• Production Application of resources such as people and machinery to convert materials into finished goods and services.

• Production and operations management Managing people and machinery in converting materials and resources into finished goods and services.

The Production Process: Inputs Conversion Process Outputs

STRATEGIC IMPORTANCE OF THE PRODUCTION FUNCTION

• A vital function for generating money for employees, lenders, and stockholders.

Mass Production

• Manufacturing products in large amounts through specialized employees skills, mechanization, and standardization.

• Assembly line

Flexible Production• Produces smaller batches of goods cost-effectively.

Customer-Driven Production• Links what a manufacturer makes with what customers want to

buy.

PRODUCTION PROCESSES

• Analytic production system

• Synthetic production system

• Continuous production process

• Intermittent production process

TECHNOLOGY AND THE PRODUCTION PROCESS

Robots • Reprogrammable machine capable of performing

numerous tasks that require manipulation of materials and tools.

Computer-Aided Design and Manufacturing• CAD—Interactions between a designer and a computer to

create a product, facility, or part.

• CAM—Analyze CAD output, determine necessary steps to implement the design, and transmit instructions to production equipment.

Flexible Manufacturing Systems• A production facility that workers can quickly

modify.Computer-controlled machining centers produce metal parts.

Robots handle the parts.

Remote-controlled carts deliver materials.

All linked by electronic controls.

Computer-Integrated Manufacturing• Computers help workers design products, control

machines, handle materials, and control the production function in an integrated fashion

THE LOCATION DECISION

THE JOB OF PRODUCTION MANAGERS

• Oversee the work of people and machinery to convert inputs (materials and resources) into finished goods and services.

Planning the Production Process• Choose what goods or services to offer customers.• Convert original product ideas into final specifications.• Design the most efficient facilities to produce those products.

Determining the Facility Layout• Process layout, product layout, fixed-position layout, and

customer-oriented layout.

Implementing the Production Plan• Make, buy, or lease decision

• Selection of suppliers

• Inventory control

• Just-in-time systems

• Materials requirement planning

Controlling the Production Process• Production control

• Production planning

• Routing

• Scheduling

• Dispatching

• Follow-up

IMPORTANCE OF QUALITY

• Best defined as a good or service free of deficiencies.

• In some companies, costs of poor quality amount to 20 percent of revenue.

• Benchmarking Determining other companies’ standards and best practices.

Quality Control• Quality control Measuring goods and services against

established quality standards.

• Many companies evaluate quality using the Six Sigma concept.

ISO Standards