Presentation on theme: "Context of Manufacturing"— Presentation transcript:
1 Context of Manufacturing Manufacturing SystemsContext of Manufacturing
2 Manufacturing Systems The Context of ManufacturingQuality ManagementProject ManagementConcurrent EngineeringManufacturing System Design and Control
3 The Context of Manufacturing Manufacturing is part of a bigger scheme known as operations.Operations takes in all systems that involve getting work done.servicesmanufactureThe same principles apply to both.
4 The Context of Manufacturing Operations is a transformation process.Inputs are transformed into outputs.Goal is to create and add value to the inputs during the transformation.InputsMaterialsLabourEquipmentCapitalOutputsGoodsServicesTransformation processManufacture: adding value to a raw material by changing its shape or properties.
5 Manufacturing process Technical terms: manufacturing process is used to turn raw material into finished items.Scrap and wasteStarting materialProcessed PartMachineryToolingPowerLabourManufacturing process
6 Manufacturing Process Economics terms: the value added to the inputs is important.Starting materialProcessed PartMaterial in processManufacturing Process€€€€€€Added Value
7 Manufacturing Industries can be grouped into: Primary – exploit natural resourcesSecondary – converts primary outputs intoconsumer goods - manufacturingTertiary – contributes to the service sector
8 Business Strategies Companies exist to make a profit Products offered by more than one companyCompanies compete for market shareCompany needs a strategyDirectionFocus
9 Business Strategies A strategy consists of four steps: Define a primary taskAssess core competenciesDetermine order qualifiers and order winnersPosition the firm
10 Business Strategies 1. Define a primary task Represents the purpose of the firm - what is its businessIdentifies the area in which it will be competing - stated in broad terms.e.g. Iarnrod Eireann is in the business of Transportation, not RailwaysOften expressed as a mission statement.Amazon.com - ‘To provide the fastest, easiest, most enjoyable shopping experience’
11 Business Strategies 2. Assess core competencies Identify what the company does bestUsually based on knowledge or processesRarely single product or technology – easily copiedDell Computer: is the ability to quickly assemble computers to order and to deliver them to customers without delay.
12 Business Strategies 3. Determine order qualifiers and order winners An order qualifier is a characteristic of a product that will make a consumer consider buying it.An order winner is the characteristic of a product that will make the consumer purchase it.Buying a car:Order qualifier - priceOrder winner - model with the most features
13 Business Strategies 4. Position the firm Choose one or two important things to concentrate on and do extremely well.Defines:how well the firm competes in the marketplacewhat unique value it will deliver to the consumerRelative strengths of competitors must be taken into accountApple computers do not compete with companies such as Dell for its market – they concentrate on a niche market for innovative products such as the iPhone, IPod where they are often first to the market.
14 Manufacturing Strategies Different ways of offering a product:Make to stockProducts are designed, produced and delivered to customer specifications in response to an orderMake to orderProducts are designed and produced for a ‘standard’ customer in anticipation of demand.Assemble to orderBase unit or module is produced onto which options can be added according the specification of the customer.
15 Manufacturing Strategies Types of Production Processes:ProjectLong time to completeLarge investment in resourcesOne item to customer orderBatch productionProduct produced in batchesVolume relatively lowDemand for item can fluctuate
16 Manufacturing Strategies Types of Production Processes:Mass ProductionLarge volume of standard productDemand is stableDemand is highContinuous ProductionVery high volume productsHighly standardisedHighly automated systems
17 Product Process Matrix Relationship between volume levels and standardisation of a product and its manufacturing processContinuous ProductionHighMass ProductionVolume of productsBatch ProductionProjectsLowLowHighStandardisation
18 Functional Organisation of a Manufacturing Enterprise Finance / AccountingBudgetsStockholder requirementsCost AnalysisProduction and Inventory dataOrdersQuality requirementsDesign SpecsMaterial availabilityQuality data etc.SuppliersSales ForecastsCustomer ordersCustomer feedbackPromotionsStatus of orderMarketingManufacturingHiring/FiringTrainingLegal requirementsJob designUnion negotiations etc.Human Resources
19 Key Success Factors in Manufacturing Competitiveness Global market means more customers but also more competitionCompanies will usually compete on:Cost - Ryanair, PenneysQuality - Toyota, MercedesFlexibility - DellSpeed - Dell, McDonalds
20 Simple System for Costing Often a choice is available:Make the product individuallyCosts moreNo setup costSet up tooling and mass produceSetup costCost less to make once set up
21 Simple System for Costing Break even AnalysisUsed to choose the most economical method for making a given number of parts.orFinding the least number of parts to justify setting up a mass production system
22 Simple System for Costing Break even AnalysisCostNumber of units madeTotal Cost of process ATotal Cost of process BChoose Process AChoose Process BBreak Even Quantity
23 Simple System for Costing Example:Qty: 500 requiredSkilled labour costs €2.50 per item to manufacture using the lathe.Unskilled labour costs €0.50 to manufacture using the automated press.The setup cost of the press tool is €500