1. 6-1 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Chapter 6 Process Selection and Facility Layout

2. 6-2 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Process Selection and System Design Forecasting Product and service design Capacity planning Facilities and Equipment Layout Work design Process selection Technological change Process selection defines the way production is organized, how things will be done

3. 6-3 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Process Strategy How an organization approaches the process selection process Important concerns: –Make or buy? –Capital intensity –Process flexibility

4. 6-4 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Introduction Make or Buy? – Available capacity – Expertise – Quality Consideration – The nature of demand – Cost

5. 6-5 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Product Variety –How much Process Flexibility –What degree will be required Volume –Expected output Process Selection

6. 6-6 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Process Types Job Shops – Small runs, high variety – Requires skilled labor and flexible equipment Batch Processing – Moderate volume, moderate variety, moderate skill Repetitive/Assembly – Semicontinuous – Higher volume, more standardized, less flexibility and skill required

7. 6-7 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Process Types Continuous Processing – High volume, highly standardized Projects – Nonroutine jobs, limited duration – Large products like buildings

8. 6-8 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Job Shop Batch Repetitive assembly Continuous Flow Variety, Flexibility, & Volume Job Shop

9. 6-9 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Automation: Machinery that operates automatically, with little or no human intervention Advantages: –Consistency –Elimination of negative human factors –Reduced variable costs Disadvantages –High initial investment –High fixed costs –Requires high volume to offset costs –Less flexible than human labor –Can hurt worker morale Automation

10. 6-10 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Automation Computer-aided design and manufacturing systems (CAD/CAM) Numerically controlled (NC) machines Robot Manufacturing cell Flexible manufacturing systems Computer-integrated manufacturing (CIM)

11. 6-11 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Management of Technology Potential effects of new technology: –Improved quality –Increased productivity –Reduced production times –Increased customer satisfaction –Reduced flexibility –Increased fixed costs –Short-term disruptions –Increased training costs –Difficult integration with existing systems

12. 6-12 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Service blueprint: A method used in service design to describe and analyze a proposed service. Steps: –Establish boundaries and determine the required level of detail –Identify and describe the steps of a process –Flowchart key process steps –Identify potential failure points –Establish a time frame for service execution and estimate variability –Analyze profitability and zero in on process steps with the biggest impact Service Blueprint

13. 6-13 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Layout: the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system Important because: –Require substantial investments of time and money –Involve long-term commitments –Significant impact on cost and efficiency Layout

14. 6-14 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Layout Reasons to redesign an existing layout: –Inefficiency –Accidents or safety hazards –Changes in product design –Introduction of new products –Changes in output volume or mix –Changes in regulations

15. 6-15 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Basic Layout Types Product Layouts Process Layouts Fixed-Position Combination Layouts

16. 6-16 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Product Layout Work divided into a series of standard tasks that every unit goes through Often uses fixed-path material handling Entire line can be shut down by one mechanical failure Advantages: –High output –Low unit cost –Labor specialization reduces training costs –High utilization rate of labor and equipment Disadvantages –Dull, repetitive jobs –Not very flexible to product design or volume changes –Susceptible to shutdowns

17. 6-17 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout A Flow Line for Production or Service Flow Shop or Assembly Line Work Flow Raw materials or customer Finished item Station 2 Station 3 Station 4 Material and/or labor Statio n 1 Material and/or labor Material and/or labor Material and/or labor

18. 6-18 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout A U-Shaped Production Line 1 234 5 6 7 8910 In Out Workers

19. 6-19 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Process Layout Work divided into departments, each of which handles a given process Products follow different paths depending on processing requirements Equipment must be more general-purpose Advantages: –More flexible –Not as vulnerable to shutdowns –General-purpose equipment often cheaper than specialized Disadvantages: –Routing and scheduling can be difficult –Low utilization rates –More costly material handling –Complex jobs can lead to higher supervision costs

20. 6-20 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Process Layout Process Layout - work travels to dedicated process centers Milling Assembly & Test Grinding Drilling Plating

21. 6-21 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Functional Layout Gear cutting Mill Drill Lathes Grind Heat treat Assembly 111 333 222 444 222 111 444 111333 11112222 222 3333 111 444 111 333333333 44444 333333 22222

22. 6-22 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Fixed Position Layout Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed Requires special attention to time materials and workers to prevent clogging up the jobsite

23. 6-23 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Design Product Layouts: Line Balancing Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.

24. 6-24 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Cycle Time Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit.

25. 6-25 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Determine Maximum Output

26. 6-26 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Determine the Minimum Number of Workstations Required: Efficiency

27. 6-27 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Precedence Diagram Precedence diagram: Tool used in line balancing to display elemental tasks and sequence requirements A Simple Precedence Diagram a b cd e 0.1 min. 0.7 min. 1.0 min. 0.5 min.0.2 min.

28. 6-28 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Example 1: Assembly Line Balancing Arrange tasks shown in the previous slide into workstations. –Use a cycle time of 1.0 minute –Assign tasks in order of the most number of followers

29. 6-29 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Solution to Example 1

30. 6-30 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Calculate Percent Idle Time

31. 6-31 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Line Balancing Rules Assign tasks in order of most following tasks. Assign tasks in order of greatest positional weight. –Positional weight is the sum of each task’s time and the times of all following tasks. Some Heuristic (intuitive) Rules:

32. 6-32 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Solution to Example 2 Station 1Station 2Station 3Station 4 ab e f d g h c

33. 6-33 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Parallel Workstations 1 min.2 min.1 min. 30/hr. 1 min. 60/hr. 30/hr. 60/hr. 1 min. 30/hr. Bottleneck Parallel Workstations

34. 6-34 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Process Selection and Facility Layout Requirements: –List of departments –Projection of work flows –Distance between locations –Amount of money to be invested –List of special considerations Designing Process Layouts