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Production Management ​

(production management == operations management)

the part of management that deals with efficiently and effectively organizing processes by means of design, management and optimization.

Operations research ​

field of mathematics that deals with modelling and optimizing processes

Historical perspective ​

  • JD Rockefeller Oil
  • Cornelius Vanderbilt Railroads/Shipping
  • JP MorganL Banking, Steel, GE
  • Andrew Carnegie, Steel

All were:

  • visionaries
  • creators
  • industrial innovators
  • ruthless, courageous businessmen
  • monopolists, captains of industry
  • fierce competitors
  • created poor working conditions
  • philanthropists in later life

Example: Henry Ford ​

made a affordable car. Model-T using the Ford assembly line

first industrial revolution ​

the spinning jenny invention in the textile industry + output - cost

steam engine (James Watt) driving force of the industrial revolution.

labour division (Adam Smith)

specialization of workers increases productivity

Interchangable parts Honore Blanc, Eli Whitney standardization of parts increases quality, production speed, efficient repairing. (rifles)

second industrial revolution ​

Electrification

scientific management(taylorism) following adam smith / charles babbage

best working practices time and motion studies differential peice rate system

Henry Gantt: gant chart Gilbreth: Time and motion studies

Diversification

Economies of scale (reduce costs, improve efficiency) => Economies of scope (two or more products) reduce risk

Market Pull economic dev

tech push automation manufacturing planning and control new technologies (3d printing)

Operations reasearch and operations managment ​

second world war: logistics problems

System dynamics ​

bullwhip effect

products that are diverse in quality makes it slower

stable production process with as little variation as possible is desirable

Re-discovering manufacturing ​

closed loop supply chains consist of the primary supply chain and secondary supply loops for the whole product, its components or its materials

supply chain.png

Changing design paradigms ​

cradle to grave => cradle to cradle

product returns represent a value stream not just a waste stream

Netherlands ​

gateway to europe

  • geographical position
  • rotterdam depth
  • excellent main ports
  • network of hinterland connections
  • logistic service providers networks
  • legislative framework and customs
  • established knowledge centers

Logistics / transport related GDP: 42 billion Euros +- 7.5% of GDP

Urban Distribution ​

everyone orders online, expecting same day or next orders

cities want to restrict freight truck traffic

The golden age of service ​

  • move from products to service
  • (spare parts, repairs) great source of revenues and profit
  • market size: aftermarkets 5x > OEM Business (original equipment manufacturer)
  • high margins: 24% of business revenues generates 45% of gross profits