C5 process & layout

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Operations Operations ManagementManagement

Process Strategies and Process Strategies and Layout StrategiesLayout Strategies

Chapter 5Chapter 5

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Process StrategiesProcess Strategies Involve determining how to produce a product or

provide a service Objective

Meet or exceed customer requirements Meet cost & managerial goals

Has long-run effects Efficiency and flexibility of production Costs & quality of the goods produced

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Types of Process StrategiesTypes of Process Strategies Four types of process strategies:

1. Process Focus 2. Repetitive Focus 3. Product Focus 4. Mass Customization

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Process-Focused StrategyProcess-Focused Strategy Facilities are organized by process Similar processes are together

Example: All drill presses are together

Low volume, high variety products ‘Jumbled’ flow

OperationProduct A

Product B

1111 2222 3333 Other names

Intermittent process Job shop

Prepared by : Shatina Saad 5-5 OPM 533

Process Focused Strategy -Process Focused Strategy - Pros & Cons Pros & Cons

Advantages Greater product flexibility More general purpose equipment Lower initial capital investment

Disadvantages High variable costs More highly trained personnel More difficult production planning & control Low equipment utilization (5% to 25%)

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Repetitive Focused StrategyRepetitive Focused Strategy A product oriented production process that uses

modules. Facilities often organized by assembly lines Characterized by modules

Parts & components of a product previously prepared

Modules combined for many output options Widely used in the assembly of automobiles and

household appliances. Other names

Assembly line Production line

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Repetitive Focused Strategy -Repetitive Focused Strategy -ConsiderationsConsiderations

More structured than process-focused, less structured than product focused

Enables quasi-customization Using modules, it enjoys economic advantage of

continuous process, and custom advantage of low-volume, high-variety model

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Product-Focused StrategyProduct-Focused Strategy Facilities are organized by product High volume, low variety products Where found

Discrete unit manufacturing Continuous process manufacturing

Operation

Products A & B

11 22 33

Other names Line flow production Continuous production

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Product-Focused StrategyProduct-Focused Strategy Pros & Cons Pros & Cons

Advantages Lower variable cost per unit Lower but more specialized labor skills Easier production planning and control Higher equipment utilization (70% to 90%)

Disadvantages Lower product flexibility More specialized equipment Usually higher capital investment

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Mass CustomizationMass Customization Rapid, low-cost production of goods and services

that cater to constantly changing unique customer desires.

Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant.

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Process StrategiesProcess Strategies

Rapid throughput techniques

Mass Customization

Modular techniques

Repetitive FocusModular design

Flexible equipment

Product-focusedLow variety, high volume

High utilization (70% - 80%)Specialized equipment

Process-focusedHigh variety, low volume

Low utilization (5% - 20%)General purpose equipment

Effective scheduling techniques

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A Comparison (1)A Comparison (1)Process Focus

(Low volume, High variety)

Repetitive Focus

(Modular)Product focus

(High-volume, low-variety)

Mass Customization

(High-volume, high-variety

1. Small quantity, large variety of products

Long runs, standardized product, from modules

Large quantity, small variety of products

Large quantity, large variety of products

2. General purpose equipment

Special equipment aids in use of assembly line

Special purpose equipment

Rapid changeover on flexible equipment

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A Comparison (2)A Comparison (2)Process Focus Repetitive Focus Product focus Mass

Customization

3 Broadly skilled operators

Modestly trained employees

Operators less broadly skilled

Flexible operators trained for customization

4 Many instructions because of change in jobs

Reduced training and number of job instructions

Few work orders and job instructions

Custom orders require many instructions

5 Raw material high relative to product value

JIT techniques used

Raw material low relative to product value

Raw material low relative to product value

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Customization

6 WIP high relative to output

JIT techniques used

WIP low relative to output

WIP driven down by JIT, kanban, lean production

7 Units move slowly thru plant

Movement measured in hours & days

Units move swiftly thru facility

Goods move swiftly thru facility

8 Finished goods made to order, not stored

Finished goods made to frequent forecasts

Finished goods made to forecast, then stored

Finished goods made to order

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Customization

9 Scheduling complex and concerned with trade-off between inventory, capacity, and customer service

Scheduling based on building models from a variety of forecasts

Scheduling relatively simple, concerns establishing sufficient rate of output to meet forecasts

Scheduling sophisticated to accommodate customization

10 Fixed costs low, variable costs high

Fixed costs dependent on flexibility of facilities

Fixed costs high, variable costs low

Fixed costs high; variable costs must be low

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Customization

11 Costing, done by job, is estimated prior to doing job but only known after doing job

Costs usually known based on experience

Because of high fixed costs, cost dependent on utilization of capacity

High fixed costs and dynamic variable costs

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Process Analysis and DesignProcess Analysis and Design

Questions to be asked when analyzing anddesigning process to transform resources into goodsand services Is the process designed to achieve competitive advantage in

terms of differentiation, response, or low cost? Does the process eliminate steps that do not add value? Does the process maximize customer value as perceived by

the customer? Will the process win orders?

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Tools for Process DesignTools for Process Design

1. Flow Diagrams – A drawing used to analyze movement of people or material.

2. Time-Function Mapping – A flow diagram but with time added on horizontal axis. It indicates the activities and flow direction with time on the horizontal axis. Allows users to identify and eliminate waste.

3. Value-Stream Mapping – takes an expanded look at where value is added (and not added) in the entire production process, including the supply chain. Helps managers to understand how to add value in the flow of material and information through the production process.

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Tools for Process DesignTools for Process Design

5. Process Charts – chart using symbols, time and distance to provide an objective and structured way to analyze and record the activities that make up a process. Allow us to focus on value added activities.

6. Service Blueprinting – A process analysis technique that focuses on customer and the provider’s interaction with the customer.

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Production Process Flow DiagramProduction Process Flow Diagram

Shipping

Customer

Customer sales representative

take order

Prepress Department(Prepare printing plates

and negatives)

Printing Department

Collating Department

Gluing, binding, stapling, labeling

Polywrap Department

Purchasing(order inks, paper,

other supplies)

Vendors

Receiving

Warehousing(ink, paper, etc.)

Accounting

Information flowMaterial flow

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SUBJECT: Request tool purchase

Dist (ft) Time (min) Symbol Description

D Write order

D On desk

75 D To buyer

D Examine

= Operation; = Transport; = Inspect; D = Delay; = Storage

Process Chart ExampleProcess Chart Example

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Time Function MapTime Function Map(Target)(Target)

1 day 1 day 1 day1 day 2 days

Customer

Sales

Production control

Plant

Warehouse

Transport

Order Product

Process Order

Print Extrude

Receive product

Wait

Wait

Move

Ord

er

Ord

er

Prod

uct

Prod

uct

WIP

6 days

Service Process DesignService Process Design•Service by nature requires some interaction and customization.

•Manager must design the process to accommodate the customers unique desires.

•The more the process design can meet the customers requirements, the more effective and efficient the process will be.

Techniques for Improving Service Techniques for Improving Service ProductivityProductivity

StrategyStrategy TechniqueTechnique ExampleExample

SeparationSeparation Structure service so Structure service so customers must go customers must go where service is where service is offeredoffered

Bank customers go Bank customers go to a manager to open to a manager to open a new account, to a new account, to loan officers for loan officers for loans, and to tellers loans, and to tellers for depositsfor deposits

Self-serviceSelf-service Self-service so Self-service so customers examine, customers examine, compare, and compare, and evaluate at their own evaluate at their own pacepace

Supermarkets and Supermarkets and department stores, department stores, internet orderinginternet ordering


PostponementPostponement Customizing at Customizing at deliverydelivery

Customizing vans at Customizing vans at delivery rather than delivery rather than at productionat production

FocusFocus Restricting the Restricting the offeringsofferings

Limited-menu Limited-menu restaurantrestaurant

ModulesModules Modular selection of Modular selection of service, modular service, modular productionproduction

Investment and Investment and insurance selection, insurance selection, prepackaged food prepackaged food modules in modules in restaurantsrestaurants

Improving Service ProductivityImproving Service Productivity


AutomationAutomation Precise personnel Precise personnel schedulingscheduling

Automatic teller Automatic teller machinesmachines

SchedulingScheduling Precise personnel Precise personnel schedulingscheduling

Scheduling ticket Scheduling ticket counter personnel at counter personnel at 15-minute intervals 15-minute intervals at airlinesat airlines

TrainingTraining Clarifying the service Clarifying the service options, explaining options, explaining how to avoid how to avoid problemsproblems

Investment Investment counselor, funeral counselor, funeral directors, after-sale directors, after-sale maintenance maintenance personnelpersonnel

Improving Service ProductivityImproving Service Productivity

Improving Service ProcessesImproving Service Processes

LayoutLayout Product exposure, customer education, Product exposure, customer education,

product enhancementproduct enhancement

Human ResourcesHuman Resources Recruiting and trainingRecruiting and training

Impact of flexibilityImpact of flexibility

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FACILITY LAYOUT

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What is Facility LayoutWhat is Facility Layout Location or arrangement of everything

within & around buildings Objectives are to maximize

Customer satisfaction Utilization of space, equipment, & people Efficient flow of information, material, &

people Employee morale & safety

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Objectives of the Layout StrategyObjectives of the Layout Strategy To develop an economical layout

which will meet the requirements of : product design and volume (product

strategy) process equipment and capacity

(process strategy) quality of work life (human resource

strategy) building and site constraints (location

strategy)

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Strategic Importance of LayoutStrategic Importance of LayoutProper layout enables: Higher utilization of space,

equipment,and people Improved flow of information,

materials, or people Improved employee morale and safer

working conditions Improved customer/client interaction Flexibility

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Seven Types of Layout StrategiesSeven Types of Layout Strategies

1.Office layout positions workers, their equipment, and spaces/

offices to provide for movement of information

2. Retail/service layout allocates shelf space and responds to customer

behavior

3. Warehouse layout addresses trade-offs between space and material

handling

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Seven Types of Layout StrategiesSeven Types of Layout Strategies4.Fixed-position layout

large bulky projects such as ships and buildings

5.Process-oriented layout deals with low-volume, high-variety production

(“job shop”, intermittent production)

6. Work-cell layout positions workers, their equipment, and spaces/

offices to provide for movement of information

7.Product-oriented layout seeks the best personnel and machine use in

repetitive or continuous production

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Requirements of a Good LayoutRequirements of a Good Layout an understanding of capacity and

space requirements selection of appropriate material

handling equipment decisions regarding environment and

aesthetics identification and understanding of

the requirements for information flow identification of the cost of moving

between the various work areas

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1.1. Office LayoutOffice Layout Design positions people, equipment,

& offices for maximum information flow

Arranged by process or product Example: Payroll dept. is by process

Relationship chart used Examples

Insurance company Software company

© 1995 Corel Corp.

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2.2. Retail/Service LayoutRetail/Service Layout Design maximizes product exposure to

customers Decision variables

Store flow pattern Allocation of (shelf) space to products

Types Grid design Free-flow design

Video

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Retail Layouts - Retail Layouts - Some Rules of ThumbSome Rules of Thumb

Locate high-draw items around the periphery of the store

Use prominent locations such as the first or last aisle for high-impulse and high margin items

Remove crossover aisles that allow customers the opportunity to move between aisles

Distribute what are known in the trade as “power items” (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items

Use end aisle locations because they have a very high exposure rate

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A Good Service Layout A Good Service Layout (Servicescape) Considers(Servicescape) Considers

Ambient conditions - background characteristics such as lighting, sound, smell, and temperature.

Spatial layout and functionality - which involve customer circulation path planning

Signs, Symbols, and Artifacts - characteristics of building design that carry social significance

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3.3. Warehouse LayoutWarehouse Layout Design balances space (cube)

utilization & handling cost Similar to process layout Items moved between dock

& various storage areas Optimum layout depends on

Variety of items stored Number of items picked

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4.4. Fixed-Position LayoutFixed-Position Layout Design is for stationary project Workers and equipment come to site Complicating factors:-

There is limited space at virtually all sites At different stages in the construction

process, different materials are needed – therefore, different items become critical as the project develops

The volume of materials needed is dynamic

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5.5. Process-Oriented LayoutProcess-Oriented Layout Design places departments with large

flows of material or people together Department areas having similar

processes located in close proximity e.g., All x-ray machines in same area

Used with process-focused processes

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6. Work-Cell Layout6. Work-Cell Layout Special case of product-oriented layout -

in what is ordinarily a process-oriented facility

Consists of different machines brought together to make a product

Temporary arrangement only Example: Assembly line set up to

produce 3000 identical parts in a job shop

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Improving Layouts by Moving to the Work Improving Layouts by Moving to the Work Cell ConceptCell Concept

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Work Cells - Some AdvantagesWork Cells - Some Advantages Reduced work-in-process inventory Less floor space required Reduced raw material and finished goods

inventories required Reduced direct labor costs Heightened sense of employee participation Increased utilization of equipment machinery Reduced investment in machinery and

equipment

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Work Cell Floor PlanWork Cell Floor Plan

OfficeOffice

Tool RoomTool RoomWork CellWork Cell

SawsSaws DrillsDrills

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7.7. Product-Oriented LayoutProduct-Oriented Layout Facility organized around product Design minimizes line imbalance

Delay between work stations Types: Fabrication line; assembly line Requirements:-

Standardized product High production volume Stable production quantities Uniform quality of raw materials &

components

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Product-Oriented Layout - Product-Oriented Layout - AssumptionsAssumptions

Volume is adequate for high equipment utilization

Product demand is stable enough to justify high investment in specialized equipment

Product is standardized or approaching a phase of its life cycle that justifies investment in specialized equipment

Supplies of raw materials and components are adequate and of uniform quality to ensure they will work with specialized equipment

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Product-Oriented Layout TypesProduct-Oriented Layout Types

Assembles fabricated parts

Uses workstation Repetitive process Paced by tasks Balanced by moving tasks

Builds components Uses series of machines Repetitive process Machine paced Balanced by physical

redesign

Fabrication Line Assembly Line

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Product-Oriented Layout Product-Oriented Layout AdvantagesAdvantages

Lower variable cost per unit Lower material handling costs Lower work-in-process

inventories Easier training & supervision Rapid throughput

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Product-Oriented Layout Product-Oriented Layout DisadvantagesDisadvantages Higher capital investment

Special equipment Any work stoppage stops

whole process Lack of flexibility

Volume Product

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Assembly Line BalancingAssembly Line Balancing Analysis of production lines Nearly equally divides work between

workstations while meeting required output

Objectives Maximize efficiency Minimize number of

work stations

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Assembly Line BalancingAssembly Line BalancingThe General ProcedureThe General Procedure

Determine cycle time by taking the demand (or production rate) per day and dividing it into the productive time available per day

Calculate the theoretical minimum number of work stations by dividing total task time by cycle time

Perform the line balance and assign specific assembly tasks to each work station

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Assembly Line Balancing StepsAssembly Line Balancing Steps

1. Determine tasks (operations)2. Determine sequence3. Draw precedence diagram4. Estimate task times5. Calculate cycle time 6. Calculate number of work stations7. Assign tasks 8. Calculate efficiency

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Assembly Line Balancing EquationsAssembly Line Balancing Equations

Cycle time = Production time available

Demand per day

Minimum number of work stations

Task times

Cycle time

Efficiency =

=

Task times

* (Cycle time)(Actual number of work stations)

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Layout Heuristics for Assigning Tasks in Layout Heuristics for Assigning Tasks in Assembly Line BalancingAssembly Line Balancing

a) Longest task time - choose task with longest operation time

b) Most following tasks - choose task with largest number of following tasks

c) Ranked positional weight - choose task where the sum of the times for each following task is longest

d) Shortest task time - choose task with shortest operation time

e) Least number of following tasks - choose task with fewest subsequent tasks

Copier Example Copier Example (longest task time approach) (longest task time approach)

This means that This means that tasks B and E tasks B and E cannot be done cannot be done until task A has until task A has been completedbeen completed

PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed

TaskTask (minutes)(minutes) BelowBelow

AA 1010 ——BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, H

Total time 66Total time 66

Copier ExampleCopier Example




Total time 66Total time 66I

GF

C

D

H

B

E

A

10

1112

5

4 3

711 3

Figure 9.13

I

GF

C

D

H

B

E

A

10

1112

5

4 3

711 3

Figure 9.13





Copier ExampleCopier Example480 available mins

per day40 units required

Cycle time =

Production time available per day

Units required per day

= 480 / 40= 12 minutes per unit

Minimum number of

workstations=

∑ Time for task i

Cycle time

n

i = 1

= 66 / 12= 5.5 or 6 stations

480 available mins per day

40 units required

Cycle time = 12 mins

Minimum workstations = 5.5 or 6





Copier ExampleCopier Example

I

GF

H

C

D

B

E

A

10 11

12

5

4

3 7

11

3

Station 1

Station 2

Station 3

Station 5

Station 4

Station 6

Figure 9.14





Copier ExampleCopier Example480 available mins

per day40 units required

Cycle time = 12 mins

Minimum workstations = 5.5 or 6

Efficiency =∑ Task times

(actual number of workstations) x (largest cycle time)

= 66 minutes / (6 stations) x (12 minutes)

= 91.7%

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C5 process & layout

Business