1、Production Planning and Control,Department of Industrial Engineering & Management Shanghai Jiao Tong University,Chapter 1 Production System and Operations Strategy,Contents Basic conception of Production & Operations management Production system and its classification Organization of production syst
2、em Operations Management &Operations Strategy Business Strategy &Operations Strategy The Classical View of Operations Strategy Modern Operations Strategy and Competition Matching Process and Product Life Cycles Capacity Growth Planning,Task of enterprise ：,1.1 Basic conception of Production and oper
3、ations management,Through production activities, with less inputs, obtain more product outputs to gain economic and social benefits,The production activities of enterprises,1. Decision activities: 2. Technology activities: 3. Supply activities: 4. Production activities: 5. Sales activities: 6. Finan
4、cial activities:2-4 is production activities,The task of Production & Operations Management,Since the production activities in enterprises are dependent mutually and connected tightly, enterprise can hardly achieve its purpose without correctly organizing them. The task of Production and Operation M
5、anagements: Organizing the production activities reasonably, making good use of the resources efficiently for the purposes as follows: Complete the product production Achieve the business objective Reduce cost, improve quality and reduce production time (cycle) Promote production systems flexibility
6、,1.2 Production system,system view:An enterprise is a large system. A production system is a subsystem of the whole enterprise system, and its main function is producing products. A production system uses operations resources to transforms inputs into some desired outputs.,Production system,Decision
7、,feedback,Resource: People, Plants, Parts, Process, PPC,management,Supplier,customer,Example: inputs-transformation -outputs of production system,Elements of production system,1. Structure Elements ： the framework of production system Technology, e.g. Process Technology and combination of equipment
8、Facility, e.g. scale and layout of Facilities Capacity, e.g. The capacity and flexibility of production Integration，e.g. inner-integration，outer-integration 2. Non-structure elements : elements that support and control systemfunction Personnel organization Production planning Production control Prod
9、uction inventory Quality management,Classification of production system,Classified based on production process continuity: Continuous flow production system Discrete production system Classified based on customization : make to stock production for order Classified based on industry : manufacturing
10、industry service industry,Continuous flow production system,characteristics: 1. The production process is relatively steady. 2. customers are usually organizations (including commercial organization) , few customer sorts 3. The standardization of products is high 4. Few product sorts 5. The facility
11、 is highly automatized, highly specialized and expensive 6. The facility failure can bring in great loss, so the equipment maintenance is very important,The key of Continuous flow production system : Emphasize on aggregate production planning and facility maintenanceTypical industry: chemistry indus
12、try, plastics, pharmacy, chemical fertilizer, fossil oil, metallurgy, spinning, beverage,Continuous flow production system,Discrete production system,Characteristics: 1. discrete products, affected by customers greatly, the markets is not so steady. 2. The construction of products is complex, many p
13、arts and components 3. Production process is required to cooperate with many departments. 4. short product life cycle, products are changed quickly (since customers demands change continually). 5. High customization proportion 6. production and operations management are complex.Many methods in IE ai
14、med at this type of production.,Discrete production system,Difficulties： Different type of products needs different production process, needs different layout of equipments. Product change, layout changes The production proportion of different type of products often changes, so workforce organizing,
15、 equipments arranging , production scheduling are very difficult and needs to adjust continuously. The requirement of production capacity is dynamic, the load-balance and the synchronization of production process are very difficult but necessary.Annual plan for production is usually inaccurate, whil
16、e the short plans such as monthly and weekly plans are the keys.,Difference between Continuous flow and discrete production,Difference in the facility and manufacturing aspects,Discrete production system,Discrete production system is classified into: Mass productionMulti-products and low volume prod
17、uctionone of a kind production,Mass production,Mass production ：Only one or a few types of products are produced repeatedly in a long period. e.g. watches, bicycles, TV, refrigerator, DVD, screw Characteristics: (1) High productivity：workers are designated to a work with high specialization，and also
18、 equipments and process are high specialized. (2) skilled workers: workers repeat the same operations (3) simple production planning and scheduling : once a production line is set up properly, it will keep going on some rhythm. (4) The products quality is easy to be guaranteed. (5) Low production co
19、st.Management emphasis: facility maintenance, worker management,and quality management,Multi-product and low volume production,Characteristic: low volume, low production stability the high productivity special equipments can not be used there are many products in production at the same time so that
20、the management is very complex.e.g. bus , car, elevator management emphasis : optimize product mix to pursue the largest economic benefits after satisfying the market demand and production resources constraints. use the GT production cell, and production line, improve the connection between processe
21、s. arrange reasonably the product kind, quantity and interval to produce products in batches and in turns. control and balance WIP, logistic and product inventory,One of a kind production,One of a kind production: start to organize production after receiving order. e.g. shipbuilding, airplane making
22、, generating electricity equipment Characteristics: (1) many kind of products, different kind needs different production process. (2) every order has only one or several quantity, with difference delivery time. (3) general equipments are required, which need a long adjustment period with lowefficien
23、cy to different product (4) workers are also required to be generalists. Management: effective cooperation (manufacture,distribution, design, process and purchase)to decide reasonable delivery date, to improve the flexibility of manufacture system to improve the generalization of parts.,Classified b
24、ased on production process continuity: Continuous flow production system Discrete production system Classified based on customization : make to stock production for order Classified based on industry : manufacturing industry service industry,Classification of production system,Make to stock,Characte
25、ristic: (1) production based on the forecasting (2) mass production, in big batch(3) high product inventory(4) high productivity(5) simple production organization Disadvantage: high risk of excess inventory or order of stock,Production for order,Characteristics: (1) production based on the order(2)
26、different product has different specification, quantity, quality anddelivery time (3) nearly zero inventory(4) delivery time is the key(5) multi-product and low volume production(6) complex production organization and management (7) high customer satisfaction production for order becomes more and mo
27、re popular.According to the level of customization, it can be further classified intoassembly to order, make to order and engineer to order,Production for order,1. assembly to orderfirst produce semi-finished products (parts and components) in advance,then assemble them into different products accor
28、ding to customer order. e.g. automobile manufacturingthe most mature production mode, the production of parts and components are like make to stock with following properties: high standardization and generalization parts or components big production batch high productivity in many cases, use flow pr
29、oduction line,2. Make to orderall products have been designed in advancethen according to customer orders, buy raw materials and parts, components,and then manufacture and assembly them into products the customer requires.Some raw materials and standard parts are prepared based on the forecasting fo
30、recasting should be paid great attention,Production for order,3. Engineer to order: first design products according to customers requirement after receiving order, then purchase, and then make them. long production cycle pay more attention to reducing design cycle standard and general parts should b
31、e used as much as possible, using CAD, CAPP.,Production for order,Production for order,Product type,many,large,few,small,Production batch,ATO,MTS,ETO,MTO,Product type and production batch,Classification of production system,Classified based on production process continuity: Continuous flow productio
32、n system Discrete production system Classified based on customization : make to stock production for order Classified based on industry : manufacturing industry service industry,Service industry,Characteristics： (1)Product is service, and it can not be stored. (2) Labor denseness, and low labor prod
33、uctivity. (3) The standard of quality: customer satisfaction degree. (4) Some service is included in the manufacture industry. e.g. sales, field support (service-after-sales) and accounting.,Service industry,Types of Service industry ： (1) High-touch type：hotel、clinic、restaurant and shop (2) low-tou
34、ch type：accounting, warehouse management, planning and scheduling, wholesale, equipment maintenance, transportationService industry management：in many aspects, methods in manufacturing industry can be used here, e.g.fast food restaurant: group technologyhospital: logistic management,1.3 The organiza
35、tion of production system,A production system is usually divided into basic units, e.g. workshop, workshop section, and working team, and all these units can be organized on the following three basic principles: Process specialization Object specialization Group technology,1. Principle of process sp
36、ecialization，organize the production units according to a production process kind. within one production unit :the same type of workers complete the same processes using the same type equipments. e.g. mechanical machining workshop, lathe section, drill section, heat treatment workshop, anneal sectio
37、n, assembly workshop,The organization of production system,The organization of production system -Principle of process specialization,Advantages： (1) high equipment utilization rate, the failure of individual equipment will bring little influence on production (2) an employee do some fixed operation
38、s, which helps to improve his skills (3) Units have high flexibility, can produce various of products,Disadvantages： long conveying routes great amount in-process inventory WIP needs long waiting time, which increase the production time frequently cooperation and interdependency among production uni
39、ts, make management very difficulty,The organization of production system,Principle of object specialization: the produce unit is organized according to a product kind ( or a part or a component kind)Within one production unit:One products production( all processes) is completed by different type wo
40、rkers using different type equipmentsIt can also be called as closed-production-unit. e.g.automobile assembling lineTV assembling line .,The organization of production system -Principle of object specialization,Advantages: (1) the handling distance in production process can be reduced greatly (2) th
41、e in-process inventory can be reduced greatly. (3) can sue the advanced organization modeproduction line. (4) the cooperation among production departments can be reduced, andhence management can be simplified. (5) clear quality responsibility and cost responsibility Disadvantages： (1) low equipment
42、utilization rate;(2) the whole production unit can be influenced once an equipment breakdown;(3) low production flexibility,The organization of production system,object specialization,process specialization,3. Group technology (cellular)allocate different equipments into a production cell to work on
43、 a product family that have similar shapes and process requirements. Within one cell:the production of a product family can be completed by different type workers using different type equipments.,The organization of production system,Advantages ： （1）better human relations. A work team complete a who
44、le task. （2）improved operator expertise. Worker only make limited type parts，repetition means quick learning. （3）Less in-process inventory and material handling. A cell include several production stages, like a production line. （4）faster production setup. similar products, fewer tool changes, so few
45、er setup.GT production cell overcomes some disadvantages of process specialization production,The organization of production system,warehouse,warehouse,warehouse,warehouse,customer,Process specialization vs. GT production cell, process specialization, group cell,interval flow line,1.4 Operations Man
46、agement &Operation Strategy,Operations Management To design, operate, access and improve production system. The heart of Operations Managementis the management of production systems,Operation Management &Operation Strategy,1.4 Operations Management &Operation Strategy,The conception of Operation Str
47、ategy:Operation Strategy is a arrange of decision planning, contents and programs that are under the guideline, which is must be obeyed when enterprise construct its production system, based on objected market and products characters. Characteristics: Contributive: emphasize on the contribution to t
48、he enterprises competition advantage. Agreeable: emphasize on the agreement between production system and enterprise demand. Operational: emphasize on its execution not just be Strategy,1.5 Business Strategy and Operation Strategy,The definition of Business Strategy The market where the enterprise c
49、ompete; The level of investment; The measures of allocating resources to and integrating separate business; Functional area strategies, including The marketing strategy; The financial strategy; The operational strategy;,Business Strategy and Operation Strategy,The definition of Operation Strategy Th
50、e means by which a firm configures its resources to achieve its competitive goals; For manufacturing firms, it involves all decisions concerning the production, storage, and distribution of goods; Key operational decisions include： Where to locate new manufacturing facilities; How large these facilities should be; What processes to use for manufacturing and moving goods through the system; What workers to employ.,
