CHAPTER 9: PRODUCTION AND

OPERATIONS MANAGEMENT
◦ How they maintain a competitive edge:
◦ Focusing more on customers
◦ Maintaining relationships with suppliers and
other companies
Manufacturers &
◦ Practicing continuous improvement service organizations
◦ Focusing on quality
◦ Saving on cost
become more
◦ Relying on the internet to unite companies competitive
that work together
◦ Adopting production techniques
From production to operations management
Production is the creation of
finished goods and services
using the factors of production
The growth of service sector
has changed the nature of
businesses
Traditionally, production
meant manufacturing and
production management is an
activity that helped firms
create goods
Operations management is a
specialized area in
management that converts or
transforms resources, including
human resources.
Operations management in the service sector
Operations management in the
service industry is all about creating
a good experience for those who
use the service
Delighting customers by
anticipating their needs has
become the quality standard for
service businesses
Spend thousands of dollars to
provide training in quality
management for every new
employee.
For example, the Ritz-Carlton hotel
operations management includes
restaurants that offer the finest in
service, elevators that run smoothly,
and a front desk that processes
people quickly.
 ◦ Form utility is the value producers add to materials in the
creation of finished goods and services.
◦ Process manufacturing physically or chemically changes
materials
◦ Assembly process puts together components to make a
product
◦ A continuous process is one in which long production runs
Production turn out finished goods over time.
◦ Intermittent process is where the production run is short,
processes and the machines are changed frequently to make
different products.
 Computer-Aided Design & Flexible manufacturing
Manufacturing
◦ Computer-aided design (CAD): The use of
computers in the design of products. • Flexible manufacturing means
designing machines to do multiple
◦ Computer-aided manufacturing (CAM) The tasks so they can produce a variety
use of computers in the manufacturing of of product
products.
• An example of this is the Allen-
Bradley who uses flexible
◦ CAD has doubled productivity in many firms. In manufacturing to build motor starters
the past CAD machines couldn’t talk to CAM
machines directly. Now, software programs
unite CAD and CAM: the result is computer
integrated manufacturing (CIM)
 Lean Manufacturing
◦ Is the production of goods using less of
everything than in mass production.
◦ Characteristics:
• Take half the human effort.
• They have half the defects in the finished
product or service.
• They require one-third the engineering
effort.
• They use half the floor space for the same
output.
• They carry 90 percent less inventory.
Mass Customization
◦ Tailoring products to meet the needs of
individual customers
◦ The retailer takes various
measurements from the buyer and
faxes the data to the factory, where
robots handle the bulk of the assembly
◦ Mass customization exists in the service
sector as well.
 Using Sensing, Measurement, and Process
Robotics Control
◦ Most advanced manufacturing
◦ Industrial robotics can work 24 hours a
techniques are driven by computers
day, seven days a week with great
working with vast amounts of data
precision

◦ The moment anything goes wrong, a

◦ Robots replace people on the assembly
sensor can detect it immediately and
line, but most of those jobs are dirty or so
notify someone to make the needed
repetitive that robots are necessary, or
changes.
at least helpful

◦ Companies are also using

◦ Robots are slowly, but surely either
nanomanufacturing
helping people perform better or are
replacing them completely
 OPERATIONS MANAGEMENT PLANNING
◦ Helps solve many of the problems in the service and
manufacturing sectors
◦ Includes:
1. Facility location
2. Facility layout
3. Materials requirement planning
4. Purchasing
5. Inventory control
6. Quality control.