Process Selection and Facility Layout Chapter 6 Process Selection and Facility Layout McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 6: Learning Objectives You should be able to: Explain the strategic importance of process selection Describe the influence that process selection has on the organization Compare the basic processing types Explain the need for management of technology List some reasons for redesign of layouts Describe the basic layout types, and the main advantages and disadvantages of each Solve simple line-balancing problems Instructor Slides 6-2

I. Process Selection Process selection Refers to deciding on the way production of goods or services will be organized. How will we produce? It has major implications for Capacity planning Layout of facilities Equipment Design of work systems Instructor Slides 6-3

Process Selection and System Design Forecasting Product and Service Design Technological Change Capacity Planning Process Selection Facilities and Equipment Layout Work Design 6-4 Instructor Slides

Process Strategy Key Aspects of Process Strategy: Capital Intensity The mix of equipment and labor that will be used by the organization Process flexibility The degree to which the system can be adjusted to changes in processing requirements due to such factors as Product and service design changes Volume changes Changes in technology Instructor Slides 6-5

Process Selection Process choice is demand driven: Variety How much? Equipment flexibility To what degree? Volume Expected output? Job Shop Repetitive Batch Continuous 6-6 Instructor Slides

Process Types Job shop Batch Repetitive/assembly line Continuous Small scale; customizable; craft Batch Moderate volume of related items. Repetitive/assembly line High volumes of standardized goods or services Continuous Very high volumes of non-discrete goods

Types of Processing Job Shop Batch Repetitive/ Assembly Continuous 6-8 Description Customized goods or services Semi- standardized Standardized Highly standardized Goods or services Advantages Able to handle a wide variety of work Flexibility; easy to add or change products or services Low unit cost, high volume, efficient Very efficient, very high volume Disadvantages Slow, high cost per unit, complex planning and scheduling Moderate cost moderate complexity Low flexibility, high cost of downtime Very rigid, lack of variety, costly to change, very high cost of downtime 6-8 Instructor Slides

Product-Process Matrix 6-9 Instructor Slides

Process Choice Effects Activity/ Function Job Shop Batch Repetitive Continuous Projects Cost estimation Difficult Somewhat routine Routine Simple to complex Cost per unit High Moderate Low Very high Equipment used General purpose Special purpose Varied Fixed costs Variable costs Very low Labor skills Low to high Marketing Promote capabilities capabilities; semi-standardized goods and services standardized goods/services Scheduling Complex Moderately complex Complex, subject to change Work –in-process inventory 6-10 Instructor Slides

Product and Service Profiling Process selection involves Substantial investment in equipment Has a very specific influence on layout Product or service profiling Linking key product or service requirements to process capabilities Key dimensions relate to Range of products or services that will be processed Expected order sizes Pricing strategies Expected frequency of schedule changes Order-winning requirements Instructor Slides 6-11

Selecting a Process Selecting your process depends upon the characteristics of your product. For the following examples, what is the BEST process? Why? (1)Upscale, gourmet restaurant serving French cuisine, each meal prepared by hand by the Chef. (2)Cheesecake company specializing in 13 varieties of cheesecakes, shipped to individual customers and restaurants.

Technology Technological Innovation Technology The discovery and development of new or improved products, services, or processes for producing or providing them Technology The application of scientific discoveries to the development and improvement of products and services and/or the processes that produce or provide them Instructor Slides 6-13

Automation Automation Machinery that has sensing and control devices that enable it to operate automatically Fixed automation Programmable automation Flexible automation 6-14 Instructor Slides

Programmable Automation Involves the use of high-cost, general-purpose equipment controlled by a computer program that provides both the sequence of operations and specific details about each operation Computer-Aided Manufacturing (CAM) The use of computers in process control, ranging from robots to automated quality control Numerically Controlled (N/C) Machines Machines that perform operations by following mathematical processing instructions Robot A machine consisting of a mechanical arm, a power supply, and a controller 6-15 Instructor Slides

Flexible Automation Flexible automation evolved from programmable automation. It uses equipment that is more customized than that of programmable automation. A key difference between the two is that flexible automation requires significantly less changeover time. FMS (Flexible Manufacturing System) A group of machines designed to handle intermittent processing requirements and produce a variety of similar products CIM (Computer Integrated Manufacturing) A system for linking a broad range of manufacturing activities through an integrated computer system 6-16 Instructor Slides

II. Facilities Layout Layout the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system Facilities layout decisions arise when: Designing new facilities Re-designing existing facilities 6-17 Instructor Slides

Does Layout Matter? Read…… “Designing Supermarkets”, page 258/186. Does the layout of the supermarket influence customers purchasing habits? Identify specific layout strategies supermarkets use to get you to spend more. What are the most profitable items? Where are they? Why? What is “the prison”?

The Need for Layout Planning Inefficient operations High cost Bottlenecks Accidents or safety hazards Changes in product or service design Introduction of new products or services Changes in output volume or product mix Changes in methods or equipment Changes in environmental or other legal requirements Morale problems 6-19 Instructor Slides

Layout Design Objectives Basic Objective Facilitate a smooth flow of work, material, and information through the system Supporting objectives Facilitate product or service quality Use workers and space efficiently Avoid bottlenecks Minimize material handling costs Eliminate unnecessary movement of workers or material Minimize production time or customer service time Design for safety Instructor Slides 6-20

Basic Layout Types Product layouts Process layouts Fixed-Position layout Combination layouts 6-21 Instructor Slides

Repetitive Processing: 1. Product Layouts Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow Raw materials or customer Finished item Station 2 3 4 Material and/or labor 1 Used for Repetitive Processing Repetitive or Continuous 6-22 Instructor Slides

Product Layouts: Advantages & Disadvantages High rate of output Low unit cost Labor specialization Low material handling cost per unit High utilization of labor and equipment Established routing and scheduling Routine accounting, purchasing, and inventory control Disadvantages Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume or product or process design Highly susceptible to shutdowns Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses Individual incentive plans are impractical Instructor Slides 6-23

Non-repetitive Processing: 2. Process Layouts Layouts that can handle varied processing requirements Dept. A Dept. B Dept. D Dept. C Dept. F Dept. E Used for Intermittent processing Job Shop or Batch 6-24 Instructor Slides

Process Layouts: Advantages & Disadvantages Can handle a variety of processing requirements Not particularly vulnerable to equipment failures General-purpose equipment is often less costly and easier and less costly to maintain It is possible to use individual incentive systems Disadvantages In-process inventories can be high Routing and scheduling pose continual challenges Equipment utilization rates are low Material handling is slow and inefficient Reduced spans of supervision Special attention necessary for each product or customer Accounting, inventory control, and purchasing are more involved Instructor Slides 6-25

3. Fixed Position Layouts Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed 6-26 Instructor Slides

4. Combination Layouts Some operational environments use a combination of the three basic layout types: Hospitals Supermarket Shipyards Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts Cellular manufacturing Flexible manufacturing systems 6-27 Instructor Slides

Service Layout Service layouts can be categorized as: product, process, or fixed position Service layout requirements are somewhat different due to such factors as: Degree of customer contact Degree of customization Common service layouts: Warehouse and storage layouts Retail layouts Office layouts Instructor Slides 6-28

Cellular Layouts Cellular production Layout in which workstations are grouped into a cell that can process items that have similar processing requirements Groupings are determined by the operations needed to perform the work for a set of similar items, part families, that require similar processing The cells become, in effect, miniature versions of product layouts 6-29 Instructor Slides

Group Technology Group technology The grouping into part families of items with similar design or manufacturing characteristics Design Characteristics: Size Shape Function Manufacturing or processing characteristics Type of operations required Sequence of operations required Requires a systematic analysis of parts to identify the part families 6-30 Instructor Slides

Service Layouts Two key factors: Layouts: Customer contact Degree of customization Layouts: Warehouse and storage layouts Retail layouts Office layouts 6-31 Instructor Slides

III. Line Balancing Line balancing The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements Goal: Obtain task grouping that represent approximately equal time requirements since this minimizes idle time along the line and results in a high utilization of equipment and labor Why is line balancing important? It allows us to use labor and equipment more efficiently. To avoid fairness issues that arise when one workstation must work harder than another. Instructor Slides 6-32

Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements. ***** Open the Word file on the course website for Chapter 6 for specific notes on line balancing that we will use in class and examples we will work.

Cycle Time Cycle time The maximum time allowed at each workstation to complete its set of tasks on a unit Cycle time also establishes the output rate of a line 6-34 Instructor Slides

How Many Workstations are Needed? The required number of workstations is a function of Desired output rate Our ability to combine tasks into a workstation Theoretical minimum number of stations Instructor Slides 6-35

Precedence Diagram Precedence diagram A diagram that shows elemental tasks and their precedence requirements 6-36 Instructor Slides

Assigning Tasks to Workstations Heuristic Rules for Line Balancing that we will use in the class, and must be used on homework and exams: Assign task with no predecessors (or where proceeding tasks have already been assigned). Assign tasks in order of most following tasks Count the number of tasks that follow Assign tasks in order of longest processing time. YOU MUST KNOW THESE RULES. 6-37 Instructor Slides

Measuring Effectiveness Balance delay (percentage of idle time) Percentage of idle time of a line Efficiency Percentage of busy time of a line Instructor Slides 6-38

Homework Finish any examples in class notes Page 277, problem 1, a,b,c,d,e Page 278, problem 4, a (1,2,3,4) Page 278, problem 5, a, b, c (based on min. cycle time), d (use line balancing rules for this class) Line Balancing Rules for this class 1. Assign tasks with no predecessors (or tasks have been assigned) 2. Assign tasks with greatest number of following tasks 3. Assign tasks with longest processing time.