1. Context of Manufacturing
Manufacturing Systems
Context of Manufacturing

2. Manufacturing Systems
The Context of Manufacturing
Quality Management
Project Management
Concurrent Engineering
Manufacturing System Design and Control

3. The Context of Manufacturing
Manufacturing is part of a bigger scheme known as operations.
Operations takes in all systems that involve getting work done.
services
manufacture
The same principles apply to both.

4. The Context of Manufacturing
Operations is a transformation process.
Inputs are transformed into outputs.
Goal is to create and add value to the inputs during the transformation.
Inputs
Materials
Labour
Equipment
Capital
Outputs
Goods
Services
Transformation process
Manufacture: adding value to a raw material by changing its shape or properties.

5. Manufacturing process
Technical terms: manufacturing process is used to turn raw material into finished items.
Scrap and waste
Starting material
Processed Part
Machinery
Tooling
Power
Labour
Manufacturing process

6. Manufacturing Process
Economics terms: the value added to the inputs is important.
Starting material
Processed Part
Material in process
Manufacturing Process € €€
€€€
Added Value

7. Manufacturing Industries can be grouped into:
Primary – exploit natural resources
Secondary – converts primary outputs into
consumer goods - manufacturing
Tertiary – contributes to the service sector

8. Business Strategies Companies exist to make a profit
Products offered by more than one company
Companies compete for market share
Company needs a strategy
Direction
Focus

9. Business Strategies A strategy consists of four steps:
Define a primary task
Assess core competencies
Determine order qualifiers and order winners
Position the firm

10. Business Strategies 1. Define a primary task
Represents the purpose of the firm - what is its business
Identifies the area in which it will be competing - stated in broad terms.
e.g. Iarnrod Eireann is in the business of Transportation, not Railways
Often expressed as a mission statement.
Amazon.com - ‘To provide the fastest, easiest, most enjoyable shopping experience’

11. Business Strategies 2. Assess core competencies
Identify what the company does best
Usually based on knowledge or processes
Rarely single product or technology – easily copied
Dell Computer: is the ability to quickly assemble computers to order and to deliver them to customers without delay.

12. Business Strategies 3. Determine order qualifiers and order winners
An order qualifier is a characteristic of a product that will make a consumer consider buying it.
An order winner is the characteristic of a product that will make the consumer purchase it.
Buying a car:
Order qualifier - price
Order winner - model with the most features

13. Business Strategies 4. Position the firm
Choose one or two important things to concentrate on and do extremely well.
Defines:
how well the firm competes in the marketplace
what unique value it will deliver to the consumer
Relative strengths of competitors must be taken into account
Apple computers do not compete with companies such as Dell for its market – they concentrate on a niche market for innovative products such as the iPhone, IPod where they are often first to the market.

14. Manufacturing Strategies
Different ways of offering a product:
Make to stock
Products are designed, produced and delivered to customer specifications in response to an order
Make to order
Products are designed and produced for a ‘standard’ customer in anticipation of demand.
Assemble to order
Base unit or module is produced onto which options can be added according the specification of the customer.

15. Manufacturing Strategies
Types of Production Processes:
Project
Long time to complete
Large investment in resources
One item to customer order
Batch production
Product produced in batches
Volume relatively low
Demand for item can fluctuate

16. Manufacturing Strategies
Types of Production Processes:
Mass Production
Large volume of standard product
Demand is stable
Demand is high
Continuous Production
Very high volume products
Highly standardised
Highly automated systems

17. Product Process Matrix
Relationship between volume levels and standardisation of a product and its manufacturing process
Continuous Production
High
Mass Production
Volume of products
Batch Production
Projects
Low
Low
High
Standardisation

18. Functional Organisation of a Manufacturing Enterprise
Finance / Accounting
Budgets
Stockholder requirements
Cost Analysis
Production and Inventory data
Orders
Quality requirements
Design Specs
Material availability
Quality data etc.
Suppliers
Sales Forecasts
Customer orders
Customer feedback
Promotions
Status of order
Marketing
Manufacturing
Hiring/Firing
Training
Legal requirements
Job design
Union negotiations etc.
Human Resources

19. Key Success Factors in Manufacturing Competitiveness
Global market means more customers but also more competition
Companies will usually compete on:
Cost - Ryanair, Penneys
Quality - Toyota, Mercedes
Flexibility - Dell
Speed - Dell, McDonalds

20. Simple System for Costing
Often a choice is available:
Make the product individually
Costs more
No setup cost
Set up tooling and mass produce
Setup cost
Cost less to make once set up

21. Simple System for Costing
Break even Analysis
Used to choose the most economical method for making a given number of parts. or
Finding the least number of parts to justify setting up a mass production system

22. Simple System for Costing
Break even Analysis
Cost
Number of units made
Total Cost of process A
Total Cost of process B
Choose Process A
Choose Process B
Break Even Quantity

23. Simple System for Costing
Example:
Qty: 500 required
Skilled labour costs €2.50 per item to manufacture using the lathe.
Unskilled labour costs €0.50 to manufacture using the automated press.
The setup cost of the press tool is €500

24. Simple Systems for Costing

25. Simple Systems for Costing
Calculating BEQ numerically
BEQ = 500/(2.50 – 0.5)
= 500/2
= 250 Items