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Chapter 09 - Production and Operations Management
9-74
Milk
X
Dress
X
Coal
X
Newspaper
X
Telephone
X
Name: ___________________________
Date: ___________________________
critical thinking exercise 9-3
SITE SELECTION
Chapter 09 - Production and Operations Management
9-75
Plenty of skilled labor
Abundant and inexpensive
resources (water, electricity,
wood, coal, etc.)
Located close to market
Low cost of land
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critical thinking exercise 9-3 (continued)
FACTOR IN SITE SELECTION
COMPANY A
COMPANY B
COMPANY C
Tax and government
support
Access to transportation
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Name: ___________________________
Date: ___________________________
critical thinking exercise 9-4
DESIGNING PLANT LAYOUT
Review the various production layouts presented in text Figure 9.2 on page 248. Choose one of
the four products below and design a plant layout for a firm producing that product. To better understand
how these products are produced, you can research the subject using the Internet.
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9-78
Name: ___________________________
Date: ___________________________
critical thinking exercise 9-5
DRAWING A PERT DIAGRAM
Review the material in the text on developing a PERT diagram (text page 252).
1. For one of the following production processes, draw a PERT diagram, including estimated
completion times. Be sure to include purchasing and transportation elements.
2. Clearly identify the critical path.
9-79
bonus case 9-1
THE STATE OF AMERICAN MANUFACTURING
Even before the recession, American manufacturing was on the skids. Outsourcing and techno-
logical advancements made the American worker obsolete in the eyes of many companies. And just when
it seemed like it couldn’t get any worse, the recession hit. Since December 2007, the manufacturing sector
discussion questions for bonus case 9-1
1. Was the loss of traditional manufacturing inevitable in the U.S. economy?
2. Can the United States hold on to its current manufacturing base?
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1. Was the loss of traditional manufacturing inevitable in the U.S. economy?
2. Can the United States hold on to its current manufacturing base?
bonus case 9-2
A SMALL HOMECOMING BY AMERICAN MANUFACTURERS
Like many other companies, the recession has not been kind to construction giant Caterpillar Inc.
Since late 2008 the company slashed approximately 20,000 U.S. jobs after profits plunged with the stock
market. In 2009 Caterpillar cut its worldwide employment further by 17%. Now the company is in recov-
discussion questions for bonus case 9-2
1. Will “onshoring” become an ongoing trend in the 2010s?
2. Why do states compete so fiercely for new manufacturing operations?
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notes on discussion questions for bonus case 9-2
1. Will “onshoring” become an ongoing trend in the 2010s?
2. Why do states compete so fiercely for new manufacturing operations?
bonus case 9-3
ORECK: AFTER THE STORM
Ten days after Hurricane Katrina tore through Long Beach, Mississippi, the Oreck Corporation
reopened the storm-damaged plant where it assembled its widely advertised vacuum cleaners. It hauled in
generators, imported trailers to house its workers, and was hailed as a local hero. Oreck’s plant, in an in-
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discussion questions for bonus case 9-3
1. Why was the Oreck move so difficult to accept?
2. What could the Oreck company have done differently?
3. What does this decision by Thomas Oreck say about his leadership skills?
4. Does Oreck have just cause for his decision? Should he have supporters for his decision to move
to Tennessee? What decision would you have made considering the situation?
notes on discussion questions for bonus case 9-3
1. Why was the Oreck move so difficult to accept?
2. What could the Oreck company have done differently?
3. What does this decision by Thomas Oreck say about his leadership skills?
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4. Does Oreck have just cause for his decision? Should he have supporters for his decision to move
to Tennessee? What decision would you have made considering the situation?
bonus case 9-4
KAIZEN: REDESIGNING THE MANUFACTURING PROCESS
Anand Sharma, 55, a personable manufacturing consultant who runs TBM Consulting Group in
Durham, North Carolina, has a reputation for finding out what a factory is doing wrong by simply walk-
ing through it with the plant manager. Sharma usually asks the manager about the factory’s “rhythm.”
More often than not, the manager expresses puzzlement. But Sharma, like a seasoned orchestra conductor,
may already have noted off-tempo components on the plant floor—a machine with a hardly perceptible
squeak here, workers laboring at an uneven pace there, too much inventory piled up.
Sharma trusts his senses to point to evidence of bad processes. In addition to looking for obvious
signs (Is the plant well lit and clean?), he checks to see if operators at one part of the line are working at a
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When his division of American Standard was put up for sale, Sharma and three colleagues started
TBM Consulting in 1991, operating out of Sharma’s home.
At one level, TPS is built on the concept of kaizen, Japanese for “continuous improvement.”
TBM experts adjust rigid Japanese methods to freer American ways when they establish kaizen method-
ology in a plant. In Sharma’s approach, for instance, production line workers have a lot more say than
Japanese workers about changes on the manufacturing floor. To assure himself of their input, Sharma re-
fuses to work with companies that propose to lay off workers after his system is introduced; that destroys
morale, he believes. Any superfluous line workers are assigned other jobs, with some becoming trainers.
“We unleash the power of the people,” he says.
discussion questions for bonus case 9-4
1. What concepts from this chapter were implemented by TPS? Do you see the benefits of knowing
such concepts now, before you choose a place to work?
2. Notice that introducing change does not necessarily lead to the layoff of workers. They merely
become more productive. Who benefits from such changes?
notes on discussion questions for bonus case 9-4
1. What concepts from this chapter were implemented by TPS? Do you see the benefits of knowing
such concepts now, before you choose a place to work?
Chapter 09 - Production and Operations Management
2. Notice that introducing change does not necessarily lead to the layoff of workers. They merely
become more productive. Who benefits from such changes?
endnotes
iSources: Douglas Waller, “NASCAR: The Army’s Unlikely Adviser,” Time, July 54, 2005; Stefanie A Gardin,
“Army News Service: Army Adopts NASCAR Technology for Helicopters,” Defense AT & L, May 1, 2005.
ii Sources: Peter Whoriskey, “A Bargain for BMW Means Jobs for 1,000 in S. Carolina,” The Washington Post, Oc-
tober 27, 2010; David J. Lynch, “Chinese Plants Grow on U.S. Turf,” Bloomberg Businessweek, December 28,
2010.
ixSources: Maggie Overfelt, “The Great American Company: Quest for Perfection,” Fortune Small Business,
March 19, 2003; Tam Harbert, “Lean, Mean, Six Sigma Machines: Electronics Companies Have Used Lean Six to
Trim Down, But Can It Help Them Pump Up?” Electronic Business, June 1, 2006.
x Source: Allison Linn, “Yes, We Do Still Make Things in America,” MSNBC, March 15, 2010.
xi Source: Kris Maher and Bob Tita, “Caterpillar Joins ‘Onshoring’ Trend,” The Wall Street Journal, March 12,
2010.
