Manufacturing Processes CHAPTER 4

Learning Objectives After completing this chapter you will: Know how production processes are organized Know the trade-offs that need to be considered when designing a production process Know what the product-process matrix is Understand how break-even analysis is just as important in operations and supply-chain analysis as it is in other areas Understand how to design an assembly line

Toshiba Producer of the 1st notebook Strength in the notebook market Aggressively priced products Technologically innovative products Retaining its position by Relentlessly improving its manufacturing processes Lowering its costs Designing Toshiba’s notebook computer line The case at the end of this chapter

Production Processes Process selection Strategic decision of selecting which kind of production processes to use to produce a product or provide service Five basic structures (defined by the general pattern of workflow) Project Workcenter Manufacturing cell Assembly line Continuous process 11

Project Product remains in a fixed location. Manufacturing equipment is moved to the product. Chapter 2 describes project management techniques.

Workcenter (WC) Place where similar equipment of functions grouped together. A part being worked on then travels from WC to WC. Jobshop

Manufacturing Cell A dedicated area where products that are similar in processing requirements are produced. A firm may have many different cells in a production area

Assembly Line Assembly line Where work processes are arranged according to the progressive steps by which the product is made. Discrete parts are made by moving from workstation to workstation at a controlled rate. Ex. Toys, appliances, automobiles

Continuous Process Similar to an assembly line, but the flow is continuous rather than discrete. Such structures Are highly automated Constitute one integrated “machine” Ex. Petroleum, chemicals, drugs

Product-Process Matrix: Framework Describing Layout Strategies Workcenter Manufacturing Cell Assembly Line Continuous Process Product Volume High Low Project Product-Process Matrix: Framework Describing Layout Strategies Product Standardization Low - one-of-a-kind High - standardized commodity product

Equipment Selection Trade-off between Ex. More specialized vs. Less specialized Special-purpose vs. General-purpose Ex. Drill press vs. Hand drill [Setup time] Some time vs. Quick [Time per unit] Quick vs. Slow

Break-Even Analysis A standard approach to choosing alternative processes or equipment. Break-even chart Alternative profits and losses vs. # of units produced or sold The choice obviously depends on anticipated demand Suitable when There is a large initial investment and fixed cost Variable costs are proportional to the # of units produced

Break-Even Analysis Break-Even Point = Break-Even Demand the point in units produced (and sold) where we will start making profit on the process or equipment where total revenue and total cost are equal Break-Even Point for single alternative

Break-Even Analysis (Continued) Break-even Demand= Purchase cost of process or equipment Price per unit - Cost per unit or Total fixed costs of process or equipment Unit price to customer - Variable costs per unit This formula can be used to find any of its components algebraically if the other parameters are known 14

Break-Even Analysis (Continued) Example: Suppose you want to purchase a new computer that will cost $5,000. It will be used to process written orders from customers who will pay $25 each for the service. The cost of labor, electricity and the form used to place the order is $5 per customer. How many customers will we need to serve to permit the total revenue to break-even with our costs? Break-even Demand: = Total fixed costs of process or equip. Unit price to customer – Variable costs =5,000/(25-5) =250 customers 14

Example 4.1 Three options for obtaining a machined part Fixed cost Purchase at $200 per unit (no fixed cost) Make it at $75 per unit using semiauto-lathe Make it at $15 per unit using MC Fixed cost Semiautomatic lathe: $80,000 Machining center: $200,000 Break-Even Analysis for multiple options

Example 4.1

Layout of Production Process

Project Layout Visualize a product as the hub of wheel Materials and equipment arranged concentrically around the production point in the order of use and movement difficulty A project layout may be developed by arranging materials according to their technological priority.

Workcenters Layout Arrange WCs in a way that optimizes the movement of material

Manufacturing Cell Layout Allocating dissimilar machines to cells that are designed to work on products that have similar shapes and processing requirements Developing a manufacturing cell Group parts into families Identify dominant flow patterns for each part family Regroup machines into cells

Manufacturing Cell Layout

Manufacturing Cell Layout

Assembly Line Layouts

Continuous Process Layout

Assembly-Line Design Workstation cycle time At workstation, The time between successive units coming off the end of the line. At workstation, Work is performed on a product By adding parts By completing assembly operations The work is made up of many bits of work, i.e., tasks.

Assembly-Line Balancing Assembly-line balancing problem Assigning all tasks to a series of workstations Sum of processing time of tasks in each workstation cannot be larger than workstation cycle time. Unassigned time across all workstations is minimized

Assembly-Line Balancing Procedure 1. Specify the sequential relationships among tasks 2. Determine the required workstation cycle time (C) 3. Determine the theoretical minimum number of workstations 4. Select assignment rules 5. Assign tasks to form 1st WC using AS rules. Repeat the process until all tasks are assigned 6. Evaluate the efficiency 7. If unsatisfactory, rebalance

Example 4.2 The Model J Wagon Workstation cycle time Production time per day: 420 mins. Required output per day: 500 wagons Find the balance that minimizes the # of WC

Example 4.2

Example 4.2 Step 1

Example 4.2 Step 2 = 60 × 420 / 500 = 25200/500 = 50.4 Step 3 C = (Production time per day)/(Output per day) = 60 × 420 / 500 = 25200/500 = 50.4 Step 3 = T/C = 195/50.4 = 3.87 = 4

Example 4.2 Step 4 Assignment rule Primary rule: the largest number of following tasks. Secondary rule: the longest task time.

Example 4.2 Step 5

Example 4.2 Step 5

Example 4.2 Step 6 Efficiency = T/( C) = 195/(5)(50.4) = .77 or 77% Step 7 Imbalance 23% idle time Workstation 5! Better balance?

Splitting Tasks Longest time task Example Shortest workstation cycle time Lower time bound Example Tasks with times 40, 30, 15, 25, 20, 18 Line runs 450 mins. & output demand is 750 C = 36 secs. 40-second task ?

Splitting Tasks Split the task Share the task Use parallel workstations Use a more skilled worker Work overtime Redesign the product

Flexible and U-Shaped Line

Flexible and U-Shaped Line

Flexible and U-Shaped Line

Mixed-Model Line Balancing Objective Meet the demand for a variety of products Avoid building high inventories MML balancing Scheduling several different models

Question Bowl What is the break-even in demand for a new process that costs $25,000 to install, will generate a service product that customers are willing to pay $500 per unit for, and whose labor and material costs for each unit is $100? 400 units 250 units 100 units 62.5 units None of the above 7

Question Bowl Fast food Grocery Hospitals Chemical company Which of the following is an example of a Continuous process? Fast food Grocery Hospitals Chemical company None of the above 7

Summary Five Basic Production Processes Break-Even Analysis Project, WC, Manufacturing Cell, Assembly Line, Continuous Process Break-Even Analysis Production system layout Assembly line design

End of Chapter 4