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7 - 1
77 Process StrategyProcess Strategy
OPMG 310 OPMG 310 Spring 2012Spring 2012
7 - 2
OutlineOutline
Four Process Strategies Process Focus
Repetitive Focus
Product Focus
Mass Customization Focus
Comparison of Process Choices
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Outline – ContinuedOutline – Continued
Process Analysis and Design Special Consideration for Service
Process Design
Selection of Equipment and Technology
Production Technology
7 - 4© 2011 Pearson Education, Inc. publishing as Prentice Hall
Harley-DavidsonHarley-Davidson
Repetitive manufacturing worksRepetitive manufacturing works
The leading U.S. motorcycle company
Emphasizes quality and lean manufacturing
Materials as Needed system
Many variations possible
Tightly scheduled repetitive production line
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Process Flow DiagramProcess Flow Diagram
THE ASSEMBLY LINETESTING28 tests
Oil tank work cell
Shocks and forks
Handlebars
Fender work cell
Air cleaners
Fluids and mufflers
Fuel tank work cell
Wheel work cell
Roller testing
Incoming parts
From Milwaukee on a JIT arrival schedule
Engines and transmissions
Frame tube bending
Frame-building work cells
Frame machining
Hot-paint frame painting
Crating
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Process, Volume, and VarietyProcess, Volume, and Variety
Process Focusprojects, job shops
(machine, print, hospitals, restaurants)
Arnold Palmer Hospital
Repetitive(autos, motorcycles,
home appliances)Harley-Davidson
Product Focus(commercial
baked goods, steel, glass, beer)
Frito-Lay
High Varietyone or few units per run,(allows customization)
Changes in Modulesmodest runs, standardized modules
Changes in Attributes (such as grade, quality, size, thickness, etc.) long runs only
Mass Customization(difficult to achieve, but huge rewards)
Dell Computer
Poor Strategy (Both fixed and variable costs
are high)
Low Volume
Repetitive Process
High Volume
VolumeFigure 7.1
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Process StrategiesProcess Strategies
Four basic strategies
1. Process focus
2. Repetitive focus
3. Product focus
4. Mass customization
Within these basic strategies there are Within these basic strategies there are many ways they may be implementedmany ways they may be implemented
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Process FocusProcess Focus Many inputs
(surgeries, sick patients, baby deliveries, emergencies)
Many different outputs(uniquely treated patients)
Many departments and many routings
Figure 7.2(a)
(low volume, high variety, intermittent processes)
Arnold Palmer Hospital
7 - 9
Repetitive Repetitive FocusFocus
Raw materials and module inputs
Modules combined for manyOutput options
(many combinations of motorcycles)
Few modules
(multiple engine models, wheel modules)
Figure 7.2(b)
(modular)
Harley Davidson
7 - 10
Product FocusProduct Focus Few Inputs
(corn, potatoes, water, seasoning)
Output variations in size, shape, and packaging
(3-oz, 5-oz, 24-oz package labeled for each material)
Figure 7.2(c)
(low-volume, high variety, continuous process)
Frito-Lay
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Product FocusProduct FocusNucor Steel Plant
Co
nti
nu
ou
s ca
ster
Continuous cast steel sheared into 24-ton slabs
Hot tunnel furnace - 300 ft
Hot mill for finishing, cooling, and coiling
D
E F
GHI
Scrap steel
Ladle of molten steelElectric furnace
A
BC
7 - 12
Mass Mass CustomizationCustomization
Many parts and component inputs
Many output versions(custom PCs and notebooks)
Many modules
(chips, hard drives, software, cases)
Figure 7.2(d)
(high-volume, high-variety)
Dell Computer
7 - 13
Mass CustomizationMass Customization
Imaginative and fast product design
Rapid process design
Tightly controlled inventory management
Tight schedules
Responsive supply chain partners
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Crossover ChartsCrossover Charts
Fixed costs
Variable costs
$
High volume, low varietyProcess C
Fixed costs
Variable costs$
RepetitiveProcess B
Fixed costs
Variable costs$
Low volume, high varietyProcess A
Fixed cost Process A
Fixed cost Process B
Fixed cost Process C
Tota
l cos
t
Total cost
Total cost
V1(2,857) V2
(6,666)
400,000
300,000
200,000
Volume
$
Figure 7.4
7 - 15
Focused ProcessesFocused Processes
Focus brings efficiency
Focus on depth of product line rather than breadth
Focus can be Customers
Products
Service
Technology
7 - 16
Process Analysis and Process Analysis and DesignDesign
Is the process designed to achieve a competitive advantage?
Does the process eliminate steps that do not add value?
Does the process maximize customer value?
Will the process win orders?
7 - 17
Process Analysis and Process Analysis and DesignDesign
Flow Charts - Shows the movement of materials
Time-Function Mapping - Shows flows and time frame
Value-Stream Mapping - Shows flows and time and value added beyond the immediate organization
Process Charts - Uses symbols to show key activities
Service Blueprinting - focuses on customer/provider interaction
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Value-Stream MappingValue-Stream Mapping
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Service BlueprintService BlueprintPersonal Greeting Service Diagnosis Perform Service Friendly Close
Level#3
Level#1
Level#2
No
Notifycustomer
and recommendan alternative
provider.(7min)
Customer arrives for service.
(3 min)
Warm greeting and obtain
service request.(10 sec)
F
Direct customer to waiting room.
F
Notify customer the car is ready.
(3 min)
Customer departs
Customer pays bill.(4 min)
F
F
Perform required work.
(varies)Prepare invoice.
(3 min)F
FYes
FYes
F
Standard request.(3 min)
Determine specifics.
(5 min)No
Canservice be
done and does customer approve?
(5 min)
7 - 20
Special Considerations for Special Considerations for Service Process DesignService Process Design
Some interaction with customer is necessary, but this often affects performance adversely
The better these interactions are accommodated in the process design, the more efficient and effective the process
Find the right combination of cost and customer interaction
7 - 21
Service Factory Service Shop
Degree of CustomizationLow High
Deg
ree
of
Lab
or
Low
High
Mass Service Professional Service
Service Process MatrixService Process Matrix
Commercial banking
Private banking
General-purpose law firms
Law clinicsSpecialized hospitals
Hospitals
Full-service stockbroker
Limited-service stockbroker
Retailing
Boutiques
Warehouse and catalog stores
Fast-food restaurants
Fine-dining restaurants
Airlines
No-frills airlines
Figure 7.9
Digital orthodontics
Traditional orthodontics
7 - 22
Improving Service Improving Service ProcessesProcesses
Layout Product exposure, customer
education, product enhancement
Human Resources Recruiting and training
Impact of flexibility
7 - 23
Equipment and TechnologyEquipment and Technology
Often complex decisions
Possible competitive advantage Flexibility
Stable processes
May allow enlarging the scope of the processes
7 - 24
Production TechnologyProduction Technology Machine technology
Automatic identification systems (AISs)
Process control
Vision system
Robot
Automated storage and retrieval systems (ASRSs)
Automated guided vehicles (AGVs)
Flexible manufacturing systems (FMSs)
Computer-integrated manufacturing (CIM)
7 - 25
Machine TechnologyMachine Technology
Increased precision
Increased productivity
Increased flexibility
Improved environmental impact
Reduced changeover time
Decreased size
Reduced power requirements
9 - 26
99 Layout StrategiesLayout Strategies
OPMG 310 OPMG 310 Fall 2011Fall 2011
9 - 27
OutlineOutline The Strategic Importance of
Layout Decisions
Types of Layout
Office Layout
Retail Layout Servicescapes
Warehousing and Storage Layouts Cross-Docking
Customizing
9 - 28
Outline – ContinuedOutline – Continued
Fixed-Position Layout
Process-Oriented Layout Computer Software for Process-
Oriented Layouts
Work Cells
Requirements of Work Cells
Staffing and Balancing Work Cells
The Focused Work Center and the Focused Factory
9 - 29
Layout Design Layout Design ConsiderationsConsiderations
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
9 - 30
Types of LayoutTypes of Layout
1. Office layout
2. Retail layout
3. Warehouse layout
4. Fixed-position layout
5. Process-oriented layout
6. Work-cell layout
7. Product-oriented layout
9 - 31
Supermarket Retail LayoutSupermarket Retail Layout
Objective is to maximize profitability per square foot of floor space
Sales and profitability vary directly with customer exposure
9 - 32
Store LayoutStore Layout
Figure 9.2
9 - 33
Retail SlottingRetail Slotting Manufacturers pay fees to retailers
to get the retailers to display (slot) their product
Contributing factors Limited shelf space
An increasing number of new products
Better information about sales through POS data collection
Closer control of inventory
9 - 34
Warehousing and Storage Warehousing and Storage LayoutsLayouts
Objective is to optimize trade-offs between handling costs and costs associated with warehouse space
Maximize the total “cube” of the warehouse – utilize its full volume while maintaining low material handling costs
9 - 35
Warehousing and Storage Warehousing and Storage LayoutsLayouts
Warehouse density tends to vary inversely with the number of different items stored
Automated Storage and Retrieval Systems (ASRSs) can significantly improve warehouse productivity by an estimated 500%
Dock location is a key design element
9 - 36
Cross-DockingCross-Docking Materials are moved directly from
receiving to shipping and are not placed in storage in the warehouse
Requires tight scheduling and accurate shipments, bar code or RFIDidentification used foradvanced shipmentnotification as materialsare unloaded
9 - 37
CustomizingCustomizing Value-added activities performed at
the warehouse
Enable low cost and rapid response strategies Assembly of components
Loading software
Repairs
Customized labeling and packaging
9 - 38
Shipping and receiving docks
Office
Cu
sto
miz
atio
n
Conveyor
Storage racks
Staging
Warehouse LayoutWarehouse LayoutTraditional Layout
9 - 39
Warehouse LayoutWarehouse LayoutCross-Docking Layout
Shipping and receiving docks
Off
ice
Shipping and receiving docks
9 - 40
Fixed-Position LayoutFixed-Position Layout Product remains in one place
Workers and equipment come to site
Complicating factors Limited space at site
Different materials required at different stages of the project
Volume of materials needed is dynamic
9 - 41
Alternative StrategyAlternative Strategy As much of the project as possible
is completed off-site in a product-oriented facility
This can significantly improve efficiency but is only possible when multiple similar units need to be created
9 - 42
Process-Oriented LayoutProcess-Oriented Layout
Like machines and equipment are grouped together
Flexible and capable of handling a wide variety of products or services
Scheduling can be difficult and setup, material handling, and labor costs can be high
9 - 43
Surgery
Radiology
ER triage room
ER Beds Pharmacy
Emergency room admissions
Billing/exit
Laboratories
Process-Oriented LayoutProcess-Oriented Layout
Patient A - broken legPatient A - broken leg
Patient B -Patient B - erratic heart erratic heart pacemakerpacemaker
Figure 9.3
9 - 44
Work CellsWork Cells Reorganizes people and machines
into groups to focus on single products or product groups
Group technology identifies products that have similar characteristics for particular cells
Volume must justify cells
Cells can be reconfigured as designs or volume changes
9 - 45
Advantages of Work CellsAdvantages of Work Cells1. Reduced work-in-process inventory
2. Less floor space required
3. Reduced raw material and finished goods inventory
4. Reduced direct labor
5. Heightened sense of employee participation
6. Increased use of equipment and machinery
7. Reduced investment in machinery and equipment
9 - 46
Requirements of Work CellsRequirements of Work Cells
1. Identification of families of products
2. A high level of training, flexibility and empowerment of employees
3. Being self-contained, with its own equipment and resources
4. Test (poka-yoke) at each station in the cell
9 - 47
Improving Layouts Using Improving Layouts Using Work CellsWork Cells
Current layout - straight lines make it hard to balance tasks because work may not be divided evenly
Improved layout - in U shape, workers have better access. Four cross-trained workers were reduced.
Figure 9.10 (b)
U-shaped line may reduce employee movement and space requirements while enhancing communication, reducing the number of workers, and facilitating inspection
9 - 48
Focused Work Center and Focused Work Center and Focused FactoryFocused Factory
Focused Work Center Identify a large family of similar products
that have a large and stable demand
Moves production from a general-purpose, process-oriented facility to a large work cell
Focused Factory A focused work cell in a separate facility
May be focused by product line, layout, quality, new product introduction, flexibility, or other requirements
9 - 49
Repetitive and Product-Repetitive and Product-Oriented LayoutOriented Layout
1. Volume is adequate for high equipment utilization
2. Product demand is stable enough to justify high investment in specialized equipment
3. Product is standardized or approaching a phase of life cycle that justifies investment
4. Supplies of raw materials and components are adequate and of uniform quality
Organized around products or families of Organized around products or families of similar high-volume, low-variety productssimilar high-volume, low-variety products
9 - 50
Product-Oriented LayoutsProduct-Oriented Layouts Fabrication line
Builds components on a series of machines
Machine-paced
Require mechanical or engineering changes to balance
Assembly line
Puts fabricated parts together at a series of workstations
Paced by work tasks
Balanced by moving tasksBoth types of lines must be balanced so that the time to perform the work at each station is the same
9 - 51
McDonald’s Assembly LineMcDonald’s Assembly Line
Figure 9.12
9 - 52
Disassembly LinesDisassembly Lines
Disassembly is being considered in new product designs
“Green” issues and recycling standards are important consideration
Automotive disassembly is the 16th largest industry in the US
9 - 53
Assembly-Line BalancingAssembly-Line Balancing Objective is to minimize the imbalance
between machines or personnel while meeting required output
Starts with the precedence relationships Determine cycle time
Calculate theoretical minimum number of workstations
Balance the line by assigning specific tasks to workstations
9 - 54
Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time
requirements.
Product Focused Layouts: Product Focused Layouts: Line BalancingLine Balancing
Since the flow is repetitive – line balancing is critical
Why is line balancing important?1. It allows us to use labor and equipment
more efficiently.2. To avoid fairness issues that arise when
one workstation must work harder than another.
9 - 55
Cycle time is the maximum time allowed at each workstation to
complete its set of tasks.
Cycle TimeCycle Time
Note: Cycle time also establishes the output rate of a line
9 - 56
Wing Component ExampleWing Component Example
This means that tasks B and E cannot be done until task A has been completed
Performance Task Must FollowTime Task Listed
Task (minutes) Below
A 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, H
Total time 66
Being wants to develop a precedence diagram for an electrostatic wing component that requires a total assembly time of 66 minutes. Boeing determines that there are 480 productive minutes of work available each day. Furthermore, the production schedule requires that 40 units of the wing component be completed from the assembly line each day. Boeing want to group the tasks into workstations.
9 - 57
Wing Component ExampleWing Component Example
Performance Task Must FollowTime Task Listed
Task (minutes) Below
A 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, H
Total time 66 I
GF
C
D
H
B
E
A
10
1112
5
4 3
711 3
Figure 9.13
9 - 58
I
GF
C
D
H
B
E
A
10
1112
5
4 3
711 3
Figure 9.13
Performance Task Must FollowTime Task Listed
Task (minutes) Below
A 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, H
Total time 66
Wing Component ExampleWing Component 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
9 - 59
Wing Component ExampleWing Component Example
I
GF
C
D
H
B
E
A
10
1112
5
4 3
711 3
Figure 9.13
Performance Task Must FollowTime Task Listed
Task (minutes) Below
A 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, H
Total time 66
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations = 5.5 or 6
Line-Balancing Heuristics
1. Longest task time Choose the available task with the longest task time
2. Most following tasks Choose the available task with the largest number of following tasks
3. Ranked positional weight
Choose the available task for which the sum of its task time and the following task times is the longest
4. Shortest task time Choose the available task with the shortest task time
5. Least number of following tasks
Choose the available task with the least number of following tasks
Table 9.4
9 - 60
I
GF
C
D
H
B
E
A
10 115
4
3
3
7
12 11
WorkstationEligible Task (positional weight)
Assign (Task time) Time
RemainingStationIdle Time
1 A (66)None
A (10) 22
2 B (33), E (26)None
B (11) 11
3 E (26), C (18), D (17) E (12) 0 0
4
5
6
H(14), C (18), D (17)H(14), D (17)H(14), F(13)G(10), H(14)
NoneG(10)I(3)
C (5)D(4)F(3) H (11)
G(7)I(3)
7301
52
0
1
2
Cycle Time: 12 minutes per workstation
Rule: “Ranked Positional weight”
Assigning Tasks to Workstations:
9 - 61
480 available mins per day
40 units required
Cycle time = 12 mins
Minimum workstations = 5.5 or 6
Performance Task Must FollowTime Task Listed
Task (minutes) Below
A 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, H
Total time 66Station 1
Wing Component ExampleWing Component Example
Station 2
Station 3Station 4
Station 3
Station 5
Station 6Station 6
I
GF
H
C
D
B
E
A
10 11
12
5
4
3 7
11
3
Figure 9.14
9 - 62
Performance Task Must FollowTime Task Listed
Task (minutes) Below
A 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, H
Total time 66
Wing Component ExampleWing Component 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%
Percentage of Idle Time (i.e. Balance Delay) = 100% - Efficiency = 8.3%
Idle Time per Cycle = Time allocated per unit – Time needed per unit = (cycle time)(# of stations) - ∑ Task times = (12 min)(6 stations) – 66 = 6 min
Another ExampleDr. Lori Baker, operations manager at Nesa Electronics, prides herself on
excellent assembly-line balancing. She has been told that the firm needs to complete 96 instruments per 24-hour day. The assembly-line activities are:
a) Draw a precedence diagram.b) If the daily (24-hour) production rate is 96 units, what is the highest
allowable cycle time in order to meet the required production rate?c) If the cycle time after allowances is given as 10 minutes, what is the daily
(24-hour) production rate?d) With a 10-minute cycle time, what is the theoretical minimum number of
workstations with which the line can be balanced?e) With a 10-minute cycle time and six workstations, what is the efficiency?f) What is the total idle time per cycle with a 10-minute cycle time and six
workstations?g) What is the best work station assignment you can make without exceeding
a 10-minute cycle time and what is its efficiency?
Solution