Chapter 09 – Production and Operations Management
9-1
Production and
Operations
Management
chapter
=
what’s new in this edition 9.3
brief chapter outline and learning goals 9.3
lecture outline and lecture notes 9.5
PowerPoint slide notes 9.42
lecture links 9.64
lecture link 9-1: THE MILITARY LEARNS FROM NASCAR 9.65
lecture link 9-2: MADE IN THE USA, BUT OWNED BY CHINA 9.65
lecture link 9-3: TOLEDO’S SUNNY FUTURE 9.65
lecture link 9-4: SPEEDING UP THE DRIVE-THROUGH 9.66
lecture link 9-5: AMERICA’S ROBOTICS REBOUND 9.66
lecture link 9-6: KODAK LEARNS SPEED 9.67
lecture link 9-7: URBAN AGRICULTURE IN DETROIT 9.68
lecture link 9-8: WYETH BIOTECH 9.68
lecture link 9-9: SPYING ON THE GREEN GIANT 9.69
lecture link 9-10: MOTOROLA AND SIX SIGMA 9.70
9
Chapter 09 – Production and Operations Management
9-2
critical thinking exercises 9.70
critical thinking exercise 9-1: GROUP PROJECT: ORGANIZING 9.70
PRODUCTION
critical thinking exercise 9-2: PRODUCTION PROCESSES 9.72
critical thinking exercise 9-3: SITE SELECTION 9.74
critical thinking exercise 9-4: DESIGNING PLANT LAYOUT 9.77
critical thinking exercise 9-5: DRAWING A PERT DIAGRAM 9.78
bonus cases 9.79
bonus case 9-1: THE STATE OF AMERICAN MANUFACTURING 9.79
bonus case 9-2: A SMALL HOMECOMING BY AMERICAN MANUFACTURERS 9.80
bonus case 9-3: ORECK: AFTER THE STORM 9.81
bonus case 9-4: KAIZEN: REDESIGNING THE MANUFACTURING PROCESS 9.83
what’s new in
this edition
additions to the 10th edition:
• Name That Company: Allen-Bradley
• Thinking Green: Key Word: Sustainability
• Reaching Beyond Our Borders: Learning from Germany
• Spotlight on Small Business: Mass Customization of Candy
revisions to the 10th edition:
• Text was revised to eliminate redundancy and tighten discussions.
• Statistical data and examples throughout the chapter were updated to reflect current information.
• Getting to Know Samuel J. Palmisano, CEO and President of IBM
deletions from the 9th edition:
• Name That Company: Ritz-Carlton
• Thinking Green
• Reaching Beyond Our Borders
Chapter 09 – Production and Operations Management
9-3
brief chapter outline
and learning goals
c h a p t e r 9
Production and Operations
Management
Getting To Know SAMUEL J. PALMISANO of IBM
learning goal 1
Describe the current state of U.S. manufacturing and what manufacturers have done to be-
come more competitive.
I. MANUFACTURING AND SERVICES IN PERSPECTIVE
A. Manufacturers and Service Organizations Become More Competitive
learning goal 2
Describe the evolution from production to operations management.
II. FROM PRODUCTION TO OPERATIONS MANAGEMENT
A. Operations Management in the Service Sector
learning goal 3
Identify various production processes and describe techniques that improve productivity, in-
cluding computer-aided design and manufacturing, flexible manufacturing, lean manufactur-
Chapter 09 – Production and Operations Management
9-4
IV. OPERATIONS MANAGEMENT PLANNING
A. Facility Location
B. Facility Location for Manufacturers
C. Taking Operations Management to the Internet
D. Facility Location in the Future
E. Facility Layout
F. Materials Requirement Planning
G. Purchasing
H. Just-in-Time Inventory Control
I. Quality Control
J. The Baldrige Awards
K. ISO 9000 and ISO 14000 Standards
learning goal 5
Explain the use of PERT and Gantt charts to control manufacturing processes.
V. CONTROL PROCEDURES: PERT AND GANTT CHARTS
VI. PREPARING FOR THE FUTURE
VII. SUMMARY
Chapter 09 – Production and Operations Management
Getting to Know SAMUEL J. PALMISANO, CEO and
PRESIDENT of IBM
Sam Palmisano is one of the lifetime IBMers who rose up through the ranks. He became
chair in 2002. Palmisano understood that an international company like IBM must always look
toward the future, maximize its strengths, and reduce its weaknesses. IBM’s strength was its
marketing, but it discovered that new-product development and manufacturing were slow and
costly. The company has outsourced both functions to concentrate on its marketing strength.
come more competitive.
I. MANUFACTURING AND SERVICES IN PER-
SPECTIVE
A. MANUFACTURING AFFECTS THE U.S. ECONOMY
This company’s robots manufacture, test, and package motor starters—all untouched
by human hands. The machines can fill special orders, even for a single item, without
slowing down the process. Name that company.
(Students should read the chapter before guessing the company’s name: Allen-
Bradley.)
Chapter 09 – Production and Operations Management
9-6
(See complete PowerPoint slide notes on page 9.42.)
(See complete PowerPoint slide notes on page 9.42.)
(See complete PowerPoint slide notes on page 9.43.)
Chapter 09 – Production and Operations Management
9-7
(See complete PowerPoint slide notes on page 9.43.)
(See complete PowerPoint slide notes on page 9.43.)
(See complete PowerPoint slide notes on page 9.44.)
(See complete PowerPoint slide notes on page 9.44.)
Chapter 09 – Production and Operations Management
downturn.
B. MANUFACTURERS AND SERVICE ORGANIZA-
TIONS BECOME MORE COMPETITIVE
1. Foreign manufacturers have become competitive
by using U.S. technology.
2. The service sector is gaining in importance.
a. Focus more on customers
b. Maintain closer relationships with suppliers
c. Practice continuous improvement
d. Focus on quality
Chapter 09 – Production and Operations Management
9-9
American manufacturing has been slowing down for years
and economists fear they could eventually lose their edge to
foreign competitors. (See the complete case, discussion ques-
tions, and suggested answers beginning on page 9.79 of this
manual.)
(See complete PowerPoint slide notes on page 9.44.)
Innovative ideas can come from unexpected sources. For
example, the military is studying processes used in NASCAR
racing. (See the complete lecture link on page 9.64 in this
manual.)
thinking
green
(Text page 236)
PPT 9-10
Key Word:
Sustainability
See complete PowerPoint slide notes on page 9.45.)
Chapter 09 – Production and Operations Management
9-10
Foreign manufacturers are setting up shop in the United
States in order to bypass trade barriers and capitalize on gov-
ernment subsidies. (See the complete lecture link on page 9.65
in this manual.)
(See complete PowerPoint slide notes on page 9.45.)
(See complete PowerPoint slide notes on page 9.45.)
To maintain a competitive edge, Toledo, Ohio, is turning
away from its glass past and toward solar energy. (See the
complete lecture link on page 9.65 in this manual.)
Chapter 09 – Production and Operations Management
9-11
learning goal 2
Describe the evolution from production to operations management.
II. FROM PRODUCTION TO OPERATIONS
MANAGEMENT
A. PRODUCTION is the creation of finished goods and
services using the factors of production: land, labor,
capital, entrepreneurship, and knowledge.
1. Production has usually been associated with
3. Operations management involves many
4. Some organizations produce mostly goods
(factories and mines); others mostly services
B. OPERATIONS MANAGEMENT IN THE SERVICE
SECTOR
Chapter 09 – Production and Operations Management
9-12
REACHING BEYOND
our borders
(Text page 237
PPT 9-13
Learning from
Germany
(See complete PowerPoint slide notes on page 9.46.)
This is a fun exercise to give students firsthand experience
in production. (See complete exercise on page 9.70 of this
manual.)
(See complete PowerPoint slide notes on page 9.46.)
(See complete PowerPoint slide notes on page 9.46.)
(See complete PowerPoint slide notes on page 9.47.)
Chapter 09 – Production and Operations Management
9-13
2. The hotel chain created a sophisticated computer-
ized guest recognition program and a Quality
Management Program to “certify” employees.
III. PRODUCTION PROCESSES
A. PRODUCTION USES BASIC INPUTS TO PRODUCE
OUTPUTS
1. Production adds VALUE, or UTILITY, to materials
or processes.
Chapter 09 – Production and Operations Management
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Fast-food retailers are taking a hard look at the drive-
through experience to improve customer satisfaction and in-
crease speed. (See the complete lecture link on page 9.66 of
this manual.)
(See complete PowerPoint slide notes on page 9.47.)
(See complete PowerPoint slide notes on page 9.48.)
(See complete PowerPoint slide notes on page 9.48.)
(See complete PowerPoint slide notes on page 9.49.)
Chapter 09 – Production and Operations Management
cost
3. TYPES OF PRODUCTION OPERATIONS
a. PROCESS MANUFACTURING is that part
process in which long production runs turn
agement is to provide high-quality goods and
services instantaneously in response to custom-
er demand.
2. TRADITIONAL ORGANIZATIONS were not de-
signed to be very responsive to the customer.
3. MASS PRODUCTION let producers make a large
number of limited varieties of products at a very
low cost.
2. COMPUTER-AIDED MANUFACTURING (CAM)
is the use of computers in the manufacturing of
products.
Chapter 09 – Production and Operations Management
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(See complete PowerPoint slide notes on page 9.51.)
Innovative ideas can come from unexpected sources. For
example, the military is studying processes used in NASCAR
racing. (See complete lecture link on page 9.66 of this manu-
al.)
(See complete PowerPoint slide notes on page 9.51.)
(See complete PowerPoint slide notes on page 9.51.)
Chapter 09 – Production and Operations Management
D. FLEXIBLE MANUFACTURING
production.
4. Characteristics of lean companies:
a. They take half the human effort.
Chapter 09 – Production and Operations Management
(See complete PowerPoint slide notes on page 9.52.)
(See complete PowerPoint slide notes on page 9.52.)
When digital photography gained market share at the ex-
pense of film photography, Kodak underwent a difficult re-
structuring process to clarify strategy and practice lean manu-
facturing (See the complete lecture link on page 9.67 of this
manual.)
(See complete PowerPoint slide notes on page 9.52.)