CHAPTER 9
Production
and
Operations
Management
McGraw-Hill/Irwin
Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.
MANUFACTURING in the U.S.
LO 91
• Some areas in the U.S.
are experiencing
economic growth while
others are declining.
• Manufacturing in the
U.S. is so productive
fewer workers are
needed.
9-2
WHAT’S MADE in the USA?
LO 91
Leading U.S. Manufactured Goods
Source: Parade Magazine, www.parade.com, accessed November 2014.
9-3
MASSIVE MANUFACTURERS
LO 91
The Top Ten U.S. Manufacturers
Source: Industry Week, www.industryweek.com, accessed November 2014.
9-4
TOPPAYING SERVICE JOBS
LO 91
• The U.S. economy is no longer manufacturing
based.
• 85% of jobs are in the service sector.
• The toppaying service jobs in the U.S. are in:
- Legal services
- Medical services
- Entertainment
- Accounting
- Finance
- Management consulting
9-5
REMAINING COMPETITIVE in
GLOBAL MARKETS
LO 91
• U.S. is still the leader in nanotechnology and
biotechnology.
• How can U.S. businesses maintain a competitive
edge?
-
Focusing on customers
-
Maintaining close relationships with suppliers
-
Practicing continuous improvement
-
Focusing on quality
-
Saving on costs through site selection
-
Relying on the Internet to unite companies
-
Adopting new production techniques
9-6
PRODUCTION and
PRODUCTION MANAGEMENT
LO 92
• Production The creation of goods using land,
labor, capital, entrepreneurship and knowledge (the
factors of production).
• Production
Management All the
activities managers do to
help firms create goods.
9-7
OPERATIONS MANAGEMENT
LO 92
• Operations Management A specialized area in
management that converts or transforms resources
into goods and services.
• Operations management includes:
- Inventory management
- Quality control
- Production scheduling
- Followup services
9-8
OPERATIONS MANAGEMENT
in the SERVICE SECTOR
LO 92
• All about creating a good experience for those
who use the service.
• In hotels, like Ritz
Carlton, operation
management
includes fine dining,
fresh flowers, and
training for every
employee.
9-9
TEST PREP
• What have U.S. manufacturers done to regain a
competitive edge?
• What must U.S. companies do to continue to
strengthen the country’s manufacturing base?
• What led companies to focus on operations
management rather than production?
9-10
The PRODUCTION PROCESS
LO 93
9-11
FORM UTILITY
LO 93
• Form Utility The value
producers add to materials
in the creation of finished
goods and services.
9-12
PROCESS and ASSEMBLY in
PRODUCTION
LO 93
• Process Manufacturing
The part of production that
physically or chemically
changes materials.
• Assembly Process The
part of the production process
that puts together components.
9-13
KEY PRODUCTION PROCESSES
LO 93
• Production processes are either continuous or
intermittent.
• Continuous Process Long production runs turn
out finished goods over time.
• Intermittent Process Production runs are short
and the producer adjusts machines frequently to
make different products.
9-14
MINUTE MADE
LO 93
Production of Some of America’s Favorite Products
9-15
DEVELOPMENTS MAKING U.S.
COMPANIES MORE COMPETITIVE
LO 93
1. Computeraided design
and manufacturing
2. Flexible manufacturing
3. Lean manufacturing
4. Mass customization
9-16
COMPUTERAIDED DESIGN and
MANUFACTURING
LO 93
• ComputerAided Design
(CAD) The use of computers
in the design of products.
• ComputerAided
Manufacturing (CAM) The
use of computers in the
manufacturing of products.
9-17
COMPUTERINTEGRATED
MANUFACTURING
LO 93
• ComputerIntegrated
Manufacturing (CIM)
The uniting of computer
aided design with computer
aided manufacturing.
• CIM is expensive but it cuts
as much as 80% of the time
needed to program machines
to make parts.
9-18
FLEXIBLE MANUFACTURING
LO 93
• Flexible Manufacturing Designing machines to
do multiple tasks so they can produce a variety of
products.
• AllenBradley uses flexible manufacturing to build
motor starters.
• 26 machines and robots build, test and package
parts.
9-19
LEAN MANUFACTURING
LO 93
• Lean Manufacturing Using less of everything
than in mass production.
• Compared to others, lean companies:
- Take half the human effort.
- Have half the defects in finished products.
- Require onethird the engineering effort.
- Use half the floor space.
- Carry 90% less inventory.
9-20
MASS CUSTOMIZATION
LO 93
• Mass Customization
Tailoring products to meet
the needs of a large
number of individual
customers.
• More manufacturers are
learning to customize.
• Mass customization
exists in the service
sector too.
9-21
ROBOTICS and SENSING
LO 93
• The use of robotics allows manufacturing to
continue 24 hours a day.
• Sensors can detect problems immediately and
changes can be made quickly.
9-22
TEST PREP
• What is form utility?
• Define and differentiate the following: process
manufacturing, assembly process, continuous
process and intermittent process.
• What do you call the integration of CAD and
CAM?
• What is mass customization?
9-23
OPERATIONS MANAGEMENT
LO 94
• Operations management planning helps solve
problems like:
- Facility location
- Facility layout
- Materials requirement planning
- Purchasing
- Inventory control
- Quality control
9-24
FACILITY LOCATION
LO 94
• Facility Location
The process of
selecting a geographic
location for a compan
y’s operations.
• Rising numbers of Internet businesses means
brickandmortar retailers must find great
locations.
• Service vs. Manufacturing
9-25