Production and Operation Magt System

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Production and OperationsManagement

Chapter 11


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Outline the importance of production and operationsmanagement.

Explain the roles of computers andrelated technologies in production.

Identify the factors involved in aplant location decision.

Explain the major tasks of production and operationsmanagers.

Compare alternative layouts for production facilities.

List the steps in the purchasing

process.

Outline the advantages anddisadvantages of maintaining largeinventories.

Identify the steps in the productioncontrol process.

Explain the benefits of qualitycontrol.

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Production: Application of resources such as people andmachinery to convert materials into finished goods and services.

Production and Operations Management : M anaging peopleand machinery in converting materials and resources intofinished goods and services.


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A vital function is necessary for generating moneyto pay employees, lenders, and stockholders.

Effective production and operations managementcan : lower a firms costs of production.

boost the quality of its goods and services.

allow it to respond dependably to customer demands. enable it to renew itself by providing new products.


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M ass Production manufacturing products inlarge amounts through standardization,

mechanization and specialized skills.Flexible Production producing smaller batches using information technology,communication and cooperation.

Customer-Driven Production evaluatingcustomer demands to link with manufacturer.


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R obots reprogrammable machines capable of performing routine jobs and manipulating material

Computer-Aided Design and M anufacturing enables engineersto design parts and buildings on computer screens faster and withfewer mistakes.

Flexible M anufacturing Systems a production facility thatworkers can quickly modify to manufacture different products.

Computer-Integrated M anufacturing integrates robots,computers and other technologies to help workers design products,control machines, handle materials, and control the productionfunction.


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O versee the work of people and machinery to convert inputs(materials and resources) into finished goods and services.


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Choose what goods or services to offer customers.Convert original product ideas into final specifications.

Design the most efficient facilities to produce those products.


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Process layout groupsmachinery and equipmentaccording to their functions.

Facilitates production of avariety of nonstandarditems in relatively smallbatches.


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Product layout sets up production equipment along a product-flow line, and the work in process moves along this line pastworkstations.

Efficiently produces large numbers of similar items.


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A fixed-position layout places the product in one spot, andworkers, materials, and equipment come to it.


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Customer-oriented layout arranges facilities to enhance the interactionsbetween customers and a service.


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M ake, Buy, or Lease Decision

Choosing whether to manufacture a needed productor component in-house, purchase it from an outsidesupplier, or lease it.

Factors in the decision include cost, availability of reliable outside suppliers, and the need for confidentiality.

Selection of Suppliers Based on comparison of quality, prices, dependability

of delivery, and services offered by competingcompanies.


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Inventory Control Perpetual inv en tory

V end or-ma n age d inv en tory

J ust-in-Time SystemsImproving profits and return on investment by minimizingcosts and eliminating waste through cutting inventory onhand.

M aterials R equirement Planning

Computer-based production planning system by which afirm can ensure that it has the correct materials for

production.


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Production control creates a well-definedset of procedures for coordinating

people, materials, and machinery.1) P lanning2) Routing

3) Scheduling4) D ispatching

5) F ollow-up


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Dispatching M anager instructs each department on what work to do and the time

allowed for its completion.

Follow-UpEmployees and their supervisors spot problems in theproduction process and determine needed changes.


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A good or service free of deficiencies.

Poor quality can account for 20% loss in revenue.

Benchmarking is the process of analyzing other firms bestpractices.

Quality control is measuring goods and services againstestablished quality standards.

Many companies evaluate quality using the Six Sigma concept. A company tries to make error-free products 99.9997% of the time,

a tiny 3.4 errors per million opportunities.


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International O rganization for Standardization (IS O ) - missionis to promote the development of standardized products tofacilitate trade and cooperation across national borders.

Representatives from more than 146 nations.

ISO 9000 series of standards sets requirements for qualityprocesses.

Nearly half a million ISO 9000 certificates have been awarded tocompanies around the world.

ISO 14000 series also sets standards for operations thatminimize harm to the environment.

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Production and Operation Magt System