1. Manufacturing and Service Processes
Chapter 06

2. Learning Objectives Understand what a production process is.
Understand the idea of production process mapping.
Define Little’s law.
Demonstrate how production processes are organized.
Describe the product-process matrix.
Provide an overview of how the different types of production processes are designed.
Understand how to design and analyze an assembly line.

3. Types of Firms Make-to-Stock
Serve customers from finished goods inventory
Make-to-Stock
Combine a number of preassembled modules to meet a customer’s specifications
Assemble-to-Order
Make the customer’s product from raw materials, parts, and components
Make-to-Order
Work with the customer to design and then make the product
Engineer-to-Order

4. Make-to-Stock Examples of products
Televisions
Clothing
Packaged food products
Essential issue in satisfying customers is to balance the level of inventory against the level of customer service
Easy with unlimited inventory but inventory costs money
Trade-off between the costs of inventory and level of customer service must be made
Use lean manufacturing to achieve higher service levels for a given inventory investment

5. Assemble-to-Order
A primary task is to define a customer’s order in terms of alternative components since these are carried in inventory
An example is the way Dell Computer makes their desktop computers
One capability required is a design that enables as much flexibility as possible in combining components
There are significant advantages from moving the customer order decoupling point from finished goods to components

6. Make-to-Order/Engineer-to-Order
Boeing’s process for making commercial aircraft is an example
Customer order decoupling point could be in either raw materials at the manufacturing site or the supplier inventory
Depending on how similar the products are it might not even be possible to pre-order parts

7. Production Process Mapping
Develop a high-level map of a supply chain process
Useful to understand how material flows and where inventory is held
First step in analyzing the flow of material through a production process

8. Inventory Measures
Total average value of inventory - the sum of the value (at cost) of the raw material, work-in process, and finished goods inventory
Commonly tracked in accounting systems and reported in financial statements
Inventory turns - the cost of goods sold divided by the average inventory value
Not particularly useful for evaluating the performance of a process
Days of supply - the inverse of inventory turns scaled to days

9. Organization of Production Processes
Project – the product remains in a fixed location, equipment is moved to the product
Workcenter (job shop) - similar equipment or functions are grouped together
Manufacturing cell - a dedicated area where products that are similar in processing requirements are produced
Assembly line - work processes are arranged according to the progressive steps by which the product is made
Continuous process - assembly line only the flow is continuous such as with liquids

10. Production System Design
The product remains in a fixed location
A high degree of task ordering is common
A project layout may be developed by arranging materials according, to their assembly priority
Project Layout
Most common approach to developing this type of layout is to arrange workcenters in a way that optimizes the movement of material
Optimal placement often means placing workcenters with large interdepartmental traffic adjacent to each other
Sometimes is referred to as a department and is focused on a particular type of operation
Workcenter

11. Production System Design
Formed by allocating dissimilar machines to cells that are designed to work on similar products (shape, processing, etc.)
Manufacturing Cell
Designed for the special purpose of building a product by going through a series of progressive steps
Assembly Line and Continuous Layout

12. Manufacturing Cell Development
Group parts into families that follow a common sequence of steps.
Identify dominant flow patterns for each part family
Machines and the associated processes are physically regrouped into cells
Workcenter layout – similar machines grouped together

13. Regrouped Machines
Manufacturing cell layout – dissimilar machines grouped together by product

14. Assembly Line Design
Workstation cycle time - a uniform time interval in which a moving conveyor passes a series of workstations
Also the time between successive units coming off the line
Assembly-line balancing - assigning tasks to a series of workstations so that the required cycle time is met and idle time is minimized
Precedence relationship - the order in which tasks must be performed in an assembly process

15. Mixed-Model Line Balancing
Most factories produce a number of different products
Inventory can be reduced by building some of each product during every period (e.g. day, week, etc.)
Mixed-model line balancing is one means of scheduling this varied production