1. Introduction to Operations Management
Process Selection and Facility Layout (Ch.6)
Hansoo Kim (金翰秀)
Dept. of Management Information Systems, YUST

2. What you should do!
Review Capacity Planning
Read Chapter 6 and 6s

3. X X X X OM Overview Class Overview (Ch. 0) Operations, Productivity,
and Strategy
(Ch. 1, 2) X
Project Management
(Ch. 17)
Strategic
Capacity
Planning
(Ch. 5, 5S)
Process
Selection/ Facility Layout; LP
(Ch. 6, 6S) X X
Mgmt of Quality/ Six Sigma Quality
(Ch. 9, 10)
Queueing/
Simulation
(Ch. 18)
Supply Chain Management
(Ch 11)
Location Planning
and Analysis
(Ch. 8)
JIT &
Lean Mfg System
(Ch. 15)
Demand Mgmt Forecasting
(Ch 3)
Aggregated Planning
(Ch. 13)
Inventory Management
(Ch. 12)
MRP & ERP
(Ch 14)
Term Project

4. Key Terms 영어 중국어 Assembly line Line balancing Automation
组装线
Line balancing
生产线平衡
Automation
自动化
Numerically controlled(N/C)machines
数控机床
Balance delay
生产线闲置率
Precedence diagram
先后顺序图
Cellular production
单元制造
Process layout
工艺原则布置
Computer-aided manufacturing
计算机辅助制造
Production line
生产线
Computer-integrated manufacturing
计算机集成制造
Product layout
产品原则布置
Cycle time 节拍
Product or service profiling
产品或服务工艺
Fixed-position layout
定位布置
Project 项目
Flexible manufacturing system
柔性制造系统
Robot
机器人
Group technology
成组技术
Technological innovation
技术创新
Intermittent processing
间歇加工
technology 技术 4

5. Learning Objectives
Explain the strategic importance of process selection.
Explain the influence that process selection has on an organization.
Describe the basic processing types.
Discuss automated approaches to processing.
Explain the need for management of technology.
List some reasons for redesign of layouts.
Describe the basic layout types.
List the main advantages and disadvantages of product layouts and process layouts.
Solve simple line-balancing problems.
Develop simple process layouts.

6. Capacity and Process Selection
Process Strategy (Key Aspects)
Capital Intensity
Process Flexibility

7. Process Selection Strategy (생산전략, 공정설계 전략)
Deciding on the way production of goods or services will be organized
“제품과 서비스를 어떤 방식으로 생성해 낼 것인가?”에 대한 방안
Process = Transformation
원자재에서 제품(혹 서비스)로 변화되는 과정
Objective(목적)
Meet or exceed customer requirements (요구사항)
Meet cost & managerial goals
최소의 비용으로 고객의 요구사항을 극대화 한다!
Long-term effect (장기적인 영향력이 있다)
Product & Volume Flexibility
Costs & Quality

8. 생각해 볼 문제들… 어떤 종류의 생산(or 서비스)방식이 있을까?
(Which types of process strategy can exist?)
생산(or 서비스)방식을 결정하는데 고려해야 하는 요소들은 어떤 것이 있을까?
Which factors should be considered to select the process strategy? 예제
홍콩반점
건강검진센타
빙천맥주공장
자동차 조립공장

9. 4 가지 공정설계 전략 (Four Process Strategies)
Process Focus (공정중심)
Product Focus (제품중심)
Repetitive Focus (공통모듈중심) (Assembly Line)
Mass Customization Focus (대량맞춤생산)

10. S-A-S-B-S-A-S-B-S-A-S-B-S-A-S-B
Machining Process
Process Time (공정시간) = Setup Time (준비시간) + Machining Time (가공시간)
How is the utilization of the Machine?
Machine
S-A-A-A-A-S-B-B-B-B
S-A-S-B-S-A-S-B-S-A-S-B-S-A-S-B
S = Setup Time
장단점?

11. Process-Focused Strategy (공정중심전략)
Facilities(설비) are organized by process
Similar processes are together
Example: All drill presses are together
Low volume, high variety products (다품종 소량)
‘Jumbled’ flow (뒤범벅 흐름)
Other names
Intermittent process
Job shop*
Operation
Product A
Product B 1 2 3

12. Process-Focused Strategy Examples
Bank
© 1995 Corel Corp.
Machine Shop
Hospital

13. Process Focus (job shop) 설비 배치
Milling
Department
Lathe Department
Drilling Department M M D D D D L M M D D D D G G G P G G G P
Grinding
Department
Painting Department A A A
Receiving and
Shipping
Assembly

14. Process Focused Strategy 장단점장점
Greater product flexibility (다양한 제품을 생산)
More general purpose equipment (범용성이 높은 설비 사용)
Lower initial capital investment (낮은 초기 설비 투자) 단점
High variable costs (높은 변동비)
More highly trained personnel (다기능공)
More difficult production planning & control (생산계획 및 통제의 어려움)
Low equipment utilization (5% to 25%) (낮은 설비 효율성)
Select one of the examples you have presented of process-focused strategy, and ask students to identify the sources of advantage and disadvantage.

15. Product Focused Strategy (제품중심전략)
Facilities(설비) are organized by product
High volume, low variety products (소품종 다량생산)
Where found
Discrete unit manufacturing
Continuous process manufacturing
Other names
Flow Line production
Continuous production
Products A & B 1 2 3
Operation 4

16. Product Focused Examples
© 1995 Corel Corp.
Soft Drinks (Continuous, then Discrete)
© 1995 Corel Corp.
Light Bulbs (Discrete)
Paper (Continuous)
© T/Maker Co.
Mass Flu Shots (Discrete)
© 1995 Corel Corp.
Some examples of products produced using a product-focused strategy.

17. Product Focus 설비 배치 L A M D G M A L S D G P In Out In Out Product A
Product B M A L S D G P In
Out

18. Product Focused Strategy 장단점장점
Lower variable cost per unit (낮은 변동비)
Lower but more specialized labor skills
Easier production planning and control (생산계획 및 통제의 용이성)
Higher equipment utilization (70% to 90%) (설비의 높은 가동율) 단점
Lower product flexibility (제품 종류가 한정)
More specialized equipment (전용설비)
Usually higher capital investment (높은 초기투자비용)

19. Repetitive Focused Strategy (공통모쥴중심 전략)
Facilities often organized by assembly lines (일반적으로 조립라인으로 설비가 구성)
Characterized by modules
Parts & assemblies made previously
Modules combined for many output options
Other names
Assembly line
Production line

20. Repetitive Focus Modules
Parts or components of a product previously prepared

21. Repetitive Focused Strategy - Considerations (고려사항들…)
More structured than process-focused, less structured than product focused 제품 자체가 좀 더 구조적으로 잘 구성되어있다
Enables quasi-customization 다양한 고객의 요구사항을 좀 더 잘 반영한다
Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model
중심이 되는 공통 모듈을 다양한 요구의 옵션(선택 사향)과 결합한 생산 방식

22. Repetitive-Focused Strategy Examples
Truck
© 1995 Corel Corp.
Clothes Dryer
Fast Food
McDonald’s over 95 billion served
© T/Maker Co.
At this point, you might compare in more detail, McDonalds (which uses a batch system) with Wendy’s (which, at least at high volumes, perhaps more closely resembles a simple assembly line).

23. Mass-Customization Focused Strategy (대량맞춤생산전략)
Rapid, low-cost production that caters to constantly changing unique customer desires
주문생산의 장점: Customization (고객의 Needs에 적극적으로 대응)
대량생산의 장점: Low-cost rapid Production (저비용 효율생산)
여러 전략의 장점을 정보시스템과 OM 기법을 통해 결합한 전략 방식

24. Process Strategies Rapid throughput techniques Mass Customization
Modular techniques
Repetitive Focus
Modular design
Flexible equipment
Product-focused
Low variety, high volume
High utilization (70% - 80%)
Specialized equipment
Process-focused
High variety, low volume
Low utilization (5% - 20%)
General purpose equipment
Effective scheduling techniques

25. Process Focus (Job Shop)
A Comparison (1)
Process Focus (Job Shop)
(Low volume, High variety)
Repetitive Focus
(Modular)
Product focus
(High-volume, low-variety)
Mass Customization
(High-volume, high-variety)
1. Small quantity, large variety of products
Long runs, standardized product, from modules
Large quantity, small variety of products
Large quantity, large variety of products
2. General purpose equipment (이것도 저것도 생산해야 하기때문에…)
Special equipment aids in use of assembly line
Special purpose equipment
Rapid changeover on flexible equipment

26. A Comparison (2) Process Focus Repetitive Focus Product focus
Mass Customization
3 Broadly skilled operators (두루두루 잘 알아야 한다)
Modestly trained employees
Operators less broadly skilled
Flexible operators trained for customization
4 Many instructions because of change in jobs
Reduced training and number of job instructions
Few work orders and job instructions
Custom orders require many instructions
5 Raw material high relative to product value
JIT techniques used
Raw material low relative to product value

27. A Comparison (3) Process Focus Repetitive Focus Product focus
Mass Customization
6 WIP high relative to output
JIT techniques used
WIP low relative to output
WIP driven down by JIT, kanban, lean production
7 Units move slowly thru plant
Movement measured in hours & days
Units move swiftly thru facility
Goods move swiftly thru facility
8 Finished goods made to order, not stored
Finished goods made to frequent forecasts
Finished goods made to forecast, then stored
Finished goods made to order

28. A Comparison (4) Process Focus Repetitive Focus Product focus
Mass Customization
9 Scheduling complex and concerned with trade-off between inventory, capacity, and customer service
Scheduling based on building models from a variety of forecasts
Scheduling relatively simple, concerns establishing sufficient rate of output to meet forecasts
Scheduling sophisticated to accommodate customization
10 Fixed costs low, variable costs high
Fixed costs dependent on flexibility of facilities
Fixed costs high, variable costs low
Fixed costs high; variable costs must be low

29. A Comparison (5) Process Focus Repetitive Focus Product focus
Mass Customization
11 Costing, done by job, is estimated prior to doing job but only known after doing job
Costs usually known based on experience
Because of high fixed costs, cost dependent on utilization of capacity
High fixed costs and dynamic variable costs

30. Volume and Variety of Products
Low Volume High
Variety Process
(Intermittent)
Repetitive
Process
(Modular)
High Volume
Low Variety
(Continuous)
One or very few
units per lot
Projects
Very small runs, high
variety
Job Shops
Modest runs, modest
Disconnected
Long runs, modest
variations
Connected
Very long runs,
changes in
attributes
Continuous
Equipment utilization
5%-25%
20%-75%
70%-80%
Poor Strategy
(High variable costs)
Mass Customization
This slide resembles a slide used earlier, but adds more detail. You may wish to use this slide in review or summary, or, simply skip it and move on.

31. Areas of Technology Machine technology
Automatic identification systems (AIS)
Bar-code, RFID
Process control
Vision system
Robot
Automated storage and retrieval systems (ASRS)
Flexible manufacturing systems (FMS)
Computer-integrated manufacturing (CIM)

32. FMS에 의한 생산라인의 개념도 1 6 4 5 7 2 3 8

33. FMS 예

34. FMS 예 머시닝센터 준비작업장 중앙관제실 자동창고 공구저장소 차팔렛트 반송 컨베이어라인 공구무인반송차 세정실
작업물 무인운반차
준비작업장

35. FMS 예

37. Types of Robot
Cylindrical
Polar
Cartesian
Joint Arm

38. FMS Machine

39. ASRS (자동창고)

40. AGV (무인운반차)

41. AGVS (무인운반차 시스템)

42. Computer Integrated Manufacturing (CIM)

43. Facility Layout Design

44. Objectives of Facility Layout
Develop an economical layout which will meet the requirements of:
product design and volume (product strategy)
process equipment and capacity (process strategy)
quality of work life (human resource strategy)
building and site constraints (location strategy)
사내물류비용의 최소화
공간의 효율적 활용
노동력의 효율적 활용
불필요한 움직임을 최소화함
병목현상을 완화
제조 및 서비스 시간 단축

45. What is Facility Layout
Location or arrangement of everything within & around buildings
Objectives are to maximize
Customer satisfaction
Utilization of space, equipment, & people
Efficient flow of information, material, & people
Employee morale & safety
In addition to discussing what facility layout is, you might also raise some of the issues that may make it problematic.

46. Types of Layouts Fixed-position layout Process-oriented layout
Office layout
Retail layout
Warehouse layout
Product-oriented layout
Give a brief description of each. You might also ask students for an example of each.

47. Emergency Room Layout (Process-Oriented Layout)
Surgery
Radiology
E.R. beds
Pharmacy
Billing/exit
E.R.Triage room
E.R. Admissions
Patient B - erratic pacemaker
Patient A - broken leg
Hallway
Students may be asked to evaluate alternative layouts for an emergency room. Perhaps a visit to view a local emergency room might be helpful.

48. Steps in Developing a Process-Oriented Layout
Construct a “from-to matrix”
Determine space requirements for each department
Develop an initial schematic diagram
Determine the cost of this layout
By trial-and-error (or more sophisticated means), try to improve the initial layout
Prepare a detailed plan that evaluates factors in addition to transportation cost
The criterion for this methodology is basically a number-of-parts (or people)-times-distance measure. Is this always useful or appropriate?

49. Cost of Process-Oriented Layout
Now that cost can be determined, ask students (1) whether this is an appropriate criteria, and (2) how they would go about minimizing cost.

50. Interdepartmental Flow of Parts1 2 3 4 5 6 50
100 20 30 10
Note that the matrix above basically measures the flow between sites, direction is immaterial. We can also develop entries for the remainder of the matrix if a different cost or route applies depending upon whether one is coming or going.

51. Possible Layout 1 Assembly Department (1) Printing (2) Machine Shop
(3)
Receiving
(4)
Shipping
(5)
Testing
(6)
Room 1 Room 2 Room 2
Room 4 Room 5 Room 6
60’
40’

52. Interdepartmental Flow Network Showing Number of Weekly Loads
100 1 1 2 3 50 30 20
100 50 20 10 4 5 6 50
근접운반비 (Adjacent Cost) = $1,
비근접운반비 (Non-Adjacent C.) = $2
Total Cost = = $570

53. Possible Layout 2 Painting Department (2) Assembly (1) Machine Shop
(3)
Receiving
(4)
Shipping
(5)
Testing
(6)
Room 1 Room 2 Room 2
Room 4 Room 5 Room 6
60’
40’

54. Interdepartmental Flow Graph Showing Number of Weekly Loads30 2 1 3 50
100
100 20 50 20 10 4 5 6 50
근접운반비(Adjacent Cost)= $1,
비근접운반비(Non-Adjacent C.)=$2
Total Cost = =$480

55. Computer Programs to Assist in Layout
CRAFT
SPACECRAFT
CRAFT 3-D
MULTIPLE
CORELAP
ALDEP
COFAD
FADES - expert system
It is probably useful to note that these programs operate on the basis of heuristics - and do not necessarily produce the optimal answer.

56. Cellular Layout - Work Cells
A temporary product-orient arrangement of machines and personnel in what is ordinarily a process-oriented facilities
Students should be asked to comment upon the technology required to implement the concept of work cells. Under what conditions is such a cellular arrangement possible?

57. Work Cell Floor Plan
Office
Tool Room
Work Cell
Saws
Drills

58. Improving Layouts by Moving to the Work Cell Concept

59. Work Cell Advantages Inventory Equipment utilization Floor space
Direct labor costs
Equipment utilization
Employee participation
Quality

60. Office Layout
Design positions people, equipment, & offices for maximum information flow
Arranged by process or product
Example: Payroll dept. is by process
Relationship chart used
Examples
Insurance company
Software company

61. Relationship Chart (부문상호관계표)1
Ordinary closeness: President (1) & Costing (2)
1 President 2 O 3
2 Costing U 4 A A
3 Engineering I
Absolutely necessary: President (1) & Secretary (4) O
4 President’s Secretary

62. Office Relationship Chart
1 President
2 Chief Technology Officer
3 Engineer’s Area
4 Secretary
5 Office entrance
7 Equipment cabinet
8 Photocopy equipment
9 Storage room U I A O E X
Val.
Closeness A
Absolutely necessary E
Especially important I
Important O
Ordinary OK U
Unimportant X
Not desirable

63. Retail /Service Layout - Grid Design
Office
Carts
Check- out
Grocery Store
Meat
Bread
Milk
Produce
Frozen Foods

64. Store Layout - with Dairy, Bread, High Drawer Items in Corners
Students should be asked to identify differences between this and the previous slide.

65. Warehouse Layout
Design balances space (cube) utilization & handling cost
Similar to process layout
Items moved between dock & various storage areas
Optimum layout depends on
Variety of items stored
Number of items picked

66. An Assembly Line Layout

67. Line Balancing Precedence diagram Cycle time
Network showing order of tasks and restrictions on their performance
Cycle time
Maximum time product spends at any one workstation

68. Line Balancing Precedence diagram Cycle time Cycle time example Cd =
Network showing order of tasks and restrictions on their performance
Cycle time
Maximum time product spends at any one workstation
Cycle time example
Cd =
production time available
desired units of output
Cd =
(8 hours x 60 minutes / hour)
(120 units)
Cd = = 4 minutes
480
120

69. Flow Time vs Cycle Time Cycle time = max time spent at any station
Flow time = time to complete all stations

70. Cycle time = max (4, 4, 4) = 4 minutes
Flow Time vs Cycle Time
Cycle time = max time spent at any station
Flow time = time to complete all stations 1 2 3
4 minutes
Flow time = = 12 minutes
Cycle time = max (4, 4, 4) = 4 minutes

71. Minimum number of workstations
Efficiency of Line  i
i = 1 ti
nCa
E = Cd
N =
Efficiency
Minimum number of workstations
where
ti = completion time for element i
j = number of work elements
n = actual number of workstations
Ca = actual cycle time
Cd = desired cycle time

72. Line Balancing Process
1. Draw and label a precedence diagram.
2. Calculate the desired cycle time required for the line.
3. Calculate the theoretical minimum number of workstations.
4. Group elements into workstations, recognizing cycle time and precedence constraints.
5. Calculate the efficiency of the line.
6. Stop if theoretical minimum number of workstations on an acceptable efficiency level reached. If not, go back to step 4.

73. Line Balancing WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
Desired unit of output : 6,000 units
Available working hour a day : 40 Hrs

74. Line Balancing D B C A WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
0.1
0.2
0.4
0.3 D B C A

75. Line Balancing D B C A WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
0.1
0.2
0.4
0.3 D B C A
Cd = = = 0.4 minute
40 hours x 60 minutes / hour
6,000 units
2400
6000
N = = = 2.5 workstations
1.0
0.4

76. Line Balancing D B C A WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
0.1
0.2
0.4
0.3 D B C A
Cd = = = 0.4 minute
40 hours x 60 minutes / hour
6,000 units
2400
6000
N = = = 2.5 workstations
1.0
0.4
3 workstations

77. Line Balancing D B C A WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

78. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

79. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

80. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

81. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

82. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
3 D 0.1 none
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

83. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
3 D 0.1 none
A, B C D
Work station 1
Work station 2
Work station 3
0.3 minute
0.4 minute
Cd = 0.4
N = 2.5
0.1
0.2
0.4
0.3 D B C A

84. Line Balancing D B C A REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
3 D 0.1 none
A, B C D
Work station 1
Work station 2
Work station 3
0.3 minute
0.4 minute
0.1
0.2
0.4
0.3 D B C A
Cd = 0.4
N = 2.5
E = = = = 83.3%
3(0.4)
1.0
1.2

85. Announcement Next week Exam I HW (제출하지 않음) Concepts, Terms
Calculation Problems Examples, Solved problems, and HW
HW (제출하지 않음)
Example 1, 2
Solved Problem 1

86. Good Bye!