Transcript Process Choice and Layout Decisions in Manufacturing and

Process Choice and
Layout Decisions in
Manufacturing and
Services
Chapter 3
Chapter Objectives
Be able to:
 Describe the five classic types of manufacturing processes.
 Discuss how different manufacturing and service process choices support
different market requirements.
 Explain how different processes can be linked together via the supply chain.
 Describe the critical role of customization in manufacturing, including the
degree and point of customization, and upstream versus downstream
activities.
 Discuss the three dimensions that differentiate services from one another
and explain the different managerial challenges driven by these dimensions.
 Create and interpret a service blueprint.
 Position a service on a conceptual model and explain the underlying
managerial challenges.
 Develop a product-based layout using line balancing and calculate basic
performance measures for the line.
 Develop a functional layout based on total distance traveled.
Manufacturing Processes
• Engineering and business
perspectives
• Classic manufacturing processes
• Choosing between classic types
• The role of customization
Engineering and Business
Perspectives
Solid Wood Seat for a Kitchen
Chair:
Process A
• Saddle Machine
• Shaper Machine
• Sander A
• Sander B
• Inspection
Process B
• 5-Axis Router
• ---• Sander A
• Sander B
• Inspection
Setup Time: 6 hours
Time/Seat 1.1 min.
Yield Rate: 92%
Setup Time: 10 min.
Time / Seat: 3.5 min.
Yield Rate: 99%
Classic Engineering Viewpoint
 Four
Transformation Processes
Conversion  Fabrication  Assembly
Testing
“Advances in Engineering increase and
improve the alternatives available”
Example: Making Windows
Conversion
Fabrication
• Raw lumber
• Molten glass
• Frame wood
• Window panes
Assembly
Assembled
Windows
Business View
• What conversion steps must be done?
• What are the production volumes like?
• How similar are the various products we
make (can we standardize)?
• If the product is customized, how late in the
process does it occur?
Classic Manufacturing Processes
Process Types
(in order of decreasing volume)
• Continuous Flow
• Production Line
• Batch (High Volume)
• Batch (Low Volume)
• Job Shop
• Project
Continuous Flow
• Large production volumes
• High level of automation
• Basic material passed along,
converted as it moves
• Usually cannot be broken into discrete
units
• Usually very high fixed costs, inflexible
Oil refinery, fiber formation, public utilities,
automotive manufacturing
Production Line
High-volume production of standard
products or “design window”
• Processes arranged by product flow
• Often “paced” (‘takt’ time discussed later)
• Highly efficient, but not too flexible
Batch I
• Somewhere in between job shop and
line processes
• Moderate volumes, multiple products
• Production occurs in “batches”
Can manufacturing, carton makers,
advertising mailers, etc.
Batch II
Layout is a cross between that found in a
line and that found in a job shop:
Group Technology
Some Examples of Batch
Manufacturing
• Numerical control (NC) machines
– Automated processing of entire batch
– Machining center - multiple NC machines
• Flexible manufacturing systems (FMS)
– Dedicated to families of parts
– NC and automated handling
• Group technology
– Similar in concept to FMS, but not as much
automation
Job Shop
• Low volume, one-of-a-kind products
• Job shops sell their capability
• Highly flexible equipment, skilled workers
• Equipment arranged by function
Project
• Used when a product is:
– one-of-a-kind
– too large to be moved
• Resources moved to where needed
• Equipment, people, etc. are highly
flexible
• Finite duration, often with deadline
Construction projects, equipment installation
Mixing Together the Process
Types  Hybrid Process
Spindles
Arms and
Legs
BATCH for
fabricating
parts ...
ASSEMBLY
LINE for
putting together
final product
Seats
Choosing Between
Classic Types
• The product-process matrix
• Product and process life cycles
Comparing Process Types...
Job Shop
Batch
Line
Volume
Very Low
High
Variety
Very High
Low
Skills
Broad
Limited
Advantage
Flexibility
Price and
Delivery
Product – Process Matrix
One of a Kind
Low Volume
Job Shop
Few Major
Products
High Volume
Commodity
Products
Very Poor Fit
Batch
Line
Multiple
Products
Moderate
Volumes
Very Poor Fit
Life-Cycle Planning Framework
Introduction
Stage
Growth
Stage
Maturity
Stage
Decline Stage
Total
Market
Sales
Time
Introduction Stage
Availability key to market success
but:
• No reliable movement history
• Unreliable forecasts
• Small shipments
• Erratic orders
Life-Cycle Planning Framework
Introduction
Stage
Growth
Stage
Maturity
Stage
Decline Stage
•High
product
availability
Total
Market
Sales
•Flexibility
to handle
variation
Time
Growth Stage
• Sales somewhat more predictable
• Higher volumes
• Performance emphasis?...
Life-Cycle Planning Framework
Introduction
Stage
Growth
Stage
Maturity
Stage
•Availability
•Achieve breakeven volumes
as soon as
possible
Less need
for flexibility
Time
Decline Stage
Total
Market
Sales
Maturity Stage
• Intense competition around more
standardized products
• Frequent price and service
adjustments
• Implications . . .
Life-Cycle Planning Framework
Introduction
Stage
Growth
Stage
Maturity
Stage
More selective,
targeted efforts
Value-added
service
Time
Decline Stage
Total
Market
Sales
Decline Stage
(Obsolescence)
• Product close-out or restricted
distribution
• Lowest cost / differentiated
performance not as critical anymore
• Priorities?
Life-Cycle Planning Framework
Introduction
Stage
Growth
Stage
Maturity
Stage
Decline Stage
• Centralized
inventory
• Speed
Total
Market
Sales
Time
Implications
• What happens to process choices as
companies follow products through
their life cycles?
• What happens to process choices
when companies support products at
various stages of the life cycle?
The Role of Customization
What is “Customization”?
An operations-centric view:
“Customization occurs when a
customer’s unique requirements
directly affect the timing and nature of
operations and supply chain
activities”
Customization Point Model I
ETO
MTO
DESIGN
SOURCING
MATERIALS
ATO
FABRICATION
MTS
ASSEMBLY/
FINISHING
DISTRIBUTION
Definitions:
ETO – engineer to order
MTO – make to order
ATO – assemble-to-order
MTS – make to stock
Upstream: before the customization point, “off-line” activities
Downstream: after the customization point, “on-line” activities
Make-to-Order Windows
Off-line Activities
On-Line Activities
•
•
•
•
•
•
•
•
Design
Buy Materials
Fabricate parts
Assemble
• Ship windows
Lead times?
Customizability?
Price?
What type of
manufacturing?
• Sell windows
Customization Point Model II
Manufacturing
Systems Design
Performance
objectives
Technology
Investment
Organization structure
Job differentiation
Integration
Discretion
Upstream
Efficiency
Productivity,
consistency
Mechanistic
High
Formal
Low
Downstream
Responsiveness
Flexibility
Organic
Low
Informal
High
Difficulty versus Customization
MANUFACTURING VIEW
HIGHER CUSTOMIZATION
LOWER DIFFICULTY
HIGHER DIFFICULTY
BASEBALL CAP WITH
SCHOOL NAME ON IT
(MTO)
BASEBALL CAP WITH
ARKANSAS RAZORBACKS
LOGO AND SCHOOL
COLORS ON IT
(ETO)
PLAIN BASEBALL CAP
(MTS)
PLAIN BASEBALL CAP IN
DIFFERENT COLORS
(ATO)
MARKETING VIEW
LOWER CUSTOMIZATION
An Operations-Centric View
Customization becomes relevant to operations and
supply chain managers when a customer’s
unique requirements directly affect the timing
and nature of operations and supply chain
activities
Job Difficulty
Operations and
Supply Chain Design
Customization
Job Routineness
“Mass customization” at
Japan’s National Bicycle Co.
TUBE CUTTING
CAM
FRONT ASSEMBLY
Marketing
ORDER DATA
INCLUDING
CUSTOMER’S
MEASUREMENTS
AND OPTIONS
CAD
CAM
REAR ASSEMBLY
CAM
2-WEEK LEAD TIME
3-D MEASUREMENT
Quality Assurance
ASSEMBLY
PAINTING
COMPUTER
INSTRUCTIONS
Law of Variability
The earlier customization is introduced
in the supply chain, the greater the
random variability of the process and
the lower its productivity
Services
• What makes them distinctive?
• High-contact versus low-contact
• Front room versus back room
• Service Blueprinting
Services . . .
•
•
•
•
•
Process and “product” are inseparable
Marketing and sales often tightly integrated
Customer often part of the process
Performance metrics can be harder to define
Nevertheless:
– Focus and process choices / trade-offs still
apply
Degree of Customer Contact
Low Contact
High Contact
• “off-line”
• Can locate for
efficiency
• Can smooth out the
workload
• “on-line”
• Can locate for easy
access
• Flexibility to respond
to customers
• Harder to manage
Check clearing, mail
sorting
Hospitals, food
service
Classifying Services
“Front Room” versus “Back Room”
Front room – what the
customer can see
Back room – what the
customer does not see
Managed for flexibility
and customer service
Managed for efficiency and
productivity
Customer lobbies, bank
teller, receptionist
Package sorting, car repair,
blood test analysis,
accounting department
What is it?
What is the performance objective?
•
•
•
•
•
Restaurant kitchen
Software help desk
Kinko’s copy center
Airline reservations
Jet maintenance
Designing Services
• Selecting a service focus
– Like manufacturing processes, different
services have strengths and weaknesses
• Key is to design a service process that
meets the needs of targeted customers
• The “service package”
Service Blueprinting
Processes
• Customer actions
• Onstage activities
• Backstage activities
• Support
Separations
• Line of interaction
• Line of visibility
• Line of internal
interaction
Service Blueprint Template
(Note similarity to ‘swim lane’ in Chapter 3?)
A Cubical Model of Services
(Three Dimensions)
Nature of the Service
Package
Primarily Physical
Activities
(Airline, trucking firm)
Primarily Intangible
Activities
(Law firm, software
developer)
Degree of Customization Lower Customization
(Quick-change oil shop)
Higher Customization
(Full-service car repair
shop)
Degree of Customer
Contact
Higher Contact
(Physical therapist)
Lower Contact
(Mail sorting)
Community Hospital
PHYSICAL
Public Hospital
SERVICE
PACKAGE
HIGH
CONTACT
INTANGIBLE
LOW
HIGH
CUSTOMIZATION
LOW
Birthing Center
PHYSICAL
Public Hospital
SERVICE
PACKAGE
HIGH
CONTACT
INTANGIBLE
LOW
HIGH
CUSTOMIZATION
LOW
Layout Decision Models
• Product-based layout
– Usually best for a line operation
– Cycle time a primary measure
• Functional layout
– Usually best for a job shop
– Distance between steps a measure
• Cellular layout
– Usually best for batch processes
Product-Based Layout
Line Balancing
• Improve ‘Takt’ time:
–
–
–
–
–
Use minimum number of workstations
Reduce idle time
Reduce setup time
Reduce unnecessary movement
Identify ‘bottlenecks’
available production time
Takt time 
required output rate
Process Layout Steps
1)
2)
3)
4)
5)
6)
Identify all steps, their relationships, and times
required.
Draw a precedence diagram
Determine takt time (time available divided by
desired output rate)
Determine minimum number of workstations
required (total process time divided by takt time)
Assign tasks to workstations according to
precedence and total time for each to not exceed
takt time.
Evaluate solution for times per workstation, % idle
time, and efficiency delay (100% - % idle time)
Precedence Diagram Example
(with workstation task assignments)
Functional Layout Improvement
A. Minimize the total distance traveled
 Determine distances between functional units
 Determine numbers of interactions between units
 Multiply distances times respective number of
interactions
 Revise original layout for minimum total distance
after first locating functions best for process
material flows
B. Minimize information flow for decisions
C. Use electronic data interchange (EDI) to allow
more flexibility for accomplishing A and B
Case Study in Manufacturing and
Service Processes
Loganville Window Treatments