Intro to business CH 10

Two-ways to classify processes

1. how inputs are converted into outputs 2. timing of the process

Medium term planning covers ____ years and is concerned with what?

2

What is the most important criterion for the award? How do companies qualify?

A firm's effectiveness at meeting customer expectations, as well as demonstrating that it offers quality goods and services. To qualify for the award, a company must also show continuous improvement in internal operations

Why would companies need contingency plans for supply-chain disruptions?

By thinking ahead, companies can avert major losses

What scheduling tool(s) allows interrelationships between many different tasks in aproject?

CPM

PERT differs from CPM how?

CPM assumes that the amount of time needed to finish a task is known with certainty; therefore, the CPM diagram shows only one number for the time needed to complete each activity.

What manufacturing combines aspects of two layouts?

Cellular manufacturing

What is production?

Creation of products and services turns inputs (natural resources, raw materials, capital) into outputs

Who was the first to say quality control should be a company-wide goal?

Dr. W. Edwards Deming, an American management consultant

• Low volume, short production runs, and high-variety production are characteristic of the continuous process

False

• The reason that Castle and Cooke processes and packages Dole pineapple products in Hawaii is more than likely because of low energy costs.

False

Three common scheduling tools

Gantt charts, the critical path method, and PERT.

What happens if a link in the supply chain is weak?

If any links in this process are weak, chances are customers—the end point of the supply chain—will end up dissatisfied

Three time estimates of PERT, what do they allow managers to do?

In contrast, PERT assigns three time estimates for each activity: an optimistic time for completion, the most probable time, and a pessimistic time. allow managers to anticipate delays and potential problems and schedule accordingly.

Mass production was a product of what? What is the emphasis of mass production?

Industrial revolution keeping manufacturing costs low by producing uniform products using repetitive and standardized processe

• Crown Holdings Inc. manufactures a high-resolution, full color digital inkjet printed cans that allows smaller beverage producers to label the cans as they are needed to be filled rather than keeping a stock of preprinted cans. This is an example of how a beverage company could use:

Just-in-time

Benefit of considering a foreign location.

Labor costs are considerably lower in certain countries, fewer regulations, moving production closer to new markets

• Which of the following is the BEST example of process manufacturing?

Lamb's wool

What three main types of decisions do operations managers make?

Production planning, production control, improving production and operations

First step in production control is ___

Routing

Another quality-control method is _______

Six sigma

What is production control?

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

What is the make-or-buy decision? What is taken into consideration when making the make-or-buy decision?

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

What vital role do they play in an organization?

They control about three-fourths of a firm's assets, including inventories, wages, and benefits.

______ management emphasizes the use of quality principles in all aspects of a company's operations.

Total quiality

• Computer-aided manufacturing (CAM) uses computers to develop and control the production process.

True

• The just-in-time (JIT) system schedules arrival of inventory so that it can be used almost immediately and will not need to be stored on site.

True

A strong existing manufacturing base provides what?

When a large number of manufacturers in a certain industry are already located in an area, that area is likely to offer greater availability of resources

Product (or assembly-line) layout is used when? Which organizations typically use product layout?

When large quantities of a product must be processed on an ongoing basis automobile and appliance manufacturers

Define continuous improvement.

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

What is perpetual inventory?

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

• Which of the following factors will be important in the selection of a site for a production facility? labor costs proximity to raw materials nearness to customers access to transportation

all of the above

• PERT charts differ from critical path method (CPM) in one important way. PERT charts ________________________and the CPM does not

assign three time estimates for each activity,

Just-in-time (JIT) is based on what belief? What does JIT rely closely on? What does it also require?

belief that materials should arrive exactly when they are needed for production, rather than being stored onsite. Relying closely on computerized systems such as MRP, MRPII, and ERP, manufacturers determine what parts will be needed and when and then order them from suppliers so they arrive "just in time.

Short-term planning converts broader goals into what? What is a short-term planning time-frame?

broader goals into specific production plans and materials management strategies within one year

How do organizations determine which type of production process to use?

by considering the type of product or service being produced

Resource planning, what does it begin with?

by specifying which raw materials, parts, and components will be required, and when, to produce finished goods

How has technology improved supply-chains efficiency?

by tracking goods through the various supply-chain stages and helping with logistics.

How does cell manufacturing work? What is the goal of cell manufacturing?

combines some aspects of both product and fixed-position layouts. to create a team environment wherein team members are involved in production from beginning to end.

What do companies mostly use to track inventory?

computers

Two basic processes for converting inputs into outputs.

continuous and intermittent processes

Access to resources, why is this a huge consideration in site selection?

cost of shipping raw materials and finished goods can be as much as 25 percent of a manufacturer's total cost

Why is the conversion less obvious in the service industry?

customers may play a role in the transformation process

• Synergy Oil and Gas builds oil-well drilling platforms to customer and government specifications. These platforms can cost as much as $1 billion. Synergy works on one platform at a time, and when it is finished, moves its crew to a new project. Synergy engages in:

customization

Inventory management involves what?

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

what does supply chain management depend on? How does technology allow them to have strong communication?

depends on strong communications with suppliers Internet allows for contact with supplies faster, providing firms with quick access to a huge database of information about the products and services of hundreds of potential suppliers

The International Organization for Standardization (ISO) did what?

developed standards of quality that are used by businesses around the world

Purchasing, or procurement, is the ________.

e process of buying production inputs from various sources

Customization involves what?

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

What decisions are made at the production stage?

focuses on controlling quality and costs, scheduling, and the actual day-to-day operations of running a factory or service facility.

What is the master schedule based on?

forecasts of demand for the company's products.

Difference between mass production and mass customization.

goods are produced using mass-production techniques, but only up to a point. At that point, the product or service is custom-tailored to the needs or desires of individual customers

Program evaluation and review technique (PERT), how does it help managers?

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

Three costs used to determine best inventory levels.

holding inventory, frequent reordering, and not keeping enough inventory on hand

ISO 1400 was designed in response to what? How does a company meet ISO 1400 standards?

in response to environmental issues a company must commit to continually improving environmental management and reducing pollution resulting from its production processes

What do good routing procedures do?

increase productivity and cut unnecessary costs.

Production involves converting __________ into ___________.

inputs, outputs

Quality control, what does it involve? Does it require company-wide dedication?

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

Scheduling involves what?

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

Is the assembly process the same as process manufacturing? How is it different?

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

• A manufacturer that uses the intermittent process to produce special customer orders is called a:

job shop

What Japanese concept goes hand in hand with lean manufacturing?

just-in-time (JIT)

Challenges of deciding how much inventory to keep on hand.

larger quantities can allow a company to take advantage of quantity discounts. but it can also tie up the firm's money, are expensive to store, and can become obsolete

• Mazda once included a solar powered ventilation system on its cars. A solar panel on the roof powered a pair of fans near the trunk, which automatically turned on when the temperature in the car reached 90 degrees. Because customers were not willing to pay for this benefit and did not complain when it was no longer available, Mazda discontinued it. This is an example of:

lean manufacturing

What is a bill of material?

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

What happens if businesses do not provide quality goods and service?

lost sales

• After product specifications are set, a company must decide whether to purchase or manufacture the parts that it needs. This is called a(n)

make-or-buy decision.

What does a manager do when using the critical path method (CPM)?

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.

Production planning (planning stage) involves what?

managers decide where, when, and how production will occur. They determine site locations and obtain the necessary resources.

Process manufacturing inputs are

natural resources , raw materials

Process manufacturing inputs are broken down into

one or more outputs

Managing the conversion process in production is the role of _____

operations management

How do managers keep track of certain inventory items?

perpetual inventory

What is E-procurement?

process of purchasing supplies and materials online

Three main types of facility layouts.

process, product, and fixed-position

• A CAD/CAM system is a(n):

production design and control system

What two things do businesses recognize go hand in hand?

quality and productivity

Ways to improve production and operations management.

quality-management techniques, lean manufacturing, and technology and automation

What does JIT require?

requires close teamwork between vendors and purchasing and production personnel because any delays in deliveries of supplies could bring JIT production to a halt

Computerized systems to control the flow of

resources and inventory.

Two key aspects of production control.

routing and scheduling

Why is a facilities layout important?

s to determine the most efficient and effective design for the particular production process

What does routing do? What does it depend on?

sets out a work flow, the sequence of machines and operations through which a product or service progresses from start to finish depends on the type of goods being produced and the facility layout

What does supply-chain management focus on?

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

What is lean manufacturing? What processes are cut?

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

• Some of the quickest emergency assistance to victims of Hurricane Katrina did not come from the American Red Cross or FEMA. It came from Wal-Mart. Millions of people were displaced or otherwise affected by the Gulf Coast calamity. Many waited for days as agencies struggled to provide assistance. Wal-Mart moved faster than traditional emergency aid groups because the retail giant has mastered:

supply chain management

Define inventory.

supply of goods a firm holds for use in production or for sale to customers

Supply chain is thought of as _____

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

What must be considered after the site location has been decided?

the facilities layout

Who are operations managers?

the people charged with managing and supervising the conversion process

Process layout arranges workflow around what? What type of organization is process layout best for?

the production process, where all workers with similar tasks are group together for firms that produce small numbers of a wide variety of products

What else must be considered in choosing a production process?

timing

Critical element of effective supply-chain management.

to develop tight bonds with suppliers

What is the goal of inventory management?

to keep down the costs of ordering and holding inventories while maintaining enough on hand for production and sales

When is intermittent process used? What is this process best for?

to make batches of different products. process is best for low- volume, high-variety products such as those produced by mass customization or customization

What is the purpose of both CPM and PERT?

to see how operations and production will flow

Where does Deming believe quality control starts? What concept did Deming develop?

top management Total Quality Management (TQM)

Electronic data interchange (EDI), how does it work? Advantage of EDI?

two trading partners exchange information electronically via a linked computer system or over the internet advantages of exchanging information with suppliers electronically include speed, accuracy, and lowered communication costs.

Total Quality Management (TQM) emphasizes what? What does TQM focus on?

use of quality principles in all aspects of a company's production and operations TQM focuses on continuous improvement

Long-term planning focuses on what? How long is this time frame?

which goods to produce, how many to produce, and where they should be produced. 3-5 years

What does ERP allow better control of? What does ERP eliminate?

ERP goes a step further and incorporate information about the firm's suppliers and customers into the flow of data eliminates production delays

How does the manufacturing environment affect manufacturers?

Some localities have a strong existing manufacturing base.

What are local incentives? Why would they be offered?

Tax breaks Local governments may offer financial assistance and/or exemptions from certain regulations to attract or keep production facilities in the area

Critical path, what is it and why is it important?

The longest path through linked activities. If the tasks on the critical path are not completed on time, the entire project will fall behind schedule.

Malcolm Baldrige National Quality Award was established by the __ Why was it established?

US congress in 1987 To recognize U.S. companies that offer goods and services of world-class quality

Outsourcing, what is it and when is it used?

When items are purchased from an outside source instead of being made internally when buying standard items, such as screws, bolts, rivets, and nails, is usually cheaper and easier than producing them internally

What does materials requirement planning (MRP) use?

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

What can it generate using a complex computerized system? What does it ensure a smooth flow of?

a production plan for the firm, as well as management reports, forecasts, and financial statements If one department's plans change, the effects of these changes on other departments are transmitted throughout the company

ISO 9000 is a set of _____________ What were they designed to offer?

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 offer a uniform way of determining whether manufacturing plants and service organizations conform to sound quality procedures

Why is location an important decision for managers?

affects operating and shipping costs and, ultimately, the price of the product or service and the company's ability to compete

What factors must a manager take into consideration before selecting a location?

availability of raw materials, parts, equipment, and available manpower marketing advantages

Blockchain technology potential.

to automate processes to cover multiple transactions with a variety of participating organizations

What is a Gantt chart? What does it show? when is it most useful?

bar graphs showing the relationship between scheduled and actual production most helpful when only a few tasks are involved, when task times are relatively long (days or weeks rather than hours), and when job routes are short and simple

What is Six Sigma? What is Six Sigma's focus?

company-wide process that focuses on measuring the number of defects that occur and systematically eliminating them in order to get as close to "zero defects" as possible. focuses on designing products that not only have fewer defects but that also satisfy customer needs

What does MRPII use?

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

The final stage of operations management focuses on what?

developing more efficient methods of producing the firm's goods or services.

define mass production

manufacturing many identical goods at once

What is value-stream mapping? What does it identify?

map flow from suppliers through the factory to customers identify where bottlenecks may occur in the production process and is a valuable tool for visualizing how to improve production routing.

Continuous process, what is it. Why is it used

uses long production runs that may last days, weeks, or months without equipment shutdowns. This is best for high- volume, low-variety products with standardized parts, such as nails, glass, and paper Per-unit costs are low, and production is easy to schedule.