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Operations and Production Management in U.S. Manufacturing: Insights and Techniques

This chapter delves into the significance of operations and production management in U.S. manufacturing, highlighting leading states like Michigan and California. It explores key concepts such as manufacturing's role in value creation and the importance of operations management. The content also examines top U.S. manufacturers, efficiency metrics, and advancements in production techniques. Emphasizing quality, cost-effectiveness, and customer focus, the chapter presents tools and strategies, including lean manufacturing and six sigma, to enhance productivity and competitiveness in the manufacturing sector.

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Operations and Production Management in U.S. Manufacturing: Insights and Techniques

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  1. Chapter 9 Operations and Production Management

  2. Leading U.S. Manufacturing States Michigan New York Illinois Ohio California Pennsylvania Texas Source: Britannica Student Encyclopedia, 2006

  3. What is Manufacturing? • Production • The creation of value using factors of production (land, labor, capital, knowledge, and entrepreneurship) • Operations Management • Overseeing the transformation of capital into goods and services

  4. Top Ten US Manufacturers • ExxonMobil • Chevron • General Motors • ConocoPhillips • Ford Motor • General Electric • Altria Group • IBM Corp. • Hewlett-Packard • Valero Energy The U.S. has been regaining its lead in manufacturing – why? Source: Industry Week, June 1, 2006

  5. 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

  6. Labor Hours / Vehicle • 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 Source: Detroit Free Press, June 2, 2006

  7. Profit/ Vehicle • Ford – ($590) • Daimler/Chrysler – $223 • GM – ($2496) • Honda – >$1200 • Toyota – >$1200 • Nissan – >$1200 Source: Detroit Free Press, June 2, 2006

  8. Plant Capacity Used • Ford – 79% • Daimler/Chrysler – 94%-106% • GM – 90% • Honda – 91% • Toyota – 94%-106% • Nissan – 94%-106% Source: Detroit Free Press, June 2, 2006

  9. Production Processes • Form Utility • The value we pay for that comes from changing a good • Process Manufacturing • Making physical changes in a good • Assembly • Putting component parts together

  10. Production Processes Can be done using: • Continuous Process • Long production runs • Turn out same thing every time • Intermittent Process • Production runs shorter • Lines get changed out to produce different things

  11. Three Requirements For Production • Quick response to the demands of the customer • Acceptable quality level • Lowest possible cost

  12. Production Efficiency • Krispy Kreme Doughnuts – 5,208 a minute • Twinkies – 972 a minute • LifeSavers 5 Flavor Roll – 100 rolls a minute • Jell-O Gelatin Boxes – 764 a minute • Chips Ahoy! – 4,000 a minute Source: World Features Syndicate

  13. What Is Increasing Productivity? Source: 2005 National Innovation Survey, Council on Competitiveness

  14. Product Improvements With Computer Technology • Computer-Aided Design - CAD • Computer-Aided Manufacturing - CAM • Computer-Integrated Manufacturing - CIM

  15. Production Techniques • Flexible Manufacturing • Lean Manufacturing • Mass Customization

  16. Operations Management Planning • Facility Location • Facility Layout • Materials Requirement Planning • Purchasing • J-I-T Inventory Control • Quality Control

  17. Quality Control • Six Sigma Quality • Statistical Quality Control (SQC) • Statistical Process Control (SPC) • The Baldrige Award • ISO 9000 • ISO 14000

  18. Control Procedures • Program Evaluation & Review Techniques (PERT) • Gantt Chart

  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 1 and 2 • Identifying the critical path

  20. 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

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