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Flashcards in Production and Operations Management Deck (7)
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1

Operations managers face numerous challenges and trade-offs that must be managed successfully if the organisation and supply chain are to achieve their performance goals. List 3 production challenges

• Competitive pressures
• Customers’ demand for choice and rapidly changing tastes make life difficult for product makers. While mass-production processes (and their economies of scale) are losing relevance in many customer-driven industries, company executives are no less demanding on the productivity and efficiency fronts.
• Labour availability and productivity issues, synchronisation of activities with the supply chain, and capital costs are just a few of the additional obstacles that must be overcome

2

Define the Push strategy

Mass Production
A push-based system that relies on long-term forecasts for production planning and decision making. In reality, few companies enjoy perfectly stable demand and more often, organisations must deal with demand variation.

The push-based strategy works well for supply chains that focus on the immediate delivery of off-the-shelf, low-cost, standardised goods.

Operating from forecasts that are derived from supply chain partners’ predictions may limit the producer’s responsiveness. Without visibility to actual end-consumer demand, the producer will be slow to react to changes in the marketplace. The result may be continued production of items whose demand is dropping and may soon be obsolete.

3

Define the Pull strategy

Lean Production
In a pull system, the producer only responds to customer demand. No action is taken until an order is placed or a purchase is made. One of the main benefits of a lean, pull-based system is the reduction of waste.

There are a few challenges inherent in the pull-based strategy, such as customers who want immediate access to products and don’t want to wait for production and delivery, and it can be difficult to achieve economies of scale in assemble-to-order and build-to-order product operations, making them more expensive to produce.

4

Define the Just-in-time (JIT)

Just-in-time (JIT) manufacturing is an approach, not a technique.
It is based around the ‘pull’ or demand driven manufacturing. JIT requires that batch sizes be small and production runs be short to enable the quantity produced be aligned closely with actual demand

5

Name the two types of planning

Two types of planning: capacity planning and materials planning

6

One of the key drivers of how production activities will be carried out is facility layout.
Facility layout involves the arrangement of machines, storage areas, and other resources within the four walls of a manufacturing or an assembly facility. What are the benefits of a successful layout?

• Reduces bottlenecks in moving people or materials
• Minimizes materials-handling costs
• Reduces hazards to personnel
• Utilizes labor efficiently

7

Name two production metrics (KPIs)

Total Cost
The most meaningful measurement of total cost is on a cash basis. All money spent on manufacturing must be summarized and the total compared to the previous period, rather than to a flexible budget or a plan.

Total Cycle Time
Total cycle time is a measure of manufacturing performance that is calculated by studying major purchased components and determining the total days on hand of each one.

Delivery Performance
Delivery performance is the percentage of customer orders shipped when the customer requested them to be shipped.

Quality
The definition of quality will vary by company, but it must focus on quality from the perspective of the customer.

Safety
The standard metrics of accident/incident frequency, severity, and cost are important to monitor, with continuous improvement (i.e., reduction) as the goal.