* * * Producing World-Class Goods and Services Nickels * McHugh McGraw-Hill/Irwin Understanding Business, 8e * * CHAPTER ** McHugh 1-1 9-1 © 2008 The McGraw-Hill Companies, Inc., All Rights * * * Leading U.S Manufacturing States Michiga n Illinois W A S H IN G T O N M O N TA N A New York M A IN E N O R T H D A K O TA M IC H I G A N O R E G O N V T M IN N E S O TA ID A H O S O U T H D A K O TA W IS C O N S IN N E W YO R K N H M A S S C O N N R I M IC H IG A N W Y O M IN G P E N N S Y LV A N IA IO W A N E VA D A N E W JE R S E Y N E B R A S K A O H IO D E LAW A R E U TA H IL L IN O IS D C IN D IA N A C O LO R A D O V IR G IN IA K A N S A S C A L IF O R N IA M A R Y LA N D W E S T M IS S O U R I V IR G IN IA K E N T U C K Y T E N N E S S E E O K LA H O M A A R IZ O N A N E W Californi a A R K A N S A S M E X IC O A L A B A M A L O U IS IA N A M IS S IS S IP P I T E X A S Ohi o G E O R G IA N O R T H C A R O L IN A S O U T H C A R O L IN A Pennsylvani a A L A S K A F L O R ID A 0 0 0 M i le s H A W A II 0 M il e s Texas 0 M il e s Source: Britannica Student Encyclopedia, 2006 9-2 * * * Top Ten US Manufacturers ExxonMobil Chevron General Motors ConocoPhillips Ford Motor General Electric Altria Group IBM Corp Hewlett-Packard 10.Valero Energy Source: Industry Week, June 1, 2006 9-3 * * * How Manufacturers Have Become More Effective • Focus on customers • Maintain close relationships • Continuous improvement • Focus on quality • Save costs • Rely on the Internet • New production techniques 9-4 * * * Labor Hours / Vehicle Source: Detroit Free Press, June 2, 2006 • Ford – 35.79 hours • Daimler/Chrysler – 33.71 hours • GM – 33.19 hours • Honda – 32.51 hours • Toyota – 29.4 hours • Nissan – 28.46 hours 9-5 * * * From Production to Operations Management • Production • Production Management • Operations Management (OM) 9-6 * * * Comparing Asian Giants • • • • • CHINA Driving Force: Manufacturing Largest Communist Country Population: 1.3 Billion Economic Growth Rate: 9% Financial/Commercial Capital: Shanghai Source: Kiplinger.com December 19, 2005, BBC News, In Depth, accessed July 15, 2006 • • • • • INDIA Driving Force: Services Largest Democracy Population: 1.1 Billion Economic Growth Rate: 7% Financial/Commercial Capital: Mumbai 9-7 * * * Production Processes • Form Utility • Process Manufacturing • Assembly Process • Continuous Process • Intermittent Process 9-8 * * * Three Requirements For Production Build and deliver products in response to the demands of the customer at a scheduled delivery time Provide an acceptable quality level Provide everything at the lowest possible cost 9-9 * * * Production Efficiency • • • • • Krispy Kreme Doughnuts – 5,208 a minute Twinkies – 972 a minute LifeSavers Flavor Roll – 100 rolls a minute Jell-O Gelatin Boxes – 764 a minute Chips Ahoy! – 4,000 a minute Source: World Features Syndicate 9-10 * * * What Is Increasing Productivity? Source: 2005 National Innovation Survey, Council on Competitiveness 9-11 * * * Product Improvements With Computer Technology • Computer-Aided Design - CAD • Computer-Aided Manufacturing - CAM • Computer-Integrated Manufacturing - CIM 9-12 * * * Top Ten Tech Spenders • • • • • • • • • • STATE California New York Texas Illinois Florida Pennsylvania Ohio New Jersey North Carolina Georgia $ in Billions 38.9 29.8 24.6 15.1 13.9 12.8 11.8 11.3 9.4 9.3 Source: Business Week Online, December 5, 2005 9-13 * * * Production Techniques • Flexible Manufacturing • Lean Manufacturing • Mass Customization 9-14 * * * Operations Management Planning • • • Facility Location • • • Purchasing Facility Layout Materials Requirement Planning J-I-T Inventory Control Quality Control 9-15 * * * Quality Control • Six Sigma Quality • Statistical Quality Control (SQC) • Statistical Process Control (SPC) • The Baldrige Award • ISO 9000 • ISO 14000 9-16 * * * Baldrige Award Recipients • • • • • • Sunny Fresh Foods, Inc., Monticello, MN (Manufacturing) DynMcDermott Petroleum Operations, New Orleans, LA (Service) Park Place Lexus, Plano, TX (Small Business) Richland College, Dallas, TX (Education) Jenks Public Schools, Jenks, OK (Education) Bronson Methodist Hospital, Kalamazoo, MI, (Health care) Source: NIST News Release, November 22, 2005 9-17 * * * ISO • ISO was founded in 1947 • At the end of 2004, the worldwide total of certificates: • ISO 9000 – 670,000 in 154 countries • ISO 14000 – 90,000 in 127 countries Source: Business Week Online, March 17, 2006 9-18 * * * Control Procedures • Program Evaluation & Review Techniques (PERT) • Gantt Chart 9-19 * * * PERT Steps Analyzing and sequencing tasks that need to be done Estimating the time needed to complete each task Drawing a PERT network illustrating the information from steps and Identifying the critical path 9-20 * * * Gantt Chart • Named for its developer, Henry Gantt • A bar graph that clearly shows what projects are being worked on and how much has been completed at any given time 9-21 * * * Learning from Failure • Formalize forums for analyzing failure • Move the goalposts • Share personal stories • Bring in outsiders • Prove yourself wrong, not right • Celebrate smart failures Source: Business Week Online, July 10, 2006 9-22 ... Jersey North Carolina Georgia $ in Billions 38.9 29.8 24.6 15.1 13.9 12.8 11.8 11.3 9.4 9.3 Source: Business Week Online, December 5, 2005 9-13 * * * Production Techniques • Flexible Manufacturing... DynMcDermott Petroleum Operations, New Orleans, LA (Service) Park Place Lexus, Plano, TX (Small Business) Richland College, Dallas, TX (Education) Jenks Public Schools, Jenks, OK (Education) Bronson... certificates: • ISO 9000 – 670,000 in 154 countries • ISO 14000 – 90,000 in 127 countries Source: Business Week Online, March 17, 2006 9-18 * * * Control Procedures • Program Evaluation & Review