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Chapter Eight. Production and Operations Management. Operations Management. The development and administration of the activities involved in transforming resources into goods and services. 8-1. The Transformation Process. 8-2.

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Chapter Eight

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Chapter eight

Chapter Eight

Production andOperations Management


Operations management

Operations Management

The development and administration of the activities involved in transforming resources into goods and services.

8-1


The transformation process

The Transformation Process

8-2


Inputs outputs and transformation processes in the manufacture of oak furniture

Inputs, Outputs, and Transformation Processes in the Manufactureof Oak Furniture

8-3


Operations in service businesses

Operations in Service Businesses

  • Service providers use human and mechanical processes to provide products that are intangible.

  • The transformation process requires inputs such as employees, equipment and supplies.

  • Outputs provide a benefit from a performance, event or type of involvement with the service provider.

8-4


Differences between manufacturers and service providers

Differences between Manufacturers and Service Providers

  • Nature and consumption of output

  • Uniformity of inputs

  • Uniformity of outputs

  • Labour required

  • Measurement of productivity

8-5


Steps in planning and designing operations systems

Steps in Planning and Designing Operations Systems

1.Planning the product

2.Designing the operations processa.standardizationb.modular designc.customization

3.Planning capacity

8-6a


Steps in planning and designing operations systems1

Steps in Planning and Designing Operations Systems

4.Planning facilitiesa.facility locationb.facility layout1.fixed position layout2.process layout3.product layoutc.technology1.CAD2.CAM3.flexible manufacturing4.CIM

8-6b


Facility layouts

Facility Layouts

Fixed-position layoutAll resources needed for a product are brought to a central location.

Process layoutLayout is organized intodepartments that group related processes.

Product layoutProduction is broken down intorelatively simple tasks assignedto workers positioned along aline.

8-7


Logistics

Purchasing

Inventory Control

Routing and Scheduling

Distribution

Logistics

8-8


Pbb global logistics provides integrated solutions

PBB Global Logistics Provides Integrated Solutions

8-9


Types of inventory

rawmaterials

work inprocess

finishedgoods

transformation process

Types of Inventory

8-10


Managing inventory

Managing Inventory

  • Economic order quantity (EOQ)model

  • Just-in-time inventory management (JIT)

  • Material-requirements planning (MRP)

8-11


Roadway assists with transportation and inventory management

Roadway Assistswith Transportation and Inventory Management

8-12


A hypothetical pert diagram for a mcdonald s big mac

Grill beef

patties

(120)

Remove buns,

2

2 beef patties,

cheese,

sauce,

Start

6

7

4

5

E

1

8

lettuce,

n

onions,

d

pickle

Place

(20)

Top

Place

Place

Serve to

3

cooked

with

Big Mac in

package

customer

patties

cheese

package

in heated

(5)

on bun

and

(5)

bin

(5)

Apply

vegetables

(5)

sauce

(15)

to bun

(10)

5

(185) Time to complete

Critical path

Activity

Event

event (seconds)

A Hypothetical PERT Diagram for a McDonald’s Big Mac

8-13


National quality institute principles of business excellence

National Quality InstitutePrinciples of Business Excellence

  • Leadership through involvement

  • Primary focus on stakeholders/customers and the market place

  • Cooperation and teamwork

  • Prevention based on process management

8-14a


National quality institute principles of business excellence1

National Quality InstitutePrinciples of BusinessExcellence

5. Factual approach to decision making

6. Continuous learning and people involvement

7. Focus on continuous improvement

8. Fulfillment of obligations to all stakeholders and society

8-14b


Total quality management

Total Quality Management

8-15

A philosophy and set of guiding principles that provide a foundation for the continuous improvement of an enterprise.


Enterprise resource planning

Enterprise Resource Planning

8-16

The integration of all departments and functions of a company into one computer system


Is0 9000 internal organization for standardization

IS0 9000Internal Organization for Standardization

  • Designed to ensure consistent quality

  • Requires documenting record keeping on training, testing and responding to defects

  • Independent auditor must verify standards required by ISO

  • ISO 9002 certification has been established for service providers

8-17


Solve the dilemma

Solve the Dilemma

  • What mistake did McKing make in approaching the introduction of pizza?

  • How could this product introduction have been coordinated to avoid the problems that were encountered?

  • If you were an executive at McKing, how would you proceed with the introduction of pizza into the restaurants?

8-18


Explore your career options

Explore Your Career Options

How can an understanding of total quality management (TQM) or ISO 9000 series certification assist in developing a career?

8-19


Additional discussion questions and exercises

Additional Discussion Questions and Exercises

1.What is the purpose of inventory control?

2.PERT charts can show a sequence of activities in days rather than seconds. Draw a PERT chart for the chairperson of a banquet committee showing the most efficient path for these projected events:January 5Confirm banquet room reservation.

January 6Publicize banquet.

January 19Count number of banquet reservations; phone in total to hotel.

January 20Phone chairpersons of banquet decorating committee and hospitality committee to review preparations for banquet.

8-20a


Additional discussion questions and exercises1

Additional Discussion Questions and Exercises

Question 2 continued.

January 27Decorating committee places decorations on tables.

(2-4 p.m.)Hospitality committee prepares registration table and banquet booklets.

January 27Banquet(6 p.m.)

January 30Send thank-you notes to all committee persons and hotel staff.

8-20b


Additional discussion questions and exercises2

Additional Discussion Questions and Exercises

3. Prepare a Gant Chart for the sequence of activities described in question #2

8-20c


Chapter 8 quiz

Chapter 8 Quiz

1.An assembly line is an example ofa.a product layoutb.a process layoutc.a fixed-position layoutd.an intermittent organization

2.Which of the following identifies the optimum number of items to order to minimize the cost of ordering them?a.just-in-time (JIT)b.material-requirements planning (MRP)c.economic-order quantity modeld.program evaluation and review technique (PERT)

8-21a


Chapter 8 quiz1

Chapter 8 Quiz

3.Which of the following characteristics is most typical of a continuous manufacturing organization?a.The firm manufactures customized products.b.The firm has a low volume of production.c.The firm has a relatively low unit cost of production.d.The firm creates many different products with many different characteristics.

4.Inspection is concerned witha.standards of quality.b.labor and energy.c.routing and scheduling.d.modular design and customization.

8-21b


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