Download - C5 process & layout
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Operations Operations ManagementManagement
Process Strategies and Process Strategies and Layout StrategiesLayout Strategies
Chapter 5Chapter 5
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Process StrategiesProcess Strategies Involve determining how to produce a product or
provide a service Objective
Meet or exceed customer requirements Meet cost & managerial goals
Has long-run effects Efficiency and flexibility of production Costs & quality of the goods produced
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Types of Process StrategiesTypes of Process Strategies Four types of process strategies:
1. Process Focus 2. Repetitive Focus 3. Product Focus 4. Mass Customization
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Process-Focused StrategyProcess-Focused Strategy Facilities are organized by process Similar processes are together
Example: All drill presses are together
Low volume, high variety products ‘Jumbled’ flow
OperationProduct A
Product B
1111 2222 3333 Other names
Intermittent process Job shop
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Process Focused Strategy -Process Focused Strategy - Pros & Cons Pros & Cons
Advantages Greater product flexibility More general purpose equipment Lower initial capital investment
Disadvantages High variable costs More highly trained personnel More difficult production planning & control Low equipment utilization (5% to 25%)
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Repetitive Focused StrategyRepetitive Focused Strategy A product oriented production process that uses
modules. Facilities often organized by assembly lines Characterized by modules
Parts & components of a product previously prepared
Modules combined for many output options Widely used in the assembly of automobiles and
household appliances. Other names
Assembly line Production line
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Repetitive Focused Strategy -Repetitive Focused Strategy -ConsiderationsConsiderations
More structured than process-focused, less structured than product focused
Enables quasi-customization Using modules, it enjoys economic advantage of
continuous process, and custom advantage of low-volume, high-variety model
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Product-Focused StrategyProduct-Focused Strategy Facilities are organized by product High volume, low variety products Where found
Discrete unit manufacturing Continuous process manufacturing
Operation
Products A & B
11 22 33
Other names Line flow production Continuous production
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Product-Focused StrategyProduct-Focused Strategy Pros & Cons Pros & Cons
Advantages Lower variable cost per unit Lower but more specialized labor skills Easier production planning and control Higher equipment utilization (70% to 90%)
Disadvantages Lower product flexibility More specialized equipment Usually higher capital investment
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Mass CustomizationMass Customization Rapid, low-cost production of goods and services
that cater to constantly changing unique customer desires.
Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant.
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Process StrategiesProcess Strategies
Rapid throughput techniques
Mass Customization
Modular techniques
Repetitive FocusModular design
Flexible equipment
Product-focusedLow variety, high volume
High utilization (70% - 80%)Specialized equipment
Process-focusedHigh variety, low volume
Low utilization (5% - 20%)General purpose equipment
Effective scheduling techniques
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A Comparison (1)A Comparison (1)Process Focus
(Low volume, High variety)
Repetitive Focus
(Modular)Product focus
(High-volume, low-variety)
Mass Customization
(High-volume, high-variety
1. Small quantity, large variety of products
Long runs, standardized product, from modules
Large quantity, small variety of products
Large quantity, large variety of products
2. General purpose equipment
Special equipment aids in use of assembly line
Special purpose equipment
Rapid changeover on flexible equipment
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A Comparison (2)A Comparison (2)Process Focus Repetitive Focus Product focus Mass
Customization
3 Broadly skilled operators
Modestly trained employees
Operators less broadly skilled
Flexible operators trained for customization
4 Many instructions because of change in jobs
Reduced training and number of job instructions
Few work orders and job instructions
Custom orders require many instructions
5 Raw material high relative to product value
JIT techniques used
Raw material low relative to product value
Raw material low relative to product value
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A Comparison (3)A Comparison (3)Process Focus Repetitive Focus Product focus Mass
Customization
6 WIP high relative to output
JIT techniques used
WIP low relative to output
WIP driven down by JIT, kanban, lean production
7 Units move slowly thru plant
Movement measured in hours & days
Units move swiftly thru facility
Goods move swiftly thru facility
8 Finished goods made to order, not stored
Finished goods made to frequent forecasts
Finished goods made to forecast, then stored
Finished goods made to order
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A Comparison (4)A Comparison (4)Process Focus Repetitive Focus Product focus Mass
Customization
9 Scheduling complex and concerned with trade-off between inventory, capacity, and customer service
Scheduling based on building models from a variety of forecasts
Scheduling relatively simple, concerns establishing sufficient rate of output to meet forecasts
Scheduling sophisticated to accommodate customization
10 Fixed costs low, variable costs high
Fixed costs dependent on flexibility of facilities
Fixed costs high, variable costs low
Fixed costs high; variable costs must be low
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A Comparison (5)A Comparison (5)Process Focus Repetitive Focus Product focus Mass
Customization
11 Costing, done by job, is estimated prior to doing job but only known after doing job
Costs usually known based on experience
Because of high fixed costs, cost dependent on utilization of capacity
High fixed costs and dynamic variable costs
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Process Analysis and DesignProcess Analysis and Design
Questions to be asked when analyzing anddesigning process to transform resources into goodsand services Is the process designed to achieve competitive advantage in
terms of differentiation, response, or low cost? Does the process eliminate steps that do not add value? Does the process maximize customer value as perceived by
the customer? Will the process win orders?
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Tools for Process DesignTools for Process Design
1. Flow Diagrams – A drawing used to analyze movement of people or material.
2. Time-Function Mapping – A flow diagram but with time added on horizontal axis. It indicates the activities and flow direction with time on the horizontal axis. Allows users to identify and eliminate waste.
3. Value-Stream Mapping – takes an expanded look at where value is added (and not added) in the entire production process, including the supply chain. Helps managers to understand how to add value in the flow of material and information through the production process.
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Tools for Process DesignTools for Process Design
5. Process Charts – chart using symbols, time and distance to provide an objective and structured way to analyze and record the activities that make up a process. Allow us to focus on value added activities.
6. Service Blueprinting – A process analysis technique that focuses on customer and the provider’s interaction with the customer.
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Production Process Flow DiagramProduction Process Flow Diagram
Shipping
Customer
Customer sales representative
take order
Prepress Department(Prepare printing plates
and negatives)
Printing Department
Collating Department
Gluing, binding, stapling, labeling
Polywrap Department
Purchasing(order inks, paper,
other supplies)
Vendors
Receiving
Warehousing(ink, paper, etc.)
Accounting
Information flowMaterial flow
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SUBJECT: Request tool purchase
Dist (ft) Time (min) Symbol Description
D Write order
D On desk
75 D To buyer
D Examine
= Operation; = Transport; = Inspect; D = Delay; = Storage
Process Chart ExampleProcess Chart Example
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Time Function MapTime Function Map(Target)(Target)
1 day 1 day 1 day1 day 2 days
Customer
Sales
Production control
Plant
Warehouse
Transport
Order Product
Process Order
Print Extrude
Receive product
Wait
Wait
Move
Ord
er
Ord
er
Prod
uct
Prod
uct
WIP
6 days
Service Process DesignService Process Design•Service by nature requires some interaction and customization.
•Manager must design the process to accommodate the customers unique desires.
•The more the process design can meet the customers requirements, the more effective and efficient the process will be.
Techniques for Improving Service Techniques for Improving Service ProductivityProductivity
StrategyStrategy TechniqueTechnique ExampleExample
SeparationSeparation Structure service so Structure service so customers must go customers must go where service is where service is offeredoffered
Bank customers go Bank customers go to a manager to open to a manager to open a new account, to a new account, to loan officers for loan officers for loans, and to tellers loans, and to tellers for depositsfor deposits
Self-serviceSelf-service Self-service so Self-service so customers examine, customers examine, compare, and compare, and evaluate at their own evaluate at their own pacepace
Supermarkets and Supermarkets and department stores, department stores, internet orderinginternet ordering
StrategyStrategy TechniqueTechnique ExampleExample
PostponementPostponement Customizing at Customizing at deliverydelivery
Customizing vans at Customizing vans at delivery rather than delivery rather than at productionat production
FocusFocus Restricting the Restricting the offeringsofferings
Limited-menu Limited-menu restaurantrestaurant
ModulesModules Modular selection of Modular selection of service, modular service, modular productionproduction
Investment and Investment and insurance selection, insurance selection, prepackaged food prepackaged food modules in modules in restaurantsrestaurants
Improving Service ProductivityImproving Service Productivity
StrategyStrategy TechniqueTechnique ExampleExample
AutomationAutomation Precise personnel Precise personnel schedulingscheduling
Automatic teller Automatic teller machinesmachines
SchedulingScheduling Precise personnel Precise personnel schedulingscheduling
Scheduling ticket Scheduling ticket counter personnel at counter personnel at 15-minute intervals 15-minute intervals at airlinesat airlines
TrainingTraining Clarifying the service Clarifying the service options, explaining options, explaining how to avoid how to avoid problemsproblems
Investment Investment counselor, funeral counselor, funeral directors, after-sale directors, after-sale maintenance maintenance personnelpersonnel
Improving Service ProductivityImproving Service Productivity
Improving Service ProcessesImproving Service Processes
LayoutLayout Product exposure, customer education, Product exposure, customer education,
product enhancementproduct enhancement
Human ResourcesHuman Resources Recruiting and trainingRecruiting and training
Impact of flexibilityImpact of flexibility
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FACILITY LAYOUT
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What is Facility LayoutWhat is Facility Layout Location or arrangement of everything
within & around buildings Objectives are to maximize
Customer satisfaction Utilization of space, equipment, & people Efficient flow of information, material, &
people Employee morale & safety
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Objectives of the Layout StrategyObjectives of the Layout Strategy To develop an economical layout
which will meet the requirements of : product design and volume (product
strategy) process equipment and capacity
(process strategy) quality of work life (human resource
strategy) building and site constraints (location
strategy)
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Strategic Importance of LayoutStrategic Importance of LayoutProper layout enables: Higher utilization of space,
equipment,and people Improved flow of information,
materials, or people Improved employee morale and safer
working conditions Improved customer/client interaction Flexibility
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Seven Types of Layout StrategiesSeven Types of Layout Strategies
1.Office layout positions workers, their equipment, and spaces/
offices to provide for movement of information
2. Retail/service layout allocates shelf space and responds to customer
behavior
3. Warehouse layout addresses trade-offs between space and material
handling
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Seven Types of Layout StrategiesSeven Types of Layout Strategies4.Fixed-position layout
large bulky projects such as ships and buildings
5.Process-oriented layout deals with low-volume, high-variety production
(“job shop”, intermittent production)
6. Work-cell layout positions workers, their equipment, and spaces/
offices to provide for movement of information
7.Product-oriented layout seeks the best personnel and machine use in
repetitive or continuous production
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Requirements of a Good LayoutRequirements of a Good Layout an understanding of capacity and
space requirements selection of appropriate material
handling equipment decisions regarding environment and
aesthetics identification and understanding of
the requirements for information flow identification of the cost of moving
between the various work areas
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1.1. Office LayoutOffice Layout Design positions people, equipment,
& offices for maximum information flow
Arranged by process or product Example: Payroll dept. is by process
Relationship chart used Examples
Insurance company Software company
© 1995 Corel Corp.
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2.2. Retail/Service LayoutRetail/Service Layout Design maximizes product exposure to
customers Decision variables
Store flow pattern Allocation of (shelf) space to products
Types Grid design Free-flow design
Video
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Retail Layouts - Retail Layouts - Some Rules of ThumbSome Rules of Thumb
Locate high-draw items around the periphery of the store
Use prominent locations such as the first or last aisle for high-impulse and high margin items
Remove crossover aisles that allow customers the opportunity to move between aisles
Distribute what are known in the trade as “power items” (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items
Use end aisle locations because they have a very high exposure rate
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A Good Service Layout A Good Service Layout (Servicescape) Considers(Servicescape) Considers
Ambient conditions - background characteristics such as lighting, sound, smell, and temperature.
Spatial layout and functionality - which involve customer circulation path planning
Signs, Symbols, and Artifacts - characteristics of building design that carry social significance
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3.3. Warehouse LayoutWarehouse Layout Design balances space (cube)
utilization & handling cost Similar to process layout Items moved between dock
& various storage areas Optimum layout depends on
Variety of items stored Number of items picked
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4.4. Fixed-Position LayoutFixed-Position Layout Design is for stationary project Workers and equipment come to site Complicating factors:-
There is limited space at virtually all sites At different stages in the construction
process, different materials are needed – therefore, different items become critical as the project develops
The volume of materials needed is dynamic
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5.5. Process-Oriented LayoutProcess-Oriented Layout Design places departments with large
flows of material or people together Department areas having similar
processes located in close proximity e.g., All x-ray machines in same area
Used with process-focused processes
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6. Work-Cell Layout6. Work-Cell Layout Special case of product-oriented layout -
in what is ordinarily a process-oriented facility
Consists of different machines brought together to make a product
Temporary arrangement only Example: Assembly line set up to
produce 3000 identical parts in a job shop
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Improving Layouts by Moving to the Work Improving Layouts by Moving to the Work Cell ConceptCell Concept
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Work Cells - Some AdvantagesWork Cells - Some Advantages Reduced work-in-process inventory Less floor space required Reduced raw material and finished goods
inventories required Reduced direct labor costs Heightened sense of employee participation Increased utilization of equipment machinery Reduced investment in machinery and
equipment
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Work Cell Floor PlanWork Cell Floor Plan
OfficeOffice
Tool RoomTool RoomWork CellWork Cell
SawsSaws DrillsDrills
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7.7. Product-Oriented LayoutProduct-Oriented Layout Facility organized around product Design minimizes line imbalance
Delay between work stations Types: Fabrication line; assembly line Requirements:-
Standardized product High production volume Stable production quantities Uniform quality of raw materials &
components
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Product-Oriented Layout - Product-Oriented Layout - AssumptionsAssumptions
Volume is adequate for high equipment utilization
Product demand is stable enough to justify high investment in specialized equipment
Product is standardized or approaching a phase of its life cycle that justifies investment in specialized equipment
Supplies of raw materials and components are adequate and of uniform quality to ensure they will work with specialized equipment
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Product-Oriented Layout TypesProduct-Oriented Layout Types
Assembles fabricated parts
Uses workstation Repetitive process Paced by tasks Balanced by moving tasks
Builds components Uses series of machines Repetitive process Machine paced Balanced by physical
redesign
Fabrication Line Assembly Line
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Product-Oriented Layout Product-Oriented Layout AdvantagesAdvantages
Lower variable cost per unit Lower material handling costs Lower work-in-process
inventories Easier training & supervision Rapid throughput
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Product-Oriented Layout Product-Oriented Layout DisadvantagesDisadvantages Higher capital investment
Special equipment Any work stoppage stops
whole process Lack of flexibility
Volume Product
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Assembly Line BalancingAssembly Line Balancing Analysis of production lines Nearly equally divides work between
workstations while meeting required output
Objectives Maximize efficiency Minimize number of
work stations
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Assembly Line BalancingAssembly Line BalancingThe General ProcedureThe General Procedure
Determine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per day
Calculate the theoretical minimum number of work stations by dividing total task time by cycle time
Perform the line balance and assign specific assembly tasks to each work station
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Assembly Line Balancing StepsAssembly Line Balancing Steps
1. Determine tasks (operations)2. Determine sequence3. Draw precedence diagram4. Estimate task times5. Calculate cycle time 6. Calculate number of work stations7. Assign tasks 8. Calculate efficiency
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Assembly Line Balancing EquationsAssembly Line Balancing Equations
Cycle time = Production time available
Demand per day
Minimum number of work stations
Task times
Cycle time
Efficiency =
=
Task times
* (Cycle time)(Actual number of work stations)
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Layout Heuristics for Assigning Tasks in Layout Heuristics for Assigning Tasks in Assembly Line BalancingAssembly Line Balancing
a) Longest task time - choose task with longest operation time
b) Most following tasks - choose task with largest number of following tasks
c) Ranked positional weight - choose task where the sum of the times for each following task is longest
d) Shortest task time - choose task with shortest operation time
e) Least number of following tasks - choose task with fewest subsequent tasks
Copier Example Copier Example (longest task time approach) (longest task time approach)
This means that This means that tasks B and E tasks B and E cannot be done cannot be done until task A has until task A has been completedbeen completed
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelow
AA 1010 ——BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, H
Total time 66Total time 66
Copier ExampleCopier Example
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelow
AA 1010 ——BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, H
Total time 66Total time 66I
GF
C
D
H
B
E
A
10
1112
5
4 3
711 3
Figure 9.13
I
GF
C
D
H
B
E
A
10
1112
5
4 3
711 3
Figure 9.13
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelow
AA 1010 ——BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, H
Total time 66Total time 66
Copier ExampleCopier Example480 available mins
per day40 units required
Cycle time =
Production time available per day
Units required per day
= 480 / 40= 12 minutes per unit
Minimum number of
workstations=
∑ Time for task i
Cycle time
n
i = 1
= 66 / 12= 5.5 or 6 stations
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations = 5.5 or 6
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelow
AA 1010 ——BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, H
Total time 66Total time 66
Copier ExampleCopier Example
I
GF
H
C
D
B
E
A
10 11
12
5
4
3 7
11
3
Station 1
Station 2
Station 3
Station 5
Station 4
Station 6
Figure 9.14
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelow
AA 1010 ——BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, H
Total time 66Total time 66
Copier ExampleCopier Example480 available mins
per day40 units required
Cycle time = 12 mins
Minimum workstations = 5.5 or 6
Efficiency =∑ Task times
(actual number of workstations) x (largest cycle time)
= 66 minutes / (6 stations) x (12 minutes)
= 91.7%