airplane simulation analysis anno 2014/2015

Airplane Simulation Analysis

Sustainable Operations Management

Anno Accademico 2014/2015

Università Commerciale Luigi Bocconi

Emanuele Marfisi

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The lay-out: Four Steps

Airplane Simulation Analysis – Assignment 01 2

Operator 1 Draws two diagonal lines on both sides of the paper with the color required by the client. Then he/she folds the paper in half length-wise.

Operator 2 Opens the paper and folds 2 points to the centre-line. Then he/she folds the pointed end down and folds the paper back in half again. Then he/she tears off a square corner of the folded paper.

Operator 3 Opens the paper and folds two corners to the centre. Then he/she folds the first corner through the tear that was made by operator 2 and folds the paper in half again.

Operator 4 Folds the two sides down to form the final wings.

Fold in half

Open Paper

Airplane Simulation Analysis – Assignment 01

Normal Work

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Step One

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Operator 1: draws two diagonal lines on both sides of the paper with the color required by the client. Then he/she folds the paper in half length-wise.

1. There is no communication between steps about choosing which colour to use.

2. The quality of work is lower due to not using right tools (ruler).

3. This step needs too much time to be completed.

Step One

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PRO

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MS

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1. Add another step at the end of the 4° operator’s work, in which the worker, after having

received the order from clients, chooses the right colours.

2. In order to rebalance the charge of the first operator’s work, add another two steps, as

we can see from the picture below.

SOLU

TIO

NSStep One


1

NOT IN MY COMPETENCE

Fold point down

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Fold 2 corners to center

New Operations

Fold in half Open Paper

Step Two

2

Normal Work

Fold 2 corners to center

Fold point down

Fold paper in half

Tears off a square corner


Operator 2: opens the paper and folds 2 points to the centre-line. Then he/she folds the pointed end down and folds the paper back in half again. Then he/she tears off a square corner of the folded paper.

1. This step is the bottleneck of the supply chain.

2. Using fingers to cut paper is a waste of time and is hard to do.

3. The quality is low because of not having the right tools.

4. This step requires most of the time available.

5. This is the only step that produces a lot of scraps.

Step Two


Recycle it !Bottle Neck Time

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PRO

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1. In order to reduce time, improve quality and try to eliminate the bottleneck,

use scissors.

2. The best way to reduce scraps is to introduce a Recycling System.

Step Two


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Recycle it !

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SOLU

TIO

NS

Step Three

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Normal Work


Fold corners down to center

Fold original corner up through cut slot

Fold paper in half

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Operator 3: Opens the paper and folds two corners to the centre. Then he/she folds the first corner through the tear that was made by operator 2 and folds the paper in half again.

The most relevant problem of this step is waiting time caused by the bottleneck.

Step Three


PRO

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MS

Step Three

This step’s problem can be solved by the introduction of scissors.


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SOLU

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NS

Step Four


Normal Work

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Fold half of paper along line to form wing

Turn paper over

Fold along line to form and wing

Airplane is finished. 12

Operator 4: Folds the two sides down to form the final wings.

1. Work is not balanced because, compared to the other workers, operator 4 doesn’t

have very many steps to do.

2. Another problem is the waiting time due to the original bottleneck.

3. There is bad management of the pallets (plastic bags) and bad comunication between

the first and the last operators.

Step Four


PRO

BLE

MS

1. Add another step at the end of the 4° operator’s work, in which the worker, after having

received the order from the client, chooses the right colours.

2. Improve comunication to solve the pallet problem with better coordination between the

steps.

Step Four


Client4

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SOLU

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1. Profit improvement.

2. Quality improvement.

3. Time reduction.

4. Colour waste reduction.

The Advantages of Solutions that we have Intorduced

With our solutions we have changed the standard model of “make to stock” into a hybrid model

between “make to stock” and “make to order”. Specifically, we have the advantages of the “make

to stock” model such as production of basic paper airplanes and the benefits of the “make to

order” model, where we can personalize the products at the end of the supply chain after having

received the customer’s order.

Money $$$

Paint Paint

Paint

Money $$$

Money

• TIMEWe have measured the time that each operator uses to perform the task for 4 airplanes (1 batch). Then, we have

added the times obtained.

We have subtracted the result that we obtained with the Peppa Pig aircraft (4’ 34’’) with the sum shown above (3’40’’). The result obtained is the time that elapses to move the batch during all the process, from the firststation to the last one.

Then, we have calculated how long take to build all airplanes. In reality, we had 4 airplanes in the warehouse,and we were able to produce only 12 airplanes in 3 weeks (3 batches). The total production was 12 + 4 = 16

airplanes in 3 weeks. Client’s demand was of 16 airplanes per week, and total demand was of 48 airplanes per3 weeks. It was not possible to satisfy all the client’s demand!

TIME TO BUILD 12 AIRCRAFTS: 4’ 34’’ x 3 = 13’ 42’’ à almost 3 weeks

OPERATOR 1 OPERATOR 2 OPERATOR 3 OPERATOR 4 SUM

1’ 02‘’ 1’ 07’’ 47’’ 44’’ 3’ 40’’

Benefits – before our improvements

TIME SAVED (in 3 weeks): (5’ x 3) – 13’ 42’’ = 1’ 18’’

WEEKS: 15’ / 1’ 18’’ = about 12 weeks à every 12 weeks we increase the production of 1 batch.


TIME TO MOVE 4 AIRCRAFTS: 4’ 34’’ – 3’ 40’’ = 54’’

After, we have calculated the time that we have to build aircrafts for three weeks (5’ x 3) subtracting the time thatwe use to produce 3 batches. In total we have saved 1 minute and 18 seconds every 3 weeks, this means that in 12weeks we have increased the production of 1 batch (4 airplanes).

• PROFIT

To calcolate the profit we have made the hypothesis that every 4 airplanes completed we have sold only3 airplanes, because the color of the airplane unsold is not in line with customer’s demand.

In more detail we have sold 9/12 airplanes of our production + 3/4 airplanes from the warehouse.

TOTAL AIRPLANES SOLD: 3 x 3 = 9 (our production) à 9 + 3 (from warehouse) = 12

PRICE PER UNIT 1 €

COST PER UNIT 0.8 €

TOTAL REVENUE 12 €

VARIABLE COSTS - 9.6 €

MARGIN CONTRIBUTION 2.4 €

FIXED COSTS 0 €

EBIT 2.4 €


Benefits – before our improvements


• TIME

At this point, we have tried to standardize the time spent at each station by changing the subdivision of labor

and introducing scissors.OPERATOR

1OPERATOR

2OPERATOR

3OPERATOR

4SUM

52’’ 51’’ 49’’ 48’’ 3’ 20’’

TIME TO WORK + TIME TO MOVE: 3’ 20‘’ + 54’’ = 4’ 14”

In these estimates, we have also considered the economies of experience, which will reduce the time that eachoperator must use to fulfill their duties.We have calculated the time saved through the enhancements compared to the normal situation:

TOTAL TIME SAVED: 4‘ 34“ - 4‘ 14" = 20“ per week

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Repeating the reasoning shown in the previous slide:

TIME TO BUILD 12 Aircrafts: 4‘ 14” x 3 = 12' 42”

TIME SAVED (in 3 weeks): (5’ x 3) - 12' 42'' = 2 ’ 18’’WEEKS: 15’ / 2’ 18'' = about 6 weeksà about every 6 weeks we increase the production of 1 batch.

We can also consider that we can improve more the production with economies of experience on time to move

aircrafts, for example we can reduced its from 54’’ to 50’’ or 48’’.In comparison from after to before our process’ modifications we have improved the result from 12 weeks toabout 6 weeks to increase the production of 1 batch. In long term will be a good advantage.

Benefits – after our improvements

• PROFITTo calcolate the profit we have made the hypothesis of total sell of all the 4 airplanes that we produced, because we

have introduced the coloring step after customer demand. With this improvement there is any unsold aircraft due to

colour problem.

PRICE PER UNIT 1 €

COST PER UNIT 0.8 €

TOTAL REVENUE 16 €

VARIABLE COSTS - 12.8 €

MARGIN CONTRIBUTION 3.2 €

FIXED COSTS 0 €

EBIT 3.2 €

Ø For more precision, we should consider scissors as a machine andtherefore we should introduce it in fixed costs and amortize each year. Wehave seen that a pair of good scissors cost about 10 € on average, but not

knowing how many years we should amortize it, we decide to avoid writeit. Also it is not a relevant cost, because the usury is not so big, and inconsequence the lifetime of scissor will be so long. à Irrelevant cost

Ø We can also consider that we can improve more EBIT and PROFIT’S resultwith economies of experience on time to move aircrafts, for example wecan reduced its from 54’’ to 50’’ or 48’’.

• QUALITYThe introduction of scissors in the production process has increased the quality of the product and reduced waste.

This increase in quality could raise the sell price, for example from 1 € per unit to 1.1 € per unit.


TOTAL AIRPLANES SOLD: 4 x 3 = 12 (our production) à 12 + 4 (from warehouse) = 16

Benefits – after our improvements

Comparison of the Results STANDARD WORK IMPROVED WORK

TOTAL OPERATORS’ WORK TIME 3’ 40’’ 3’ 20’’

TIME FOR AICRAFTS MOVEMENT 54’’ 54’’

TOTAL TIME 4’ 34’’ 4’ 14’’

TIME COMPARISON

STANDARD WORK IMPROVED WORK

TOTAL REVENUE 12 € 16 €

VARIABLE COSTS -9.6 € - 12.8 €

MARGIN CONTRIBUTION 2.4 € 3.2 €

FIXED COSTS 0 € 0 €

EBIT 2.4 € 3.2 €

PROFIT COMPARISON

QUALITY COMPARISONQuality of the improved products is better than quality of the standard work, thanks to the newintroductions in all steps of work.


The time in improved work isbetter than in standard work,because with the newintroductions, people work faster.

The profit in improved work isbigger than in standard work,because with the newintroduction, the productivity ofworkers is improved and there isany unsold airplane.

From environmental point of view, we can notice several improvements thanks to the introduction of

the solutions discussed above:

Environmental Impact

Reduction of Overproduction

The choice of colour at the end of the supply chain reduces:

1. Unnecessary aircrafts.

2. Unsold aircrafts that become obsolete.

3. Aircrafts in stock and therefore a reduction of energy for heating, cooling

and lighting the warehouse.

Reduction of Physical Waste

The introduction of scissors allows:

1. Reduction of scraps: it eliminates the possibility of tearing paper

incorrectly.

2. Reduction of energy: thanks to the reduction of the time, more is

produced with the same amount of energy.


Reduction of Consumption

The production under full load enables the reduction of energy consumption along the production

chain.

Reduction of Consumption

Further Suggestions

Used recycled paper: the production of each ton of recycled paper uses from 7 to 15 kg of

chemical compounds based on oxygen, compared to the 250 kg necessary for non-recycled paper.

Introduction of ISO 14001 and EMAS certificates.

Reuse of waste materials.

Use of renewable energy; in the short term the investment in renewable energy is a huge cost, but

the enterprise can receive several incentives provided by law.


airplane simulation analysis anno 2014/2015

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