1. Manufacturing Process Selection and Design
CHAPTER 7
Manufacturing Process Selection and Design

2. Manufacturing Process Flow Design
Overview
Process Selection
Types of Processes
Process Flow Structures
Product-Process Matrix
Break-Even Analysis
Manufacturing Process Flow Design 2

3. Process Selection

4. Process and Process Selection
Process: Any set of activities performed by an organization that takes inputs and transforms them into outputs ideally of greater value to the organization than the original inputs.
Process selection refers to the strategic decision of selecting with which kind of production processes to have in the manufacturing plant. 4

5. Process Selection Three primary questions:
How much variety in products or services will the system need to handle?
What degree of equipment flexibility will be needed?
What is the expected volume of output?

6. Types of Processes Based on what they do Conversion process
Iron ore  steel sheets, ingredients of toothpaste  toothpaste
Fabrication process: changing raw materials into some specific form
Sheet metal  car fender, gold  a crown for a tooth, cloth  clothes
Assembly process
Assemble parts to components, put toothpaste tubes into a box, fasten a dental crown into someone’s mouth
Testing process
For quality of products 11

7. Process Types
A process flow structure refers to how a factory organizes material flow using one or more of the process technologies.
Job shop
Batch shop
Assembly Line
Continuous Flow 12

8. Job Shop
Job shop: A process structure suited for low-volume production of a great variety of nonstandard products.
Each job may require a different set or sequence of processing steps
High flexibility of equipment (General-purpose equipment )
Skilled workers
Examples: commercial printing firms, copy center making a single copy of a student term paper, airplane manufacturers, machine tool shops, American Chopper 12

9. Batch Shop
Batch shop: A process structure that produces a moderate variety of standard products at relatively low volumes.
A somewhat standardized job shop
Employed when a business has a relatively stable line of products
The products are produced periodically in batches to reduce the impact of setup time on equipment
The equipment need NOT be as flexible as in a job shop
The skill level of workers need NOT to be as high as in a job shop
Examples:
Bakeries: make bread, cakes, cookies in batches;
Movie theatre: shows movies to groups (batches) of people;
Airlines: carry batches of people from airport to airport;
Other examples: production of beer, book, magazine, etc 12

10. Assembly Line Assembly line (Repetitive processing):
A process structure designed to make discrete parts moving through a set of specially designed workstations at a controlled rate.
High volume
Standardized products
Slight flexibility of equipment
Skill of workers is usually low
Examples: manual assembly of toys and appliances, automatic assembly of components on a printed circuit board, production line (automobiles, computers, etc.) 12

11. Example: Production Line

12. Continuous Flow
Continuous flow: An often automated process structure that converts raw materials into finished product in one continuous process.
Highly standardized products, no variety
Special-purpose equipment (no need for equipment flexibility)
Skill of workers is low
Examples: petroleum, steel, sugar, flour, and salt 12

13. Example: Continuous Flow

14. Product-Process Matrix
Choice of process flow structure is based on two main considerations:
Variety—how much the product changes from customer to customer;
Volume of demand.
Product-process matrix: Shows the relationship between process structures and product volume and variety characteristics.
As volume increases and the product line narrows, specialized equipment and standardized material flows become economically feasible. (see next slide) 12

15. Product-Process Matrix
Exhibit 7.1
High
Variety
Low
Low
Volume
High 12

16. Break-Even Analysis

17. Break-Even Analysis
A standard approach to choosing among alternative processes or equipment.
Most suitable when processes and equipment entail a large initial investment and fixed cost, and when variable costs are reasonably proportional to the number of units produced.
Break-even Point (BEP)
One option case: determine the point in units (produced and sold) at which total cost = total revenue.
Multiple options case: determine the points in units at which one option is indifferent to another. 12

18. Cost-Volume Relationships (Total Cost)
Amount ($)
Total cost = VC + FC
Variable cost (VC)
Fixed cost (FC)
Q (Quantity in units)
Total cost (TC) = Fixed cost (FC) + Variable cost (VC)
= Fixed cost (FC) + Unit cost (v) X Quantity (Q)

19. Revenue-Volume Relationships (Total Revenue)
Amount ($)
Q (Quantity in units)
Total revenue = Revenue per unit (R) X Quantity (Q)

20. Cost-Volume Relationships (BEP)
+ Profit
Total revenue
Amount ($)
Total cost
- Loss
BEP
Q (volume in units)
Break-even point (BEP): the quantity of output at which total cost and total revenue are equal.

21. One-Option Case Find out the quantity that makes:
Total Revenue (TR) = Total Cost (TC)
Total Revenue = Total Fixed Cost + Total Variable Cost
Unit Revenue* Units = Total Fixed Cost + Unit Cost* Units
R * Q = FC + v * Q
Break Even Quantity: QBEP = FC / (R – v)
Profit (margin) = Total Revenue – Total Cost

22. Example -- One-Option Case
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?
FC = $5,000, R = $25/customer, v = $5/customer
Break-even quantity QBEP:
= FC /(R-v) = 5,000/(25-5)
= 250 customers
How many customers should we serve to make a profit of $1,000?
Profit = Total Revenue – Total Cost
= R * Q – (FC + v * Q) = (R-v) * Q - FC
1,000 = (25-5) * Q – 5,000
Q = 300 customers 14

23. Example -- Multiple-Option Case (page 207)
Suppose a manufacturer has identified the following options for obtaining a machined part:
1. purchase the part
$200/unit, no fixed cost
2. make the part on a semiautomatic lathe
$75/unit, fixed cost = $80,000
3. make the part on a machining center
$15/unit, fixed cost = $200,000
Which option should the manufacturer choose?
TC_buy = 200 * Q
TC_lathe = 80, * Q
TC_machine = 200, * Q 14

24. Example -- Multiple-Option Case (page 207)
Minimum cost
TC_buy
TC_Machine A
TC_Lathe B
Demand < B  Buy
B < Demand < A  Semiautomatic Lathe
Demand >A  Machine center 14

25. Example -- Multiple-Option Case (page 207)
Break-even point B:
Total cost of “buy” = Total cost of “Make on lathe”
200 x Demand = 80, x Demand
DemandB = 80,000/(200-75) = 640 units
Break-even point A:
Total cost of “Make on lathe” = Total cost of “Make on machine”
80, x Demand = 200, x Demand
DemandA= (200, ,000)/(75-15) = 2,000 units 14

26. Manufacturing Process Flow Design

27. Manufacturing Process Flow Design
A process flow design can be defined as a mapping of the specific processes that raw materials, parts, and subassemblies follow as they move through a plant.
The most common tools to conduct a process flow design include assembly drawings, assembly charts, operation and route sheets, and process flowcharts. 14

28. Assembly Drawing
An assembly drawing is simply an exploded view of the product showing its component parts.
Plug assembly drawing 14

29. Assembly Chart
An assembly chart uses the information presented in the assembly drawing and defines how parts go together, their order of assembly, and often the overall material flow pattern.
Assembly chart
for plug assembly 14

30. Operation and Route Sheet
An operation and route sheet specifies operations and process routing for a particular part. It conveys such information as the type of equipment, tooling, and operations required to complete the part.
Operation and route sheet for plug assembly 14

31. Process Flowchart
A process flowchart denotes what happens to the product as it processes through the productive facility.
Process flowchart for plug housing 14

32. Recap Process Process selection Types of processes
Process flow structures
Job shop
Batch shop
Assembly line
Continuous flow
Product-process matrix
Break-even point (BEP)
One-option case
Multiple-option case
Manufacturing process flow design