Chapter 6: Value Engineering

1
Chapter 9
OPERATIONS ANALYSIS
2
OBJECTIVES

• Explore using Mathematical Models as a Tool
• Tools will help you to make a decision
• BUT they will not make it for you

3
Location of One Item

• The Problem To Locate an Item, A person, a
  machine, a part, an order, a building, etc.
• What do we solve for Locate the
• item to get the most of it. Examples
• Truck delivery (Coke), ambulance,
• garbage pick up truck, etc.
• HOW Minimize, material handling and
• capital cost, etc, recommend
  solution

4
Location of One Item

• The Problem Item Machine
• Customers Other Machines (Bullets Manuf.)
• To Minimize Distance
• Customers should
• be served from A or B
• The Solution
• 1) Straight Line
• 2) Rectangular
• 3) Measure in a Map
• 4) A Comb. of 1, 2, 3
• See Table 9.2

3
2
1
75
6
B
50
Y
4
25
A
5
0
X
5
Location of One Item

• The Mathematical Model
• N
• MVCost WGTK x Dist ? (Xi,j - Xk Yi,j
  - Yk )
• k1
• ? ?(Xi,j - Xk)2 (Yi,j - Yk )2
• Solution
• 1) Movement cost at B is 126 A
  (67,954/53,581)
• 2) Compute cost at different points, Draw a
  countour
• map X 42 , Y 40
• Assumptions MVCost Cte. Not very
  Realistic See Table 9.3 NOTES

6
Location of One Item

• More Realistic Model
• Dist Lk Ck (Xi,j - Xk
  Yi,j - Yk )
• (for rectangular)
• Dist Lk Ck ?(Xi,j - Xk)2
  (Yi,j - Yk )2
• (for straight line)
• Where
• Lk load unload cost per trip between Kth
  customer
• feasible location
• Ck cost/unit distance (including Lk )
• NOTES

7
Systematic Layout Procedure (SLP)
Developed by R. Muther (1960 - 1980s). For
entire Facilities, a process or a machine Step
1) Grouping - Prods. Relationships
From-to Table (Table 9.4) - Service
Relationship use Rel. Chart (Table 9.5)
(used when is difficult to quantify
relationships between
Departments) NOTES
8
Systematic Layout Procedure (SLP)
Step 2) Assign Floor Space to Activities plus
Physical Features Restrictions
- Typical Example Inventories-Warehouse
(Table 9.6) CCL -
Consider additional space If a machine, allow
extra space for machine, operator,
maint., potential local storage
for parts, products and supplies.

9
Systematic Layout Procedure (SLP)
Step 3) Make an Activity Realationship Diagram
- List all relationships for As, then
Bs, etc. - Make a Diagram with JUST
As - Add the Bs, etc. Step 4) Make a
Scaled Layout (a couple of trials) using
information on Step3) with areas considered
in Step 2. See Figures 7.3 and
7.4 An excellent tool to use, before
construction, is CAD. Produce 2 alternatives for
decision makers satisfaction CCL
10
Systematic Layout Procedure (SLP)
Step 5) Evaluate Alternatives -
Include Relevant Criteria and their weights
Example A Excellent 4, B Good 3
C Average 2, D Fair, F Bad 0
- Use Grades, Percentage scale, -
Get Peoples input - Go back, select
features from alternatives to get
improved set of designs. Step 6) Detail the
Layout (at scale) and Refine it.
Determine Material Handling and Aisles. Locate
Machines and Operators, Utilities, Services,
... CCL
11
Balancing Flow Lines

• Standard Technique Given are
• - Table of Work Elements with Times Table 9.8
• - A Precedent Diagram Figure 9.5
• - Requires Units/min from line
• To be Determined are
• - of Stations
• - Workers/station
• - Elements to be Done at Each Station
• GOAL Minimize Total Idle Time Example

12
Balancing Flow Lines

• Modifications to Standard Technique
• 1) Sharing Element
• Operators Tools, Station
• 2) Cycle Times are NOT Fixed
• Also consider
• Setup Cost - Inventory Carrying
  Cost
• (Computer centered is a plus !)
• 3) You can redefine elements (operations-task)
• 4) Interchange Elements as new tasks are add

13
Flow Diagrams and Flow Charts
Visual Structure of the Problem - They offer
a Concise Communication Tool - Methods of
Documentation for Others - In an Organized
manner Fig 9.7 - Use a Flow Diagram Fig. 9.8 -
Use of Symbols Fig 9.9 Applications In
Hospitals now patients are discharged late
afternoon, rather than next morning. Maternities
are another example.
14
Flow Diagrams and Flow Charts
3 Types of Flow Diagrams - Single Object Fig
9.7 and 9.8 Example follow an object or
laborer Fig 9.10 - Assembly Process
Example Useful to point out des-organized
storage problems (warehouses) Pizza,
Orange Juice Analysis Fig. 9.11 Disassembly
lines another example (Fig 9.12) -
Action-Decision Example Cashiers
15
EXERCISE Written Documentation

• You fill out your check in a department store,
  remove it from your checkbook and hand it to the
  sales clerk. The sales clerk carries it to the
  supervisor and gives it to her.
• The supervisor examines and approves it.
• The supervisor initials it and hands it back to
  the sales clerk.
• The sales clerk carries it back to the cash
  register and places it in the cash drawer where
  it sits until the end of the day.
• At the end of the day, the accounting receipts
  clerk removes all checks, cash and the register
  slip, and carries them to the accounting
  department and places them on the receipts desk.
  They sit there until the balancing clerk can get
  to them, usually about one hour.
• The balancing clerk examines each check for date,
  signature and matching amounts, stamps each with
  the bank stamp, and prepares a batch total.

16

• WRITTEN DOCUMENTATION (contd)
• After the register has been balanced, a deposit
  slip is prepared, the checks are bundled with the
  deposit slip and taken by the courier to the bank
  and deposited.
• The next morning, the banks deposit clerk opens
  the package and examines each check for date,
  signature, and matches the amount against the
  deposit slip.
• The checks are then taken to the encoding clerk,
  who enters the amounts.
• Draw a Flow Chart using the Symbols we just
  learned

BLOCK DIAGRAM
Fill Out
Place In Register
Hand To Clerk
Take To Supervisor
Examine Approve
Initial
Hand To Clerk
CHECK
17
FLOWCHART

• Deterministic Flow Analysis
• CHART THE CHECK
• Quantification Cost
• Clerk9/Hour0.15/Min Supervisor18/Hour0.30
  /Min Volume100,000/Year

18
Final Process Chart
Deterministic Flow Analysis CHART THE
CHECK Quantification Cost Clerk
9/Hour0.15/Min Supervisor18/Hour0.30/Min
Volume100,000/Year
1 Min
0.5 Min
1.5 Min
0.5 Min
1 Min
2 Min
To Register
To Supervisor
Approve it
Yes
Examine
Place in Register
Initials Returns
Write Check
Start
95
No
5
0.15
0.075
0.225
0.30
0.675
0.15
Instructs Return
0.5 Min 0.225
End of day
To Customer
Makes Corrections
1 Min 0.15
1Min 0.15
19
Multi-Activity Charts
People Gang Chart People and/or Machine
Man-Machine Chart Left Right Hand
Lefthand-Righthand Chart Concept To have 2 or
more columns using a common
scaled time axis. Purpose Improved utilization
of a column (less idle time, for
example) Extra Info 1 Op. Handles 2 Machines
20
Multi-Activity Charts
Kitting Gathering components technique to
ensure before assembly so to minimize operations
avoiding missing parts Columns T Give
cycles/yr, cost/min idle Disadvantage It
requires an standardized. Solution
Use computer simulation
21
Fish Diagrams

• See Last Lecture

IF or Decision Structure Tables
Also known as Protocols or Contingency Tables
Goal Make better (educated) quality decisions
1) Better decision Analysis
2) Less time pressure for decision
22
Breakeven Charts
General Purpose Equipment vs
Special Purpose Equipment Idea They
become the same at some point in
production, i.e., Breakeven Point Step 1)
Tooling Costs New ? Step 2) Operating
Efficiency time/unit Step 3) Learning Curves
on Labor time 2/Prod Step 4) Lets Gamble
Normal vs Repeat Orders Example Table 9.11
23
Subjective Opinions
Goal Evaluate alternatives To Predict How Ask
questions to somebody. But ... you
better Shape the Question 1) The Borg Vote
Used as an Index for Stress Based on the
Psychophysical Power Law To estimate heart
rate of 30 - 50yr old people Example a 0.09
m longer lifting hook used by forestry
workers, addressing heart rate, O2 consump.
force plate, etc.
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Subjective Opinions
2) Body Discomfort Map Or where (body) and
how much it hearts. (see Fig. 7.20 and Table
7.12 3) Adjective Scales (Absolute - Semantics)
A person chooses between 2 adjectives to
give his opinion about a product,
environment, etc. Good -Bad, Hot-Cold, Handy
- Not Handy, etc. A scale shows to be
helpful Very Hot 6 Hot 5
Hot-Warm 4 Warm 3 Cold 2
Very Cold 1
25
Subjective Opinions
3) Relative (Paired) A person can decide on
options side by side But rating cannot tell
strength of preference A relative scale is
chosen Two values are extracted preference
and amount 10 - 9 -
absolutely better 8 - 7 -
significantly better 6 - 5 - much
better 4 - 3 - somewhat better 2 -
1 - equal to Now we have an
eigenvector Data is normalized, single value is
computed which is manipulated through Statistics
Analysis Table 7.13-14