Production and Operations

ManagementBetter Business

1st EditionPoatsy · Martin

© 2010 Pearson Education, Inc. 1

chapter11

Slide presentation prepared by Pam JansonStark State College of Technology

The Production Process

• For goods and services• Efficient production processes:

o Decrease costso Allow for lower priceso Improve producto Attract customers o Increase profits

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Mass Production

• Relies on machines and automated assembly lines to produce goods that are identical and adhere to certain standards of quality

• On an assembly line, partially complete products are moved from one worker to the next on a conveyor belt

• A disadvantage is inflexibility

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Facility Location

Factors to consider:• Raw materials• Transportation

costs• Human factors

o Labor availability• Physical factors

o Utilitieso Communication

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Transportation Factors

• Proximity to market• Cost of transporting raw materials• Presence of

highways and other transportation systems

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Human Factors

• Living conditionso Business brings opportunities or,

potentially, threatso Business seeks area with high quality of

life • Labor availability

o Needed skills • Laws and regulations

o Protecting workerso Protecting the environment

© 2010 Pearson Education, Inc. 6

Production Management

• Also called operations management

• Goal: ensure products and services provide utility

Production planningo Facility locationo Facility layouto What to produceo How much to

produceo What processes and

machinery to useo How to meet the

needs of employeeso Quality control

Production planningo Facility locationo Facility layouto What to produceo How much to

produceo What processes and

machinery to useo How to meet the

needs of employeeso Quality control

© 2010 Pearson Education, Inc. 7

Just-in-Time (JIT) Inventory Control

• Keeps on hand the smallest amount of inventory possible

• Items ordered “just-in-time” for use• Reduces storage costs• Requires strong supplier relationships• Requires robust inventory control

systemo Technology helps streamline the process

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Quality Control

• Activities to guarantee that a good or service meets a specified level of quality

• Historically, quality control happened at the end of the process (final inspection)

• More commonly today, the product or service is inspected by workers at each critical operation

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 9

Total Quality Management

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 10

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Plan

DoCheck

Act