Establishing Control Establishing Control SystemsSystemsChapter 23 Chapter 23

Exploring Manufacturing Exploring Manufacturing TextbookTextbook

After studying this chapter, you After studying this chapter, you will be able to:will be able to:

►Name the four phases involved in Name the four phases involved in developing and using a resource developing and using a resource control system.control system.

►List the major resources used to List the major resources used to manufacture a product.manufacture a product.

►Discuss the three major factors that Discuss the three major factors that affect labor costs.affect labor costs.

►Name and discuss the two tasks in a Name and discuss the two tasks in a total quality control system.total quality control system.

Resource controlResource control► Resource Control: making sure that resources Resource Control: making sure that resources

are being fully utilized, and not sitting idle or are being fully utilized, and not sitting idle or being wasted.being wasted. Machines that the company owns must be used as Machines that the company owns must be used as

much as possible.much as possible. People need to be kept busy doing productive work.People need to be kept busy doing productive work. Materials should not be wasted.Materials should not be wasted. The outputs of the system must also be controlled.The outputs of the system must also be controlled.

►Waste, scrap, and pollution must be kept down.Waste, scrap, and pollution must be kept down.►Product quality must be assured, too.Product quality must be assured, too.

Control SystemsControl Systems►Planning ActivitiesPlanning Activities►Measuring PerformanceMeasuring Performance►Evaluating PerformanceEvaluating Performance►Corrective ActionCorrective Action

Planning ActivitiesPlanning Activities►There are two basic types of There are two basic types of

manufacturing plans:manufacturing plans: Long-rangeLong-range Short-termShort-term

Long-Range PlansLong-Range Plans►Long-range plans are usually three to five Long-range plans are usually three to five

year projections (forecasts or guesses).year projections (forecasts or guesses).►They direct overall business activities.They direct overall business activities.►Long-range product development, Long-range product development,

marketing, and finance plans are marketing, and finance plans are common.common.

►Long-range plans are general in nature. Long-range plans are general in nature. They only give guidelines for policy They only give guidelines for policy decisions.decisions.

Short-Term PlansShort-Term Plans► Short-term plans are more concrete (real).Short-term plans are more concrete (real).► They outline performance goals (work to be done) for a They outline performance goals (work to be done) for a

set period.set period.► Short-term plans can be for a day, week, month, or Short-term plans can be for a day, week, month, or

year. They provide directions for daily activity.year. They provide directions for daily activity.► Typical short-term plans include production schedules, Typical short-term plans include production schedules,

budgets, and sales quotas. (A quota is a goal or budgets, and sales quotas. (A quota is a goal or amount to be done.) Goals guide day-to-day amount to be done.) Goals guide day-to-day operations.operations.

► Manufacturing activities are guided by short-term Manufacturing activities are guided by short-term plans.plans. They include plans for using labor, materials, and machines.They include plans for using labor, materials, and machines. Also included are plans for controlling product quality.Also included are plans for controlling product quality.

Measuring PerformanceMeasuring Performance►Manufacturing activities are controlled.Manufacturing activities are controlled.►Their performance is measured .Their performance is measured .►Some method is used to record the Some method is used to record the

use of machines, labor, and material.use of machines, labor, and material.►Records are kept of time worked, Records are kept of time worked,

products produced, and material used.products produced, and material used.►These measurements provide the These measurements provide the

basis for management decisions.basis for management decisions.

Evaluating PerformanceEvaluating Performance►Manufacturing performances is also rated Manufacturing performances is also rated

against some base.against some base.►This base is often the company’s plan.This base is often the company’s plan.►The number of products produced is The number of products produced is

measured against production plans.measured against production plans.►Product quality and worker output (amount Product quality and worker output (amount

of work done) are always measured.of work done) are always measured.►Product function, reliability, and Product function, reliability, and

appearance are evaluated.appearance are evaluated.

Corrective ActionCorrective Action► Such measurement and evaluation often point out Such measurement and evaluation often point out

shortcomings.shortcomings.► Management must decide what action to take.Management must decide what action to take.► A number of things could be done.A number of things could be done.

Operations may need to be changed.Operations may need to be changed. Manufacturing engineers may redesign the task.Manufacturing engineers may redesign the task. The work station could be made more efficient.The work station could be made more efficient. These actions could increase the worker’s efficiency.These actions could increase the worker’s efficiency. Scrap rates could go down.Scrap rates could go down. Productivity could rise.Productivity could rise. Materials may be changed.Materials may be changed. Another standard size could provide better cuts.Another standard size could provide better cuts. The size of scrap at the ends of the material could be reduced.The size of scrap at the ends of the material could be reduced. A different material may work better.A different material may work better.

► Whatever the corrective action, product quality must be Whatever the corrective action, product quality must be maintained.maintained.

Develop Plan

Measure Performance

Evaluate Plan/Performance

Correct Plan/Performance

Control System

Phases of a control system.

Factors to ControlFactors to Control► Everything a company does is controlled.Everything a company does is controlled.► Sales are controlled.Sales are controlled.► Raw materials and finished goods Raw materials and finished goods

inventories (stores) are controlled.inventories (stores) are controlled.► Income and expenses are controlled.Income and expenses are controlled.► Control is the basis for success.Control is the basis for success.► Two major concerns of any company are:Two major concerns of any company are:

Use of resourcesUse of resources Quality of its products.Quality of its products.

Controlling Use of ResourcesControlling Use of Resources►The major resources used to make The major resources used to make

products are:products are: Human labor.Human labor. Machine time.Machine time. Materials.Materials.

►These resources must be managed. These resources must be managed. ►They must be used efficiently.They must be used efficiently.

Controlling Human LaborControlling Human Labor►Each job takes time to do.Each job takes time to do.►There is a labor cost for the job.There is a labor cost for the job.►This cost adds to the total product cost.This cost adds to the total product cost.►The actual labor cost is affected by The actual labor cost is affected by

several things. These include:several things. These include: How well the operations are planned.How well the operations are planned. Worker efficiency. (How well the workers Worker efficiency. (How well the workers

do their job).do their job). Wage rate paid to the workers.Wage rate paid to the workers.

OperationsOperations►Manufacturing engineers can study flow and Manufacturing engineers can study flow and

operation process charts.operation process charts.►Operations can be simplified and combined.Operations can be simplified and combined.►Product design changes can do away with Product design changes can do away with

some assembly steps.some assembly steps.►New technology may make manufacturing New technology may make manufacturing

more efficient.more efficient.►Any of these actions can reduce labor costs.Any of these actions can reduce labor costs.

Worker EfficiencyWorker Efficiency► The task can be made more efficient.The task can be made more efficient.► Machines can be modified (changed) to make them Machines can be modified (changed) to make them

easier to use.easier to use.► Tooling can be improved.Tooling can be improved.► Machine controls can be located for greater Machine controls can be located for greater

convenience.convenience.► The amount of reaching can be reduced by handier The amount of reaching can be reduced by handier

location of materials.location of materials.► Often, the efficient use of labor is improved by Often, the efficient use of labor is improved by

automation.automation. Routine jobs are given to machines, robots, and Routine jobs are given to machines, robots, and

computers.computers.

Wage RateWage Rate► The final item in labor cost is wage rates.The final item in labor cost is wage rates.► Wage rates: what the worker is paid.Wage rates: what the worker is paid.► Labor cost and worker skill are related.Labor cost and worker skill are related.

Difficult jobs require skilled workers.Difficult jobs require skilled workers. Skills take time and ability to learnSkills take time and ability to learn This ability and training is rewarded with higher wage rates.This ability and training is rewarded with higher wage rates. Labor costs can be controlled by deskilling (making the job simpler).Labor costs can be controlled by deskilling (making the job simpler).

► The total skill of any operation includes:The total skill of any operation includes: Skill built into the machine.Skill built into the machine. Skill of the worker.Skill of the worker.

► Manufacturing engineers always try to build skill into the machine. Manufacturing engineers always try to build skill into the machine. They do this in several ways:They do this in several ways: Better toolingBetter tooling Easier-to-use or self-adjusting controlsEasier-to-use or self-adjusting controls The operator needs less skill to run the machine.The operator needs less skill to run the machine.

► She or he can be hired at a cheaper wage.She or he can be hired at a cheaper wage.

Measuring LaborMeasuring Labor►There are three major measurements There are three major measurements

used to control labor costs. These are:used to control labor costs. These are: Time WorkedTime Worked Products ProducedProducts Produced ProductivityProductivity

Time WorkedTime Worked►The simplest measure for labor is time The simplest measure for labor is time

worked.worked.►Workday: the time span in which Workday: the time span in which

employees record the times they start employees record the times they start and end work.and end work.

►Time Clock: a device that automatically Time Clock: a device that automatically prints the employee’s starting and prints the employee’s starting and ending times on a card. At the end of the ending times on a card. At the end of the week, total time worked is added week, total time worked is added together.together.

Products ProducedProducts Produced►Work completed at each station is another Work completed at each station is another

way to measure labor.way to measure labor.►The time worked is important to the The time worked is important to the

worker. Time is the basis for many worker. Time is the basis for many people’s pay.people’s pay.

►The number of good products made is the The number of good products made is the important measure for a company.important measure for a company.

►Profits are made by producing quality Profits are made by producing quality products.products.

►Production records are often kept.Production records are often kept.

ProductivityProductivity►Productivity: a measure of the output Productivity: a measure of the output

per unit of labor.per unit of labor.► It is measured in terms of products per It is measured in terms of products per

worker hour (one person working one worker hour (one person working one hour) or worker day (one person hour) or worker day (one person working one day).working one day).

Controlling Machine TimeControlling Machine Time► Proper use of machines has an important effect on cost of Proper use of machines has an important effect on cost of

production.production.► Machines must be carefully scheduled for use.Machines must be carefully scheduled for use.► Production planners must see that machines are not idle for Production planners must see that machines are not idle for

long.long.► Similar operations should be scheduled on the same machine. Similar operations should be scheduled on the same machine.

This reduces set-up and tear-down times. This reduces set-up and tear-down times.► Long runs should be scheduled whenever possible.Long runs should be scheduled whenever possible.► Efficiency rises as the length of the run increases.Efficiency rises as the length of the run increases.► All machine operations have at least three phases:All machine operations have at least three phases:

Loading parts or materials into the machine.Loading parts or materials into the machine. Processing the parts or materials.Processing the parts or materials. Unloading parts or materials from the machine.Unloading parts or materials from the machine.

► Loading and unloading time should be kept to a minimum.Loading and unloading time should be kept to a minimum.► Correct machine speeds and feeds should be used.Correct machine speeds and feeds should be used.

Drilling a hole at a speed slower than required is wasteful.Drilling a hole at a speed slower than required is wasteful.

Controlling Material UseControlling Material Use► Inventory control: controlling the amount of Inventory control: controlling the amount of

material on hand.material on hand.► There are several materials that can be There are several materials that can be

controlled.controlled. Raw materials – materials that will be processed during Raw materials – materials that will be processed during

manufacture.manufacture. Purchased parts – hardware and parts bought from Purchased parts – hardware and parts bought from

other companies. They will become part of the product.other companies. They will become part of the product. Work-in-process – products that are being built but are Work-in-process – products that are being built but are

not finished.not finished. Finished products – completed products ready for Finished products – completed products ready for

shipment to customers.shipment to customers. Supplies – materials, such as abrasives or paint, that Supplies – materials, such as abrasives or paint, that

are used up in the manufacture of the product.are used up in the manufacture of the product.

Controlling Material UseControlling Material Use► These inventories are carefully kept.These inventories are carefully kept.► Computers are used to help keep the records.Computers are used to help keep the records.► The record will list material by six categories:The record will list material by six categories:

On order – items ordered but not yet received.On order – items ordered but not yet received. Received – items received since the last update of Received – items received since the last update of

the records.the records. On hand – items in storage.On hand – items in storage. Issued – items released from the stockroom to Issued – items released from the stockroom to

production or shipping.production or shipping. Allocated – items being held that are marked for Allocated – items being held that are marked for

production or shipping.production or shipping. Available – items in inventory that are available for Available – items in inventory that are available for

use.use.

Controlling QualityControlling Quality► Quality is Quality is everybody’severybody’s business. business.

Customers want products that work.Customers want products that work. Retailers want to sell good products.Retailers want to sell good products. Sales can be lost by creating dissatisfied customers.Sales can be lost by creating dissatisfied customers. The success of a company will depend on its image.The success of a company will depend on its image. It must be seen by customers as a quality manufacturer.It must be seen by customers as a quality manufacturer. The key to producing a quality product is The key to producing a quality product is quality control.quality control. It ensures that the product meets standards.It ensures that the product meets standards. This function of a company has two tasks:This function of a company has two tasks:

► Motivating workers to produce quality products.Motivating workers to produce quality products.► Inspecting products to remove substandard items.Inspecting products to remove substandard items.

MotivationMotivation► Posters are used to encourage quality production.Posters are used to encourage quality production.► Foreign competition has changed workers’ minds.Foreign competition has changed workers’ minds.► The automotive and steel industries were seriously The automotive and steel industries were seriously

hurt by the image of poor quality.hurt by the image of poor quality.► Workers were asked to join Workers were asked to join quality circlesquality circles, these , these

are voluntary groups that meet often to discuss are voluntary groups that meet often to discuss ways to improve the company and its operations. ways to improve the company and its operations. New production methods, management activities, New production methods, management activities, and other ideas are discussed.and other ideas are discussed.

► The goal of quality circles is to improve quality of The goal of quality circles is to improve quality of both products and work life.both products and work life. Workers who join these groups tend to feel they are Workers who join these groups tend to feel they are

important.important. They can help the company improve and compete.They can help the company improve and compete.

InspectionInspection► Inspection: a process that ensures only quality products leave the plant.Inspection: a process that ensures only quality products leave the plant.► Inspection includes checking:Inspection includes checking:

Materials entering the plant.Materials entering the plant. Purchased parts.Purchased parts. Work-in-progress.Work-in-progress. Finished products.Finished products.

► They are often tagged to indicate the condition.They are often tagged to indicate the condition. Good items receive an “accepted” tag.Good items receive an “accepted” tag. Other parts are marked for either rework or scrap.Other parts are marked for either rework or scrap.

► Rework corrects defects. Parts are then inspected again before they leave the Rework corrects defects. Parts are then inspected again before they leave the plant.plant.

► Inspectors also prepare inspection reports.Inspectors also prepare inspection reports. They report on their activity for a set period of time (hourly, daily, etc.).They report on their activity for a set period of time (hourly, daily, etc.). They record the number of parts:They record the number of parts:

► InspectedInspected► AcceptedAccepted► Rejected and the reason.Rejected and the reason.

This information will identify problems in the manufacturing system. This information will identify problems in the manufacturing system. Managers can then take proper corrective action.Managers can then take proper corrective action.

SummarySummary► Resources must be used wisely.Resources must be used wisely.

Materials must not be wasted.Materials must not be wasted. Machines must be used efficiently.Machines must be used efficiently. People need to be assigned to appropriate work.People need to be assigned to appropriate work. They must be busy producing products.They must be busy producing products. Production planners must schedule the use of these resources.Production planners must schedule the use of these resources. They then need to evaluate their use.They then need to evaluate their use.

► Product quality must also be maintained.Product quality must also be maintained. Employees need to understand their importance.Employees need to understand their importance. Each worker should know that his or her job contributes to quality Each worker should know that his or her job contributes to quality

products.products. Everyone must be motivated to produce good products.Everyone must be motivated to produce good products.

► Inspection activities must remove defective items.Inspection activities must remove defective items. Materials and purchased parts must meet standards.Materials and purchased parts must meet standards. The product must also meet standards.The product must also meet standards. It must be inspected to ensure quality.It must be inspected to ensure quality. Only through control of resources and quality can a company compete.Only through control of resources and quality can a company compete.

Name the four phases involved in Name the four phases involved in developing and using a resource control developing and using a resource control

system.system.►Planning ActivitiesPlanning Activities►Measuring PerformanceMeasuring Performance►Evaluating PerformanceEvaluating Performance►Corrective ActionCorrective Action

Develop Plan

Measure Performance

Evaluate Plan/Performance

Correct Plan/Performance

Control System

Phases of a control system.

List the major resources used to List the major resources used to manufacture a product.manufacture a product.

►The major resources used to make The major resources used to make products are:products are: Human labor.Human labor. Machine time.Machine time. Materials.Materials.

Discuss the three major factors Discuss the three major factors that affect labor costs.that affect labor costs.

►There are three major measurements There are three major measurements used to control labor costs. These are:used to control labor costs. These are: Time WorkedTime Worked Products ProducedProducts Produced ProductivityProductivity

Name and discuss the two tasks Name and discuss the two tasks in a total quality control system.in a total quality control system.►Total quality control system has two Total quality control system has two

tasks:tasks: Motivating workers to produce quality Motivating workers to produce quality

products.products. Inspecting products to remove Inspecting products to remove

substandard items.substandard items.

Any Any Questions??Questions??