BUS 110 Chp 9: Production & Operations Management

3 Output Factors

1) Goods 2) Services 3) Ideas

5 Input Factors

1) Land 2) Labor 3) Capital 4) Entrepreneurship 5) Knowledge

5 Production Control Factors

1) Planning 2) Routing 3) Scheduling 4) Dispatching 5) Follow-up

5 Characteristics of Lean Companies

1) Takes 1/2 the human effort 2) Have 1/2 the defects in finished product/service 3) Require 1/3 engineering effort 4) Use 1/2 floor space for same output 5) Carry 90% less inventory

3 Basic Requirements of Production

1) To build and deliver products in response to demands of customers at a scheduled delivery time 2) To provide an acceptable quality level 3) To provide everything at the lowest possible cost

Fixed-Position Layout

Allows workers to congregate around product to be completed

Gantt Chart

Bar graph showing production managers what products are being worked on and what stage they are in at any given time

ISO 14,000

Collection of best practices for managing an organization's impact on env.

ISO 9,000

Common name given to quality management and assurance standards

Materials Requirement Planning (MRP)

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

Quality

Consistently producing what customer wants while reducing errors before and after delivery to customer

Production

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

Flexible Manufacturing

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

Purchasing

Function in a firm that searches for high quality material resources, finds best suppliers, and negotiates best price for goods and services

Critical Path

In a PERT network, the sequence of tasks that takes the longest time to complete

Production Process

Input --> Production Control --> Output

Process Layout

Layout in which similar equipment and functions are grouped together

Program Evaluation and Review Technique (PERT)

Method for analyzing tasks involved in completing given project, estimating time needed to finish each task, and identifying min. time needed to complete total project

Enterprise Resource Planning (ERP)

Newer version of MRP that combines computerized functions of all divisions and subsidiaries of the firm such as finance, HR, and order fulfillment into a single integrated software program that uses a single database

Process Manufacturing

Part of production process that physically or chemically changes materials

Assembly Process

Part of production process that puts together components

Facility Layout

Physical arrangement of resources (including people) in the production process

Facility Location

Process of selecting geographic location for a company's operations

Statistical Process Control (SPC)

Process of testing statistical samples of product components at each stage of production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond set standards

Statistical Quality Control (SQC)

Process some managers use to continually monitor all phases of production process to assure quality is being built into the product from beginning

Lean Manufacturing

Production of goods using less of everything compared to mass production

Just-in-Time (JIT) Inventory Control

Production process in which a min of inventory is kept on premises and parts, supplies, and other needs are delivered just in time to go on assembly line

Continuous Process

Production process in which long production runs turn out finished goods over time

Intermittent Process

Production process in which production run is short and machines are changed often to make different products

Six Sigma Quality

Quality measure that allows only 3.4 defects per million opportunities

Operations Management

Specialized area in management that converts or transforms resources (including human resources) into goods and services

Mass Customization

Tailoring products to meet needs of individual customers

Modular Layout

Teams of workers combine to produce more complex units of final product

Production Management

Term used to describe all the activities managers do to help their firms create goods

Computer-Integrated-Manufacturing (CIM)

Uniting of CAD with CAM

Computer-Aided Design (CAD)

Use of computers in the design of products

Computer-Aided Manufacturing (CAM)

Use of computers in the manufacturing of products

Form Utility

Value producers add to material in the creation of finished goods and services

Assembly-Line Layout

Workers do only a few tasks at a time

Telecommuting

Working from home via computer