Managing Production and Operations

1. CHAPTER19 Managing Production and Operations 19.1 Developing New Products 19.2 Planning a Manufacturing Business 19.3 Service Businesses

2. 19.1 Developing New Products GOALS • Describe the steps in new-product development. • Describe the differences between alternative manufacturing processes. CHAPTER 19

3. Steps in Product Development • Develop an idea for a new product that customers want to buy. • Turn the idea into a workable product design. • Be able to produce the product and make it available to consumers at a price they are willing to pay. CHAPTER 19

4. Creating Product Ideas • Consumer research • Product research • Pure research • Applied research • Designing new products CHAPTER 19

5. Producing the Product • Different types of manufacturing processes • Mass production • Continuous processing • Repetitive production • Intermittent processing • Custom manufacturing CHAPTER 19

6. 19.2 Planning a Manufacturing Business GOALS • Discuss the important considerations in locating a manufacturing business. • Describe the factors that influence the organizing and production process. CHAPTER 19

7. Locating the Business • Availability of raw materials – locate close to source – JIT - justintime • Transportation methods – boat, air, truck, rail, pipeline • Supply and cost of energy and water • Land and building costs – purchase/lease, consider expansion possibilities • Labor supply – skilled/unskilled • Location of customers – control transportation costs • Economic and legal factors – taxes and zoning CHAPTER 19

8. Production Planning • Production planning activities • Inventory management – when do we order raw materials, where do we store, how much do we store • Human resource planning – managing your workforce • Production scheduling – how much do we produce, what are the steps • Building layout • Improving production processes • Quality mgm’t – developing standards and measure results (Malcolm Baldridge Award) • CAD – Computer Aided Design – design and test models w/o building • CIM – Computer Integrated Manufacturing • Integrating design, planning, scheduling, resource mgm’t CHAPTER 19

9. 19.3 Service Businesses GOALS • Identify the characteristics of services that make them different from products. • Describe the ways businesses maintain product and service quality. CHAPTER 19

10. The Nature of Services • How services differ from products • Form • Availability • Quality • Timing • Managing a service business CHAPTER 19

11. Differences Between Services and Products SERVICES PRODUCTS Tangible Available whenever the purchaser wants them Quality depends on manufacturing process but should not vary significantly among batches Can be stored for later use • Intangible • Available only from the person providing them • Quality depends on the skill of the provider and may vary from provider to provider • Cannot be stored CHAPTER 19

12. Ensuring Service Quality • SERVQUAL • Tangibles • Reliability • Responsiveness • Assurance • Empathy • Standardizing services CHAPTER 19