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    2006 Prentice Hall, Inc. 1 1

    OperationsManagementChapter 1 Operations and Productiit!

    2006 Prentice Hall, Inc.

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    NGUYN DANH NGUYN, PHDNGUYN DANH NGUYN, PHDDivision of Industrial ManagementDivision of Industrial ManagementScool of !conomics and ManagamentScool of !conomics and ManagamentHanoi Universit" of #ecnolog"Hanoi Universit" of #ecnolog"

    " $acelor of Industrial Heat and %efregiration !ngineering,$acelor of Industrial Heat and %efregiration !ngineering,

    HU#, &''(HU#, &''(" M$A ) AI#, #ailand, &''*M$A ) AI#, #ailand, &''*" PD ) +a"ama Universit", -a.an, /001PD ) +a"ama Universit", -a.an, /001" 2ield %esearc3 Management, Production and +.eration2ield %esearc3 Management, Production and +.eration

    Management, 4ualit" Management, Service Management,Management, 4ualit" Management, Service Management,

    H%M, and +rgani5ational $eavior6H%M, and +rgani5ational $eavior6" #rainer for AI#78, SA8, #o"ota, 2ord, 8ietnam Airlines6#rainer for AI#78, SA8, #o"ota, 2ord, 8ietnam Airlines6

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    #!9##!9#:ecture notes:ecture notes

    Norman Gaiter and Greg 2ra5ier, Production andNorman Gaiter and Greg 2ra5ier, Production and+.erations Management, sevent edition, Sout;+.erations Management, sevent edition, Sout;

    7ases and su..lementar" reading materials7ases and su..lementar" reading materials" %eference =oos%eference =oos

    Scmenner %6

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    8I!#NAM!S! #!9#8I!#NAM!S! #!9#

    " 4un lB Sn Cut ) #S6 Ngu"En 8Fn Ngin, N4un lB Sn Cut ) #S6 Ngu"En 8Fn Ngin, NCut =n Ji Kc 4uLc gia H ni, /00&6Cut =n Ji Kc 4uLc gia H ni, /00&6

    " 4un tr Sn Cut v tOc ngi. ) #S6Qng Min4un tr Sn Cut v tOc ngi. ) #S6Qng Min#rang, N Cut =n #Lng R, /00(6#rang, N Cut =n #Lng R, /00(6

    " 4un tr Sn Cut v Dc v ; #S6 Tng t #an4un tr Sn Cut v Dc v ; #S6 Tng t #anPVng, N Cut =n #Lng R ) /00(PVng, N Cut =n #Lng R ) /00(

    " GiOo trWn 4un tr Sn Cut v #Oc ngi. ) #S6GiOo trWn 4un tr Sn Cut v #Oc ngi. ) #S6#rVng on #X 7Z =iRn[ ) N Cut =n :ao#rVng on #X 7Z =iRn[ ) N Cut =n :ao\ng 9] i ) /00>\ng 9] i ) /00>

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    +utline+utline

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    +utline ; 7ontinued+utline ; 7ontinued

    #e Heritage +f +.erations#e Heritage +f +.erationsManagementManagement

    +.erations In #e Service Sector+.erations In #e Service Sector Differences $et@een Goods AndDifferences $et@een Goods AndServicesServices

    Gro@t +f ServicesGro@t +f Services

    Service Pa"Service Pa"

    !Cciting Ne@ #rends In +.erations!Cciting Ne@ #rends In +.erationsManagementManagement

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    +utline ; 7ontinued+utline ; 7ontinued

    #e Productivit" 7allenge#e Productivit" 7allenge Productivit" MeasurementProductivit" Measurement

    Productivit" 8aria=lesProductivit" 8aria=les Productivit" And #e Service SectorProductivit" And #e Service Sector

    !tics And Social %es.onsi=ilit"!tics And Social %es.onsi=ilit"

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    :earning +=_ectives:earning +=_ectives

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    :earning +=_ectives:earning +=_ectives

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    +rgani5ing to Produce+rgani5ing to Produce

    Goods and ServicesGoods and Services !ssential functions3!ssential functions3

    Mareting ) generates demandMareting ) generates demand

    Production`o.erations ) createsProduction`o.erations ) createste .roductte .roduct

    2inance`accounting ) tracs o@2inance`accounting ) tracs o@

    @ell te organi5ation is doing, .a"s@ell te organi5ation is doing, .a"s=ills, collects te mone"=ills, collects te mone"

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    +rgani5ational 7arts+rgani5ational 7arts

    +.erations#eller

    Sceduling7ec 7learing7ollection#ransaction

    .rocessing

    2acilitiesdesign`la"out8ault o.erationsMaintenanceSecurit"

    2inanceInvestments

    Securit"%eal estate

    Accounting

    Auditing

    Mareting:oans

    7ommercial Industrial 2inancial Personal

    Mortgage

    #rust De.artment

    7ommercial $an

    Figure 1.1(A)Figure 1.1(A)

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    +rgani5ational 7arts+rgani5ational 7arts

    +.erationsGround su..orte?ui.mentMaintenanceGround +.erations 2acilit" maintenance 7atering

    2ligt +.erations 7re@ sceduling 2l"ing 7ommunications Dis.atcingManagement science

    2inance`accounting

    Accounting Pa"a=les %eceiva=les General :edger2inance 7as control

    International eCcange

    Airline

    Figure 1.1(B)Figure 1.1(B)

    Mareting#rafficadministration %eservations Scedules #ariffs .ricing[Sales

    Advertising

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    MaretingSales.romotionAdvertising

    SalesMaretresearc

    +rgani5ational 7arts+rgani5ational 7arts

    +.erations2acilities 7onstruction maintenanceProduction and inventor" control

    Sceduling materials control4ualit" assurance and controlSu..l";cain managementManufacturing #ooling fa=rication assem=l"Design

    Product develo.ment and design Detailed .roduct s.ecificationsIndustrial engineering !fficient use of macines, s.ace,

    and .ersonnel

    Process anal"sis Develo.ment and installation of .roduction tools and e?ui.ment

    2inance`accountingDis=ursements`credits

    %eceiva=les Pa"a=les General ledger2unds Management Mone" maret International

    eCcange7a.ital re?uirements Stoc issue $ond issue

    and recall

    Manufacturing

    Figure 1.1(C)Figure 1.1(C)

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    +.tions for Increasing+.tions for Increasing7ontri=ution7ontri=ution

    SalesSales $100,000$100,000 $150,000$150,000 $100,000$100,000 $100,000$100,000

    Cos o! "oo#sCos o! "oo#s 80,00080,000 120,000120,000 80,00080,000 64,00064,000

    "ross argi%"ross argi% 20,00020,000 30,00030,000 20,00020,000 36,00036,000

    Fi%a%&e CossFi%a%&e Coss 6,0006,000 6,0006,000 3,0003,000 6,0006,000Su'oalSu'oal 14,00014,000 24,00024,000 17,00017,000 30,00030,000

    aes a 25*aes a 25* 3,5003,500 6,0006,000 4,2504,250 7,5007,500

    Co%ri'uio%Co%ri'uio% $ 10,500$ 10,500 $ 18,000$ 18,000 $ 12,750$ 12,750 $ 22,500$ 22,500

    Fi%a%&e+Fi%a%&e+arei%garei%g A&&ou%i%gA&&ou%i%g --

    -io%-io% -io%-io% -io%-io%

    /%&rease/%&rease e#u&ee#u&e e#u&ee#u&e

    SalesSales Fi%a%&eFi%a%&e ro#u&io%ro#u&io%Curre%Curre% ee%ue 50*ee%ue 50* Coss 50*Coss 50* Coss 20*Coss 20*

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    #en 7ritical Decisions#en 7ritical Decisions

    #en Decision Areas#en Decision Areas

    Service and .roduct designService and .roduct design 4ualit" management4ualit" management Process and ca.acit" designProcess and ca.acit" design :ocation:ocation :a"out design:a"out design Human resources, _o= designHuman resources, _o= design Su..l";cain managementSu..l";cain management Inventor" managementInventor" management

    ScedulingSceduling MaintenanceMaintenance

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    #e 7ritical Decisions#e 7ritical Decisions

    Service and .roduct designService and .roduct design

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    #e 7ritical Decisions#e 7ritical Decisions

    Process and ca.acit" designProcess and ca.acit" design

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    #e 7ritical Decisions#e 7ritical Decisions

    :a"out design:a"out design Ho@ sould @e arrange te facilit"Ho@ sould @e arrange te facilit"

    and material flo@^and material flo@^

    Ho@ large must te facilit" =e to meetHo@ large must te facilit" =e to meetour .lan^our .lan^

    Human resources and _o= designHuman resources and _o= design Ho@ do @e .rovide a reasona=le @orHo@ do @e .rovide a reasona=le @or

    environment^environment^ Ho@ muc can @e eC.ect ourHo@ muc can @e eC.ect our

    em.lo"ees to .roduce^em.lo"ees to .roduce^

    a'le 1.2 (&o%.)a'le 1.2 (&o%.)

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    #e 7ritical Decisions#e 7ritical Decisions

    Su..l";cain managementSu..l";cain management Sould @e mae or =u" tis com.onent^Sould @e mae or =u" tis com.onent^

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    #e 7ritical Decisions#e 7ritical Decisions

    Intermediate and sortIntermediate and sort))termtermscedulingsceduling Are @e =etter off ee.ing .eo.le onAre @e =etter off ee.ing .eo.le on

    te .a"roll during slo@do@ns^te .a"roll during slo@do@ns^

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    Significant !vents in +MSignificant !vents in +M

    Figure 1.3Figure 1.3

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    #e Heritage of +M#e Heritage of +M

    Division of la=or Adam Smit &**>Division of la=or Adam Smit &**>7arles $a==age &b1/[7arles $a==age &b1/[

    Standardi5ed .arts [Gantt carts Gantt &'&>[

    Motion stud" 2ran and :illian Gil=retMotion stud" 2ran and :illian Gil=ret&'//[&'//[

    4ualit" control Se@art &'/( Deming4ualit" control Se@art &'/( Deming&'10[&'10[

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    #e Heritage of +M#e Heritage of +M

    7om.uter Atanasoff &'b[7om.uter Atanasoff &'b[

    7PM`P!%# DuPont &'1*[7PM`P!%# DuPont &'1*[

    Material re?uirements .lanning +rlic"Material re?uirements .lanning +rlic"

    &'>0[&'>0[ 7om.uter aided design 7AD &'*0[7om.uter aided design 7AD &'*0[

    2leCi=le manufacturing s"stem 2MS &'*1[2leCi=le manufacturing s"stem 2MS &'*1[

    $aldrige 4ualit" A@ards &'b0[$aldrige 4ualit" A@ards &'b0[ 7om.uter integrated manufacturing &''0[7om.uter integrated manufacturing &''0[

    Glo=ali5ation &''/[Glo=ali5ation &''/[

    Internet &''1[Internet &''1[

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    !li 1 died &b/1$orn &*>1 died &b/1

    In &*'b, received governmentIn &*'b, received government

    contract to mae &0,000 musetscontract to mae &0,000 musets So@ed tat macine tools couldSo@ed tat macine tools could

    mae standardi5ed .arts to eCactmae standardi5ed .arts to eCact

    s.ecificationss.ecificationsMuset .arts could =e used in an"Muset .arts could =e used in an"

    musetmuset

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    2rederic died &'&1$orn &b1> died &'&1

    no@n as fater of scientificno@n as fater of scientific

    managementmanagement In &bb&, as cief engineer forIn &bb&, as cief engineer for

    Midvale Steel, studied o@ tassMidvale Steel, studied o@ tass

    @ere done@ere done$egan first motion and time studies$egan first motion and time studies

    7reated efficienc" .rinci.les7reated efficienc" .rinci.les

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    $orn &b> died &'(*$orn &b> died &'(* In &'0, created 2ord MotorIn &'0, created 2ord Motor

    7om.an"7om.an"

    In &'&, first used moving assem=l"In &'&, first used moving assem=l"line to mae Model #line to mae Model #Unfinised .roduct moved ="Unfinised .roduct moved ="

    conve"or .ast @or stationconve"or .ast @or station Paid @orers ver" @ell for &'&&Paid @orers ver" @ell for &'&&

    k1`da"h[k1`da"h[

    Henr" 2ordHenr" 2ord

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    7ontri=utions 2rom7ontri=utions 2rom

    Human factorsHuman factors

    Industrial engineeringIndustrial engineering

    Management scienceManagement science$iological science$iological science

    P"sical sciencesP"sical sciences Information scienceInformation science

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    Ne@ 7allenges in +MNe@ 7allenges in +M

    Glo=al focusGlo=al focus

    -ust;in;time-ust;in;time

    Su..l" cainSu..l" cain.artnering.artnering

    %a.id .roduct%a.id .roductdevelo.ment,develo.ment,alliancesalliances

    MassMasscustomi5ationcustomi5ation

    !m.o@[email protected]"ees, teamsem.lo"ees, teams

    #o#o2rom2rom :ocal or national focus:ocal or national focus

    $atc si.ments$atc si.ments

    :o@ =id .urcasing:o@ =id .urcasing

    :engt" .roduct:engt" .roductdevelo.mentdevelo.ment

    Standard .roductsStandard .roducts

    -o= s.eciali5ation-o= s.eciali5ation

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    7aracteristics of Goods7aracteristics of Goods

    #angi=le .roduct#angi=le .roduct

    7onsistent .roduct7onsistent .roductdefinitiondefinition

    Production usuall"Production usuall"se.arate fromse.arate fromconsum.tionconsum.tion

    7an =e inventoried7an =e inventoried :o@ customer:o@ customer

    interactioninteraction

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    7aracteristics of Service7aracteristics of Service

    Intangi=le .roductIntangi=le .roduct Produced andProduced and

    consumed at same timeconsumed at same time

    +ften uni?ue+ften uni?ue Hig customerHig customer

    interactioninteraction

    Inconsistent .roductInconsistent .roductdefinitiondefinition

    +ften no@ledge;=ased+ften no@ledge;=ased

    2re?uentl" dis.ersed2re?uentl" dis.ersed

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    Industr" and Services asIndustr" and Services as

    Percentage of GDPPercentage of GDPManufacturingManufacturing ServiceService

    Australia

    Australia

    7anada

    7anada

    7ina

    7ina

    75ec%e.

    75ec%e.

    2rance

    2rance

    German"

    German"

    Hongong

    Hongong

    -a.an

    -a.an

    MeCico

    MeCico

    %

    ussian2ed

    %ussian2ed

    SoutAfrica

    SoutAfrica

    S.ain

    S.ain

    UU

    USUS

    '0'0

    b0b0

    *0*0

    >0>0 1010

    (0(0

    00

    /0/0

    &0&0 00

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    Goods 8ersus ServicesGoods 8ersus Services

    a'le 1.3a'le 1.3

    7an =e resold7an =e resold

    7an =e inventoried7an =e inventoried

    Some as.ects of ?ualit"Some as.ects of ?ualit"

    measura=lemeasura=leSelling is distinct fromSelling is distinct from.roduction.roduction

    Product is trans.orta=leProduct is trans.orta=le

    Site of facilit" im.ortant for costSite of facilit" im.ortant for cost

    +ften eas" to automate+ften eas" to automate

    %evenue generated .rimaril"%evenue generated .rimaril"from tangi=le .roductfrom tangi=le .roduct

    Attri=utes of GoodsAttri=utes of Goods

    #angi=le Product[#angi=le Product[

    Attri=utes of ServicesAttri=utes of Services

    Intangi=le Product[Intangi=le Product[

    %eselling unusual%eselling unusual

    Difficult to inventor"Difficult to inventor"

    4ualit" difficult to measure4ualit" difficult to measure

    Selling is .art of serviceSelling is .art of service

    Provider, not .roduct, isProvider, not .roduct, isoften trans.orta=leoften trans.orta=le

    Site of facilit" im.ortant forSite of facilit" im.ortant forcustomer contactcustomer contact

    +ften difficult to automate+ften difficult to automate

    %evenue generated .rimaril"%evenue generated .rimaril"from te intangi=le servicefrom te intangi=le service

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    +rgani5ations in !ac Sector+rgani5ations in !ac Sector

    Service SectorService Sector !Cam.le!Cam.le of all of all-o=s-o=s

    ProfessionalProfessionalServices,Services,!ducation,!ducation,:egal, Medical:egal, Medical

    Notre Dame Universit",Notre Dame Universit",San Diego oo, ArnoldSan Diego oo, ArnoldPalmer Hos.italPalmer Hos.ital

    25.525.5

    #rade retail,#rade retail,@olesale[@olesale[

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    +rgani5ations in !ac Sector+rgani5ations in !ac Sector

    Service SectorService Sector !Cam.le!Cam.le of all of all

    -o=s-o=s

    $usiness and$usiness and%e.air Services%e.air Services

    Snelling and Snelling,Snelling and Snelling,, HiltonHotels,

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    +rgani5ations in !ac Sector+rgani5ations in !ac Sector

    ManufacturingManufacturingSectorSector !Cam.le!Cam.le of all of all-o=s-o=s

    GeneralGeneral General !lectric, 2ord,General !lectric, 2ord,U6S6 Steel, IntelU6S6 Steel, Intel

    13.313.3

    7onstruction7onstruction $ectel, McDermott$ectel, McDermott 7.17.1

    AgricultureAgriculture ing %ancing %anc 2.52.5

    MiningMining Homestae MiningHomestae Mining 0.40.4

    SectorSector Percent of all _o=sPercent of all _o=s

    ServiceService 76.7*76.7*

    ManufacturingManufacturing 23.3*23.3*

    a'le 1.4a'le 1.4

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    ServicesServices

    Manufacturing

    Manufacturing

    Develo.ment of teDevelo.ment of teService !conom"Service !conom"

    Figure 1.5 (A)Figure 1.5 (A)

    AgricultureAgriculture

    &00&00

    '0'0

    b0b0

    *0*0

    >0>0

    1010

    (0(0

    00

    /0/0

    &0&0

    00

    &b00&b00 &b10&b10 &'00&'00 &'10&'10 /000/000

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    Develo.ment of teDevelo.ment of teService !conom"Service !conom"

    Figure 1.5 (B)Figure 1.5 (B)

    00 )

    /1/1 )

    /0/0 )

    &1&1 )

    &0&0 )

    11 )

    00 )

    &'10&'10 &'*0&'*0 &''0&''0 /0&0/0&0

    ) &10&10

    ) &/1&/1

    ) &00&00

    ) *1*1

    ) 1010

    ) /1/1

    ) 00!m

    .lo"mentYmillions[

    !m

    .lo"mentYmillions[

    IndeC3

    IndeC31997

    51

    00

    1997

    51

    00Manufacturing

    em.lo"ment

    Industrial.roduction

    !stimate

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    Develo.ment of teDevelo.ment of teService !conom"Service !conom"

    Figure 1.5 (C)Figure 1.5 (C)

    United States

    7anada

    2ranceItal"

    $ritain

    -a.an

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    Ne@ #rends in +MNe@ #rends in +M

    :ocal or:ocal ornationalnationalfocusfocus

    :o@;cost, relia=le:o@;cost, relia=le@orld@ide communication@orld@ide communicationand trans.ortationand trans.ortationnet@orsnet@ors

    Glo=al focusGlo=al focus

    $atc large[$atc large[si.mentssi.ments Sort .roduct life c"clesSort .roduct life c"clesand cost of ca.ital .utand cost of ca.ital .ut.ressure on reducing.ressure on reducinginventor"inventor"

    -ust;in;time-ust;in;timesi.mentssi.ments

    :o@;=id:o@;=id.urcasing.urcasing

    4ualit" em.asis re?uires4ualit" em.asis re?uirestat su..liers =e engagedtat su..liers =e engaged

    in .roduct im.rovementin .roduct im.rovement

    Su..l";Su..l";caincain

    .artners,.artners,!nter.rise!nter.rise%esource%esourcePlanning,Planning,e;commercee;commerce

    Figure 1.6Figure 1.6

    PastPast 7auses7auses 2uture2uture

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    2006 Prentice Hall, Inc. 1 49

    Ne@ #rends in +MNe@ #rends in +M

    :engt":engt".roduct.roductdevelo.mentdevelo.ment

    Sorter life c"cles,Sorter life c"cles,Internet, ra.id internationalInternet, ra.id internationalcommunication, com.uter;communication, com.uter;aided design, andaided design, andinternational colla=orationinternational colla=oration

    %a.id .roduct%a.id .roductdevelo.ment,develo.ment,alliances,alliances,colla=orativecolla=orativedesignsdesigns

    Standardi5edStandardi5ed.roducts.roducts

    Affluence and @orld@ideAffluence and @orld@idemarets increasingl"marets increasingl"fleCi=le .roductionfleCi=le .roduction.rocesses.rocesses

    MassMasscustomi5ationcustomi5ation@it added@it addedem.asis onem.asis on?ualit"?ualit"

    -o=-o=s.eciali5ations.eciali5ation

    7anging socioculture7anging socioculturemilinium increasingl" amilinium increasingl" ano@ledge and informationno@ledge and informationsociet"societ"

    !m.o@[email protected]"ees,em.lo"ees,teams, andteams, andleanlean.roduction.roduction

    Figure 1.6Figure 1.6

    PastPast 7auses7auses 2uture2uture

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    Ne@ #rends in +MNe@ #rends in +M

    :o@;cost:o@;costfocusfocus

    !nvironmental issues, IS+!nvironmental issues, IS+&(000, increasing dis.osal&(000, increasing dis.osalcostscosts

    !nvironmentall"!nvironmentall"sensitivesensitive.roduction,.roduction,greengreenmanufacturing,manufacturing,

    rec"cledrec"cledmaterials,materials,remanufacturingremanufacturing

    Figure 1.6Figure 1.6

    PastPast 7auses7auses 2uture2uture

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    2006 Prentice Hall, Inc. 1 51

    Productivit" 7allengeProductivit" 7allenge

    Productivit" is te ratio of out.uts goodsProductivit" is te ratio of out.uts goodsand services[ divided =" te in.utsand services[ divided =" te in.uts

    resources suc as la=or and ca.ital[resources suc as la=or and ca.ital[

    #e o=_ective is to im.rove tis#e o=_ective is to im.rove tismeasure of efficienc"measure of efficienc"

    Im.ortant NotehProduction is a measure of out.ut

    onl" and not a measure of efficienc"

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    2006 Prentice Hall, Inc. 1 52

    2eed=ac2eed=ac loo.loo.

    +ut.uts+ut.uts

    Goodsand

    services

    ProcessesProcesses

    #e U6S6 economic s"stemtransforms in.uts to out.uts

    at a=out an annual 2.5*increase in .roductivit" .er

    "ear6 #e .roductivit"increase is te result of a

    miC of ca.ital (38*of 2.5*),la=or (10*of 2.5*), and

    management (52*of 2.5*)6

    #e !conomic S"stem#e !conomic S"stem

    In.utsIn.uts

    :a=or,ca.ital,

    management

    Figure 1.7Figure 1.7

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    2006 Prentice Hall, Inc. 1 53

    Increasing Productivit" )Increasing Productivit" )#e :A Motor Pool#e :A Motor Pool

    $efore3$efore3 7ost7ost $120$120million annuall"million annuall" 21,00021,000veiclesveicles

    30*30*of teof te 900900tras trucs @ere in re.airtras trucs @ere in re.air 11*11*of .olice cars @ere in re.airof .olice cars @ere in re.air

    Actions3Actions3 7reated team assignments7reated team assignments

    Assigned .aring .laces for trucsAssigned .aring .laces for trucs

    #ires ceced and trucs em.tied eac nigt#ires ceced and trucs em.tied eac nigt Standard customer .icu.s esta=lisedStandard customer .icu.s esta=lised 7om.uteri5ed fleet management7om.uteri5ed fleet management Mecanics moved to nigt siftMecanics moved to nigt sift

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    Measure of .rocess im.rovementMeasure of .rocess im.rovement

    %e.resents out.ut relative to in.ut%e.resents out.ut relative to in.ut

    +nl" troug .roductivit"+nl" troug .roductivit"increases can our standard of livingincreases can our standard of livingim.roveim.rove

    Productivit"Productivit"

    Productivit" Productivit" Units .roducedUnits .roduced

    In.ut usedIn.ut used

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    Productivit" 7alculationsProductivit" 7alculations

    Productivit" Productivit" Units .roducedUnits .roduced:a=or;ours used:a=or;ours used

    44units`la=or;ourunits`la=or;our1,0001,000250250

    :a=or Productivit":a=or Productivit"

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    Multi;2actor Productivit"Multi;2actor Productivit"

    +ut.ut+ut.ut

    :a=or p Material p !nerg":a=or p Material p !nerg"p 7a.ital p Miscellaneousp 7a.ital p Miscellaneous

    Productivit" Productivit"

    Also no@n as total factor .roductivit"Also no@n as total factor .roductivit"

    +ut.ut and in.uts are often eC.ressed+ut.ut and in.uts are often eC.ressedin dollarsin dollars

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88 rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    +ld la=or+ld la=or

    .roductivit".roductivit"

    88titles`da"titles`da"

    3232la=or;rsla=or;rs

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    88titles`da"titles`da"

    3232la=or;rsla=or;rs

    +ld la=or+ld la=or

    .roductivit".roductivit" .25.25titles`la=or;rtitles`la=or;r

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88 rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    1414titles`da"titles`da" +veread +veread $800$800`da"`da"Ne@ S"stem3Ne@ S"stem3

    88titles`da"titles`da"

    3232la=or;rsla=or;rs

    +ld la=or+ld la=or

    .roductivit".roductivit"

    Ne@ la=orNe@ la=or

    .roductivit".roductivit"

    6/1 titles`la=or;r 6/1 titles`la=or;r

    1414titles`da"titles`da"

    3232la=or;rsla=or;rs

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    1414titles`da"titles`da" +veread +veread $800$800`da"`da"Ne@ S"stem3Ne@ S"stem3

    88titles`da"titles`da"

    3232la=or;rsla=or;rs

    +ld la=or+ld la=or

    .roductivit".roductivit" .25.25titles`la=or;rtitles`la=or;r

    1414 titles`da"titles`da"

    3232la=or;rsla=or;rs

    Ne@ la=orNe@ la=or.roductivit".roductivit" .4375.4375titles`la=or;rtitles`la=or;r

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    1414titles`da"titles`da" +veread +veread $800$800`da"`da"Ne@ S"stem3Ne@ S"stem3

    +ld multifactor+ld multifactor

    .roductivit".roductivit"

    88titles`da"titles`da"

    $640 400$640 400

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    1414titles`da"titles`da" +veread +veread $800$800`da"`da"Ne@ S"stem3Ne@ S"stem3

    88titles`da"titles`da"

    $640 400$640 400

    +ld multifactor+ld multifactor

    .roductivit".roductivit" .0077.0077titles`dollartitles`dollar

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    1414titles`da"titles`da" +veread +veread $800$800`da"`da"Ne@ S"stem3Ne@ S"stem3

    88titles`da"titles`da"

    $640 400$640 400

    +ld multifactor+ld multifactor

    .roductivit".roductivit"

    Ne@ multifactorNe@ multifactor

    .roductivit".roductivit"

    .0077.0077titles`dollartitles`dollar

    1414titles`da"titles`da"

    $640 800$640 800

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    7ollins #itle Productivit"7ollins #itle Productivit"

    Staff ofStaff of 44@ors@ors 88rs`da"rs`da" 88titles`da"titles`da"Pa"roll cost Pa"roll cost $640$640`da"`da" +veread +veread $400$400`da"`da"

    +ld S"stem3+ld S"stem3

    1414titles`da"titles`da" +veread +veread $800$800`da"`da"Ne@ S"stem3Ne@ S"stem3

    88titles`da"titles`da"

    $640 400$640 400

    1414titles`da"titles`da"

    $640 800$640 800

    +ld multifactor+ld multifactor

    .roductivit".roductivit"

    Ne@ multifactorNe@ multifactor

    .roductivit".roductivit"

    .0077.0077titles`dollartitles`dollar

    .0097.0097titles`dollartitles`dollar

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    Measurement Pro=lemsMeasurement Pro=lems

    4ualit"4ualit"ma" cange @ile tema" cange @ile te?uantit" of in.uts and out.uts?uantit" of in.uts and out.uts

    remains constantremains constant !Cternal elements!Cternal elementsma" cause anma" cause an

    increase or decrease inincrease or decrease in.roductivit".roductivit"

    Precise unitsPrecise unitsof measure ma" =eof measure ma" =elacinglacing

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    Productivit" 8aria=lesProductivit" 8aria=les

    :a=or:a=or; contri=utes a=out; contri=utes a=out 10*10*ofofte annual increasete annual increase

    7a.ital7a.ital; contri=utes a=out; contri=utes a=out 32*32*of te annual increaseof te annual increase

    ManagementManagement; contri=utes a=out; contri=utes a=out

    52*52*of te annual increaseof te annual increase

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    :a=or Sills:a=or Sills

    A=out alf of te &*;"ear;olds in te US cannotA=out alf of te &*;"ear;olds in te US cannotcorrectl" ans@er ?uestions of tis t".ecorrectl" ans@er ?uestions of tis t".e

    Figure 1.8Figure 1.8

    I t t d P d ti it

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    Investment and Productivit"Investment and Productivit"in Selected Nationsin Selected Nations

    USUS UU

    7anada7anada

    Ital"Ital"

    $elgium$elgium

    2rance2rance

    NeterlandsNeterlands

    -a.an-a.an

    &0&0

    bb

    >>

    ((

    //

    00

    Percentincreaseinmfg

    .roductivit"

    Percentincreaseinmfg

    .roductivit"

    Percentage investmentPercentage investment

    &0&0 &1&1 /0/0 /1/1 00 11

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    Productivit" at #aco $ellProductivit" at #aco $ell

    Im.rovements3Im.rovements3 %evised te menu%evised te menu Designed meals for eas" .re.arationDesigned meals for eas" .re.aration

    Sifted some .re.aration to su..liersSifted some .re.aration to su..liers !fficient la"out and automation!fficient la"out and automation #raining and em.lo"ee em.o@erment#raining and em.lo"ee em.o@erment

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    Productivit" at #aco $ellProductivit" at #aco $ell

    Im.rovements3Im.rovements3 %evised te menu%evised te menu Designed meals for eas" .re.arationDesigned meals for eas" .re.aration

    Sifted some .re.aration to su..liersSifted some .re.aration to su..liers !fficient la"out and automation!fficient la"out and automation #raining and em.lo"ee em.o@erment#raining and em.lo"ee em.o@erment

    %esults3

    Pre.aration time cut to 8secondsManagement s.an of control

    increased from 5to 30 In;store la=or cut =" 15ours`da" Stores andle t@ice te volume @it

    alf te la=or 2ast;food lo@;cost leader

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    !tics and Social %es.onsi=ilit"!tics and Social %es.onsi=ilit"

    7allenges facing7allenges facingo.erations managers3o.erations managers3

    Develo.ing safe ?ualit" .roductsDevelo.ing safe ?ualit" .roducts

    Maintaining a clean environmentMaintaining a clean environment

    Providing a safe @or.laceProviding a safe @or.lace

    Honoring communit" commitmentsHonoring communit" commitments