Process Choice, Design,

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Process Choice, Design, Analysis
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Process Choice, Design, Analysis

• Operational Design components
• People following
• Process and Procedures applying
• Technologies and Resources
• Drivers of design choice
• Characteristics of the Product
• Characteristics of Demand
• Competitive Priorities driven by corporate
  strategic analysis
• No one best way to deliver a product.
  Congruence about design elements is key.

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Understanding Processes

• Process Analysis Tools
• Flowcharts
• Run Diagrams
• PERT CPM charts (projects)
• Simulation Models
• Description Analysis Elements of an Operation
• Structural
• Infrastructural

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Elements of Operations Strategy

• Structure Infrastructure
• Capacity Workforce
• Facilities Layout Quality
• Technology Work Control
• Make-Buy Organization
• or Vertical Integration
• source Hayes and Wheelwright, Manufacturing
  Strategy

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Structure Capacity

• How much capacity to provide
• Above, below, or to the forecast
• How should it be added or provided?
• In large or small increments?
• Using overtime?
• Applying extra shifts?
• By expanding facilities?

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Structure Technology

• Processes
• Project
• Batch
• Job shop
• Line Flow
• Continuous
• Equipment
• General purpose
• Specialized

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Process-Product Matrix
Product
Each Unique Wide Variety
Commodity Little Variety
Consistent
Opportunities for real advantage

• Line Flow
• Continuous
• Discrete

Flow Patterns
Batch
Job Shop
????
Project
Jumbled
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Structure Facilities

• Facility Network Design
• Centralized large
• Decentralized small
• Location
• Near markets
• Materials
• Labor

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Facilities Layout

• Fixed Position layout
• huge and immovable
• Ships, buildings etc.
• Process Layout
• Focus on processes
• Batch production, job shop
• Product Layout
• Focus on one product
• Assembly Line
• Combination Layout
• Manufacturing Cells
• Focus on part families with similar
  characteristics

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Process Layout
A typical job shop/batch production shop
A typical service operation
Numbers represent jobs or patients
Product travels to dedicated processing centers.
Objective Minimize Total load Distance
Traveled
The arrangement should provide greater closeness
rating.
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Process Layout
Objective Minimize total material handling
costs, or Minimize total people movement costs.
Arrange departments or processes such
that departments or processes with large
inter- departmental traffic are close to one
another.
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Product Layout Line Flow Process
Can handle high volumes of the same product
Work moves through a fixed route
Raw Materials
Finished Goods
Station 2
Station 3
Station 1
Station n-1
Station n
. . .
Additional Material, components or labor
Total idle time at the stations should be a
minimum.
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Product Layout - Line Flow
Objective Minimize total idle time on the work
stations.
Cycle Time Required Maximum time allowed on any
station to complete the allocated task.
Production Time per day Desired output per
day Theoretical minimum number of stations
needed Total Task Time Cycle Time
Efficiency of Line Total Task
Time . Cycle Time Number of
stations
C
N
E
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Cellular Layout
Each part/product has its own cell or group of
machines.
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Comparison of Layout Types
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Example Service Facility Location Model
Examines trade-off between cost of service
locations responsiveness to customer service
requests.
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Cost versus Responsiveness Trade-Off Curve
Higher Response Emphasis (2nd coverage map)
High
Degree of Responsiveness
Lower Response Emphasis (1st coverage map)
Low
High
Low
Salary Office Costs

• Trade-Off Curve Generated by the Planning Tool

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Structure Make-Buy/Vertical Integration

• Make it or Buy it?
• Cost
• Skill building
• Knowledge development
• Dependence on outsourcers
• Impact on flexibility
• Independent vs. Captive Supplier-Vendor
  Relationships
• How much of their business do you want to be?
• Do you want to control them?
• Arms length or partnership?

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Infrastructure Workforce

• Role of workforce in concert with
• Technology
• Process
• Selection, training, compensation
• Selection criteria?
• How and on what will you train people?
• How will you keep them?
• Overtime and layoffs
• Do you keep people in a downturn?
• Will your people rely on overtime?

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Job Design

• A good job design
• is reasonably demanding - either physically or
  mentally or both.
• provides an opportunity to learn.
• provides recognition and social support at the
  work place.
• leads to some desirable future.
• relates to the individuals social life.

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Work Methods
Steps for improving current process 1. Study -
Study the process as it is performed
now. Describe and measure every step. Some
useful tools Process Chart Man-machine chart
etc. 2. Analyze - Examine each step in
detail. Ask - Who, what, when, where and
why? 3. Improve - Develop new methods to
eliminate unnecessary work. Some useful
tools - Principles of motion economy Therblig
analysis etc.
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Labor Standards

• Needed for
• Determining Standard Cost of items
• Determining cost and time estimates
• Determining staffing needs
• Developing work and labor schedules
• Calculating labor efficiencies

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Time Standards

• a) Non- engineered
• - Based on historical data
• - Technical or Supervisors estimates
• b) Engineered
• - Stop watch time studies
• - Predetermined Time Standards (MTM)
• - Work Sampling

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Stop Watch Time Study

• 1. Using work methods, develop the best way to
  perform the job.
• 2. Select an average worker to observe.
• 3. Time the worker over a suitable number of
  cycles.
• 4. Find the average time for the job. (AT)
• 5. Estimate the performance rating of the worker
  while under observation.
• 6. Calculate Normal Time (NT) AT Perf.
  Rating ()/100
• 7. Assign allowances for the job depending on
  its nature.
• 8. Calculate Standard Time (ST)
• ST NT (100 Allowance ())/100
• (if allowance is given as part of the
  job time)
• ST NT 100 / (100 - Allowance ())
• (if allowance is given as part of the
  total time)

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Infrastructure Quality Management

• Quality Assurance Systems
• Test it in?
• Emphasize DIRFT?
• SPC?
• Role of employees, management, customers?
• Roles and responsibilities
• Central, Quality Department?
• Distributed quality awareness?
• Continuous Improvement
• Designing a system that learns -- and learns how
  to learn

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Quality Dimensions

• Tangible Goods
• Safety
• Durability
• Reliability
• Aesthetics
• Conformance
• Performance
• Serviceability

• Services
• Reliability
• Responsiveness
• Assurance
• Empathy
• Tangibility

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Infrastructure Work Scheduling and Control

• Push System
• MRP
• Pull System
• Kanban/JIT
• Integrating beyond the company into the Value
  Chain
• Enterprise Resource Planning ERP
• Customers and/or suppliers
• All or just the largest?

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Manufacturing Planning Control
Sales Forecast
Service Parts Forecast
Aggregate Capacity Plan
RM, FG, WIP
Master Production Schedule
BOM
Material Requirements Planning
FG
Shop Floor Control
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Service Planning Control
Sales Forecast
Aggregate Capacity Plan
Shop Floor Control
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Extending the Resource Planning Model
Distribution Resource Planning (DRP)
Customer Relationship Management (CRM)
Suppliers
Customers
Company
Back Office
Front Office
Material Resource Planning (MRP)
Enterprise Resource Planning (ERP)
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Types of Control

• Reactive control Fire fighting
• Preventive control Removing abnormal variation
  - requires continuous activity
• Progressive control Shrink the size of the
  acceptable range through removal of normal
  variation
• Dynamic Control Make changes in the formula and
  still maintain the critical process
  characteristics within acceptable (and narrowing)
  limits.
• Source Hayes, Wheelwright, Clark, Dynamic
  Manufacturing Creating the Learning
  Organization, NY Free Press, 1988.

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Infrastructure Organization

• Control systems and structure
• Staff vs. Line choices
• Compensation and incentive policies
• Hierarchical vs. flat organization