Manufacturing and Process Selection Design

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Chapter 6

• Manufacturing and Process Selection Design

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Types of Processes

• Conversion (ex. Iron to steel)
• Fabrication (ex. Cloth to clothes)
• Assembly (ex. Parts to components)
• Testing (ex. For quality of products)

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Process Flow Structures

• Job shop (ex. Copy center making a single copy of
  a student term paper)
• Batch shop (ex. Copy center making 10,000 copies
  of an ad piece for a business)
• Assembly Line (ex. Automobile manufacturer)
• Continuous Flow (ex. Petroleum manufacturer)

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Exhibit 5.10
These are the major stages of product and
process life cycles
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Virtual FactoryDefined

• A virtual factory can be defined as a
  manufacturing operation where activities are
  carried out not in one central plant, but in
  multiple locations by suppliers and partner firms
  as part of a strategic alliance

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Break-Even Analysis

• A standard approach to choosing among alternative
  processes or equipment
• Model seeks to determine the point in units
  produced (and sold) where we will start making
  profit on the process or equipment
• Model seeks to determine the point in units
  produced (and sold) where total revenue and total
  cost are equal

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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

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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
  break-even 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

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Example

• Option 1 purchase at 200 each
• Option 2 buy an 80,000 machine and produce at
  75 each
• Option 3 buy a 200,000 machine and produce at
  15 each
• What will you do?

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Process Flow DesignDefined

• A process flow design can be defined as a mapping
  of the specific processes that raw materials,
  parts, and subassemblies follow as they move
  through a plant
• The most common tools to conduct a process flow
  design include assembly drawings, assembly
  charts, and operation and route sheets

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Example Assembly Chart (Gozinto)
From Exhibit 5.14
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Example Process Flow Chart
Material Received from Supplier
No, Continue
Inspect Material for Defects
Defects found?
Yes
Return to Supplier for Credit
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Process Chart Example
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Global Product Design and Manufacturing Strategies

• Joint Ventures
• Global Product Design Strategy

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Measuring Product Development Performance
Performance Dimension
Measures

• Freq. Of new products introduced
• Time to market introduction
• Number stated and number completed
• Actual versus plan
• Percentage of sales from new products

Time-to-market

• Engineering hours per project
• Cost of materials and tooling per project
• Actual versus plan

Productivity

• Conformance-reliability in use
• Design-performance and customer satisfaction
• Yield-factory and field

Quality