Production & Operations Management - Week 8

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Questions and Answers

What is the main focus of production management?

  • Increasing the number of employees in a factory
  • Transforming raw materials into finished products (correct)
  • Maximizing raw material usage
  • Eliminating all costs associated with production

Which of the following is NOT a key objective of production management?

  • Producing goods regardless of cost (correct)
  • Producing goods at the right time
  • Producing goods in the right quantity
  • Producing goods of the right quality

How is the 'right quality' of a product determined in production management?

  • By the use of the highest quality materials available
  • Through adherence to industry standards only
  • Based on customer needs and cost considerations (correct)
  • By comparing it to competitors' products

What aspect of production management involves the optimal utilization of resources?

<p>Process planning (D)</p> Signup and view all the answers

Which of the following statements about production management is true?

<p>It combines various resources to add value to products. (D)</p> Signup and view all the answers

What role do services play in the production management process?

<p>They are part of process planning and support the production function. (D)</p> Signup and view all the answers

Which component is NOT typically considered a resource in production management?

<p>Marketing strategy (D)</p> Signup and view all the answers

In production management, what does continuous inventory refer to?

<p>Consistent monitoring of quality and cost in production (D)</p> Signup and view all the answers

What happens if production exceeds demand?

<p>Capital becomes tied up in inventory. (C)</p> Signup and view all the answers

Why is timeliness of delivery important for the production department?

<p>It is an indicator of production department effectiveness. (B)</p> Signup and view all the answers

What is the goal of establishing manufacturing costs before product creation?

<p>To reduce discrepancies between actual and standard costs. (D)</p> Signup and view all the answers

How does an operating system function in production?

<p>It converts raw materials into outputs to satisfy customer needs. (D)</p> Signup and view all the answers

What distinguishes production and operations management from other business functions?

<p>Its primary concern for conversion of physical resources. (D)</p> Signup and view all the answers

What does the location of facilities entail in operations management?

<p>A long-term capacity decision related to geographical factors. (B)</p> Signup and view all the answers

Which of the following is a component of the production and operations management scope?

<p>Converting inputs to outputs for desired customer utilities. (A)</p> Signup and view all the answers

What is a likely outcome of producing less than the demand?

<p>Customer dissatisfaction due to product shortages. (B)</p> Signup and view all the answers

What is the primary goal of production planning and control?

<p>To create an efficient workflow (C)</p> Signup and view all the answers

Which function of production planning focuses on determining the sequence of operations to be executed?

<p>Scheduling (C)</p> Signup and view all the answers

What does routing primarily determine in the production process?

<p>The flow of materials through different departments (A)</p> Signup and view all the answers

Which of the following statements best describes the concept of planning in production?

<p>Planning decides what to do, how to do it, and when to do it (A)</p> Signup and view all the answers

What is the role of dispatching in production planning?

<p>To start production processes based on planned schedules (D)</p> Signup and view all the answers

What does the phrase 'First Plan Your Work and then Work on Your Plan' emphasize?

<p>The sequence of setting goals before taking action (D)</p> Signup and view all the answers

In terms of process design, what does the selection of a workstation impact?

<p>The effectiveness of workflow in production (D)</p> Signup and view all the answers

Which function of production planning involves following up on the progress of production orders?

<p>Follow-up (C)</p> Signup and view all the answers

What is one unique characteristic of services?

<p>Service production and consumption are simultaneous. (C)</p> Signup and view all the answers

What is primarily included in the definition of a product?

<p>Anything that satisfies a want or need (A)</p> Signup and view all the answers

Which of the following is NOT a concern for a production manager?

<p>Hiring of sales staff (A)</p> Signup and view all the answers

What is the main philosophy behind the Just-In-Time (JIT) concept?

<p>To encourage improvements and eliminate recurring problems. (C)</p> Signup and view all the answers

Why can calculating cost and productivity in service organizations be challenging?

<p>They involve customer participation in the service process. (B)</p> Signup and view all the answers

What is the main purpose of production planning and control?

<p>To ensure timely delivery of products or services (C)</p> Signup and view all the answers

Which of the following is NOT a responsibility associated with recruiting production personnel?

<p>Participation in product pricing. (A)</p> Signup and view all the answers

Which factor is considered a major quantitative factor when choosing a plant location?

<p>Cost (A)</p> Signup and view all the answers

Which of the following is true regarding qualitative factors in location selection?

<p>They may affect the attractiveness of a site (B)</p> Signup and view all the answers

What does the term 'time perishable' refer to in the context of service capacity?

<p>Unused service capacity cannot be recovered once lost. (D)</p> Signup and view all the answers

In service organizations, what is a significant challenge related to managing capacity?

<p>High variability in demand. (C)</p> Signup and view all the answers

What encompasses the key elements of plant establishment?

<p>Flow of materials and handling methods (A)</p> Signup and view all the answers

Which aspect of JIT contributes to increased customer satisfaction?

<p>Total quality control integration. (C)</p> Signup and view all the answers

Which approach might be taken when evaluating location options for a plant?

<p>Using a combination of quantitative and qualitative analysis (A)</p> Signup and view all the answers

Which of the following statements about service operations is true?

<p>Service operations often require significant human labor. (A)</p> Signup and view all the answers

What is an important aspect of a production manager's role regarding market demands?

<p>Forecasting market trends and customer needs (A)</p> Signup and view all the answers

What is the primary function of follow-up in production management?

<p>To report daily work progress and investigate deviations (B)</p> Signup and view all the answers

Which of the following is NOT an objective of quality control?

<p>To increase production speed (D)</p> Signup and view all the answers

In quality control, what does 'interchangeability of manufacture' refer to?

<p>The production of identical items on a large scale (C)</p> Signup and view all the answers

How can companies reduce costs through quality control?

<p>By minimizing losses due to defects (B)</p> Signup and view all the answers

What aspect does quality control primarily focus on?

<p>Future production satisfaction (C)</p> Signup and view all the answers

Which characteristic of a product does quality control NOT aim to maintain?

<p>Aesthetic design (B)</p> Signup and view all the answers

What is a likely consequence of inadequate quality control?

<p>Costly quality calamities (B)</p> Signup and view all the answers

What is one way that prompt inspection contributes to quality control?

<p>By ensuring adherence to regulatory standards (B)</p> Signup and view all the answers

Flashcards

Production Management

Planning, organizing, directing, and controlling production activities to transform resources into desired products.

Production Management Objectives

Producing goods and services with right quality, quantity, time, and cost.

Right Quality

Meeting customer needs and technical specifications at a suitable cost; not necessarily the best quality.

Right Quantity

Producing the correct amount of products needed.

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Input Resources

Materials, machines, information, capital that go into the production process.

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Output Resources

The products or services produced in the production process.

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Transformation Process

The process of changing inputs into outputs.

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Product Design

Creating a product's specifications, appearance, and features.

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Production excess

When more products are made than are demanded. This leads to excess inventory.

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Production shortage

When fewer products are made than are demanded, leading to a lack of products in stock.

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Timely delivery

Delivering products when promised, it's a crucial aspect of production success.

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Manufacturing Cost

The cost of producing a product, decided before production starts.

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Operating System

The process of transforming inputs into outputs, typically fulfilling customer needs.

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Production & Operations Management

Converting inputs into outputs to meet desires, emphasizing efficiency and adaptability.

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Facility Location

The choice of physical location for a business's operations. This is a long-term decision.

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Input/Output

Products used to make an item and finished goods prepared for sale.

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Process Design Decisions

These decisions involve choosing the production process, selecting appropriate technology, analyzing the workflow, and designing the facility layout.

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Process Design Goal

To analyze how raw materials are converted into finished products and to assign workstations for each step in the workflow.

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Production Planning & Control

The process of planning production in advance, setting routes for each item, scheduling start and finish dates, issuing production orders, and tracking progress.

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Production Planning & Control Principle

First plan your work, then work on your plan.

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Planning in Production

Deciding what to produce, how to produce it, when to produce it, and who will produce it.

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Routing in Production

Selecting the path that each part of the product will follow from raw materials to finished goods.

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Scheduling in Production

Determining the time and date for each operation and the sequence of operations.

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Dispatching in Production

Authorizing the start of production based on planned routes and schedules.

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Follow-up Function

A daily process that reports on the progress of work in each shop using a specific format and investigates reasons for deviations from planned performance.

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Quality Control

A process that ensures customers receive products of satisfactory quality. It focuses on features and characteristics that meet a specific need and aims to improve future production.

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Quality Control Objectives

Improving company income by making production more acceptable to customers, reducing costs by minimizing defects, achieving interchangeability for mass production, producing optimal quality at lower prices, and ensuring customer satisfaction.

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Scope of Production and Operations Management

A broad field that includes various key areas like location and facilities, plant layout, maintenance management, material handling, material management, production/operation management, product design, quality control, process design, and production planning & control.

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Plant Layout

The arrangement of machinery, equipment, and workspaces within a production facility to optimize workflow and efficiency.

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Material Handling

The process of moving materials within a production facility, including storage, transportation, and handling.

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Process Design

Creating the sequence of steps and activities needed to transform inputs into outputs in a production process.

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What are the 4 P's of Production Management?

The four P's stand for Product, Plant, Location, and People. They represent key elements to consider for successful production management.

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Product (4 Ps)

A product is anything offered for attention, use, or consumption to satisfy a want or need. It includes physical objects, services, activities, places, organizations, or ideals.

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Plant (4 Ps)

A plant is an establishment where goods or services are produced. Key factors for a plant's success include location, capacity, manufacturing methods, material flow, and handling methods.

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Location (4 Ps)

Plant location influences its operations and costs. Factors to consider include costs, infrastructure, social environment, and regulatory aspects.

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Qualitative Location Factors

Qualitative factors, like social infrastructure, community support, environment, education, and government policies, can also influence plant location decisions.

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Combining Location Factors

The final plant location decision should often be based on a combination of quantitative and qualitative factors. The goal is to achieve minimum location cost while considering both economic and social aspects.

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What is the key to JIT success?

JIT emphasizes continuous improvement and staff involvement to identify and prevent problems. This ensures quality and efficiency.

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What makes service operations unique?

Services are intangible, perishable, produced and consumed simultaneously, labor-intensive, involve customer participation, and the customer determines the service location.

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What is Just-in-Time (JIT)?

A production system that ensures only necessary inventory is available when needed. It aims to reduce waste, optimize efficiency, and enhance quality.

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What is the purpose of JIT?

It aims to identify problems early and prevent them from recurring, promoting continuous improvement and customer satisfaction.

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How does JIT relate to quality?

JIT is considered total quality control. It prioritizes continuous efforts to create high-quality products and services that ensure customer happiness.

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What are the challenges of service systems?

Services involve uncertainty with capacity and costs, are produced and consumed in the customer's presence, and can't be stored physically. They also rely on individualized judgments and are difficult to standardize.

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What is the connection between recruitment and production?

Effective production management involves active recruitment and selection of personnel, training, performance appraisal, compensation, motivation, and supervision, as well as ensuring their wellbeing and safety.

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What is the goal of staff training and development?

It aims to enhance staff skills, knowledge, and abilities to improve performance, productivity, and overall effectiveness within the organization.

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Study Notes

Production & Operations Management - Week 8

  • Production is defined as the activity of transforming raw materials or components into finished goods. Production management involves effectively planning and controlling operations within an enterprise.
  • From an economic perspective, organizations are viable if they satisfy customer needs through products, services, or systems. Production operations management effectively manages organizational resources to achieve this.
  • Production and operations management is crucial for successful organizations, ensuring efficient and effective resource utilization.
  • Industries and organizations vary significantly in their organizational structures and methods of work; therefore, terminology isn't standardized across the board. Nevertheless, basic principles can be adapted to different production types.

Introduction

  • Organizations are only viable if they fulfill customer wants through the products, services or systems they create or provide, economically speaking.
  • Production and operations functions focus on creating goods, services, or systems.
  • Production operations management specifically deals with the effective use of organizational resources in creating these goods, services, or systems.
  • Efficient and effective production/operations management is essential for a successful organization.

Definition

  • Essential aspects of production include converting raw materials or components into finished products.
  • Production management encompasses the effective planning and control of operations within an organization's production sector.
  • The various industries and companies within an industry exhibit significant variations in their organization and operational methods.
  • Terminology surrounding production management has not been standardized to a large degree, but some basic principles are applicable to various production types.

The Concept of Production Management

  • The production function within an organization is responsible for transforming inputs into outputs that meet required quality levels.
  • Production is defined as the stepwise conversion of materials into another form, increasing the product's utility for the end user via chemical or mechanical processes.
  • Production is a value-added process, with each processing stage contributing to increasing value.

Input, Transformation Process, Output

  • Key inputs include people, materials, machinery, information, and capital.
  • The transformation process encompasses different stages, including product design, process planning, product control, and maintenance, to transform inputs into outputs.
  • Key outputs include products and services.
  • Continuous monitoring of inventory levels, quality, and cost is integral in this transformation process.

Production Management Objectives

  • Production management aims to create goods and services with the right quality, quantity, at the correct time, and at a suitable manufacturing cost.
  • Right quality: Product quality is set based on customer needs and cost/technical characteristics. It isn't necessarily about achieving the best quality, but about the product meeting its required needs.
  • Right quantity: Organizations should produce products in sufficient numbers to meet demand. Excess production leads to inventory buildup; insufficient production results in shortages.
  • Right time: Timeliness of delivery is crucial for evaluating the effectiveness of the production department, thus requiring optimal input resource utilization.
  • Right manufacturing cost: Manufacturing costs should be established before production begins to minimize variations between actual and planned costs.

Operating System

  • An operating system transforms inputs into outputs according to customer needs, adding utility to the product/service.
  • In some organizations, outputs are physical goods (e.g., hotels), while in others they are services (e.g., hospitals).
  • Examples of an operating system include hospitals, transportation providers, tailors, and builders.

Scope of Production & Operations Management

  • Production and operations management encompasses the conversion of inputs to outputs, maximizing efficiency and effectiveness within organizational objectives.
  • This function is distinct from other organizational functions, such as personnel or finance, with its primary focus on conversion using physical resources.

Location of Facilities

  • Facility location decisions are long-term strategic decisions significantly impacting organizations.
  • Key considerations include the placement of primary operations and plant/machinery investments.
  • Poor location decisions can lead to wasted investment in facilities, machinery, and equipment.
  • Decisions should consider broader business strategies, market expansion plans, availability of raw materials, and other diverse factors.

Plant Layout and Material Handling

  • Plant layout refers to the physical arrangement of facilities, work centers, and equipment to ensure efficient material flow.
  • Its optimization aims to produce adequate quality and quantity most cost-effectively.
  • Material handling encompasses the movement of material throughout the manufacturing process, from the storage to the production machinery, and from one machine to the next.

Product Design

  • The conversion of ideas into physical products represents the crucial first stage of product design.
  • An organization's survival and growth strategies often hinge on the effectiveness (or design of) new product introductions in the marketplace.
  • Effective product design involves the identification of customer needs, translating these into technical specifications. It also includes the detailed design stages to meet the needs, and processes for creating the product itself.

Process Design

  • Process design involves overarching decisions regarding the best route for converting raw materials into finished products, which often involves considering process selection, technology choice, process flow analysis, and facility layouts.
  • Proper process design analyses workflows and identifies workstation selections conducive to optimal material transformation.

Production Planning and Control

  • Production planning and control involves comprehensively planning and controlling production in advance. Exact routes, starting and finishing dates, and production orders are key elements of this process.
  • The principle of production involves planning the work thoroughly before implementation (First Plan Your Work and then Work on Your Plan).
  • Key planning and control aspects include planning, routing, scheduling, dispatching, and follow-ups.

Main Functions of Production Planning & Control

  • Production planning and control involves establishing what to create, how to make it, who will do what, and when.
  • Routing designates the preferred route through production elements and equipment, optimizing efficiency. Effective schedules, including the time and date of each step, effectively determine their sequence.

Dispatching and Follow-up

  • Dispatching authorizes the commencement of production steps previously detailed in planning and scheduling.
  • Follow-ups ensure that ongoing production activities and output progress align with planned performance. This detailed monitoring and reporting process is paramount for effective quality control

Quality Control

  • Quality control is integral in ensuring that customers receive goods and services with adequate quality.
  • The quality of a product is relevant to organizational financial performance, as high costs can be associated with poor quality.
  • Objectives of quality control include improving appeal to customers, reducing manufacturing defects, achieving consistent quality across outputs, offering cost-effective production to consumers, and building customer trust.

Just-in-Time (JIT)

  • The just-in-time production approach originated in Japan as an effort to optimize inventory levels, reducing waste and improving production efficiency.
  • Key objectives underpinning JIT include ensuring inventory is only available when and as it's required.
  • Overall, JIT aims to identify problems early on and allow for consistent improvements in production methodologies.

Objectives of JIT

  • The core objectives of a JIT system center around producing finished goods as needed for sale.
  • This system also aims to assemble sub-assemblies into completed products just in time for sale; purchase necessary parts just in time to assemble those sub-assemblies; and transform raw materials into manufactured components just as they're needed.

Benefits of JIT

  • JIT systems offer advantages such as increased productivity, reduced inventory levels, reduced waste, enhanced employee motivation, improved customer service, lowered administrative costs, and fewer materials handling needs.

Five Types of Production Processes

  • Project: This approach is suitable for unique, large-scale projects where resources are brought together to the project site.
  • Jobbing: Job production entails working on small-size projects or items, completing and delivering them in-house to the end consumer.
  • Batch: Batch production deals with large standardized outputs where a given facility accommodates various batches of similar items. A facility is adjusted and then re-used for different batches within the facility
  • Line: This method entails a repetitive sequence of operations; all products follow the same process or line, and in limited numbers.
  • Continuous: This process is customized for standardized outputs on a large scale and highly repetitive manner. The level of production is constant, often demanding standardized raw materials.
  • Mass: Mass production is an identical product type, made to meet the demand of an assembly line or the market. Planning for materials, process, machine maintenance, and operator instructions are paramount in this system. Bulk material purchasing is beneficial.

People

  • Organizational success is directly related to the quality of its workforce (manpower).
  • Managers should actively plan and control activities related to employee recruitment, training, and development. These activities require continuous employee motivation and supervision, alongside ongoing welfare and safety program support.

Services

  • Service systems' capacity and costs often exhibit greater uncertainty due to unpredictability of customer presence.
  • Services cannot be stored physically and involve direct customer interaction, leading to varying service demands. This can lead to challenges in accurately calculating costs. Many customer-based business need to manage variable demands; such as doctor's appointments, concert tickets, or hotel reservations.
  • Unique service dynamics, like intangibility and time-perishability, necessitate specialized production processes and customer relationship management strategies.

Scope of Production and Operations Management (Diagrammed)

  • A diagram is included (with the uploaded files) encompassing several key functions within the production and operations management field.

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