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Manufacturing, Service Operations and Logistics from Prof. Goldsman’s lecture notes
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Outline Manufacturing and Service Terminologies Product/Process Matrix
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Vocabulary List ManufacturingService Setup, setup cost Lot or batch size Product mix Capacity Custom process/project Jobshop Batch flow/batch process Line flow/flowshop/flowline/mass production Continuous flow Product/process matrix Capital intensive, labor intensive
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Manufacturing versus Service Manufacturing: makes things Physical goods: books, cellphones, pipes, bricks, cars, … Service: makes intangible items Education, lawyers and other professionals, repairs, hotels, entertainment, … Created, delivered, and consumed at once << capital investments compared to manufacturing
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Why Service Matters? Growing sector Newer, hence more opportunities for IEs Environmental concerns turning manufacturing into service Buy transportation, not a car!
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Product/Process Matrix PRODUCT MIX PROCESS PATTERN One of a kind or few Low Vol. many products Higher Vol. several major products Very high Vol. Std product (commodity) Challenges for management Very jumbled flow; process segments loosely linked PROJECT JOBSHOP Scheduling; materials handling; shifting bottlenecks Jumbled flow; but a dominant flow exists BATCH FLOW Worker motivation; balance; maintaining enough flexibility Line flowLINE FLOW Cont, automated, rigid flow; process segments tightly linked CONTINUOUS FLOW Capital expenses for big chunk capacity; technological changes; material mgt; vertical integration Challenges for Mangement Bidding; delivery; product design, flexibility Quality (product diff ’ n); flex in output vol. Price Stay on the diagonal!
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Note That … During the lifecycle of a product (Product Life Cycle), the process strategy may change Computers? Many real process don ’ t fit so neatly into these categories It ’ s just a guidelines!
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Supply Chain Management “Consist of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers and customer themselves” – Chopra and Meindl Assembler Distributors Suppliers Logistics Providers Suppliers’ Suppliers Customer
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Supply Chain Management PhysicalProduct SCM Money Information
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ManufacturersWholesale Distributors Suppliers Customers Information Flows Goods Flow Retailers The Traditional Supply Chain
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Customers Today’s Supply Chain Supplier Exchanges Customer Exchanges Logistics Exchanges Contract Manufacturers Logistics Providers Virtual Manufacturers Manufacturers Wholesale Distributors Information Flows Goods Flow Retailers
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Four Categories of SCM*) *) Michael Hugo PLAN SOURCE MAKE DELIVER
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Plan-Source-Make-Deliver Procurement Credit and Collections Product Design Productions Scheduling Facility Management Order Management Delivery Scheduling Make Deliver Demand Forecasting Product Pricing Inventory Management Plan Source
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Benefit of SCM Delivery Performance Inventory Reduction Fulfillment Cycle Time Forecast Accuracy Overall Productivity Lower Supply-Chain Costs Fill Rates Improved Capacity Realization Increase Competitiveness
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Customer Results: Increased ROI wPlanning Cycle Time wOperating Expenses (Overtime) expenses wCustomer Service wThroughput revenues wInventory wOrder LT wProduction LT assets ROI
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Key Drivers Key drivers to the SCM process are: –Shorter life cycles –Reduced costs –Improved customer service
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Program Binusian 2012 17 hours days weeks months year + buy make move sell store operational tacticalstrategic scheduling strategicbusinessplanningstrategicbusinessplanning master planning demand fulfillment manufacturing planning scheduling distribution planning transportation planning demand management demand management Supply Chain Solutions Covers ROI impact
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SCM: Manufacturing Perspective Production by lots Make-to-order production Special machine building P R O D U C T C O M P L E X I T Y P R O D U C T S T A B I L I T Y Assembly production/ Assemble-to-order Period-based production/takted flow production Mass production Process manufacturing
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