1. Manufacturing Processes
CHAPTER 4

2. 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

3. 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

4. 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

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

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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. Example 4.1

18. Layout of Production Process

19. 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.

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

21. 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

22. Manufacturing Cell Layout

23. Manufacturing Cell Layout

24. Assembly Line Layouts

25. Continuous Process Layout

26. 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.

27. 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

28. 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

29. 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

30. Example 4.2

31. Example 4.2
Step 1

32. 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

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

34. Example 4.2
Step 5

35. Example 4.2
Step 5

36. 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?

37. 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 ?

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

39. Flexible and U-Shaped Line

40. Flexible and U-Shaped Line

41. Flexible and U-Shaped Line

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

43. 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

44. 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

45. 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

46. End of Chapter 4