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