UNIT 7: PRODUCTION

READING 1: PRODUCTION AND OPERATION MANAGEMENT

Manufacturing fuctions:

  • Finance: raise K to buy equipment

  • Production: make the product

  • Marketing: sells and distribute

READING 2: LEAN PRODUCTION

Defi: cut down waste of resources + time → efficiency → reduce the time it takes for product to be developed and become available

Types of waste:

  • Overproduction: produce bf order → storage costs + goods damage

  • Waiting

  • Transportation: moving around → no value + damaged

  • Unnecessary inventory: takes up space → cost money

  • Motion: movements of empee → waste time + machines

  • Over-processing: complex machinery → simple tasks

  • Defects: require fixing and time wasted in inspecting

Lean production:

  • Kaizen: continuous improvement

    • Ideas of groups of workers → meet → discuss

    • get rid of large inventory + reduce time walking

    • corporate culture

    • proactive (take actions bf it happens)

  • Just-in-time:

    • Deliver raw materials jit for the production

    • Make parts jit for the next stage

    • finish the product jit for delivery

    → Need reliable suppliers + efficient system of ordering raw materials

  • Cell production:

    • Divided into cells → each make a part =/= mass production line

    • improve empee’s morale → less likely to go on strike

Method of production

Job production

Batch production

Flow production

methodology

products made specifically to order

Each is different may not be repeated

similar products made in batches

a number of products are made → another product

large quantities of product in a continuous process → low cost

→ mass product of standardised product

Example

Eg: restaurant

eg: bakery, jeans size

cars, cameras, TVs, packaged food

Advantage

  • customization

  • high-quality output

  • flexibility in production

  • greater efficiency

  • moderate flexibility

  • economies of scale

  • high efficiency

  • low cost per unit

  • economies of scale

  • faster production

Disadvantage

  • high cost per unit

  • longer production times

  • less economies of scale

  • intermediate level of customization

  • inventory mana challenges

  • setup times btw batches

  • limited customization

  • inflexibility in changing products

  • high initial setup costs

Writing 2:

  1. What are two main strategies that manufacturers use for production

  • Pull: according to current demand

  • Push: based on estimates of future demand

  1. What is JIT 

  • Other names: lean production, stockless production, continuous flow manufacture, agile manufacturing

  • Common principles of these systems: nothing is bought or produced until it is needed

  1. Differences of pull strategy and push strategy

  • Pull strategy: production is based on current demand, items are produced or bought only when needed. Inventory is kept minimal

  • Push strategy: MRP (Manufacturing Resources Planning) initiates production based on estimated demand and often involves maintaining safety stocks and safety lead times due to uncertain demand forecasts

  1. Types of waste in production

    Seven: Overproduction, Waiting, Transportation, Unnecessary inventory, Motion, Over-processing, Defects

  2. Benefits of JIT

    • Reduce the costs of holding inventory and warehouse space

    • improves cash flow

  1. Why is JIT beneficial for cash flow

  • Reduce the time btw paying for raw materials or components and receiving payment from customers

  1. Job production (SX định chế)

  • Suitable for low-volume, high-quality, customized products,

  • but it may be costly, time-consuming, and requires skilled workers

  1. Batch production

  • It is suitable for medium-volume, standardized products, may requires frequent changes in machinery or equipment and create work-in-progress inventory

  1. Cell production

  • A production method that divides the production line into separate, self-contained units that make an identifiable part of the finished product