CHAPTER NINE. Operations Management (Production). Manufacturing. Service. What’s Had The Biggest Effect on Productivity?. Leading U.S. Manufacturing States. New York. Illinois. Ohio. California. Pennsylvania. Texas.
Operations Management (Production)
Both teams practiced hard and long to reach their peak performance.
On the big day they felt they were ready
The Japanese won by a mile.
Corporate management decided that the reason for the crushing defeat had to be found, so a consulting firm was hired to investigate the problem and recommend corrective action
The Japanese team had eight people rowing and one person steering;
the American team had one person rowing and eight people steering..
the consultant firm concluded that too many peoplewere steering and not enough were rowing on the American team
So as race day neared again the following year, the American team’s management structure was completely reorganized.
Four steering managers, three area steering managers, and a new performance review system for the person rowing the boat to provide work incentive.
The next year, the Japanese won by TWO miles
Humiliated, the American corporation laid off the rower for poor performance and gave the managers a bonus for discovering the problem.
Cost savings through site selection
New manufacturing techniques
Reliance on the Internet
Total Quality Management
ISO 9000/ISO 140000What has the US done to regain a competitive edge?
Using land, labor, capital, entrepreneurship, knowledge to produce goods and services.
Transforms resources into goods and services.
UB’s Dry Cleaners
1. Facility location
2. Facility layout
3. Quality Control
1. Baldridge Awards: quality in
2. ISO 9000
3. ISO 14000
1. Measuring quality
2. Technological improvements
1. Form Utility
- the value added by the creation of finished goods and services
2. Types of Production Processes
2. Types of Production Processes
1. Materials Requirement Planning (MRP)
a. Uses sales forecasts to make sure required parts are available when needed
b. Now outdated
2. MRPII – Manufacturing resource planning
a. involved more than just materials
b. also has been updated
3. ERP Enterprise resource planning
a. Links multiple firms.
b. Monitors quality and satisfaction as it’s happening.
c. IT has had a major influence
2. Internet purchasing
a. Reduces purchasing costs
b. 3 types
1) trading exchange platforms
- assist companies in several markets
2) industry-sponsored exchanges
3) Net market makers
-host electronic marketplaces
3. Flexible Manufacturing
a. Designing machines to do multiple tasks
b. Ford makes both V-8 and V-6 engines
4. Lean Manufacturing
a. Increasing capacity to produce high-quality goods while decreasing need for resources
b. Workers perform a cluster of tasks, not one assembly line job.
5. Mass customization
- Flexible machines can produce a good as fast as mass-produced goods once could.
6. Competing in Time
a. Being as fast or faster than all competition in responding to customer want and needs
b. Essential in global marketplace
7. CAD and CAM
a. CAD – 3D designing
b. CAM – direct computer involvement in production process
c. CIM Computer Integrated Manufacturing
1) software that unites CAD and CAM
2) currently expensive
3) cuts 80% of the time needed to program machines to make parts
Competing in time
The Daimler-Chrysler plant in Fenton, MO receives shipments about every 4 hours from its seat supplier, and literally hundreds of other parts continually. There is virtually no storage.
Volvo uses modular construction in their plants, where workers are grouped into autonomous teams working on mobile assembly platforms that carry the cars to the workers. Each worker has been trained to do a whole cluster of tasks. This system enabled Volvo to build quality cars with fewer workers in more space efficient plants and has reduced the number of hours to assemble a car.
Because of the increases competition from its Japanese counter-parts Xerox implemented a program designed to cut its new product development time in half
Levis markets a service which enables any customer to order a custom-made pair of jeans from any retailer at any time. The jeans cost $10 more than an “off-the-rack” pair.
At Dynalink Industries, 15 machines are used to make, test and package component parts for stereo and quadraphonic sound systems. The parts are never touched by human hands.
Designing a PERT Chart
1. Analyze and sequence task that need to be done
2. Estimate the time needed to complete each task
3. Draw a PERT network illustrating the two previous steps
brew coffee 6 min
pour coffee (1 min)
assemble eggs and toast (1 min)
cook eggs (3 min)
butter toast (1 min)
make toast (2 min)