Chapter 3 MANAGING THE TRANSFORMATION PROCESS

Issues in Transformation Process Issue #1: Investment in Technology Is your technology increasing your competitive advantage? The decision is about the right technology for the right reason. Technology is dynamic, and must be integrated with other areas, such as human skills and capabilities, and financial aspect Invest or not to invest? Yes/No? – Justification in investment! has to go beyond simply replacing labour costs to the principle of competitive advantage in other areas, such as product quality, delivery speed and delivery reliability. http://www.forbes.com/sites/att/2014/12/08/6-common-mistakes-to-avoid-when-making-technology-investments-for-your-small-business/ Issue #2:The process choice The decision about the appropriate method and process (technology) transforms inputs into products within the plant Must the understand the layout. The layout decision will have the impact on the process choice

Fixed-Position Layout Product remains in one place Workers and equipment come to site Complicating factors Limited space at site Different materials required at different stages of the project Volume of materials needed is dynamic

Process-Oriented Layout Surgery Radiology ER triage room ER Beds Pharmacy Emergency room admissions Billing/exit Laboratories Patient A - broken leg Patient B - erratic heart pacemaker Figure 9.3

Process-Oriented Layout Arrange work centers so as to minimize the costs of material handling Basic cost elements are Number of loads (or people) moving between centers Distance loads (or people) move between centers

Product-Oriented Layout Organized around products or families of similar high-volume, low-variety products Volume is adequate for high equipment utilization Product demand is stable enough to justify high investment in specialized equipment Product is standardized or approaching a phase of life cycle that justifies investment Supplies of raw materials and components are adequate and of uniform quality

Product-Oriented: assembly line

Cellular Layout Cellular Layout :small teams of workers handle all aspects of building a component, a “family” of components, or even a finished product. Each team works in a small area, or cell, equipped with everything that it needs to function as a self-contained unit. Machines are sometimes configured in a U-shape, with people working inside the U. Because team members often share duties, they’re trained to perform several different jobs. Teams monitor both the quantity and the quality of their own output. This arrangement often results in faster completion time, lower inventory levels, improved quality, and better employee morale.

https://www.youtube.com/watch?v=c50_lAIfzsk

Process Choice Process Choice Layout Project processes: Unique Not repeated Large Scale Complex Example: House / ship building Fixed Position layout

Process Choice Process Choice Layout Job processes: ‘one-off’ design general purpose process technology Many different products materials handling has to be modified to suit many different products and types. Process Oriented layout

Process Choice Process Choice Layout Line processes: Big volume greater standardization Value and cost are added at each stage of manufacture until the product is completed. The line is dedicated to a particular product Short processing times Workstations located closely to minimize materials handling Materials flow and control is critical and stock-outs have to be avoided. Product/Assembly layout

Process Choice Process Choice Layout Continuous processes: Very high volume product the process is dedicated to making only one product. Huge investment for automation Example: Steel manufacturer Food processing Product layout

Summary the link between process choice and layout

Process choice and competitive factors

From Pure Standardization to Pure Customization

Flexible Manufacturing System Flexible manufacturing is an element of mass customization Where mass production’s process ‘strategy’ emphasized efficiency in production, modern world-class manufacturing firms emphasize product quality, differentiation and any other factor perceived to be important for customers.

Illustration example of a FMS

FMS Example Body Shop Paint Shop Final Assembly Through the use of reprogrammable tooling in the body shop, standardized equipment in the paint shop and common build sequence in final assembly, Ford can build multiple models on one or more platforms in one plant. In the body shop, where the sheet metal comes together to form the vehicle’s body, flexibility means more than 80 percent of the tooling is not specific to one model. It can be reprogrammed to weld a car or a truck or a crossover of similar size. Body Shop In the paint shop, flexibility means robotic applicators are programmed to cover various body styles – as they move through the paint booth – with equal precision. This results in minimizing waste and environmental impact while maximizing quality. Paint Shop In the final assembly area, flexibility means the build sequence is the same among multiple models on one or more platforms allowing for efficient utilization of people and equipment. Final Assembly