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1. ISEN 220 Introduction to Production and Manufacturing Systems 12/28/09 Texas A&M Industrial Engineering

2. Productivity Figure 1.5 (B) 30 – 25 – 20 – 15 – 10 – 5 – 0 – 1950 1970 1990 2010 – 150 – 125 – 100 – 75 – 50 – 25 – 0 Employment (millions) Index: 1997 = 100 Manufacturing employment Industrial production Estimate

3. Productivity Challenge Productivity is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital) The objective is to improve this measure of efficiency Important Note! Production is a measure of output only and not a measure of efficiency

5. Productivity Calculations Labor Productivity Productivity = Units produced Labor-hours used = = 4 units/labor-hour 1,000 250

7. Collins Title Productivity Staff of 4 works 8 hrs/day 8 titles/day Payroll cost = $640 /day Overhead = $400 /day Old System: = Old labor productivity

8. Collins Title Productivity Staff of 4 works 8 hrs/day 8 titles/day Payroll cost = $640 /day Overhead = $400 /day Old System: 14 titles/day Overhead = $800 /day New System: = Old labor productivity = New labor productivity

9. Collins Title Productivity Staff of 4 works 8 hrs/day 8 titles/day Payroll cost = $640 /day Overhead = $400 /day Old System: 14 titles/day Overhead = $800 /day New System: = Old multifactor productivity

10. Collins Title Productivity Staff of 4 works 8 hrs/day 8 titles/day Payroll cost = $640 /day Overhead = $400 /day Old System: 14 titles/day Overhead = $800 /day New System: = Old multifactor productivity = New multifactor productivity

11. Productivity Measurement Issues

15. Other Examples

16. Boeing Suppliers (787) Firm Country Component Dassault France Design and PLM software Messier-Bugatti France Landing gear Thales France Electrical power conversion system and integrated standby flight display Diehl Germany Interior lighting FR-HiTemp UK Fuel pumps and valves Smiths Aerospace UK Central computer system

17. Boeing Suppliers (787) Firm Country Component BAE SYSTEMS UK Electronics Alenia Aeronautics Italy Upper center fuselage & horizontal stabilizer Toray Industries Japan Carbon fiber for wing and tail units Fuji Heavy Japan Center wing box Industries Kawasaki Heavy Japan Forward fuselage, Industries fixed section of wing, landing gear well

18. Boeing Suppliers (787) Firm Country Component Teijin Seiki Japan Hydraulic actuators Mitsubishi Heavy Japan Wing box Industries Chengdu Aircraft China Rudder Group Hafei Aviation China Parts

19. Reasons to Globalize

21. Product Life Cycle Figure 2.5 Best period to increase market share R&D engineering is critical Practical to change price or quality image Strengthen niche Poor time to change image, price, or quality Competitive costs become critical Defend market position Cost control critical Introduction Growth Maturity Decline Company Strategy/Issues Internet Flat-screen monitors Sales DVD CD-ROM Drive-through restaurants Fax machines 3 1/2” Floppy disks Color printers

22. Product Life Cycle Product design and development critical Frequent product and process design changes Short production runs High production costs Limited models Attention to quality Forecasting critical Product and process reliability Competitive product improvements and options Increase capacity Shift toward product focus Enhance distribution Standardization Less rapid product changes – more minor changes Optimum capacity Increasing stability of process Long production runs Product improvement and cost cutting Little product differentiation Cost minimization Overcapacity in the industry Prune line to eliminate items not returning good margin Reduce capacity Figure 2.5 Introduction Growth Maturity Decline OM Strategy/Issues