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Chapter 3: Process Planning and Design1 Chapter 3 Process Planning and Design.

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Presentation on theme: "Chapter 3: Process Planning and Design1 Chapter 3 Process Planning and Design."— Presentation transcript:

1 Chapter 3: Process Planning and Design1 Chapter 3 Process Planning and Design

2 Chapter 3: Process Planning and Design2 Process Planning and Design Chapter 2 identified the critical factors in providing value to the customer. This chapter discusses the selection and design of the transformation process that can deliver those factorslow cost, high quality, enhanced functionality, speed, and so onin an efficient and effective manner.

3 Chapter 3: Process Planning and Design3 Introduction Fender's Custom Shop Assembly line at IBM's plant in Charlotte, North Carolina Rickard Associates, an editorial production company Martin Marietta's aerospace electronics manufacturing facility in Denver, Colorado Nynex

4 Chapter 3: Process Planning and Design4 Examples Examples illustrate several transformation systems. The Fender Custom Shop is a job shop that has specialized departments for routing, lathe operations, inlaying, paint and finishing, and final assembly. Because work is organized by the task performed, Rickard Associates is also a job shop - even though the work is not performed in one location. Companies like Rickard that rely on information technology to bring separated workers together are referred to as virtual organizations. Martin Marietta converted into focused factories. And assembly lines like the one IBM uses are referred to as flow shops.

5 Chapter 3: Process Planning and Design5 Fenders Custom Shop Customers include Eric Clapton, John Deacon (Queen), David Gilmour, Yngwie Malmsteen and Stevie Ray Vaughn Production Steps: computer controlled routers and lathes shape guitar bodies and necks also have Neck Duplicator necks and bodies hand and machine sanded

6 Chapter 3: Process Planning and Design6 Fenders Custom Shop continued detailed inlay work done with Hegner precision scroll saw paint and finishing operations in special room where air is re-circulated 10 times/minute buffed hung up and seasoned for two weeks final assembly by actual musicians

7 Chapter 3: Process Planning and Design7 IBMs Charlotte, NC Plant Assembly line produces 27 significantly different products Products include hand-held bar-code scanners, portable medical computers, fiber- optic connectors, and satellite communications devices Kits of parts delivered to workers Computer screen displays assembly instructions

8 Chapter 3: Process Planning and Design8 Rickard Associates Produces magazines and marketing materials Only two of editorial production companys employees work at headquarters in NJ Art director works in AZ Editors are located in FL, GA, MI, and D.C. Freelancers even more scattered Internet and AOL used to coordinate work

9 Chapter 3: Process Planning and Design9 Martin Marietta Aerospace Plant Originally set up as job shop with numerous functional departments high WIP levels long lead times long travel distances departmental barriers inhibited communication Plant subsequently arranged into three focused factories

10 Chapter 3: Process Planning and Design10 Martin Marietta continued Each focused factory completed entire electronic assembly for particular application Each focused factory treated as separate business enterprise Factory manager assigned to each focused factory NFL draft used to select worker teams

11 Chapter 3: Process Planning and Design11 Martin Marietta continued Within focused factories part families identified based on technology and processes Standard routings identified for each part family Improvements seven months of consecutive production with no scrap 50% reduction in WIP 21% reduction in lead times 90% reduction in overtime

12 Chapter 3: Process Planning and Design12 Nynex Analyzed company in terms of four core processes customer operations customer support customer contact customer provisioning

13 Chapter 3: Process Planning and Design13 Nynex continued Obtained services of Boston Consulting Group Visited 152 companies to document best practices Estimated savings are $1.5 to $1.7 billion

14 Chapter 3: Process Planning and Design14 Variety of Transformation Systems Fender Custom Shop is job shop Rickard Associates is job shop and is also a virtual organization Martin Marietta converted from a job shop to focused factories IBM uses a flow shop

15 Chapter 3: Process Planning and Design15 Transformation System Design and Layout Analysis Transformation system design considers alternative transformation forms and selects best one given characteristics of desired outputs. Layout analysis seeks to maximize the efficiency or effectiveness of operations.

16 Chapter 3: Process Planning and Design16 Forms of Transformation Systems Continuous Process

17 Chapter 3: Process Planning and Design17 Continuous Process Highly standardized products in large volumes Often these products have become commodities Typically these processes operate 24 hours/day seven days/week Objective is to spread fixed cost over as large a volume as possible

18 Chapter 3: Process Planning and Design18 Continuous Process continued Starting and stopping a continuous process can be prohibitively expensive Highly automated and specialized equipment used Layout follows the processing stages Output rate controlled through equipment capacity and flow mixture rates

19 Chapter 3: Process Planning and Design19 Continuous Process continued Low labor requirements Often one primary input Initial setup of equipment and procedures very complex

20 Chapter 3: Process Planning and Design20 Forms of Transformation Systems Flow Shop

21 Chapter 3: Process Planning and Design21 Flow Shop Similar to continuous process except discrete product is produced Heavily automated special purpose equipment High volume - low variety Both services and products can use flow shop form of processing

22 Chapter 3: Process Planning and Design22 A Generalized Flow Shop Operation

23 Chapter 3: Process Planning and Design23 Advantages of the Flow Shop Low unit cost specialized high volume equipment bulk purchasing lower labor rates low in-process inventories simplified managerial control

24 Chapter 3: Process Planning and Design24 Disadvantages of Flow Shop Variety of output difficult to obtain Difficult to change rate of output Minor design changes may require substantial changes to the equipment Worker boredom and absenteeism Work not very challenging Vulnerable to equipment breakdowns

25 Chapter 3: Process Planning and Design25 Disadvantages of Flow Shop continued Line balanced to slowest element Large support staff required Planning, design, and installation very complex task Difficult to dispose of or modify special purpose equipment

26 Chapter 3: Process Planning and Design26 Flow Shop Layout Objective is to assign tasks to groups The work assigned to each group should take about the same amount of time to complete Final assembly operations with more labor input often subdivided easier Paced versus unpaced lines

27 Chapter 3: Process Planning and Design27 Line Balancing

28 Chapter 3: Process Planning and Design28 Line Balancing Example

29 Chapter 3: Process Planning and Design29 Line Balancing Example continued Company operates one shift per day Available time per shift is 450 minutes Demand is 100 units/day

30 Chapter 3: Process Planning and Design30 Precedence Diagram A B C D E FG

31 Chapter 3: Process Planning and Design31 Calculations cycle time = 450/75 = 6 minutes/part N T = 20/6 = 3.33 = 4 stations

32 Chapter 3: Process Planning and Design32 Task Assignment

33 Chapter 3: Process Planning and Design33 Task Assignment continued

34 Chapter 3: Process Planning and Design34 Line Balancing Solution A B C D E FG Station 1 Station 2 Station 3 Station 4

35 Chapter 3: Process Planning and Design35 Efficiency efficiency = 20/(4*6) = 83.3%

36 Chapter 3: Process Planning and Design36 Precedence Graph for Credit Applications

37 Chapter 3: Process Planning and Design37 Stations Assignments for Credit Application

38 Chapter 3: Process Planning and Design38 Forms of Transformation Systems Job Shop

39 Chapter 3: Process Planning and Design39 Job Shop High variety - low volume Equipment and staff grouped based on function Each output processed differently

40 Chapter 3: Process Planning and Design40 A Generalized Job Shop Operation

41 Chapter 3: Process Planning and Design41 Advantages of the Job Shop Flexibility to respond to individual demands Less expensive general purpose equipment used Maintenance and installation of general purpose equipment easier General purpose equipment easier to modify and therefore less susceptible to becoming obsolete

42 Chapter 3: Process Planning and Design42 Advantages of the Job Shop continued Dangerous activities can be segregated from other operations Higher skilled work leading to pride of workmanship Experience and expertise concentrated Pace of work not dictated by moving line Less vulnerable to equipment breakdowns

43 Chapter 3: Process Planning and Design43 Disadvantages of the Job Shop General purpose equipment is slower Higher direct labor cost High WIP inventories High material handling costs Management control very difficult

44 Chapter 3: Process Planning and Design44 Directly Specified Closeness Preferences A = absolutely necessary E = especially important I = important O = ordinary closeness OK U = unimportant X = undesirable

45 Chapter 3: Process Planning and Design45 Cost-Volume-Distance Model

46 Chapter 3: Process Planning and Design46 Office Layout

47 Chapter 3: Process Planning and Design47 Forms of Transformation Systems Cellular Production

48 Chapter 3: Process Planning and Design48 The Cell Form Combines flexibility of job shop with low costs and short response times of flow shop Based on group technology First identify part families Then form machine cells to produce part families

49 Chapter 3: Process Planning and Design49 Conversion of a Job Shop Layout to a Cellular Layout

50 Chapter 3: Process Planning and Design50 Organization of Miscellaneous Parts into Families

51 Chapter 3: Process Planning and Design51 Advantages of Cellular Production Reduced machine setup times increased capacity economical to produce in smaller batch sizes smaller batch sizes result in less WIP less WIP leads to shorter lead times shorter lead times increase forecast accuracy and provide a competitive advantage

52 Chapter 3: Process Planning and Design52 Advantages of Cellular Production continued Parts produced in one cell Capitalize on benefits of using worker teams Minimal cost to move from job shop to cellular production (e.g. EHC) Can move from cellular production to mini-plants

53 Chapter 3: Process Planning and Design53 Disadvantages of Cellular Production Volumes too low to justify highly efficient high volume equipment Vulnerable to equipment breakdowns Balancing work across cells Does not offer the same high degree of customization as the job shop

54 Chapter 3: Process Planning and Design54 Cellular Layout Teams of workers and equipment to produce families of outputs Workers cross-trained Nominal cells versus physical cells. Remainder cell Cell formation methods production flow analysis

55 Chapter 3: Process Planning and Design55 Original Machine-Component Matrix

56 Chapter 3: Process Planning and Design56 Reordered Machine-Component Matrix

57 Chapter 3: Process Planning and Design57 Forms of Transformation Systems Project Operations

58 Chapter 3: Process Planning and Design58 Project Operations Large scale Finite duration Nonrepetitive Multiple interdependent activities Offers extremely short reaction times

59 Chapter 3: Process Planning and Design59 Selection of the Process

60 Chapter 3: Process Planning and Design60 Volume/Variety Considerations High volume indicate automated mass production High variety implies use of skilled labor and general purpose equipment Make-to-stock versus make-to-order

61 Chapter 3: Process Planning and Design61 Effect of Output Characteristics on Transformation Systems

62 Chapter 3: Process Planning and Design62 Product/Process Life Cycles In R&D stage, product made in small volumes At peak of life cycle, demand may justify high volume special purpose equipment System should evolve as market evolves Whether an organization moves with a product through its life cycle depends on the organizations focus

63 Chapter 3: Process Planning and Design63 Selection of Transformation System by Stage of Life Cycle

64 Chapter 3: Process Planning and Design64 Service Processes Often implemented with little development or pretesting Need to consider amount of customer contact Customers may not arrive at smooth and even increments Including customer in service process provides opportunities to improve service

65 Chapter 3: Process Planning and Design65 New Transformational Technologies and Reengineering

66 Chapter 3: Process Planning and Design66 Information Technology World Wide Web Federal Express Web server set up in late 1994 By 1996 12,000 customers using service each day to access package-tracking database provides higher customer service saves FedEx $2 million per year Intranets

67 Chapter 3: Process Planning and Design67 Information Technology continued Decision support systems Artificial intelligence Expert systems

68 Chapter 3: Process Planning and Design68 The Office of the Future Focus of 1980s was on improving individual productivity Focus 1990s is enhancing way teams work together Groupware communications (e-mail) collaboration (access to shared data) coordination (jointly accomplishing activities)

69 Chapter 3: Process Planning and Design69 Manufacturing Technologies Numerical Control (NC) computer numerical control direct numerical control Robotics Flexible Manufacturing Systems (FMS)

70 Chapter 3: Process Planning and Design70 Business Process Design (Reengineering)

71 Chapter 3: Process Planning and Design71 Division of Labor Concept Work broken down into its simplest most basic tasks Performing same task facilitates attaining greater skill No time lost switching to another task Workers well positioned to improve tools and techniques

72 Chapter 3: Process Planning and Design72 Division of Labor Concept continued Division of labor concept not challenged until recently despite dramatic changes in technology Quality, innovation, service, and value more important than cost, growth, and control

73 Chapter 3: Process Planning and Design73 Process Set of activities that taken together produce a result of value to the customer Organizing on basis of processes Eliminate delays and errors when work is handed off Capture information once and at source When people closest to process perform work, there is little need for management overhead

74 Chapter 3: Process Planning and Design74 Business Process Design (BPD) The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance Hammer, M. and Stanton, S. The Reengineering Revolution, Harper Business, 1995.

75 Chapter 3: Process Planning and Design75 Radical Profoundly change the way work performed Not concerned with making superficial changes Get to root Get rid of old Reinventing, not improving

76 Chapter 3: Process Planning and Design76 Redesign BPD is about designing how work is done Smart, capable, well trained, highly motivated employees mean little if the way work is performed is poorly designed

77 Chapter 3: Process Planning and Design77 Process All organizations perform processes Customers not interested in individual activities but rather overall results Few of them are organized on the basis of processes Thus, processes tend to go unmanaged Team approach one way this addressed

78 Chapter 3: Process Planning and Design78 Dramatic Quantum leaps in performance, not marginal or incremental improvements Breakthroughs in performance

79 Chapter 3: Process Planning and Design79 IBM Credit Example

80 Chapter 3: Process Planning and Design80 IBM Credit Example continued Order logged by 1 of 14 people in conference room Carted upstairs to credit department Information entered into computer to check borrowers creditworthiness Results written on piece of paper

81 Chapter 3: Process Planning and Design81 IBM Credit Example continued Business practices department modified standard loan covenant in response to customer requests Used its own computer system Pricer keyed data into PC to determine appropriate interest rate Administrator converted to quote letter and Fedexed to field sales rep.

82 Chapter 3: Process Planning and Design82 IBM Credit Example continued Average time to process a request was 6 days Could take as long as 2 weeks Actual processing time 90 minutes Deal Structurer Turnaround time 4 hours Number of deals processed increased 100 times with small reduction in head count

83 Chapter 3: Process Planning and Design 83


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