Transcript Process Selection

Process Selection
Chapter 3, Part 2
Intermittent Operations
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Intermittent operations: processes used to
produce a variety of products with different
processing requirements at lower volumes
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Project processes: used to make one-of-a-kind
items to customer specifications
Batch processes: used to make small quantities of
products in batches based on customer orders or
specifications
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Also called job shops
Repetitive Operations
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Repetitive operations: Processes used to make one
product or a few standardized products in high
volume
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Line process – also called an assembly line or flow shop
 May have assemble-to-order options
Continuous process: operates continuously, produces a high
volume of a fully standardized product
Some firms use more than one type of process
See Figure 3.6, page 67
Effects of Higher Volume
(Economies of Scale)
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When volume increases
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product standardization usually increases
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product flexibility decreases
more efficient processes can often be used
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automation is more likely to be cost-effective
costs per unit decrease
Ways to Get More Product
Flexibility when Volume is High
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Assemble-to-order
Flexible manufacturing system
Just-in-time
Making Low-Volume Goods
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Project or batch process
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More product variety – may be
customized products
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Production based on customer
orders
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General purpose equipment
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Higher skilled labor
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Higher work in process
inventory
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Lower fixed costs
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Higher variable costs
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Make-to-order or assemble-toorder inventory policy
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Low vertical integration
Making High-Volume Goods
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Line or continuous process
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Limited product variety
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Production based on a sales
forecast
Special purpose equipment
Labor is usually less skilled
Lower work in process
inventory
Higher fixed costs
Lower variable costs
Assemble-to-order or make-tostock inventory policy
High vertical integration
Vertical Integration
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Vertical integration is the degree to which a firm
chooses to perform a variety of operations in the
supply chain
Backward integration means moving closer to primary
raw materials (natural resources)
Forward integration means moving closer to
customers
Fixed and Variable Costs
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Fixed costs do not change with volume in
the short term
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Examples: facilities, equipment, staff overhead
Variable costs change with volume in the
short term.
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Examples: labor, materials
Outsourcing
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Outsourcing means purchasing goods or services,
rather than making them
Offshore outsourcing means purchasing goods or
services outside the country where they will be sold
or used to produce a good or service
Decisions about whether to produce or outsource are
called make-or-buy decisions
Considerations in
Make-or-Buy Decisions
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Strategic impact
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Your capabilities vs. supplier capabilities
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Will outsourcing help or hurt the firm's ability to achieve its
strategic goals?
Outsourcing non-core activities allows the firm to
concentrate on its core competency
It is usually not wise to outsource a core competency
Available capacity
Expertise to produce the good or service
Quality
Timely production or delivery (speed)
Fixed and variable costs
Process Choice and Layout
Intermittent operations usually
use a process (department)
layout: workers & equipment
are grouped by function
•Different products may take
different paths through the
production process
Repetitive operations use a
product layout: workers &
equipment are grouped in the
order in which they will be
needed
Process Choice and Inventory Policy
Process Design Tools
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Process flow analysis is a tool used to analyze and document
the sequence of steps within a total process. Usually first step in
process reengineering.
Process reengineering is the fundamental rethinking and radical
redesign of a process to bring about dramatic improvements in
performance
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Cost
Quality
Time
Flexibility
Both operations processes and business processes can be reengineered.
Re-engineer a process before you automate it or computerize it.
Process Flow in a Pizza Restaurant
Automatic Identification of Objects
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Magnetic stripes are used on credit cards and
vending cards
Bar codes identify goods and packages
Radio frequency identification (RFID) uses memory
chips with tiny radio antennas to broadcast the
location of goods to a wireless receiver
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RFID can identify goods inside a box.
Useful in retailing and distribution
Wal-Mart is requiring its top 100 vendors to supply RFID
tags on all goods.
Vision Systems
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Vision systems are computer systems with
artificial intelligence that can "see" objects
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Often built into robots.
Used for sorting and positioning parts
Used for inspection. Suspect parts can be
inspected by a second vision system or by a
person
Can recognize images of hands, etc.
Biometrics:
Automatic Identification of People
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Used to identify people and grant access to facilities,
work areas, equipment, etc.
Include a vision system, database, and artificial
intelligence.
Stored image of some portion of each user's body.
May use hand, finger, or iris (colored part of eye).
Vision system develops and stores images.
Artificial intelligence compares body part of person
seeking access with stored image.
Computer-Aided Design & Engineering
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Computer-aided design (CAD): use of computer
software to design products
 Similar software is used to make animated films
Computer-aided engineering (CAE): use of
computer software to evaluate and improve product
designs
Specialized CAD/CAE software is used by architects
and landscape architects
Advantages of CAD and CAE
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Marketing: Firms can design better products and get
them to market faster
Finance: CAD and CAE reduce design costs,
production costs, and the number of major product
and process changes needed
Operations: It is easier to make the product and to
maintain good quality.
General: Easier to use concurrent engineering, value
engineering, design for manufacturing, and to involve
suppliers in product design.
Data Flow in Manufacturing Technology
Computer
aided
design
(CAD)
Computer
aided
process
planning
(CAPP)
Product
design
data
No
Computer
aided
engineering
(CAE)
Manufacturing
instructions
Computer
aided
manufacturing
(CAM)
Final
design?
Final
Yes
design
data
Finished
goods
Computer Aided Manufacturing (CAM)
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CAM is the use of a computer to
program and control
re-programmable
manufacturing equipment
A traditional robot is a
mechanical arm with a power
supply and a computer that
controls the movements of the
arm
Uses of Robots
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Monotonous work, such as assembly line work
Work that is hard or unhealthy for people, such as
painting or nuclear plant cleanup
Work that requires great precision
 Making integrated circuits
 Surgery – guided by a surgeon
Products: Robot vacuum cleaners, lawn mowers,
toys, assistants for disabled people
Flexible Manufacturing System (FMS)
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System that links flexible manufacturing cells
and/or robot assembly lines under control of
a central computer
Includes materials handling
Usually includes automated inspection
Advantages of FMS Technology
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Fast response - short manufacturing
lead time
High product flexibility
High quality
Very efficient if total production volume
is high
Transparency Masters to accompany Operations
Management, 5E (Heizer & Render)
7s-20
© 1998 by Prentice Hall, Inc.
A Simon & Schuster Company
Upper Saddle River, N.J. 07458
Advantages of FMS Technology
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Low unit costs
 Very little direct labor
 Less material waste
 Very low work in process inventory
Transparency Masters to accompany Operations
Management, 5E (Heizer & Render)
7s-20
© 1998 by Prentice Hall, Inc.
A Simon & Schuster Company
Upper Saddle River, N.J. 07458
Disadvantages of FMS Technology
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High capital cost - need high total
product volume to justify investment
Expertise required to design and
maintain the system
Transparency Masters to accompany Operations
Management, 5E (Heizer & Render)
7s-20
© 1998 by Prentice Hall, Inc.
A Simon & Schuster Company
Upper Saddle River, N.J. 07458
Computer Integrated Manufacturing (CIM)
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CAD, CAE and CAPP
Flexible Manufacturing System
Production planning and inventory management
Purchasing
Common databases and control systems for all these
functions
Provides product flexibility, cost savings, and short
manufacturing lead times