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Chapter 9

Chapter 9. Operations and Production Management. Leading U.S. Manufacturing States. Michigan. New York. Illinois. Ohio. California. Pennsylvania. Texas. Source: Britannica Student Encyclopedia, 2006. What is Manufacturing?. Production

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Chapter 9

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  1. Chapter 9 Operations and Production Management

  2. Leading U.S. Manufacturing States Michigan New York Illinois Ohio California Pennsylvania Texas Source: Britannica Student Encyclopedia, 2006

  3. What is Manufacturing? • Production • The creation of value using factors of production (land, labor, capital, knowledge, and entrepreneurship) • Operations Management • Overseeing the transformation of capital into goods and services

  4. Top Ten US Manufacturers • ExxonMobil • Chevron • General Motors • ConocoPhillips • Ford Motor • General Electric • Altria Group • IBM Corp. • Hewlett-Packard • Valero Energy The U.S. has been regaining its lead in manufacturing – why? Source: Industry Week, June 1, 2006

  5. How Manufacturers Have Become More Effective • Focus on customers • Maintain close relationships • Continuous improvement • Focus on quality • Save costs • Rely on the Internet • New production techniques

  6. Labor Hours / Vehicle • Ford – 35.79 hours • Daimler/Chrysler – 33.71 hours • GM – 33.19 hours • Honda – 32.51 hours • Toyota – 29.4 hours • Nissan – 28.46 hours Source: Detroit Free Press, June 2, 2006

  7. Profit/ Vehicle • Ford – ($590) • Daimler/Chrysler – $223 • GM – ($2496) • Honda – >$1200 • Toyota – >$1200 • Nissan – >$1200 Source: Detroit Free Press, June 2, 2006

  8. Plant Capacity Used • Ford – 79% • Daimler/Chrysler – 94%-106% • GM – 90% • Honda – 91% • Toyota – 94%-106% • Nissan – 94%-106% Source: Detroit Free Press, June 2, 2006

  9. Production Processes • Form Utility • The value we pay for that comes from changing a good • Process Manufacturing • Making physical changes in a good • Assembly • Putting component parts together

  10. Production Processes Can be done using: • Continuous Process • Long production runs • Turn out same thing every time • Intermittent Process • Production runs shorter • Lines get changed out to produce different things

  11. Three Requirements For Production • Quick response to the demands of the customer • Acceptable quality level • Lowest possible cost

  12. Production Efficiency • Krispy Kreme Doughnuts – 5,208 a minute • Twinkies – 972 a minute • LifeSavers 5 Flavor Roll – 100 rolls a minute • Jell-O Gelatin Boxes – 764 a minute • Chips Ahoy! – 4,000 a minute Source: World Features Syndicate

  13. What Is Increasing Productivity? Source: 2005 National Innovation Survey, Council on Competitiveness

  14. Product Improvements With Computer Technology • Computer-Aided Design - CAD • Computer-Aided Manufacturing - CAM • Computer-Integrated Manufacturing - CIM

  15. Production Techniques • Flexible Manufacturing • Lean Manufacturing • Mass Customization

  16. Operations Management Planning • Facility Location • Facility Layout • Materials Requirement Planning • Purchasing • J-I-T Inventory Control • Quality Control

  17. Quality Control • Six Sigma Quality • Statistical Quality Control (SQC) • Statistical Process Control (SPC) • The Baldrige Award • ISO 9000 • ISO 14000

  18. Control Procedures • Program Evaluation & Review Techniques (PERT) • Gantt Chart

  19. PERT Steps • Analyzing and sequencing tasks that need to be done • Estimating the time needed to complete each task • Drawing a PERT network illustrating the information from steps 1 and 2 • Identifying the critical path

  20. Learning from Failure • Formalize forums for analyzing failure • Move the goalposts • Share personal stories • Bring in outsiders • Prove yourself wrong, not right • Celebrate smart failures Source: Business Week Online, July 10, 2006

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