Key Terms
Production
Converting inputs (resources) into outputs (goods/services).
Inputs
Natural resources, raw materials, human resources, capital.
Outputs
Finished products and services.
Operations management
Managing the entire conversion process.
Four components
Facility location, facility layout, MRP, inventory control.
Process layout
Workflow is organized around the process itself. Workers doing similar tasks are grouped together.
Example
Custom machinery manufacturer.
Product (assembly-line) layout
Workstations arranged in a line; products move along the line continuously. Best for large quantities of one product.
Fixed-position layout
The product stays in one place; workers and machinery come to it. Used when the product cannot be moved.
Cellular layout
Small self-contained work cells; each cell has several machines and five to ten workers trained to perform every step in
Enterprise Resource Planning (ERP)
Goes beyond MRP. Provides an integrated, continuously updated view of ALL core business processes using shared databases
Goal
Parts and materials arrive at the exact moment they are needed on the floor.
Risk
Supply chain disruptions (natural disasters, port shutdowns) hit JIT operations harder than companies with larger invent
Key advantage over traditional lines
Switching products requires reprogramming computer-controlled machines; not physically modifying equipment. Saves time a
Key selection factors
Speed, machine cost, prototype cost, material cost and choice, color capabilities.