Objective 2.03

Understand production and operations.

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Topics

• Types of productions and manufacturing

• Production and manufacturing planning

• Business operations

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Types of Productions and ManufacturingThe forms of production

– Extraction and cultivation – obtaining products from nature or using natural resources to grow.

• Example: farming, mining, fishing, forestry

– Processing – changing and improving the form of another product.

• Example: paper mill, oil refinery

– Manufacturing – combining raw materials and processed goods into finished products.

• Example: bakery, automotive plant, and shoe factory

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Types of Productions and Manufacturing• Mass production - the process of using

assembly activities to produce large quantities of identical products.– Examples: Krispy Kreme donuts, Honda

Civics, and Nike sneakers

• Custom manufacturing - the process of producing a specific and exclusive product for a customer. – Examples: ceramics, artwork, business signs

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Types of Productions and Manufacturing

Materials processing - the process of changing raw materials to another form in order to be consumed or used to make other products.

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Production and Manufacturing Planning

Production and manufacturing involve the following activities in order to produce products:– Product development– Production planning– Inventory management

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Production and Manufacturing Planning• Product development – the process of

creating a product or improving the form of another product

• Product research - performed by engineers and other scientists to develop new products or to discover improvements for existing products.

• Product design - creating models and then deciding the best possible design.

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Production and Manufacturing Planning

Two types of product research– Applied research is marketing research that

studies existing products to develop design improvements or new product ideas.

– Pure research discovers new solutions to problems.

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Production and Manufacturing PlanningProduction planning involves three activities

– Production process consists of activities, equipment, and resources needed to manufacture products.

– Production resources consists of machines, tools, and other equipment needed for production.

– Personnel consists of employees and skills needed for production.

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Production and Manufacturing Planning• Continuous Process Improvement (CPI) –

an ongoing effort to improve manufacturing processes to increase the quality of work

– What is the purpose of CPI efforts for a manufacturing company?

• Reduce errors, inefficiencies, and waste

• CPI has the following six steps:1. Involve everyone.2. Identify process activities.3. Establish quality performance standards.4. Select measurement tools.5. Monitor performance continuously.6. Improve process quality.

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Business Operations

Common business operations– Facilities management– Logistics– Scheduling– Safety and security

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Business Operations

• Facilities management - managing the buildings and land of a business and ensuring that everything is used, repaired, and running properly.– Why would a business need to be concerned about

management of their facilities?

• Logistics - managing the receiving, moving, and storing of supplies, materials, and finished products– Why is logistics important?

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Business Operations

• What is involved in scheduling work, people, and resources for a business?– Scheduling involves managing work to be

completed, the people who will complete the work, and the resources needed for completing the work.

• What is involved in safety and security for a business?– Safety and security involves managing personnel

being in place to prevent accidents and injuries of employees and customers and protect people and property.

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Business Operations• Management tools

– Operational plan– Operating budget– Schedule– Procedures

– Standards • Technology tools

– Supply chain management software

– Collaboration software– Computer security– Inventory– Project Management– Budgeting– Document Management– Manufacturing Automation

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