Chapter 8 - Operations Management
Operations Management & Manufacturing Overview
- Operations management: turning resources into goods/services while controlling costs
- Manufacturing: turning was materials into a finished product
- Manufacturing management: management of all manufacturing processes
Manufacturing Strategies
- Make-to-Stock (MTS): make and stock based on demand forecasts (push system)
- Challenge: avoid excess inventory and stockouts
- MTS model holds excess inventory “just in case”
- Make-to-Order (MTO): manufacturing after order received
- Can customize products, no excess inventory, but not appropriate for all goods
- Assemble-to-Order (ATO): manufactured parts but not assembled until order placed
- Hybrid of MTS and MTO (quick and customizable)
- Engineer-to-Order (ETO): product designed, engineered, and built after order
- Dramatic version on MTO (finished product is different every time)
- Cost of poor quality is high
- Least to most cycle time: MTS, ATO, MTO, ETO
Manufacturing Processes
- Intermittent Processes: many products with different requirements in lower volumes
- Job Shop Production (project production): custom product for each customer
(high customization)
- Batch Production: small fixed quantities (bakeries, textiles, furniture, etc)
- Repetitive Processes: one or few standard products in high volumes
- Line Flow Production (mass production): same task time, right after another,
(assembly line)
- Continuous Production: highly automated, inflexible, mainstream products
-
- AI & ML (computers learn and adapt): drive better decision-making, predictive
maintenance, better production quality and reduce waste, better demand forecasting
- Automation: tech performs tasks without human intervention
- Smart manufacturing: coordinating technologies across supply chain
- Internet of Things (IoT): physical objects communicate through cloud with sensors,
software, and technologies (monitor performance, detect failures, optimize production)
- 3D Printing: limitless customization, less waste, speed, and cost effective
Operations Management & Manufacturing Overview
- Operations management: turning resources into goods/services while controlling costs
- Manufacturing: turning was materials into a finished product
- Manufacturing management: management of all manufacturing processes
Manufacturing Strategies
- Make-to-Stock (MTS): make and stock based on demand forecasts (push system)
- Challenge: avoid excess inventory and stockouts
- MTS model holds excess inventory “just in case”
- Make-to-Order (MTO): manufacturing after order received
- Can customize products, no excess inventory, but not appropriate for all goods
- Assemble-to-Order (ATO): manufactured parts but not assembled until order placed
- Hybrid of MTS and MTO (quick and customizable)
- Engineer-to-Order (ETO): product designed, engineered, and built after order
- Dramatic version on MTO (finished product is different every time)
- Cost of poor quality is high
- Least to most cycle time: MTS, ATO, MTO, ETO
Manufacturing Processes
- Intermittent Processes: many products with different requirements in lower volumes
- Job Shop Production (project production): custom product for each customer
(high customization)
- Batch Production: small fixed quantities (bakeries, textiles, furniture, etc)
- Repetitive Processes: one or few standard products in high volumes
- Line Flow Production (mass production): same task time, right after another,
(assembly line)
- Continuous Production: highly automated, inflexible, mainstream products
-
- AI & ML (computers learn and adapt): drive better decision-making, predictive
maintenance, better production quality and reduce waste, better demand forecasting
- Automation: tech performs tasks without human intervention
- Smart manufacturing: coordinating technologies across supply chain
- Internet of Things (IoT): physical objects communicate through cloud with sensors,
software, and technologies (monitor performance, detect failures, optimize production)
- 3D Printing: limitless customization, less waste, speed, and cost effective
