Chapter 13 Production & Business Operations

1. Chapter 13Production & Business Operations Business Essentials  Mrs. Wilson

2. BEFORE ACTIVITY – Group Think • The 3 categories of products used by businesses and consumers are: • Natural resources • Agricultural products • Processed goods • Work in a group to name products produced in AL that fit within each of these categories

3. This lesson addresses the role of producers and production in the economy and the various methods used to manufacture products. 13-1 Types of production

4. Production as an Economic Activity • The economy begins with production • The 3 categories of products used by businesses and consumers are: • Natural resources – raw materials supplied by nature • Agricultural products – crops and animals raised by farmers • Processed goods – products that have been changed in form to increase their value and usefulness

5. Production as an Economic Activity • There are 4 types of businesses that are responsible for production: • Producers – develop products to sell • Extractors – obtain natural resources from the earth • Farmers – tend land and grow crops and livestock • Manufacturers – obtain materials from other producers and convert them into products • Ex) Focus on Real Life p318

6. Production as an Economic Activity • The forms of production (p319): • Extraction & cultivation – products are obtained from nature or grown using natural resources • Most basic form of production • Processing – changing and improving the form of another product • Manufacturing – combines raw materials and processed goods into finished products • Each of these forms of production is needed to make all of the goods and services demanded by businesses and consumers

7. Manufacturing • Usually, several manufacturers are a part of the total activity needed to produce goods (p320) • Increasingly, businesses around the world complete these activities

8. Manufacturing • Manufacturing businesses can set up production in several ways to make their product • The number of products needed and the characteristics of the products will determine the type of manufacturing procedures

9. Manufacturing • Types of manufacturing procedures (p320): • Mass production – an assembly process that makes a large number of identical products using a continuous, efficient procedure • Cadbury video • Custom manufacturing – building a specific and unique product to meet the needs of one customer • Materials processing – changing the form of raw materials so they can be consumed or used to make other products

10. Major production activities and how manufacturing procedures are organized are the focus of this lesson. 13-2 Production& Planning

11. Production Activities • Before any production planning can occur, the company decides what products it will produce • A business cannot rely on selling the same products year after year • As customer needs and competition changes, new products will have to be developed • Product planning involves 2 steps: • New product research • Product design

12. Production Activities PRODUCT RESEARCH • Companies devote a large amount of their resources to discovering new product ideas • Companies carry out 2 types of research to discover new product ideas: • Applied research – studies existing products to develop design improvements or new product uses • Pure research – research done without a specific product in mind with the goal of discovering new solutions to problems

13. Production Activities PRODUCT DESIGN • When scientists develop a new product idea, businesses must turn that idea into a product that they can make and sell profitably • Design engineers create models and test them to come up with the best possible design • If a company develops and tests a new product idea and concludes that it can sell the product at a profit, the company then develops plans to produce the product

14. Production Activities • Production planning includes 3 activities: • The company develops a production process – the activities, equipment, and resources needed to manufacture a product • The company obtains production resources • The company selects and prepares production personnel

15. Manufacturing Procedures • One of the biggest changes in manufacturing businesses is the production procedures used • Today, assembly is quite different • Employees often work in teams, completing many procedures together • The type of product and production process will determine how the work area is organized • Manufacturers face challenges as they cope with rising costs, greater global competition, and growing customer demands

16. Manufacturing Procedures • Manufacturers have now adopted Continuous Process Improvement (CPI) as a way to make sure processes are completed as effectively and efficiently as possible • CPI – increases the quality of work by reducing errors, inefficiencies, and waste

17. Manufacturing Procedures • Continuous Process Improvement (CPI) steps: • Involve everyone • Identify process activities • Establish quality performance standards • Select measurement tools • Monitor performance continuously • Improve process quality

18. This lesson helps students understand the importance of effective business operations and tools used to manage those operations. 13-3 planning &Managing Business Operations

19. The Importance of Business Operations • The day-to-day operations of a business often determines its success or failure • Common types of business operations: • Facilities management (p330) • Logistics– managing the acquisition, movement, and storage of supplies, materials, and finished products in a business • Scheduling • Safety & security

20. Tools for Business Operations • Several tools help people manage the day-to-day operations of a business • They include management tools and technology tools • Examples of management tools: • Operational plan – identifies how work will be done, who will do it, and what resources will be needed • Schedule – a time plan for completing activities • Standard – a specific measurement against which an activity or result is judged

21. AFTER ACTIVITY – Review • http://www.cengage.com/cgi-wadsworth/course_products_wp.pl?fid=M20bI&product_isbn_issn=9780538445610 • Complete Lesson 1 - Forms of Production • Mrs. Wilson must verify your score!