Issues to Be Solved When Organising a Manufacturing Process
It goes without saying that the first thing the manufacturing companies have to decide is what goods to produce and what services to render. Introducing new products obviously requires doing market research, identifying market opportunities and accurate sales forecasting. Manufactures should also concentrate on the quality of the goods produced and services rendered.
Companies are faced with a ‘make or buy’ decision for every process or service.Thus, manufacturing companies have to decide how much research and development (R&D) to do. Should they do fundamental or applied research themselves, or use research institutes, universities and independent research laboratories, or simply license a product or service designs from other organisations when necessary?
Decisions about what products to make or what services to offer have to take into account a company’s operational capability, labour, capital and equipment requirements. After it has been decided what to manufacture, operations management have to decide where to manufacture (whether it is necessary to construct a new plant, where to locate it and how to lay it out), what production facilities to have, how much productive capacity the factory or plant should have and how much inventory to maintain (the necessary level of inventory parts and finished products). Decisions have to be also made concerning the hiring of staff, the purchase of equipment and so on. In Reading III we are going to concentrate on some of these issues.
Concept check
What are the basic functions of any manufacturing enterprise? Comment on each of them.
What are the objectives of production departments? Complete the list below.
The objectives of production departments are sometimes said to be incompatible. Why?
What are the three basic phases of the production and operations process? What do they include? Draw up a chart to illustrate your answer.
Choose from the items in the table to complete the diagramme below, and give your reasons for classifying each item as an INPUT or an OUTPUT:
updated stock file |
rendered services |
inventory of finished goods |
money |
raw materialts |
pieces of machinery and equipment |
completed orders |
computers and tools |
sales orders |
labour force |
Define production and operations process.
What factors does P/OM include?
What problems should producers sort out when organising a manufacturing process? Fill in the chart below.
Read the statements and decide whether they are true or false. Comment on your viewpoint.
Production departments concentrate only on quantity and quality of manufactured products.
Production or operations management is important to all businesses.
Production plants, equipment in them and other physical resources are more important for P/OM than human effort.
Workers who are motivated will probably be more productive.
Large companies are generally obliged to do their own research and development.
Decision-making about manufacturing new products or the building of new production facilities follows sales forecasting.
Reading III