CH: 10 Achieving World-Class Operations Management

Three stages of production and operations management:

1. Production planning 2. Production control 3. Improving production and operations

enterprise resource planning (ERP)

A computerized resource-planning system that incorporates information about the firm's suppliers and customers with its internally generated.

make-or-buy decision

A firm must decide whether to make its own production materials or buy them from outside sources

Business Process Management

A unified system that has the power to integrate and optimize a company's sprawling functions by automating much of what it does.

Malcolm Baldrige National Quality Award

An award given to U.S. companies that offer goods and services of world-class quality; established by Congress in 1987 and named for a former secretary of commerce.

critical path

In a critical path method network, the longest path through the linked activities

Operations management

Management of the production process

blockchain technology

Refers to a decentralized "public ledger" of all transactions that have ever been executed. It is constantly expanding, as "completed" blocks are added to the ledger with each new transaction.

supply chain

The entire sequence of securing inputs, producing goods, and delivering goods to customers.

mass customization

Uniform standardized production to a point, then unique features added to each product

continuous improvement

a commitment to constantly seek better ways of doing things in order to achieve greater efficiency and improve quality.

Six Sigma

a company-wide process that focuses on measuring the number of defects that occur and systematically eliminating them in order to get a close to "zero defects" as possible.

percetual inventory

a continuously updated list of inventory levels, orders, sales, and receipts, for all major items.

ISO 9000

a set of five technical standards designed to offer a uniform way of determining whether manufacturing plants and service organizations conform to sound quality procedures.

process layout

arranges workflow around the production process.

flexible manufacturing system (FMS)

automates a factory by blending computers, robots, machine tools, and materials-and-parts-handing machinery into an integrated system.

Examples of mass production

automobiles in the Industrial Revolution, canned goods, over-the-counter drugs, and household appliances.

Gantt charts

bar graphs plotted on a time line that shows the relationship between scheduled and actual production.

electronic data interchange (EDI)

two trading partners exchange information electronically.

Materials requirement planning (MRP)

uses a master schedule to ensure that the materials, labor, and equipment needed for production are at the right places in the right amounts at the right times.

Manufacturing resource planning II (MRPII)

uses complex computerized system to integrate data from many departments, including finance, marketing, accounting, engineering, and manufacturing.

Computer-aided manufacturing (CAM)

uses computers to develop and control the production process.

continuous process

uses long production runs that may last days, weeks or months with equipment shutdowns

just-in-time(JIT)

belief that materials should arrive exactly when they are needed for production, rather than being stored on-site.

CAD/CAM systems

combine the advantages of CAD and CAM by integrating design, testing and manufacturing control into one linked computer system.

Computer-integrated manufacturing (CIM)

combines computerized manufacturing processes (such as robots and flexible manufacturing systems) with other computerized systems that control design, inventory, production, and purchasing.

computer-aided design (CAD)

computers are used to design and test new products and modify existing one.

example of customization

custom homes, legal services, and haircuts

example of mass customization

dell computers, tract homes, and Taylor Made gold clubs

ISO 14000

designed in response to environmental issues such as global warming and water pollution and promotes clean production processes.

Total Quality Management (TQM)

emphasizes the use of quality principles in all aspects of a company's production and operations.

Supply-chain management

focuses on smoothing transitions along the supply chain, with the ultimate goal of satisfying customers with quality products and services.

quality

goods and services meet customer expectations by providing reliable performance.

program evaluation and review technique (PERT)

helps managers identify critical tasks and assess how delays in certain activities will affect operations or production.

Quality control

involves creating quality standards, producing goods and meet them, and measuring finished goods and services against them.

Inventory management

involves deciding how much of each type of inventory to keep on hand and the ordering, receiving, storing, and tracking it.

Scheduling

involves specifying and controlling the time required for each step in the production process.

fixed-position layout

lets the product stay in one place while workers and machinery move to it as needed.

bill of material

lists the items and the number of each required to make the product

What are the three phases of production planning?

long-term (3-5 years), medium-term (years), and short term (1 year)

Mass production

manufacturing many identical goods at once. Many products made sequentially

purchasing

or procurement, is the process of buying production inputs from various sources.

value-stream mapping

production managers "map" the flow from suppliers through the factory to customers.

Cellular manufacturing

production technique that uses small, self-contained production units, each performing all or most of the tasks necessary to complete a manufacturing order.

examples of fixed-position layout

products that are impossible to move like ships, airplanes, and construction projects

product (or assembly-line) layout

products that require a continuous or repetitive production process

routing

sets out a workflow, the sequence of machines and operations through which a product or service progresses from start to finish.

intermittent process

short production runs are used to make batches of different products

Lean manufacturing

streamlines production by eliminating steps in the production process that do not add benefits customers want.

production planning

the aspect of operations management in which the firm considers the competitive environment and its own strategic goals in an effort to find the best production methods.

process manufacturing

the basic inputs (natural resources, raw materials) are broken down into one or more outputs (products)

assembly process

the basic inputs, like natural resources, raw materials or human resources, are either combined to create the output or transformed into the output.

production control

the coordination of materials, equipment, and human resources to achieve production and operating efficiencies.

Production

the creation of products and services, is an essential function in every firm.

customization

the firm produces goods or services one at a time according to the specific needs or wants of individual customers.

critical path method (CPM)

the manager identifies all of the activities required to complete the project, the relationships between these activities, and the order in which they need to be completed.

E-procurement

the process of purchasing supplies and materials online.

inventory

the supply of goods it holds for use in production or for sale to customers.

Robotics

the technology involved in designing, constructing, and operating robots.

production process

the way a good or service is created

outsourcing

when items are purchased from an outside source instead of being made internally.