Transcript Slide 1

CHAPTER 4
MANUFACTURING
PROCESSES
Learning Objectives
After completing this chapter you will:
 Know how production processes are organized
 Know the trade-offs that need to be considered
when designing a production process
 Know what the product-process matrix is
 Understand how break-even analysis is just as
important in operations and supply-chain analysis
as it is in other areas
 Understand how to design an assembly line
Toshiba
 Producer of the 1st notebook
 Strength in the notebook market
 Aggressively priced products
 Technologically innovative products
 Retaining its position by
 Relentlessly improving its manufacturing processes
 Lowering its costs
 Designing Toshiba’s notebook computer line
 The case at the end of this chapter
Production Processes
 Process selection

Strategic decision of selecting which kind of production
processes to use to produce a product or provide service
 Five basic structures (defined by the general
pattern of workflow)





Project
Workcenter
Manufacturing cell
Assembly line
Continuous process
Project
 Product remains in a fixed location.
 Manufacturing equipment is moved to the product.
 Chapter 2 describes project management techniques.
Workcenter (WC)
 Place where similar equipment of functions grouped
together.
 A part being worked on then travels from WC to
WC.
 Jobshop
Manufacturing Cell
 A dedicated area where products that are similar in
processing requirements are produced.
 A firm may have many different cells in a production
area
Assembly Line
 Assembly line
 Where work processes are arranged according to the
progressive steps by which the product is made.
 Discrete parts are made by moving from workstation
to workstation at a controlled rate.
 Ex.
 Toys, appliances, automobiles
Continuous Process
 Similar to an assembly line, but the flow is
continuous rather than discrete.
 Such structures
 Are highly automated
 Constitute one integrated “machine”
 Ex.
 Petroleum, chemicals, drugs
Product-Process Matrix:
Framework Describing Layout
Strategies
Low one-of-a-kind
Project
Workcenter
Manufacturing
Cell
Assembly
Line
Continuous
Process
Product
Standardization
High standardized
commodity
product
Low
Product Volume
High
Equipment Selection
 Trade-off between
 More specialized vs. Less specialized
 Special-purpose vs. General-purpose
 Ex.
 Drill press vs. Hand drill
 [Setup time] Some time vs. Quick
 [Time per unit] Quick vs. Slow
Break-Even Analysis
 A standard approach to choosing alternative
processes or equipment.
 Break-even chart

Alternative profits and losses vs. # of units produced or sold
 The choice obviously depends on anticipated
demand
 Suitable when


There is a large initial investment and fixed cost
Variable costs are proportional to the # of units produced
Break-Even Analysis
 Break-Even Point = Break-Even Demand
 the point in units produced (and sold)
where we will start making profit on the process or equipment
 where total revenue and total cost are equal

 Break-Even Point for single alternative
Break-Even Analysis (Continued)
Break-even Demand=
Purchase cost of process or equipment
Price per unit - Cost per unit
or
Total fixed costs of process or equipment
Unit price to customer - Variable costs per unit
This formula can be used to find any of its
components algebraically if the other
parameters are known
Break-Even Analysis (Continued)
 Example: Suppose you want to purchase a new
computer that will cost $5,000. It will be used to
process written orders from customers who will
pay $25 each for the service. The cost of labor,
electricity and the form used to place the order is
$5 per customer. How many customers will we
need to serve to permit the total revenue to breakeven with our costs?
 Break-even Demand:
= Total fixed costs of process or equip.
Unit price to customer – Variable costs
=5,000/(25-5)
=250 customers
Example 4.1
 Three options for obtaining a machined part
 Purchase at $200 per unit (no fixed cost)
 Make it at $75 per unit using semiauto-lathe
 Make it at $15 per unit using MC
 Fixed cost
 Semiautomatic lathe: $80,000
 Machining center: $200,000
 Break-Even Analysis for multiple options
Example 4.1
Layout of Production Process
Project Layout
 Visualize a product as the hub of wheel
 Materials and equipment arranged concentrically around the
production point in the order of use and movement difficulty
 A project layout may be developed by arranging
materials according to their technological priority.
Workcenters Layout
 Arrange WCs in a way that optimizes the movement
of material
Manufacturing Cell Layout
 Allocating dissimilar machines to cells
 that are designed to work on products

that have similar shapes and processing requirements
 Developing a manufacturing cell
 Group parts into families
 Identify dominant flow patterns for each part family
 Regroup machines into cells
Manufacturing Cell Layout
Manufacturing Cell Layout
Assembly Line Layouts
Continuous Process Layout
Assembly-Line Design
 Workstation cycle time
 The time between successive units coming off the end of the
line.
 At workstation,
 Work is performed on a product
By adding parts
 By completing assembly operations

 The work is made up of many bits of work, i.e., tasks.
Assembly-Line Balancing
 Assembly-line balancing problem
 Assigning all tasks to a series of workstations
Sum of processing time of tasks in each workstation cannot be
larger than workstation cycle time.
 Unassigned time across all workstations is minimized

Assembly-Line Balancing
 Procedure
1. Specify the sequential relationships among tasks
2. Determine the required workstation cycle time (C)
3. Determine the theoretical minimum number of
workstations  N 
4. Select assignment rules
5. Assign tasks to form 1st WC using AS rules. Repeat
the process until all tasks are assigned
6. Evaluate the efficiency
7. If unsatisfactory, rebalance
t
Example 4.2
 The Model J Wagon
 Workstation cycle time
 Production time per day: 420 mins.
 Required output per day: 500 wagons
 Find the balance that minimizes the # of WC
Example 4.2
Example 4.2
 Step 1
Example 4.2
 Step 2
 C = (Production time per day)/(Output per day)
= 60 × 420 / 500 = 25200/500
= 50.4
 Step 3

N t = T/C
= 195/50.4 = 3.87
=4
Example 4.2
 Step 4
 Assignment rule
Primary rule: the largest number of following tasks.
 Secondary rule: the longest task time.

Example 4.2
 Step 5
Example 4.2
 Step 5
Example 4.2
 Step 6
 Efficiency = T/( N aC) = 195/(5)(50.4)
= .77 or 77%
 Step 7
 Imbalance
 23% idle time
 Workstation 5!
 Better balance?
Splitting Tasks
 Longest time task
 Shortest workstation cycle time
 Lower time bound
 Example
 Tasks with times 40, 30, 15, 25, 20, 18
 Line runs 450 mins. & output demand is 750
 C = 36 secs.
 40-second task ?
Splitting Tasks
 Split the task
 Share the task
 Use parallel workstations
 Use a more skilled worker
 Work overtime
 Redesign the product
Flexible and U-Shaped Line
Flexible and U-Shaped Line
Flexible and U-Shaped Line
Mixed-Model Line Balancing
 Objective
 Meet the demand for a variety of products
 Avoid building high inventories
 MML balancing
 Scheduling several different models
Question Bowl
What is the break-even in demand for
a new process that costs $25,000 to
install, will generate a service
product that customers are willing
to pay $500 per unit for, and whose
labor and material costs for each
unit is $100?
a. 400 units
b. 250 units
c. 100 units
d. 62.5 units
e. None of the above
Question Bowl
Which of the following is an example
of a Continuous process?
a. Fast food
b. Grocery
c. Hospitals
d. Chemical company
e. None of the above
Summary
 Five Basic Production Processes
 Project, WC, Manufacturing Cell, Assembly Line, Continuous
Process
 Break-Even Analysis
 Production system layout
 Assembly line design
End of Chapter 4