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© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Chapter 4
Processes and Technology
Ch 2 - 16© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Processes & Technology
• Project–one-time production of product to customer order
• Batch production–process many jobs at same time in batch
• Mass production–produce large volumes of standard product for mass market
• Continuous processes–very high volume commodity product
Ch 2 - 17© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Product-Process MatrixV
olu
me
LowLow High
High
Projects
Batchproduction
Massproduction
Continuousproduction
Standardization
Ch 2 - 17© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Product-Process MatrixL
abo
r In
ten
sity
LowLow High
High
Professional Service
ServiceShop
MassService
ServiceFactory
Customization
Ch 6 - 2© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Process Strategy
• Overall approach to producing goods & services• Defines:
–capital intensity–process flexibility–vertical integration–customer involvement
Ch 6 - 3© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Types of Processes
• Projects• Batch production• Mass production• Continuous production
Ch 6 - 4© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Project Batch Mass Continuous
Product Unique Made to order Made to stock Commodity
Customer Singly Few individuals Mass market Mass market
Demand Infrequent Fluctuates Stable Very stable
Volume Very low Low to med High Very high
Variety Infinite Many, high Low Very low
System Long-term Intermittent Flow lines Process industry
Equipment Varied General-purp. Special-purp. Highly automated
Type of work Contracts Fabrication Assembly Mix, treat, refine
Skills Experts Wide range Limited range Equipment
craftspeople monitors
Advantages Custom work Flexibility Efficiency Highly efficient
quality sped, low cost large capacity
Disadv. Nonrepeating Costly, slow Capital invest. Difficult to change
Example Construction Printing, bakery Autos, TV’s Paint, oil, food
Ch 6 - 5© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Process Selection With Break-Even Analysis
Total cost = total fixed cost + total variable costTC = cf vcv
Total revenue = volume x priceTR =vp
Total profit = total revenue - total costZ = TR- TC
= vp - (cf vcv)
cf = fixed costv = volumecv = variable cost per unitp =price per unit
Ch 6 - 6© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Solving For Break-Even Volume
TR TC
vp vc
vp vc
v p c
vp c
v
v
v
v
( )
( )
c
c
c
c
f
f
f
f
Ch 6 - 7© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Break-Even Example
v cf
p cv
200010 5
400 rafts
Fixed cost = cf =$2,000Variable cost = cv = $5 per raftPrice = $10 per raft
Ch 6 - 8© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Break-Even Graph
$0
$1,000
$2,000
$3,000
$4,000
$5,000
400
Units
Do
llars
Ch 6 - 9© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Choosing Between Two Processes
$3v = $8,000
v = 2,667 rafts
$2,000 + $5v = $10,000 + $2v
Process A Process B
Below 2,667, choose AAbove 2,667, choose B
Ch 6 - 10© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Graphical Solution To Process Selection
$0
$5,000
$10,000
$15,000
$20,000
$25,000
0 1000 2000 3000 4000
Units
Do
llars
A B
Ch 6 - 11© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Point Of Indifference
• Volume where cost of A = cost of B• Rule for choosing process:
–Above point of indifference choose process with lowest variable cost–Below point of indifference choose process with lowest fixed cost
Ch 6 - 12© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Process Planning
• Make-or-buy decisions• Process selection• Specific equipment selection• Process plans• Process analysis
Ch 6 - 16© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Bill Of Material(unstructured)
No. Part No. Part name1 51292 Outlet end2 51284 Handle3 52043 Switch4 51576 Electric cord5 51265 Rear housing
6 51268 Motor mounting plate
Ch 6 - 17© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Product Structure Diagram
Upholstery tool
Crevice tool Hand-vac
Dusting tool Package
Packaged Hand-vac
Forward housing
assembly
Screw & lock washer
assembly
Rear housing
assembly
Ch 6 - 18© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Operations Process ChartPart name Table legPart no. 2410Usage TableAssembly No. 437
Oper No. Description Dept. Machine Time Tools10 Saw to rough length 04120 Plane to size 04330 Saw to finished length 04140 Measure dimensions 05150 Sand 052
Ch 6 - 19© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Process Analysis
• Continuous improvement–basic tool is process flowchart
• Reengineering–basic tool is process map
Ch 6 - 20© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Process Flowchart Symbols
Operations
Inspection
Transportation
Delay
Storage
D
Ch 6 - 21© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Process Flowchart
Ste
p
Ope
ratio
nT
rans
port
Insp
ect
Del
ayS
tora
ge
Dis
tanc
e(f
eet)
Tim
e(m
in)Description
ofprocess
1
2
3
4
5
6
7
8
9
10
11
Unload apples from truck
Move to inspection station
Weigh, inspect, sort
Move to storage
Wait until needed
Move to peeler
Apples peeled and cored
Soak in water until needed
Place in conveyor
Move to mixing area
Weigh, inspect, sort
TotalPage 1 0f 3 480
30
5
20
15
360
30
20
190 ft
20 ft
20 ft
50 ft
100 ft
Date: 9-30-95
Analyst: TLR
Location: Graves Mountain
Process: Apple Sauce
Ch 6 - 24© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Continuous Improvement and Breakthroughs
Ch 6 - 27© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Design Principles For Reengineering
1. Organize around outcomes, not tasks2. Capture information once, at the source3. Centralize resources with info. tech.4. Link parallel subprocesses5. Design to do work right the first time6. Remove complexity7. Identify information & technology levers
Ch 6 - 29© 2000by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Information Technology
• Management information system (MIS)–move large amounts of data
• Decision support system (DSS)–add decision making support
• Expert system–recommend decision based on expert knowledge
Ch 6 - 30© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Decision Support System
Information:reportsmodel resultswhat if? analysis
Computersystem:dataprocessing
Data
Quantitativetechniques
Personnel
Accounting
Production
Marketing
Distribution
Other areas
Decisions
Management Information System
What -if? analysis
ManagementDecision Support System
Ch 6 - 31© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Artificial Intelligence
• Neural networks–emulate interconnections in brain
• Genetic algorithms–based on adaptive capabilities in nature
• Fuzzy logic–simulate human ability to deal with ambiguity
Ch 6 - 32© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Advanced Communications
• Electronic data interchange (EDI)• Internet• Wireless communications• Teleconferencing & telecommuting• Bar coding• Virtual reality
Ch 6 - 33© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Manufacturing Technology
• Numerically controlled (NC) machines–controlled by punched tape
• Computer numerical controlled (CNC)–controlled by attached computer
• Direct numerical control (DNC)– several NC machines controlled by single computer
Ch 6 - 34© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 2/e
Automated Material Handling
• Conveyors• Automated guided vehicle (AGV)• Automated storage & retrieval system (ASRS)
Ch 6 - 35© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Flexible Manufacturing Systems (FMS)
• Programmable machine tools• Controlled by common computer network• Combines flexibility with efficiency• Reduces setup & queue times
Ch 6 - 36© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Flexible Manufacturing System
PartsFinished
goods
Load Unload
Computercontrolroom
Terminal
Machine Machine
Tools
Conveyor
Pallet
Ch 6 - 37© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Robotics
• Programmable manipulators• Follow specified path• Better than humans with respect to
–hostile environments–long hours–consistency
Ch 6 - 38© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Robot Parts
• Controller–hardware, software, power source
• Manipulator–robot arm
• End-effector–“hand”
Ch 6 - 39© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Computer Integrated Manufacturing (CIM)
• Integration of design, manufacture & delivery via computer technology
• CAD - uses software to create & modify designs• CAM - uses programmable automation in manufacturing• CAE - links functional design to CAD form design• CAPP - creates processing instructions for CAM
• GT- classifies designs to benefit from prior experience
Ch 6 - 40© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Components Of CIM
CIM
Productdesign
Manufacture
Processplanning
Systemsmanagement
RoboticsFMSNC/CNC/
DNCCells
and centersAutomatedinspection
AGV,ASRS
JIT/kanban
DSS/ES/AI
LAN, TOP,satellites
TQM
Bar codes,EDI
MRP
GTCAECADIGES,PDES,DMIS
DFM
Cellularmanufacturing
MAP,STEP
CAD/CAM
CAPP
Ch 6 - 41© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e
Adoption Of Technology
• Technology Readiness• Need well-designed products & efficient processes
• Technology Design• Know what to automate
• Technology Selection• Choose the right level
• Technology Integration• Have a strategy for incremental automation