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Chapter 10

RSM100Y1 Chapter 10 Notes

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University of Toronto St. George
Rotman Commerce
Michael Khan

RSM100Y1 Textbook Notes Chapter 10 Production: the use of resources, such as workers and machinery, to convert materials into finished goods and services. Production and operations management: the process of overseeing the production process by managing the people and machinery that convert materials and resources into finished goods and services. INPUTS CONVERSION OUTPUTS PROCESS - Resources - Goods - Raw Materials - Add Value - Services The production proves always converts inputs into outputs. When production and operations management are effective: o They can lower a firms costs of production o Increase the quality of its goods and services o Allow it to be dependable when meeting customer demands o Enable it to renew itself by providing new products. Mass production: a system for manufacturing products in large quantities by using effective combinations of employees with specialized skills, mechanization, and standardization (outputs become cheaper). Specialization of work divides up work into its simplest forms so that each worker can focus on one task. In mechanization, machines do much of the work previously done by people. Standardization involves producing identical, interchangeable goods and parts. Assembly line (result of spec-, mech-, and standardization): a product moves along a conveyor belt past many workstations, where workers perform specialized tasks (i.e. painting, welding etc.). Mass production is highly inefficient for producing small batches of different items and can also lead to boring jobs (same task continuously repeated). Flexible production uses: o Information technology To share the details of customer orders. o Programmable equipment To fill the orders. o Skilled people To carry out the tasks needed to complete an order. Flexible production is usually more cost-effective for producing smaller runs and requires a lot of communication amongst everyone in the organization. Customer-driven production: a system that assesses customer demands to make a connection between the products that are manufactured and the products people want to buy. One method is to: o Set up computer links between factories and retailers scanners. Data about sales are then used to create short-term forecasts and design production schedules to meet those forecasts. Another method is to: o Wait until a customer orders a product and then produce it (no matter the product). Production processes either use: o An analytic system Reduces a raw material to its component (individual) parts to extract one or more marketable products (i.e. petroleum refining breaks down crude oil into gas, heating oil, aviation fuel etc.). o A synthetic system Combines two or more raw materials or parts, or transforms raw materials, to produce finished products. Time requirements use either: o A continuous process Creates finished products over a long period of time (machines are not usually shut down). o An intermittent process (most services) Creates products in short production runs. Machines may be shut down frequently or may be changed so they produce different products. More manufacturing firms are investing resources into developing processes that result in less waste, lower energy use, and little or no pollution. LEED (Leadership in Energy and Environmental Design): a voluntary certification program administered by the Canada Green Building Council, aimed at promoting the most sustainable construction processes available. Robot: a machine that can be programmed to perform tasks that require the repeated use of materials and tools. Pick-and-place robot (simplest): moves in only two or three directions, picking up one item from one spot and placing it in another spot. Field robots: assist people in nonmanufacturing, often dangerous environments (i.e. police bomb diffusers). By using vision systems, infrared sensors, and bumpers on mobile platforms, robots can move parts or finished goods from one place to another. Computer-aided design (CAD): a process used by engineers to design parts and entire products on the computer. Engineers who use CAD can work faster and with fewer mistakes than those who use traditional drafting systems. Computer-aided manufacturing (CAM): a computer tool that a manufacturer uses to analyze CAD output and the steps that a machine must take to produce a needed product or part. Flexible manufacturing system (FMS): a production facility that workers can quickly change to manufacture different products. o Typically uses computer-controlled machining centres to produce metal parts, robots to handle the parts and remote-controlled carts to deliver the materials. Computer-integrated manufacturing (CIM): an integrated production system that uses computers to help workers design products, control machines, handle materials, and control the production function. o Key is a centralized computer system running software that integrates and controls separate processes and functions. o Advantages: Increased productivity Decreased design costs Increased equipment utilization Improved quality When deciding on a location, a production and operations manager must consider the following factors: o Closeness to suppliers, warehouses, and service operations o Costs of insurance and taxes o Availability of employee needs such as housing, sc
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