1. PROCESS SELECTIONIN MANUFACTURING Prof. Kaushik Paul

2. 2 OBJECTIVES The Product & Process Design framework Types of Manufacturing Processes The Product-Process design matrix The cost perspective of operations A Typology of Operations using the 4V’s Managing Flexibility and variety in operations Process Flow Design Global Product Design and Manufacturing

3. 3 Preliminary Design Product Planning & screening new ideas Concept Development & Business analysis The design methodology Evaluation and Improvement Prototyping and final design PRODUCT AND PROCESS DESIGN Processes that Design Products and Services Processes that Produce Products and Services Supply Network Design Layout and Flow Process Technology Job Design

4. 4 TYPES OF MANUFACTURING PROCESSES Conversion (ex. Iron to steel) Fabrication (ex. Cloth to clothes) Assembly (ex. Parts to components) Testing (ex. For quality of products)

5. 5 THE PRODUCT-PROCESS DESIGN MATRIX Job shop (ex. Copy center making a single copy of a student term paper) Batch shop (ex. Copy center making 10,000 copies of an ad piece for a business) Assembly Line (ex. Automobile manufacturer) Continuous Flow (ex. Petroleum manufacturer)

6. 6 Few Major Products, Higher Volume High Volume, High Standard- ization Low Volume, One of a Kind Multiple Products, Low Volume Flexibility (High) Unit Cost (High) I. Job Shop Commercial Printer French Restaurant II. Batch Heavy Equipment III. Assembly Line Automobile Assembly Burger King IV. Continuous Flow Sugar Refinery Flexibility (Low) Unit Cost (Low) These are the major stages of product and process life cycles

7. 7 PROJECT PROCESSES One-off, complex, large scale, high work content “products” Speciallymade, every one customized Defined start and finish: time, quality and cost objectives Many different skills have to be coordinated

8. 8 THE JOB SHOP Very small quantities: “one-offs”, or only a few required Speciallymade. High variety, low repetition. “Stranger products” Skill requirements are usually very broad Skilled jobber, or team of jobbers complete whole product

9. 9 BATCH PROCESSES Higher volumes and lower variety than for jobbing Standard products, repeating demand. But can make specials Specialized, narrower skills Set-ups (changeovers) at each stage of production

10. 10 ASSEMBLY LINE/MASS PRODUCSTION PROCESSES Higher volumes than Batch Standard, repeat products (“runners”) Low and/or narrow skills No set-ups, or almost instantaneous ones

11. 11 CONTINUOUS PROCESS Extremely high volumes and low variety: often single product Standard, repeat products (“runners”) Highly capital-intensive and automated Few changeovers required Difficult and expensive to start and stop the process

12. 12 MANUFACTURING PROCESS TYPES SERVICE PROCESS TYPES High High Project Professional service Jobbing Service shop Batch Variety Variety Mass Mass service Contin- -uous Low Low High Volume Low High Volume Low

13. 13 THE COST PERSPECTIVE The cost of producing products and services is obviously influenced by many factors such as input costs, but two important sets are….. The 4 V’s Volume Variety Variation Visibility The internal performance of the operation at Quality Speed Dependability Flexibility

14. 14 A TYPOLOGY OF OPERATIONS IMPLICATIONS IMPLICATIONS High repeatability Specialization Systemization Capital intensive Low unit cost Low repetition Each staff member performs more of job Less systemization High unit costs Volume High Low Well defined Routine Standardized Regular Low unit costs Flexible Complex Match customer needs High unit cost Variety Low High Stable Routine Predictable High utilization Low unit costs Changing capacity Anticipation Flexibility In touch with demand High unit cost Variation in demand Low High Time lag between production and consumption Standardized Low contact skills High staff utilization Centralization Low unit costs Short waiting tolerance Satisfaction governed by customer perception Customer contact skills needed Received variety is high High unit cost Visibility High Low

15. 15 FLEXIBILITY Flexibility has several distinct meanings but is always associated with an operation’s ability to change Change what ? The products and services it brings to the market – Product/service flexibility The mix of products and services it produces at any one time – Mix flexibility The volume of products and services it produces –Volume flexibility The delivery time of its products and services –Delivery flexibility

16. 16 VARIETY Marketing Viewpoint Customer Choice  Competitive Confusion  Duplication  Training Difficulties  High Advertising Costs )

17. 17 VARIETY Operations Viewpoint Shorter Production Runs  Higher Costs  Greater Complexity  More Difficulty in Specialising  Equipment  People 

18. 18 REMOVAL OF ROBOTS AT IBM, GREENOCK In 1986 IBM at Greenock spent £6 million setting up a robotic assembly line for PC monitors. Yet by 1993, the company had decided to dispense with the robot and increase line manning. Before 1993 some 25 assembly staff, with their robots made 550 monitors per shift. Afterwards, 50 assembly workers made 700. The reasons for the change were the rapid pace of technological development and the different safety standards that had been imposed in different countries. Both factors caused the product variety to increase and the line was not flexible enough to cope. To alter the product on the line, it had to be shut down and all the tools and holding mechanisms had to be changed. The remaining robots packed the items in cartons for shipping.

19. 19 VARIETY MANAGEMENT Reduce The Unnecessary Control The Necessary Identification Classification : Rational Grouping & Coding & Arrangement Simplification : The Reduction of Unnecessary Variety Standardisation: The Control of Necessary Variety Specialisation: The Concentration of Effort where Special Knowledge is available (DVP-15)

20. 20 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, and operation and route sheets

21. 21 Lockring 4 Spacer, detent spring 5 A-2 SA-2 Rivets (2) 6 Spring-detent 7 A-5 Component/Assy Operation Inspection EXAMPLE: ASSEMBLY CHART (GOZINTO)

22. 22 EXAMPLE: PROCESS FLOW CHART Material Received from Supplier No, Continue… Inspect Material for Defects Defects found? Yes Return to Supplier for Credit

23. 23 BREAK-EVEN ANALYSIS A standard approach to choosing among alternative processes or equipment Model seeks to determine the point in units produced (and sold) where we will start making profit on the process or equipment Model seeks to determine the point in units produced (and sold) where total revenue and total cost are equal

24. 24 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

25. 25 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

26. 26 VIRTUAL FACTORY A virtual factory can be defined as a manufacturing operation where activities are carried out not in one central plant, but in multiple locations by suppliers and partner firms as part of a strategic alliance

27. 27 GLOBAL PRODUCT DESIGN AND MANUFACTURING STRATEGIES Joint Ventures Global Product Design Strategy

28. References: 1) ‘Operations Management’ By Nigel Slack et al. 2e2) ‘Operations Management for Competitive Advantage’ By Chase, Jacobs & Aquilano, 10e HOPE YOU ENJOYED THE CLASS. QUESTIONS PLEASE THANK YOU