Transcript Operations 3 BUSN 6110 - supply chain research

Facilities
Objectives of Facility Layout
 Minimize material handling costs
 Utilize space efficiently
 Utilize labor efficiently
 Eliminate bottlenecks
 Facilitate communication and interaction
between workers, between workers and
their supervisors, or between workers and
customers
 Reduce manufacturing cycle time or
customer service time
Objectives of Facility Layout
 Eliminate waste or redundant movement
 Facilitate the entry, exit, and placement of
material, products, or people
 Incorporate safety and security measures
 Promote product and service quality
 Encourage proper maintenance activities
 Provide a visual control of operations or
activities
 Provide flexibility to adapt to changing
conditions
 Increase capacity
Basic Types of Layouts
 Process Layout
 Machines grouped by process they perform
 Product Layout
 Linear arrangement of workstations to
produce a specific product
 Fixed Position Layout
 Used in projects where the product cannot
be moved
Manufacturing Process Layout
Lathe Department
L
L
L
L
L
L
L
L
L
L
Milling
Department
Drilling Department
M
M
D
D
D
D
M
M
D
D
D
D
G
G
G
P
G
G
G
P
Grinding
Department
Receiving and
Shipping
Painting Department
A
A
Assembly
A
Manufacturing Process Layout
Lathe Department
L
L
L
L
L
L
L
L
L
L
Milling
Department
Drilling Department
M
M
D
D
D
D
M
M
D
D
D
D
G
G
G
P
G
G
G
P
Grinding
Department
Receiving and
Shipping
Painting Department
A
A
Assembly
A
Manufacturing Process Layout
Lathe Department
L
L
L
L
L
L
L
L
L
L
Milling
Department
Drilling Department
M
M
D
D
D
D
M
M
D
D
D
D
G
G
G
P
G
G
G
P
Grinding
Department
Receiving and
Shipping
Painting Department
A
A
Assembly
A
A Product Layout
In
Out
Comparison Of Product
And Process Layouts
PRODUCT LAYOUT
1. Description
2. Type of Process
3. Product
4.
5.
6.
7.
Demand
Volume
Equipment
Workers
Sequential arrangement
of machines
Continuous, mass
production, mainly
assembly
Standardized
made to stock
Stable
High
Special purpose
Limited skills
PROCESS LAYOUT
Functional grouping
of machines
Intermittent, job shop
batch production,
mainly fabrication
Varied,
made to order
Fluctuating
Low
General purpose
Varied skills
Comparison Of Product
And Process Layouts
8. Inventory
9. Storage space
10. Material
handling
11. Aisles
12. Scheduling
13. Layout decision
14. Goal
15. Advantage
PRODUCT LAYOUT
PROCESS LAYOUT
Low in-process,
high finished goods
Small
Fixed path
(conveyor)
Narrow
Part of balancing
Line balancing
Equalize work at
each station
Efficiency
High in-process,
low finished goods
Large
Variable path
(forklift)
Wide
Dynamic
Machine location
Minimize material
handling cost
Flexibility
Fixed-Position Layouts
 Typical of projects
 Equipment, workers, materials, other
resources brought to the site
 Highly skilled labor
 Often low fixed
 Typically high variable costs
Designing Process Layouts
 Minimize material handling costs
 Block Diagramming
 Minimize nonadjacent loads
 Use when quantitative data
is available
 Relationship Diagramming
 Based on location preference between areas
 Use when quantitative data is not available
Block Diagramming
 Create load summary chart
 Calculate composite (two way)
movements
 Develop trial layouts minimizing
number of nonadjacent loads
Block Diagrams
(a) Initial block diagram
1
2
4
3
5
Block Diagrams
(a) Initial block diagram
1
(b) Final block diagram
2
4
3
5
1
4
2
3
5
Relationship Diagramming
(Murther’s Grid)
 Used when quantitative
data is not available
 Muther’s grid displays
preferences
 Denote location
preferences with
weighted lines
Relationship Diagramming
Example
Production
Offices
Stockroom
Shipping and
receiving
Locker room
Toolroom
Relationship Diagramming
Example A Absolutely
E
Production
I
O
U
X
O
A
Offices
U
A
U
U
O
O
O
A
X
U
Locker room
Toolroom
E
O
Stockroom
Shipping and
receiving
I
necessary
Especially
important
Important
Okay
Unimportant
Undesirable
Relationship Diagramming
Example A Absolutely
E
Production
I
O
U
X
O
A
Offices
U
A
U
U
O
O
O
A
X
U
Locker room
Toolroom
E
O
Stockroom
Shipping and
receiving
I
necessary
Especially
important
Important
Okay
Unimportant
Undesirable
Relationship Diagramming
Example
1 Absolutely
2
Production
3
4
5
6
4
1
Offices
5
1
5
5
4
4
4
1
6
5
Locker room
Toolroom
2
4
Stockroom
Shipping and
receiving
3
necessary
Especially
important
Important
Okay
Unimportant
Undesirable
Relationship Diagramming
Example
1 Absolutely
2
Production
3
4
5
6
4
1
Offices
5
1
5
5
4
4
4
1
6
5
Locker room
Toolroom
2
4
Stockroom
Shipping and
receiving
3
necessary
Especially
important
Important
Okay
Unimportant
Undesirable
Service Layouts
 Usually process layouts due to
customers needs
 Minimize flow of customers or
paperwork
 Retailing tries to maximize customer
exposure to products
 Computer programs consider shelf
space, demand, profitability
 Layouts must be aesthetically pleasing
Designing Product Layouts
 Product layouts or assembly lines
 Develop precedence diagram of
tasks
 Jobs divided into work elements
 Assign work elements to
workstations
 Try to balance the amount work of
each workstation
Line Balancing
 Precedence diagram
 Network showing order
of tasks and restrictions
on their performance
 Cycle time
 Maximum time product
spends at any one
workstation
Hybrid Layouts
 Cellular layouts
 Group machines into machining cells
 Flexible manufacturing systems
 Automated machining & material
handling systems
 Mixed-model assembly lines
 Produce variety of models on one line
Cellular Layouts
1. Identify families of parts with
similar flow paths
2. Group machines into cells
based on part families
3. Arrange cells so material
movement is minimized
4. Locate large shared machines
at point of use
Advantages Of
Cellular Layouts
 Reduced material handling and transit time
 Reduced setup time
 Reduced work-in-process inventory
 Better use of human resources
 Easier to control - visibility
 Easier to automate
Disadvantages Of
Cellular Layouts
 Inadequate part families
 Poorly balanced cells
 Expanded training and scheduling
of workers
 Increased capital investment
Paths of three
workers moving
within cell
Material
movement
Key:
S
L
HM
VM
G
Direction of part movement within cell
Manufacturing
Cell
= Saw
= Lathe
= Horizontal milling machine
= Vertical milling machine
= Grinder
HM
VM
Worker 3
VM
L
Worker 2
G
L
Final
inspection
S
Worker 1
In
Finished
part
Out
Flexible Manufacturing
Systems
 Automated machining operations
 Automated material handling
 Automated tool changers
 Computer controlled system
 Designed around size of parts processed
& average processing time for parts
 Can process wide variety of items quickly
Mixed Model
Assembly Lines
 Produce multiple models in any
order on one assembly line
 Harley, Opel
 Issues in mixed model lines
 Line balancing
 U-shaped line
 Flexible workforce
 Model sequencing
Facility Location
Models
Types Of Facilities
 Heavy manufacturing
Auto plants, steel mills, chemical plants
 Light industry
Small components mfg, assembly
 Warehouse & distribution centers
 Retail & service
Factors in Heavy
Manufacturing Location
 Construction costs
 Land costs
 Raw material and finished goods
shipment modes
 Proximity to raw materials
 Utilities
 Labor availability
Factors in Light
Industry Location
 Construction costs
 Land costs
 Easily accessible
geographic region
 Education & training capabilities
Factors in
Warehouse Location
 Transportation costs
 Proximity to markets (Customers)
Transportation and distribution industry--based on business and employment
base providing transportation, distribution, warehousing and related services.
Work force--geared to existing and available logistics-related workers in the
area.
Road infrastructure--measures factors like available lane miles per capita,
interstate highway access, miles of paved roads etc.
Road density, congestion and safety--ranks the city on traffic volumes and
delays as well as accident statistics and other factors affecting the smooth flow of
traffic.
Road condition--draws on state performance and includes condition of highways
and bridges among other measures.
Interstate highway--includes access to interstate highways, spending on
highway construction and maintenance.
Taxes and fees--provides a measure of logistics-related costs, including highway
and fuel taxes and related business activity taxes.
Railroad--offers a state-based rank of access to Class 1 and other rail services
and miles of track.
Waterborne commerce--includes ocean port capacity as well as inland
waterways.
Air cargo--ranks the city on its access to cargo services, including wide-body
passenger service by combination carriers, international and expedited services.
Source: Logistics Today, “The Logistics Quotient: Midwest
2007 Rating METROPOLI T&D Industry Work Force
TAN AREA Metro Rank Cost Metro
Rank
5-Star
5-Star
5-Star
5-Star
5-Star
5-Star
5-Star
ChampaignUrbana, Ill.
Charleston,
W.Va. MSA
ChicagoNapervilleJoliet, Ill.Ind.-Wis.
MSA
CincinnatiMiddletown,
Ohio-Ky.-Ind.
MSA
ClevelandElyriaMentor, Ohio
MSA
Columbus,
Ohio MSA
DavenportMoline-Rock
Island, IowaIll. MSA
Road Infrastructure
Metro Rank
Road D/C/S
Metro Rank
Road
Condition
State Rank
Interstate
Highways
Metro Rank
Taxes & Fees Rail Road
State Rank Metro Rank
Waterborne
Commerce
Metro Rank
Air Cargo
Metro Rank
159
39
84
65
73
36
344
24
119
134
115
126
223
171
251
36
247
63
6
115
2
26
103
348
87
2
294
1
5
5
23
45
222
209
189
15
149
34
24
20
25
18
146
150
192
5
208
17
14
44
21
53
146
250
192
36
208
34
52
34
99
115
162
82
109
23
288
63
51
111
Source: Logistics Today, “The Logistics Quotient: Midwest
Layout Considerations
•
•
•
•
•
•
•
•
Cross docking
dock doors - how many
picking techniques
bulk storage
safety/backup stocks
product flow
conveyors?
Vehicle flow
Warehouse Size
Considerations
•
•
•
•
•
•
•
•
•
Customer service level
layout
# of products (Stock Keeping Units - SKUs)
customer base
size of products
racks/shelving
demand variability
MHE requirements/aisle size
regulations - CAL OSHA - earthquake; safety; fire
Factors in Retail Location
 Proximity to customers
 Ease of customer entry and
exit
 Location is everything
Global Location Factors
 Government stability
 Government regulations
 Political and economic
systems
 Economic stability and
growth
 Exchange rates
 Culture
 Climate
 Export import regulations,
duties and tariffs
 Raw material availability
 Number and proximity of
suppliers
 Transportation and
distribution system
 Labor cost and education
 Available technology
 Commercial travel
 Technical expertise
 Cross-border trade
regulations
 Group trade agreements
Regional Location Factors
 Labor (availability,
education, cost and
unions)
 Proximity of
customers
 Number of customers
 Construction/leasing
costs
 Land costs
 Modes and quality of
transportation
 Transportation costs
 Incentive packages
 Governmental
regulations
 Environmental
regulations
 Raw material
availability
 Commercial travel
 Climate
 Infrastructure
 Quality of life
Regional Location Factors
 Community
government
 Local business
regulations
 Government services
 Business climate
 Community services
 Taxes
 Availability of sites
 Financial Services
 Community
inducements
 Proximity of suppliers
 Education system
Site Location Factors
 Customer base
 Construction/
leasing cost
 Land cost
 Site size
 Transportation
 Utilities
 Zoning restrictions
 Traffic
 Safety/security
 Competition
 Area business
climate
 Income level
Location Incentives
 Tax credits Wal-Mart in Wyandotte
 Relaxed government regulation
 Job training
 Infrastructure improvement
 Money
Center-of-Gravity Technique
 Locate facility at center of geographic area
 Based on weight and distance traveled
 Establish grid-map of area
 Identify coordinates
and weights shipped
for each location
Center of gravity
Data
Weight
Location 1
Location 2
Location 3
Location 4
Location 5
0.2
0.2
0.2
0.2
0.2
X coord Y coord
100
400
250
200
50
125
300
300
10
475
Location
500
400
Results
Sum
1
Average
Weighted Average
300
710
142
142
1500
300
300
200
100
0
0
100
200
300
Distance table
X coord
Y coord
X coord Y coord
100
400
250
200
50
125
300
300
10
475
100
250
50
300
10
400
200
125
300
475
Location 1 Location 2 Location 3 Location 4 Location 5
Location 1
0
250 279.5085 223.6068 117.1537
Location 2
250
0 213.6001 111.8034
365
Location 3 279.5085 213.6001
0 305.1639 352.2783
Location 4 223.6068 111.8034 305.1639
0 338.7108
Location 5 117.1537
365 352.2783 338.7108
0
Total
870.269 940.4035 1150.551 979.2849 1173.143
Weighted
Total
174.0538 188.0807 230.1102
195.857 234.6286
400
Center of gravity
Data
Weight
Location 1
Location 2
Location 3
Location 4
Location 5
X coord
0.3
0.25
0.1
0.2
0.15
100
250
50
300
10
Y coord
400
200
125
300
475
Location
500
400
300
Results
Sum
1
Average
Weighted Average
710
142
159
1500
300
313.75
200
100
0
0
100
200
300
Distance table
X coord
Y coord
X coord Y coord
100
400
250
200
50
125
300
300
10
475
Location 1
Location 2
Location 3
Location 4
Location 5
Total
Weighted
Total
100
250
50
300
10
400
200
125
300
475
Location 1 Location 2 Location 3 Location 4 Location 5
0
250 279.5085 223.6068 117.1537
250
0 213.6001 111.8034
365
279.5085 213.6001
0 305.1639 352.2783
223.6068 111.8034 305.1639
0 338.7108
117.1537
365 352.2783 338.7108
0
870.269 940.4035 1150.551 979.2849 1173.143
152.7453 173.4707 251.1271 176.3559 229.3661
400
Project Management
and Operations
Project
Management
First Essay on Project Management:
1697 – “An Essay Upon Projects”
1959 HBR Article – “The Project Manager
Air Force Manual 1964
Project Management
Project management is the discipline of organizing and managing
resources in such a way that these resources deliver all the work required to
complete a project within defined scope, quality, time and cost constraints. A
project is a temporary and one-time endeavor undertaken to create a
unique product or service, that brings about beneficial change or added
value. This property of being a temporary and a one-time undertaking
contrasts with processes, or operations, which are permanent or semipermanent ongoing functional work to create the same product or
service over and over again. (wikipedia)
Project Management
In today’s global marketplace, complexity and speed are
certainties. In such an environment, a good axiom for project
management is, Do It, Do It Right, Do It Right Now. Creating
clear direction, efficiency, timely response, and quality outcomes
requires project managers who are agile -- adept at change. The
associated disciplinary areas are clearly spelled out in the
following PMI definition.
“Project management is the application of knowledge, skills,
tools, and techniques to a broad range of activities in order to
meet the requirements of a particular project. Project
management is comprised of five Project Management Process
Groups – Initiating Processes, Planning Processes,
Executing Processes, Monitoring and Controlling
Processes, and Closing Processes.
Source: Project Management Institute - http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501
Program Management
Program management is the process of managing multiple ongoing interdependent projects. An example would be that of designing, manufacturing and
providing support infrastructure for an automobile manufacturer. This requires
hundreds, or even thousands, of separate projects. (wikipedia)
Elements of Project
Management
 Project team
 Individuals from different departments within
company
 Matrix organization
 Team structure with members from different
functional areas depending on skills needed
 Project manager - Leader of project team
 Project Charter – high level description of what is
to be accomplished in a project and delegates
authority to project manager to implement
actions to complete project
Project Planning
 Statement of work
 Written description of goals, work &
time frame of project
 Activities require labor, resources &
time
 Precedence relationship shows
sequential relationship of project
activities
Elements of
Project Planning
 Define project objective(s)
 Identify activities
 Establish precedence relationships
 Make time estimates
 Determine project completion time
 Compare project schedule objectives
 Determine resource requirements to
meet objective
Work Breakdown
Structure
 Hierarchical organization of work to
be done on a project
 Project broken down into modules
 Modules subdivided into
subcomponents, activities, and tasks
 Identifies individual tasks,
workloads, and resource
requirements
Project Control
 All activities identified and included
 Completed in proper sequence
 Resource needs identified
 Schedule adjusted
 Maintain schedule and
budget
 Complete on time
A Gantt Chart
Around since 1914
 Popular tool for project scheduling
 Graph with bar for representing the
time for each task
 Provides visual display of project
schedule
 Also shows slack for activities
 Amount of time activity can be
delayed without delaying project
Gantt Charts
Gantt described two principles for his
charts:
1. measure activities by the amount of time
needed to complete them
2. the space on the chart can be used the
represent the amount of the activity that
should have been done in that time.
Gantt charts were employed on major infrastructure projects
including the Hoover Dam and Interstate highway system and
still are an important tool in project management.
A Gantt Chart
0
|
2
|
Month
4
|
6
|
8
|
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive
materials
Build house
Select paint
Select carpet
Finish work
1
Figure 6.2
3
5
Month
7
9
10
Example of Gantt Chart
Problem
6.8
Project Management
Gantt Chart
Data
a
b
c
d
e
f
PrecedencePrecedence
1
Precedence
2
Precedence
3
Precedence
4
Precedence
5
Precedence
6
7
3
3a
5a
4a
3c
2d
Early
Early Start Finish
0
3
3
8
8
12
Project
c
a
c
0
e
Late
Late Start Finish
3
0
6
11
8
3
12
8
11
9
14
12
14
5
10
Time
Results
Task
a
b
c
d
e
f
e
Activity
Time
Slack
3
14
8
12
12
14
0
8
0
0
1
0
15
CPM/PERT
 Critical Path Method (CPM)
 DuPont & Remington-Rand (1956)
 Deterministic task times
 Project Eval. & Review Technique
(PERT)
 US Navy, Lockheed
 Multiple task time estimates
PERT/CPM
Program Evaluation and Review Technique (PERT):
developed in conjunction with the development of the
Polaris missile program for submarines – developed by
the US Navy with Lockheed as the lead contractor
Critical Path Method (CPM): developed through a joint
venture between the DuPont Corporation and the
Remington Rand Corporation – the original purpose
was to monitor and evaluate plant maintenance
management projects.
Project Network for a House
3
Lay
foundation
2
3
1
Design house
and obtain
financing
2
Dummy
Build
house
0
1
Order and
receive
materials
4
Select
paint
6
3
1
1
5
Figure 6.4
Finish
work
Select
carpet
1
7
Critical Path
 A path is a sequence of connected
activities running from start to end
node in network
 The critical path is the
path with the longest
duration in the network
 Project cannot be
completed in less than
the time of the critical
path
The Critical
Path
3
Lay
foundation
2
3
1
Design house
and obtain
financing
Dummy
Build
house
0
1
2
4
Order and
receive
materials
Select
paint
Finish
work
6
3
1
1
Select
carpet
5
A: 1-2-3-4-6-7
3 + 2 + 0 + 3 + 1 = 9 months
B: 1-2-3-4-5-6-7
3 + 2 + 0 + 1 + 1 + 1 = 8 months
C: 1-2-4-6-7
3 + 1 + 3 + 1 = 8 months
D: 1-2-4-5-6-7
3 + 1 + 1 + 1 + 1 = 7 months
1
7
The Critical
Path
3
Lay
foundation
2
Dummy
Build
house
0
3
1
1
2
Design house
and obtain
financing
4
Order and
receive
materials
Select
paint
Finish
work
6
3
1
1
7
1
Select
carpet
5
Activity Start Times
3
Start at 5 months
2
1
3
2
0
1
4
6
3
1
1
7
1
Start at 8 months
Start at 3 months
5
Figure 6.6
Finish at
9 months
Early
Times
3
Lay
foundation
2
3
1
Dummy
Build
house
0
1
2
Design house
and obtain
financing
4
Order and
receive
materials
Select
paint
Finish
work
6
3
1
1
1
7
Select
carpet
5
 ES - earliest time activity can start
 Forward pass starts at beginning of
CPM/PERT network to determine ES times
 EF = ES + activity time




ESij = maximum (EFi)
EFij = ESij - tij
Why is
ES12 = 0
EF12 = ES12 - t12
= 0 + 3 = 3 months
this important?
Late Times
Who Cares? Why is this Important?
LS - latest time activity can start &
not delay project
Backward pass starts at end of
CPM/PERT network to determine LS
times
LF = LS + activity time
LSij = LFij - tij
LFij = minimum (LSj)
Activity Slack
Data
3
Lay
foundation
2
Dummy
Build
house
0
3
1
1
2
Design house
and obtain
financing
4
Order and
receive
materials
Select
paint
Finish
work
6
3
1
1
Select
carpet
5
Activity
*1-2
*2-3
2-4
*3-4
4-5
*4-6
5-6
*6-7
* Critical path
LS
ES
LF
EF
Slacks
0
3
4
5
6
5
7
8
0
3
3
5
5
5
6
8
3
5
5
5
7
8
8
9
3
5
4
5
6
8
7
9
0
0
1
0
1
0
1
0
1
7
Activity Slack
Data
3
Lay
foundation
2
3
Dummy
Build
house
0
1
1
2
Design house
and obtain
financing
4
Order and
receive
materials
Select
paint
Finish
work
6
3
1
1
1
Select
carpet
5
Activity Slack
Activity
*1-2
S=0
*2-3
2-4
3
*3-4
1
2
S=0
4-5
*4-6
5-6
*6-7
Figure 6.10* Critical path
LS
0 3
3
42
1
5
S=1
6
5
7
8
ES
0
LF
0
S=0
3
3
5 4
5
5 S=1
6
8
EF
3
5
5
S=0
5
3
71
1
8
8 5
9
3
5
4
5 6
6
8S = 1
7
9
Slacks
0
0
1
1
0
S=0
1
0
1
0
7
7
Project Crashing
 Crashing is reducing project time
by expending additional resources
 Crash time is an amount of time an
activity is reduced
 Crash cost is the cost of reducing
the activity time
 Goal is to reduce project duration
at minimum cost
Time-Cost Relationship
 Crashing costs increase as project
duration decreases
 Indirect costs increase as project
duration increases
 Reduce project length
as long as crashing
costs are less than
indirect costs
Life Cycle Management
• Long term view of projects to guide
decision making – solutions that provide
life time success vice short term
• Acquisition; development; production;
introduction; sustainment; disposal
• Links system costs to big picture; better
use of resources; minimize total cost of
ownership
What’s Next
• Mid Term
• Chapters 10, 11