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
- 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
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
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
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
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.
Decreased design costs
Increased equipment utilization
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