1. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved. Chapter 6 Process Selection and Facilities Layout

2. 6- 2 Process Selection Process selection –Refers to the deciding on the way production of goods or services will be organized –It has major implications for Capacity planning Layout of facilities Equipment Design of work systems

3. 6- 3 Process Selection and System Design

4. 6- 4 Process Strategy Key Aspects of Process Strategy: –Capital Intensity The mix of equipment and labor that will be used by the organization –Process flexibility The degree to which the system can be adjusted to changes in processing requirements due to such factors as –Product and service design changes –Volume changes –Changes in technology

5. 6- 5 Technology –The application of scientific discoveries to the development and improvement of products and services and operations processes Technological Innovation –The discovery and development of new or improved products, services, or processes for producing or providing them

6. 6- 6 Kinds of Technology Operations Management is concerned with: –Product and service technology Discovery and development of new products and services –Process technology Methods, procedures, and equipment used to produce goods and provide services –Information technology The science and use of computers and other electronic equipment to store, process, and send information

7. 6- 7 Technology for Competitive Advantage Technological advances can lead to competitive advantage –Product technology Increased market share and profits –Processing technology Improved quality Lower costs Higher productivity Expanded processing capabilities

8. 6- 8 Process Selection 1.Variety –How much? 2.Equipment flexibility –To what degree? 3.Volume –Expected output? Job ShopRepetitive Batch Continuous

9. 6- 9 Types of Processing

10. 6- 10 Product-Process Matrix

11. 6- 11 Process Choice Effects

12. 6- 12 Product and Service Profiling Process selection involves –Substantial investment in equipment –Has a very specific influence on layout Product or service profiling –Linking key product or service requirements to process capabilities –Key dimensions relate to Range of products or services that will be processed Expected order sizes Pricing strategies Expected frequency of schedule changes Order-winning requirements

13. 6- 13 Automation –Machinery that has sensing and control devices that enable it to operate automatically Fixed automation Programmable automation Flexible automation

14. 6- 14 Automation Questions 1.What level of automation is appropriate? 2.How would automation affect system flexibility? 3.How can automation projects be justified? 4.How should changes be managed? 5.What are the risks of automating? 6.What are the likely effects of automating on: –Market share –Costs –Quality –Customer satisfaction –Labor relations –Ongoing operations

15. 6- 15 Facilities Layout Layout –the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system –Facilities layout decisions arise when: Designing new facilities Re-designing existing facilities

16. 6- 16 The Need for Layout Planning Inefficient operations –High cost –Bottlenecks Accidents or safety hazards Changes in product or service design Introduction of new products or services

17. 6- 17 The Need for Layout Planning Changes in output volume or product mix Changes in methods or equipment Changes in environmental or other legal requirements Morale problems

18. 6- 18 Layout Design Objectives Basic Objective –Facilitate a smooth flow of work, material, and information through the system Supporting objectives –Facilitate product or service quality –Use workers and space efficiently –Avoid bottlenecks –Minimize material handling costs –Eliminate unnecessary movement of workers or material –Minimize production time or customer service time –Design for safety

19. 6- 19 Basic Layout Types Product layouts Process layouts Fixed-Position layout Combination layouts

20. 6- 20 Repetitive Processing: Product Layouts Product layout – Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow Raw materials or customer Finished item Station 2 Station 2 Station 3 Station 3 Station 4 Station 4 Material and/or labor Station 1 Material and/or labor Material and/or labor Material and/or labor Used for Repetitive Processing Repetitive or Continuous

21. 6- 21 Product Layout: Advantages High rate of output Low unit cost Labor specialization Low material handling cost per unit High utilization of labor and equipment Established routing and scheduling Routine accounting, purchasing, and inventory control

22. 6- 22 Product Layout: Disadvantages Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume or product or process design Highly susceptible to shutdowns Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses Individual incentive plans are impractical

23. 6- 23 Non-repetitive Processing: Process Layouts Process layouts –Layouts that can handle varied processing requirements Used for Intermittent processing Job Shop or Batch Dept. A Dept. BDept. D Dept. C Dept. F Dept. E

24. 6- 24 Process Layout: Advantages Can handle a variety of processing requirements Not particularly vulnerable to equipment failures General-purpose equipment is often less costly than the specialized equipment used in product layouts It is possible to use individual incentive plans

25. 6- 25 Process Layout: Disadvantages In-process inventory costs can be high Challenging routing and scheduling Equipment utilization rates are low Material handling slow and inefficient Complexities often reduce span of supervision Special attention for each product or customer Accounting and purchasing are more involved

26. 6- 26 Fixed Position Layouts Fixed Position layout – Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed

27. 6- 27 Combination Layouts Some operational environments use a combination of the three basic layout types: –Hospitals –Supermarket –Shipyards Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts –Cellular manufacturing –Flexible manufacturing systems

28. 6- 28 Flexible Manufacturing System (FMS) FMS –A group of machines designed to handle intermittent processing requirements and produce a variety of similar products Includes supervisory computer control, automatic material handling, and robots or other automated processing equipment It is a more automated version of cellular manufacturing

29. 6- 29 Computer Integrated Manufacturing (CIM) CIM –A system for linking a broad range of manufacturing activities through an integrated computer system Activities include –Engineering design –FMS –Purchasing –Order processing –Production planning and control

30. 6- 30 Service Layout Service layouts can be categorized as: product, process, or fixed position Service layout requirements are somewhat different due to such factors as: –Degree of customer contact –Degree of customization Common service layouts: –Warehouse and storage layouts –Retail layouts –Office layouts

31. 6- 31 Line Balancing Line balancing –The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements –Why is line balancing important? 1.It allows us to use labor and equipment more efficiently. 2.To avoid fairness issues that arise when one workstation must work harder than another.

32. 6- 32 Cycle Time Cycle time –The maximum time allowed at each workstation to complete its set of tasks on a unit –Cycle time also establishes the output rate of a line

33. 6- 33 Cycle Time and Output Rate

34. 6- 34 How Many Workstations are Needed? The required number of workstations is a function of –Desired output rate –Our ability to combine tasks into a workstation Theoretical minimum number of stations

35. 6- 35 Precedence Diagram Precedence diagram –A diagram that shows elemental tasks and their precedence requirements

36. 6- 36 Assigning Tasks to Workstations Some Heuristic (Intuitive) Rules: –Assign tasks in order of most following tasks Count the number of tasks that follow –Assign tasks in order of greatest positional weight. Positional weight is the sum of each task’s time and the times of all following tasks.

37. 6- 37 Line Balancing Procedure

38. 6- 38 Measuring Effectiveness Balance delay (percentage of idle time) –Percentage of idle time of a line Efficiency –Percentage of busy time of a line

39. 6- 39 Designing Process Layouts The main issue in designing process layouts concerns the relative placement of the departments Measuring effectiveness –A major objective in designing process layouts is to minimize transportation cost, distance, or time

40. 6- 40 Information Requirements In designing process layouts, the following information is required: –A list of departments to be arranged and their dimensions –A projection of future workflows between the pairs of work centers –The distance between locations and the cost per unit of distance to move loads between them –The amount of money to be invested in the layout –A list of any special considerations –The location of key utilities, access and exit points, etc.