state of U.S. manufacturing and what manufacturers have done to become more competitive.
Manufacturing in the U.S. •By 1979, nearly 20 million people worked in manufacturing. •Approximately 12.8 million people worked in manufacturing in 2019. •The value of products made in the U.S. reached a record high. •Technology and automation have changed the types of jobs. •Now 80 percent of jobs are in the service sector. Manufacturers and Service Organizations Become More Competitive •U.S. manufacturers compete with China, Germany, South Korea, and India. •U.S. businesses must keep up with latest production techniques. •Service industries must: •Provide customers with quality care and attention. •Maintain close relationships with suppliers. •Practice continuous improvement.
What is just-in-time inventory control?
One major expense in the production process is the holding of parts. The goal of just-in-time inventory is to eliminate or reduce that cost. Just-in-time inventory systems keep a minimum of inventory on the premises and only deliver parts just as they are needed on the factory floor.
What is operations management?
Operations management is the specialization area in management that converts or transforms resources, including human resources, into goods and services.
Define and differentiate the following: process manufacturing, assembly process, continuous process, and intermittent process.
Process manufacturing physically or chemically changes materials, such as turning sand into glass or computer chips. The assembly process puts together components to create a product. For example, cars are made through an assembly process that puts together the frame, engine, and other parts. Continuous process involves long production runs turning out finished goods over time. For example, a plant that makes plastic cups is run on a continuous process. Rather than using long runs, an intermittent process involves short runs that respond directly to specific customer orders. An example of this process would include manufacturers of men's custom business suits.
MRP is a computer based operations management system that uses ______ to make sure that needed parts and materials are available at the right time and place.
sales forecasts
When a computerized data control ______________ detects a problem, it notifies someone to make needed changes.
sensor
What is 3D printing and what is it used for?
3D printing (also known as additive manufacturing) is technology that creates a product one layer at a time by a nozzle similar to those found in inkjet printers. Today 3D printing is largely used to create prototype models or molds for other industrial projects, but use is growing in areas such as medical equipment.
LO 9-4 Describe operations management planning issues including facility location, facility layout, materials requirement planning, purchasing, just-in-time inventory control, and quality control.
Facility Location for Manufacturers •Considerations for moving facilities to a new location: •Labor costs. •Availability of resources. •Time to market, including access to transportation and proximity to suppliers and customers. •Quality of life for employees. •Crime rates, cost of living. •Need to train or retrain local workforce. Materials Requirement Planning (MRP) •A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place. •Enterprise resource planning (ERP) — A newer version of MRP that combines the computerized functions of all the divisions and subsidiaries of the firm—such as finance, human resources, and order fulfillment—into a single integrated software program that uses a single database. Quality Control •Quality — Consistently producing what the customer wants while reducing errors before and after delivery to the customer. •Six Sigma quality — A quality measure that allows only 3.4 defects per million opportunities. •Statistical quality control (SQC) — The process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning. •Statistical process control (SPC) — The process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph.
