unit 1_introduction to production management

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  • Page 1 of 22

    Course:

    Production Management

    Unit-1:

    Introduction to Production

    Management

  • Page 2 of 22

    Table of Contents

    1.1. Introduction ............................................................................................................................... 4

    1.2. Learning Objectives .................................................................................................................. 5

    1.3. History of Production Management ......................................................................................... 6

    1.4. Definition of Production Management ..................................................................................... 7

    1.5. Dimensions of Production Management ................................................................................... 8

    1.5.1. Product Design .................................................................................................................... 9

    1.5.2. Insourcing and Outsourcing ................................................................................................. 9

    1.5.3. Capacity Planning and Control ............................................................................................. 9

    1.5.4. Purchasing Process............................................................................................................. 10

    1.5.5. Evaluation, Selection and Measurement of Suppliers ......................................................... 10

    1.5.6. Basic Inventory Systems .................................................................................................... 10

    1.5.7. Aggregate Production Planning and Just-in-Time Systems ................................................. 11

    1.5.8. Master Production Schedule ............................................................................................... 11

    1.6. Production Strategies .............................................................................................................. 12

    1.6.1. Strategy Targeting to Minimise Cost .................................................................................. 12

    1.6.2. Strategy Aiming at Highest Quality .................................................................................... 12

    1.6.3. Strategy of Innovation ........................................................................................................ 13

    1.6.4. Strategy of Balancing the Competitive Priorities ................................................................ 13

    1.7. Computer Integrated Manufacturing ..................................................................................... 14

    1.7.1. Computer Technology ........................................................................................................ 14

    1.7.2. Computer-Aided Design (CAD) ......................................................................................... 15

    1.7.3. Computer-Aided Manufacturing (CAM) ............................................................................ 15

    1.7.4. Robotics ............................................................................................................................. 15

    1.7.5. Electronic Data Interchange (EDI) ..................................................................................... 15

    1.7.6. Manufacturing Resource Planning...................................................................................... 15

    1.7.7. Automated Guided Vehicle Systems .................................................................................. 16

    1.7.8. Group Technology ............................................................................................................. 16

    1.7.9. Vendor Scheduling............................................................................................................. 16

    1.8. Automation and Enterprise Resource Planning ..................................................................... 16

    1.8.1. Supply Chain Management (SCM) Systems ....................................................................... 18

    1.8.2. Customer Relationship Management (CRM) Systems ........................................................ 19

  • Page 3 of 22

    1.8.3. Supplier Relationship Management (SRM) Systems .......................................................... 19

    1.8.4. Product Lifecycle Management (PLM) Systems ................................................................. 19

    1.8.5. Employee Lifecycle Management (ELM) Systems ............................................................. 19

    1.8.6. Corporate Performance Management (CPM) Systems ........................................................ 19

    1.8.7. Business to Consumer (B2C) Systems................................................................................ 19

    1.8.8. Business to Business (B2B) Systems .................................................................................. 20

    1.9. Summary.................................................................................................................................. 20

    1.10. References .............................................................................................................................. 21

  • Page 4 of 22

    1.1. Introduction

    The purpose of recalling is to inspect the front drive shaft. "The front shaft in these vehicles may

    include a component that contains cracks that developed during the manufacturing process," said a

    statement by Toyota Motor Sales, USA. "As those vehicles are used, the cracks may eventually lead

    to the separation of the drive shaft at the joint portion," it added.

    The Tacoma trouble is the latest embarrassment for the world's biggest automaker. Toyota has

    recalled millions of vehicles in past months due to problems linked to accelerator and brake

    functions. Those recalls cover the models with "sticky accelerators" that cause cars to race out of

    control a defect cited in several deadly crashes. It has widened to brake system problems in the

    Prius and other hybrid models.

    The Tacoma pickup shafts were built by supplier Dana Corp from December until early this month,

    a US government official said, speaking on condition of anonymity. Dana told the National

    Highway Transportation Safety Administration, a government agency, that it was going to handle

    the shaft recall on vehicles built for automakers Ford, Toyota and Nissan, the official said.

    This was "because they had discovered a defect in their manufacturing process," the official said.

    "So it looks like, out of caution, Toyota decided to submit its own recall notification to us because

    technically, the vehicle manufacturer is responsible for recalls."

    Separately, Toyota said in a letter to US lawmakers that it would investigate complaints on the

    Tacoma relating to "engine idle speed changes when the vehicle is stopped and high idle speed

    when the engine is cold." Also to be probed were complaints on "cruise control downshifting

    behavior, engine speed changes when shifting (manual transmission) and lurching when a vehicle

    is coming to a stop."

    Amid the series of recalls, Toyota said it was studying the possibility of a new override system to

    deactivate engines as an extra safety layer in emergency situations. "Toyota is considering adding

    a multiple tap function to the start/stop button for vehicles produced in the future," said Toyota

    spokesman Brian Lyons. The fix could make it easier to turn off engines in cases of accelerator

    malfunctions in cars with keyless ignition systems.

    A US woman filed a federal lawsuit in Los Angeles against Toyota, blaming the company for the

    Exhibit 1.1

    Automotive Manufacturing

    Toyota faced new woes with another recall - this time involving its Tacoma

    pickup trucks. This was happened after US President Barack Obama warned

    carmakers not to drag their feet on beefing up vehicle safety. Toyota said it was

    voluntarily recalling 8,000 of the 2010 model Tacoma four-wheel drive pickups

    in the United States

  • Page 5 of 22

    death of her husband when the Prius she was driving suddenly accelerated. Jacquelyn Donoghue, a

    67-year-old nurse, alleges in the suit that her car suddenly sped up and ploughed into another car

    when she was driving home with her husband in December, and that a brake-to-idle override could

    have prevented the crash.

    Source: Toyota recalls 8,000 Tacoma trucks The Times of India, International Business, February 13, 2010. http://timesofindia.indiatimes.com

    Exhibit 1.1 provides a good backdrop for understanding the importance of Production Management. A legendary company, such as Toyota, which has been hitherto known for its leading-edge

    innovations in the field, is facing unprecedented criticism for its recent oversight.

    Under the given situation discussed in Exhibit 1.1, some of the questions faced by Toyota are:

    How did Toyota overlook the flaws when the vehicles/faulty components were being designed?

    Were there anomalies in the process that was used for assembling the failed components?

    Was there slip ups during the vendor selection for the failed components?

    Did Toyota perform proper controls to check if the components supplied by the vendors were up to the specifications?

    Was Toyota quick enough to respond to the complaints it received from the disgruntled customer