Syllabus

1
Syllabus

• Class 1 (Mar 10) chap 1 chap 2, case study
• March 17 No Class
• Class 2 (Mar 24) chap 5 chap 6 ( thru 243)
• Class 3 (Mar 31) chap 7 chap 9 (Take home exam)
• Class 4 (Apr 7) Webster Spring Break
• Class 5 (Apr 14) chap 10, chap 11
• Class 6 (Apr 21) chap 6 (243-250) chap 12, case
  study
• Class 7 (Apr 28) Reverse Logistics need The
  Forklifts Have Nothing To Do! Available in the
  Lewis and Clark Bookstore chap 14 chap 16
  Supply Chain Security
• Class 8 (May 5) Chap 13 Chap 3, Take home exam
• Class 9 (May 12) No Class
• Other requirements
• ?visit Harley-Davidson Plant in Kansas City to
  see operations management in practice and write a
  3-5 page paper comparing the class slides and
  readings to the Harley operations

2
Grades

• Class Participation 10
• Mid Term 40
• Final Exam 40
• Harley Paper 10

3

• Decision Analysis

4
The Payoff Table

• A method of organizing illustrating the payoffs
  from different decisions given various states of
  nature
• A payoff is the outcome of the decision a Craps
  table pay off chart is an example of a payoff
  chart

5
Payoff Table

• States Of Nature
• (Alternatives)
• Decision a b
• 1 Payoff 1/a Payoff 1/b
• 2 Payoff 2/a Payoff 2/b

6
Decision Making Criteria Under Uncertainty

• Maximax criterion (optimistic)
• Choose decision with the maximum of the maximum
  payoffs
• Minimin criterion (pessimistic) ? Choose
  decision with the minimum of the minimum
  payoffs
• Maximin criterion
• Choose decision with the maximum of the minimum
  payoffs

7
Maximums 1,300,000 500,000 Minimums 500,000
320,000 -150,000
8
(No Transcript)
9
Chapter 5

• Products and Services

10
Product Design

• Specifies materials
• Determines dimensions tolerances
• Defines appearance
• Sets performance standards

11
Service Design

• Specifies what the customer is to experience
• Physical items
• Sensual benefits
• Psychological benefits

12
An Effective Design Process

• Matches product/service characteristics with
  customer needs
• Meets customer requirements in simplest, most
  cost-effective manner
• Reduces time to market - haste vs. speed to
  market
• Minimizes revisions - quality designed into the
  product

13
Stages in the Design Process

• Idea Generation Product Concept - can you
  create your own market? What role does the voice
  of the customer play in idea generation?
• Feasibility Study Performance Specifications
• Preliminary Design Prototype - testing and
  redesign
• Final Design Final Design Specifications
• Process Planning Manufacturing Specifications
  - make to order/stock assembly line?

14
The Design Process
15
Idea Generation

• Suppliers, distributors, salespersons
• Trade journals and other published material
• Warranty claims, customer complaints, failures
• Customer surveys, focus groups, interviews
• Field testing, trial users
• Research and development

16
More Idea Generators

• Perceptual Maps
• Visual comparison of customer perceptions
• Benchmarking
• Comparing product/service against best-in-class
• Reverse engineering
• Dismantling competitors product to improve your
  own product

17
Perceptual Map of Breakfast Cereals
18
Perceptual Map of Breakfast Cereals
19
Feasibility Study

• Market Analysis - Market Segmentation
• Economic Analysis
• Technical / Strategic Analysis
• Performance Specifications

Not unlike mission analysis or Intelligence
Preparation of the Battlefield
20
Risk Analysis

• 1. Identify the Hazards
• 2. Assess hazards to determine risks.
• 3. Develop controls and make risk decisions.
• 4. Implement controls.
• 5. Supervise and evaluate.

From FM 100-14
21
Preliminary Design
How will it look?

• Create form functional design
• Build prototype
• Test prototype
• Revise prototype
• Retest

22
Functional Design(How the Product Performs)

• Reliability
• Probability product performs intended function
  for specified length of time
• Maintainability
• Ease and/or cost or maintaining/repairing product

23
Computing Reliability
Components in series
0.90 x 0.90 0.81
24
Computing Reliability
Components in series
0.90 x 0.90 0.81
Components in parallel
0.95 0.90(1-0.95) 0.995
25
System Availability
26
System Availability
27
System Availability
SAA 60 / (60 4) .9375 or 93.75 SAB 36 /
(36 2) .9473 or 94.73 SAC 24 / (24 1)
.96 or 96
28
Production Design

• Part of the preliminary design phase
• Simplification
• Standardization
• Modularity

29
Final Design Process Plans

• Produce detailed drawings specifications
• Create workable instructions for manufacture
• Select tooling equipment
• Prepare job descriptions
• Determine operation assembly order
• Program automated machines

30
Improving the Design Process

• Design teams
• Concurrent design
• Design for manufacture assembly
• Design to prevent failures and ensure value
• Design for environment
• Measure design quality
• Utilize quality function deployment
• Design for robustness
• Engage in collaborative design

31
Breaking Down Barriers to Effective Design
32
Design Teams
Preferred solution cross functional teams

• Marketing, manufacturing, engineering
• Suppliers, dealers, customers
• Lawyers, accountants, insurance companies

33
Concurrent Design

• Improves quality of early design decisions
• Decentralized - suppliers complete detailed
  design
• Incorporates production process
• Scheduling and management can be complex as tasks
  are done in parallel
• include the customer in the process!!

34
Design for Manufacture and Assembly

• Design a product for easy economical production
• Incorporate production design early in the
  design phase
• Improves quality and reduces costs
• Shortens time to design and manufacture
• also known as Design for Six Sigma

35
Design for Six Sigma

• Define the goals of the design activity
• Measure customer input to determine what is
  critical to quality from the customers
  perspective what are customer delighters? What
  aspects are critical to quality?
• Analyze innovative concepts for products and
  services to create value for the customer
• Design new processes, products, and services to
  deliver customer value
• Verify new systems perform as expected

36
DFM Guidelines

• Minimize the number of parts, tools, fasteners,
  and assemblies
• Use standard parts and repeatable processes
• Modular design
• Design for ease of assembly, minimal handling
• Allow for efficient testing and parts replacement

37
Design for Assembly (DFA)

• Procedure for reducing number of parts
• Evaluate methods for assembly
• Determine assembly sequence

38
Design Review

• Failure Mode and Effects Analysis (FMEA)
• A systematic approach for analyzing causes
  effects of failures
• Prioritizes failures
• Attempts to eliminate causes

39
Value Analysis (Value Engineering)
Is there value added?

• Ratio of value / cost
• Assessment of value
• 1. Can we do without it?
• 2. Does it do more than is required?
• 3. Does it cost more than it is worth?
• 4. Can something else do a better job
• 5. Can it be made by less costly method, tools,
  material?
• 6. Can it be made cheaper, better or faster by
  someone else? Should we contract it out?

40
Design for Environment

• Design from recycled material
• Use materials which can be recycled
• Design for ease of repair
• Minimize packaging
• Minimize material energy used during
  manufacture, consumption disposal
• green laws in Europe -

41
Examples

• Recycling of oil
• carpets in land fills - 4 billion pounds in land
  fills annually
• Xerox and Hewlett-Packard - pay for return of
  printer cartridges on larger printers

42
Metrics for Design Quality

• Percent of revenue from new products or services
• Percent of products capturing 50 or more of the
  market
• Percent of process initiatives yielding a 50 or
  more improvement in effectiveness
• Percent of suppliers engaged in collaborative
  design

43
Metrics for Design Quality

• Percent of parts that can be recycled
• Percent of parts used in multiple products
• Average number of components per product
• Percent of parts with no engineering change
  orders (ULLS/SAMS/SARSS)
• Things gone wrong - should be identified by the
  returns process

44
Quality Function Deployment (QFD)

• Translates the voice of the customer into
  technical design requirements
• Displays requirements in matrix diagrams
• First matrix called house of quality
• Series of connected houses

45
Design for Robustness

• Product can fail due to poor design quality
• Products subjected to many conditions
• Robust design studies
• Controllable factors - under designers control
• Uncontrollable factors - from user or environment
• Designs products for consistent performance

46
Consistency is Important

• Consistent errors are easier to correct than
  random errors
• Parts within tolerances may yield assemblies
  which arent
• Consumers prefer product characteristics near
  their ideal values

47
Characteristics of Services

• Services are intangible
• Service output is variable
• Service have higher customer contact
• Services are perishable
• Service inseparable from delivery
• Tend to be decentralized and dispersed
• Consumed more often than products
• Services can be easily emulated
• Call girl principle value diminishes after
  service is rendered

48
A Well-Designed Service System is

• Consistent with firms strategic focus
• Customer friendly
• Easy to sustain
• Effectively linked between front back office
• Cost effective
• Visible to customer

49
Design for High-Contact Services
DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT
SERVICE
50
Design for High-Contact Services
DESIGN DECISION HIGH-CONTACT SERVICE LOW-CONTACT
SERVICE
51
Chapter 6

• Processes and Technologies

52
Process Strategy

• Overall approach to producing goods and services
• Defines
• Capital intensity
• Process flexibility
• Vertical integration
• Customer involvement

53
Types of Processes

• Projects
• Batch production
• Mass production
• Continuous production

54
Process Selection with Break-Even Analysis
Total cost fixed cost total variable
cost TC cf vcv Total revenue volume x
price TR vp Profit total revenue - total
cost Z TR - TC vp - (cf vcv)
55
Process Selection with Break-Even Analysis
Total cost fixed cost total variable
cost TC cf vcv Total revenue volume x
price TR vp Profit total revenue - total
cost Z TR - TC vp - (cf vcv)
cf fixed cost v volume (i.e., number of units
produced and sold) cv variable cost per
unit p price per unit
56
Solving for Break-Even Volume
57
Break-Even Analysis
Fixed cost cf 2,000 Variable cost cv
5 per raft Price p 10 per raft
58
Break-Even Analysis
Fixed cost cf 2,000 Variable cost cv
5 per boogie board Price p 10 per board
The break-even point is
59
Process Planning

• Make-or-buy decisions
• Process selection
• Specific equipment selection
• Process plans
• Process analysis

60
Make-or-Buy Decisions

• 1. Cost
• 2. Capacity
• 3. Quality
• 4. Speed
• 5. Reliability
• 6. Expertise

What about Proprietary Information? Barrier to
Make-or-Buy?
61
Source Aberdeen Research, Low-Cost Country
Sourcing Success Strategies Maximizing and
Sustaining the Next Big Supply Savings
Opportunity, Jun 2005
62
Specific Equipment Selection

• Purchase cost
• Operating cost
• Annual savings
• Revenue enhancement
• Replacement analysis
• Risk and uncertainty
• Piecemeal analysis one piece at
• a time

63
Process Plans

• Blueprints
• Bill of material Flat or multiple layers - part
  or assembly
• Assembly chart /product structure diagram
• Operations process chart - list of operations
  involved in assembly
• Routing sheet - sequence of events

64
Operations Process Chart
65
Process Analysis

• The systematic examination of all aspects of a
  process to improve its operation
• Faster
• More efficient
• Less costly
• More responsive
• Basic tools
• Process flowchart
• Process diagrams
• Process maps

66
Process Flowchart Symbols
67
Process Flowchart
68
Process Diagram
69
Process Map
70
Continuous Improvement and Breakthroughs
71
Process Reengineering
72
Principles for Redesigning Processes

• Remove waste, simplify, consolidate
• Link processes to create value
• Let the swiftest and most capable execute
• Capture information digitally and propagate

73
Principles for Redesigning Processes

• Provide visibility through information about
  process status
• Fit the process with sensors and feedback loops
• Add analytic capabilities
• Connect, collect and create knowledge around the
  process
• Personalize the process

74
Other ways to redesign the process

• Define
• Measure
• Improve

• Define
• Measure
• Analyze
• Improve
• Control

Velocity Management Methodology
General Electrics Six Sigma Methodology
75
Techniques for Generating Innovative Ideas

• Vary entry point to a problem
• Draw analogies
• Change your perspective
• Use attribute brainstorming

76
Information Technology

• Management Information Systems (MIS)
• Move large amounts of data
• Decision Support Systems (DSS)
• Add decision making support
• Expert System
• Recommend decision based on expert knowledge

77
Decision Support System
78
Decision Support System
79
Decision Support System
Figure 4.12
80
Artificial Intelligence

• Neural networks
• Emulate interconnections in brain
• Genetic algorithms
• Based on adaptive capabilities in nature
• Fuzzy logic
• Simulate human ability to deal with ambiguity

81
Enterprise Software

• Collect, analyze, and make decisions based on
  data
• ERP - Enterprise Resource Planning
• Managing wide range of processes
• Human resources, materials management, supply
  chains, accounting, finance, manufacturing, sales
  force automation, customer service, customer
  order entry
• Finding hidden patterns through data mining

82
ERP

• SAP 42 of market forecast to 43 in 2006
• Oracle 20 forecast to 23 2006
• Sage Group 6
• Microsoft 4
• Horror Stories Hersheys, Dell

83
Advanced Communications

• Electronic data interchange (EDI)
• Internet, extranets
• Wireless communications
• Teleconferencing telecommuting
• Bar coding, Radio Frequency Identification
• Virtual reality

Distance Learning?
84
RFID

• Active Tags
• Always on
• Battery powered
• Can be read from up to 300 ft
• US Army
• Savi Tags

• Passive Tags
• Small
• Must be activated
• May be turned off
• England
• California
• Rolex

85
Automated Material Handling

• Conveyors
• Automated guided vehicle (AGV)
• Automated storage retrieval system (ASRS)
  Grainger/Defense Distribution Center, San Joaquin

86
Flexible Manufacturing Systems (FMS)

• Programmable machine tools
• Controlled by common computer network
• Combines flexibility with efficiency
• Reduces setup queue times
• cellular layout - more on design next week

87
Robotics

• Programmable manipulators
• Follow specified path
• Better than humans with respect to
• Hostile environments
• Long hours
• Consistency
• Adoption has been slowed by ineffective
  integration and adaptation of systems
• Welding at Harley Davidson Plant

88
Next Week

• Chapter 7, 9
• Handout Mid Term