Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.
1. Describe the current state of U.S. manufacturing and
what manufacturers have done to become more
2. Describe the evolution from production to operations
3. Identify various production processes and describe
techniques that improve productivity, including
computeraided design and manufacturing, flexible
manufacturing, lean manufacturing and mass
4. Describe operations management planning issues
including facility location, facility layout, materials
requirement planning, purchasing, justintime
inventory control and quality control.
5. Explain the use of PERT and Gantt charts to control
• Moved from Pakistan to the
U.S. at the age of 16.
• After college, he got a job
• Bought the company after two
years and refined the
• Now the company brings in
over $3 billion in sales each
NAME that COMPANY
Operations management in this hotel company
includes restaurants that offer the finest in
service, elevators that run smoothly, and a front
desk that processes people quickly. It may
include freshcut flowers in the lobbies and
dishes of fruit in every room.
Name that company!
MANUFACTURING in the U.S.
• Some areas in the U.S.
economic growth while
others are declining.
• Manufacturing in the
U.S. is so productive
fewer workers are
WHAT’S MADE in the USA?
Leading U.S. Manufactured Goods
Source: Parade Magazine, www.parade.com, accessed November 2014.
The Top Ten U.S. Manufacturers
Source: Industry Week, www.industryweek.com, accessed November 2014.
YOUR OWN FARM in a BOX
• Freight Farms was developed after the founders
were unsatisfied with rooftop greenhouses.
• Each container is 320squarefeet and can
produce 900 heads of leafy greens each week.
• The company works with small and medium
sized food distributers so local food can be
enjoyed year round.
TOPPAYING SERVICE JOBS
• The U.S. economy is no longer manufacturing
• 85% of jobs are in the service sector.
• The toppaying service jobs in the U.S. are in:
- Legal services
- Medical services
- Management consulting
REMAINING COMPETITIVE in
• U.S. is still the leader in nanotechnology and
• How can U.S. businesses maintain a competitive
Focusing on customers
Maintaining close relationships with suppliers
Practicing continuous improvement
Focusing on quality
Saving on costs through site selection
Relying on the Internet to unite companies
Adopting new production techniques
NOBODY DOES IT BETTER
• Germany’s economy is the
most powerful and
respected economy in
• Mittlestand companies
design their own machines
and production processes.
• China has purchased many
German firms and are
studying their production
• Production The creation of goods using land,
labor, capital, entrepreneurship and knowledge (the
factors of production).
Management All the
activities managers do to
help firms create goods.
• Operations Management A specialized area in
management that converts or transforms resources
into goods and services.
• Operations management includes:
- Inventory management
- Quality control
- Production scheduling
- Followup services
in the SERVICE SECTOR
• All about creating a good experience for those
who use the service.
• In hotels, like Ritz
includes fine dining,
fresh flowers, and
training for every
THERE’S an APP for THAT
Top Productivity Apps for iPad
Source: PC Magazine, www.pcmag.com, accessed November 2014.
• What have U.S. manufacturers done to regain a
• What must U.S. companies do to continue to
strengthen the country’s manufacturing base?
• What led companies to focus on operations
management rather than production?
The PRODUCTION PROCESS
• Form Utility The value
producers add to materials
in the creation of finished
goods and services.
GROVE’S BASIC PRODUCTION
1. To build and deliver products in response to the
demands of the customer at the scheduled
2. To provide an acceptable quality level.
3. To provide everything at the lowest possible
PROCESS and ASSEMBLY in
• Process Manufacturing
The part of production that
physically or chemically
• Assembly Process The
part of the production process
that puts together components.
KEY PRODUCTION PROCESSES
• Production processes are either continuous or
• Continuous Process Long production runs turn
out finished goods over time.
• Intermittent Process Production runs are short
and the producer adjusts machines frequently to
make different products.
Production of Some of America’s Favorite Products
DEVELOPMENTS MAKING U.S.
COMPANIES MORE COMPETITIVE
1. Computeraided design
2. Flexible manufacturing
3. Lean manufacturing
4. Mass customization
COMPUTERAIDED DESIGN and
• ComputerAided Design
(CAD) The use of computers
in the design of products.
Manufacturing (CAM) The
use of computers in the
manufacturing of products.