Introduction to Business

1. Lecture 9 Introduction to Business Basics of production and operations management www.AssignmentPoint.com

2. Definitions of production & manufacturing • Production is the total process by which a company produces finished goods or services. • Production involves many such as the work, ideas, plans, the production manager, supervisors, workers. • Manufacturing refers to the physical process of producing goods out of materials and parts, generally some items made by someone. • Manufacturing involves the production of tangible goods only. www.AssignmentPoint.com

3. Operations • Operations include the total functions that are needed to keep the company producing. • Operations generally includes purchasing, raw materials inventory, maintenance, quality control, production, manufacturing, equipment management, plant management, etc. www.AssignmentPoint.com

4. Senior management Purchasing Inventory management Production Quality Maintenance Materials cost, Availability Machine utilization, Maintenance costs Stock outs, Inventory levels Variances, Labor efficiency, On-time production Reject levels, Quality costs, Rework costs Activities of operations in a plant www.AssignmentPoint.com

5. Mass production • Mass production refers to the production of goods in bulk or large quantities. • Mass production is done through the use of assembly lines and division of labour where each worker does one small but specialized part of job. • By producing in large quantities, companies can reduce the CM and thus it enables consumers to buy in a competitive price. www.AssignmentPoint.com

6. History of Industrialization • The early industrialization was among the countries like Japan, Germany and USA. • USA was a dominating industrialist country in the world during 50s, 60s, and 70s. • American products and services that dominated in the world were food products, toys, automobiles, trucks, electrical parts, soft drinks, medicines, etc. • After the World War II, Europe started rebuilding their industries and started exporting their goods to the World. www.AssignmentPoint.com

7. Typical job of a production manager • Production managers are responsible for producing the goods that business needs to sell. • Their job is to oversee a number of company operations which include: • Product planning • Site location • Inventory control • Purchasing • Manufacturing and production • Quality control • Plant management www.AssignmentPoint.com

8. Planning site location • Considerations in planning site location • Cost – building, land, taxes, insurances, etc • Nearness to suppliers, raw material industries, warehouses, low cost and quality labor force • Air, environment and water conditions • Availability of workforce or employee needs such as housing, schools, transportation, religious facilities, day care, shopping & recreational facilities • Community acceptance www.AssignmentPoint.com

9. Planning site layout • Considerations in planning site layout • Type of production held • Production areas – cutting, finishing, pattern making, order handling, assembling, designing, etc • Conference areas • Storage areas – normal storage, freezers • Parking, loading docks and transport areas • Interior layout – office space for different departments like top management, marketing, etc www.AssignmentPoint.com

10. Managing materials, purchase & inventory • Materials include office supplies, raw materials and other general supplies. • Procurement of these materials should be done economically and adequately so that don’t run short on these during production & operations. • Inventory means stocking. A business usually stocks their own goods and raw materials (outside sources) which are needed to produce their finished goods. www.AssignmentPoint.com

11. “Just in time” inventory management • Just in Time(JIT) inventory control was developed at Toyota Motor Corporation on Japan. • JIT is named like this because the raw materials that are required to stock comes just-in-time when they are needed for production. • Companies who use this system carries very little inventory just for emergency. Suppliers or other departments know when the actual production begins and they deliver accordingly. www.AssignmentPoint.com

12. Controlling production • Production is controlled through scheduling and it requires perfect use of labor, materials, and facilities in a timely manner. • PERT Charts. Program evaluation and review technique chart was first developed by the US navy for scheduling their missile project. • Nowadays this PERT chart is very widely used by business for accomplishing their projects. www.AssignmentPoint.com

13. Controlling production (contd.) • Steps in producing a PERT chart. • Break the project into event; label the amount of time required to finish it. • List the first event of the task/project. • List the event that follows the first one. If two events follows, list both & draw arrows to those events. • Chart all the events needed to complete the project in the same way till the project work is finished. • Label the arrows with the amount of time it takes to complete each activity. www.AssignmentPoint.com

14. Use of technology • Computer Aided Design (CAD) and Computer Aided Engineering (CAE) have made easier to produce millions of designs and patterns for products in a very small time frame. • Computer Aided Manufacturing (CAM) includes the use of computerized robots in manufacturing products. Use of these robots makes the production faster and with less errors. • Industries such as automobiles, electronics, computers, steel, machineries, and equipments use these technologies extensively. www.AssignmentPoint.com

15. Improving quality • What is quality? How do we define it? • Quality is something that is superior in terms of usability and useful life. • Germans praise about their automobile quality, Swiss prides for their watch and chocolate quality & Italians boost for their marble and fashion quality. • Who evaluates the quality in general? • Consumers evaluates the quality of a product or service by comparing it with other similar products or services. www.AssignmentPoint.com

16. Dimensions of quality www.AssignmentPoint.com

17. Improving productivity • Productivity is the rate at which goods and services are produced or created. • The common form of measuring productivity is the labor productivity, which is expressed in amount of money produced per hour worked. • Labor and technology combined generate the outputs and these costs are added along with products that are sold to consumers. www.AssignmentPoint.com

18. Maintaining safety • Production managers and the whole production unit should ensure that the workplace is safe and nobody gets hurts while working. • Worker’s safety is a corporate responsibility of business to its employees. • Even if anyone gets hurt, the company should provide compensation for that. • Production managers should also ensure the product safety and that is also a social responsibility to consumers. www.AssignmentPoint.com