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10: Achieving World-Class Operations Management

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    Learning Objectives

    After reading this chapter, you should be able to answer these questions:

    1. Why is production and operations management important in both manufacturing and service firms?
    2. What types of production processes do manufacturers and service firms use?
    3. How do organizations decide where to put their production facilities? What choices must be made in designing the facility?
    4. Why are resource-planning tasks such as inventory management and supplier relations critical to production?
    5. How do operations managers schedule and control production?
    6. How can quality-management and lean-manufacturing techniques help firms improve production and operations management?
    7. What roles do technology and automation play in manufacturing and service-industry operations management?
    8. What key trends are affecting the way companies manage production and operations?

    • 10.0: Introduction
      This page discusses Deborah Butler's role as a Master Black Belt at Caterpillar, where she employs Six Sigma to boost operational management, reduce defects, and enhance product quality. Since its global implementation in 2001, Six Sigma has driven profit increases and improved customer satisfaction at Caterpillar. The content emphasizes the necessity for companies to innovate in production to meet demands for quality and speed, highlighting trends in production planning and efficiency control.
    • 10.1: Production and Operations Management—An Overview
      This page discusses the significance of production and operations management in manufacturing and service firms, noting its role in transforming inputs into products while enhancing customer satisfaction. It highlights historical shortcomings in customer focus and today's need for effective operations managers to optimize production across divisions. Additionally, it underscores the importance of the production planning process in balancing business goals and improving operational efficiency.
    • 10.2: The Production Process- How Do We Make It?
      This page explains that manufacturers and service firms use distinct production processes—mass production, mass customization, and customization—based on their goals and customer demands. Mass production reduces costs by creating identical products; mass customization adapts standard offerings to individual needs; customization makes unique items on demand.
    • 10.3: Location, Location, Location- Where Do We Make It?
      This page discusses the importance of selecting production facility locations based on factors such as raw materials, labor availability, shipping costs, customer proximity, and local incentives. It highlights the significance of facility design after site selection, mentioning various layouts like process, product, fixed-position, and cellular manufacturing that cater to different operational requirements.
    • 10.4: Pulling It Together- Resource Planning
      This page discusses the importance of resource planning tasks, such as inventory management and supplier relations, for effective production. It highlights make-or-buy decisions, maintaining strong supplier ties for quality, and the use of computerized systems like MRP and ERP to optimize resources. Companies like Mitsui O.S.K.
    • 10.5: Production and Operations Control
      This page explains how operations managers enhance production efficiency through routing and scheduling. Routing defines the operational sequence to optimize costs, with tools like value-stream mapping to spot bottlenecks. Scheduling focuses on timing and coordination of materials and labor, employing tools like Gantt charts for progress tracking and PERT/CPM for managing complex projects. These methods enable effective resource monitoring and adaptive planning for smoother production processes.
    • 10.6: Looking for a Better Way- Improving Production and Operations
      This page discusses quality management and lean manufacturing techniques that enhance production and operations. It highlights that quality management focuses on meeting customer standards, reducing defects, and costs. Tools like Total Quality Management (TQM) and Six Sigma promote continuous improvement and aim for zero defects. Lean manufacturing removes non-value-added steps and uses just-in-time (JIT) systems for inventory optimization.
    • 10.7: Transforming the Factory Floor with Technology
      This page discusses how technology and automation are transforming operations management in both manufacturing and service sectors. Key advancements like CAD, CAM, robotics, and flexible manufacturing systems enhance efficiency, precision, and competitiveness while reducing labor costs. Non-manufacturers, including banks and retailers, also leverage automation to improve customer service and productivity.
    • 10.8: Trends in Production and Operations Management
      This page discusses key trends in U.S. production and operations management, highlighting challenges like a skills gap, reliance on technology, and global competition. It notes that declining federal research investment and a lack of qualified workers hinder innovation leadership. Business Process Management (BPM) is recognized as essential for optimizing global supply chains, improving efficiency and competitiveness. The page emphasizes the need for U.S.

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