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OPM 08E: Operation Transformation Management
Instructor: K. S. Thyagaraj
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Design &
Develop-ment
Introduction
Growth Maturity Decline
Sales - low rising peak declining
Costs high high high low low
Profits negative negative small high declining
Competitors few few few many declining
Principle
Order
Qualifier
- price, quality price,
quality
quality,
delivery
dependability
quality, delivery
dependability
Principle
Order
Winner
- design &
performance,
delivery lead
time
product
variety,
delivery
lead time
product
variety (but to
a lesser extent
than in
Growth
Stage), price
price (only
successful
products
retained)
Product and Process Life Cycle
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Design &
Develop-
ment
Introduction
Growth Maturity Decline
Production
Planning
Techniques
CAD/CAM,
CIM
Concurrent
Engineering,
FMEA, DFSS
finite
scheduling
using MRP-II,
managing
bottleneck
using
OPT/TOC.
Designchanges (if
any) are
incorporated.
Less popular
designs
discarded.
finite
scheduling
using MRP-II,
incorporating
flexible, lean
production
practices with
JIT finalassembly
take
advantage of
economies-of-
scale, and
learning curve
to reduce cost
take advantage of
learning curve and
reduced product
variety to reduce
cost
Product and Process Life Cycle
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Design &
Develop-
ment
Introduction
Growth Maturity Decline
Push-Pull
boundary
- end-product
made-to-order,
componentsmade-to-stock.
Less of push
more of pull.
end-product
made-to-
order,components
made-to-
stock. More
of push Less
of pull.
end-products
and
componentsboth made-to-
stock. All of
Push
end-products and
components both
made-to-stock. Allof Push
Product and Process Life Cycle
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Design &
Develop-
ment
Introduction
Growth Maturity Decline
Production
Process
- fabrication is
process focused
with general
purpose
machines while
assembly is
product focused .
Machines are
preferably NC.
fabrication
using Group
Technology
with
general
purpose
machines
Assembly is
productfocused.
Machines
are
preferably
NC
fabrication
using Group
Technology
with special
purpose
machines with
product
focused
assembly.Machines are
preferably Hard
Automated .
fabrication using
Group Technology
with special
purpose machines
with product
focused assembly.
Machines are
(manually
operated or NC) orHard Automated if
sufficient volume
exists
Product and Process Life Cycle
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Design &
Develop-
ment
Introduction
Growth Maturity Decline
Facilitylayout highly flexiblefacility (job-
shop)
flexiblefacility dedicatedfacility (flow
shop)
general facility
Job Breadth
proportional
to workers
job
satisfaction
broad
(fabrication)
narrow
(assembly)
broad
(fabrication)
narrow
(assembly)
broad
(fabrication)
narrow
(assembly)
broad(fabrication)
narrow(assembly)
Product and Process Life Cycle
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Medium Term Capacity Planning
Master Production Schedule- amount and need dates of specific end-items.
MPS exploded- gives parts and sub-assemblies requirements offset by lead
times- backward scheduled
thus load on individual work centers is obtained assuming infinite capacity, based
on one unit of average product in a product family, and std. hrs obtained using
performance measurement.
10-20% of lead time is comprised of set-up and run-time
remaining 80-90% of lead time the job spends waiting to be moved, being moved
or in queue.
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Medium Term Capacity Planning: Improve standard lead-time
Reduce set-up time(SMED/OTED)
Improve job movement improve workplace layout - waiting to be moved, beingmoved .
For functional or process layout Computerized Relative Allocation of Facilities(CRAFT)
Combination layout Process Layout for Fabrication and Product Layout forassembly
GT (Cellular) Layout- parts requiring similar operations grouped together andundergo operations in a cell - machines arranged usually in U shape minimal
no. of workers
Assure Quality (TQM)
Reduce WIP inventory- queue in front of work centers- improve scheduling,Reliability Centered Maintenance (RCM).
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Short Term Capacity Planning: Leveling Load in Process
Layout(job shop/batch flow)
Overlapping-dont wait for entire lot to be completed - send portion of completed
lot to next operation
Operation splitting- splits lot and sends to more than one machine
Lot splitting-breaking up order and running part of it ahead of schedule
Reduce load- reject orders- negotiate longer due dates or acceptance of part
shipments.
Simulate alternate MPS on resource requirement and obtain feasible MPS.
alternate routing, sub-contracting , scheduling overtime, reallocating work force,
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Short Term Capacity Planning leveling load in Product
Layout(worker/machine paced line flow)
Assembly Line balancing
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forward schedule- for custom order-delivery ASAP increases WIP
backward schedule- assembly reduces WIP.
Load Calculation- Gantt Chart
Job Shop Loading- each job can be processed at any of the machine center and
operation time varies at each machine
1. n jobs/n machines assignment method, and
2. n jobs/m(
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Job Sequencing: N jobs-1 machine
1. Priority Rules:
(1)First Come First Serve,
(2) Shortest Processing Time( best except for variance of job lateness (Slack-
time per operation, Earliest Due Date), mean job tardiness (Critical Ratio))
(3)Slack-time per operation( (remaining time till due date -remaining
processing time)/remaining no. of operations),
(4) Critical Ratio (remaining processing time/remaining time till due date),
(5)Shortest Weighted Processing Time(delay cost, holding cost etc.)
2. Performance Measures: total, mean, and variance - flow time, lateness(+/-),
tardiness(+), and waiting time.
Short Term Capacity Planning in Job Shop
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Load is in excess of capacity at bottleneck:
1. improve utilization2. reduce variation in standard cycle time
3. reduce standard cycle time, and
4. increase machine availability.
(1) and (2) improves efficiency at bottleneck
(3) and (4) increases capacity of bottleneck.
improve bottleneck utilization-see that bottleneck is not idle due to lack of material
increase machine availability in short term by scheduling additional shifts and/orovertime, outsourcing part of job, sub-contracting workers.
reduce standard run time- reduce set-up time (SMED/ OTED)- use CNC machines.
reduce variation in standard run time- use CNC machines
Short Term Capacity Planning- Batch Flow-Managing Bottleneck
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Job Sequencing: Flow shop
1. N jobs-2 machine in series,
2. N jobs- 3 machines in series,
3. N jobs- M machines in series,
4. N jobs- M identical machines in parallel.
Short Term Capacity Planning- Batch Flow
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Scheduling Process Industry-
inverted BOM- example Refinery- jet fuel unleaded regular gasoline-unleaded
high-octane gasoline- lot-size of each product to produce before changing over
production to next product to be determined
Scheduling Process Industry
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Long Term Capacity Planning
Methodology : decision trees to evaluate alternatives
5-10 year decision period
Example: Increase machine capacity in long term- by replacing with or adding a
faster equipment.
Required number of machines=forecasted sales/(forecasted yield/machine)
P(r-c)+(1-P)(-c)>=0, P>c/r
Large capacity increments (money tied up vs. economies of scale) or small capacity
increments.
Alternative capacity (overtime + multiple shifts postpones tying up money) + small
capacity increments or large capacity increments.
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Location of Facility and Transportation Design
Logistics cost (inventory, facility cost, and transportation) vs. Responsiveness.
Location model: Gravity vs. Network optimization model
Modes of transportation-air, package carriers, truck, rail, water, pipeline,
intermodal
Transportation Design evaluates options in terms of costs and complexity: (i)
transportation cost vs. inventory aggregation cost. (ii) transportation cost vs.
responsiveness
Routing methods: saving matrix method, generalized assignment method.
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Service Industry
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Performance Standards
Performance standards
Purpose of labor costing, wage incentive, scheduling and machine loading
Informal-supervisors estimate and past performance data
Work-Time distribution:
total standard time=normal time + standard allowance for personal time +
allowances for measured delays normal to the job + fatigue allowances
Performance Rating
normal time=actual observed time x performance rating/100.
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Work Measurement
Work Measurement Systems
Stop watch time studies and simultaneous performance rating
Work sampling for proportion and non-cyclic pattern of work
normal time=(total observed time x work time in decimals x average performance
rating in decimals)/total pieces produced
Standard data work measurement systems
1. Universal data based on minute elements of motion
2. Standard data based on major elements of job
Wage incentive
1. Piece rate
2. Standard hour plan
(return)
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SMED/OTED
Advantages of small Set-up time:
1. costs less can change set-up more often can produce in smaller batches
improved flexibility- reduced lead time
2. Smaller batchesdoesnt tie up machinery for long produce only what is needed
(MTO)
3. Production defects in a batch is identified quickly and can be corrected.
4. WIP is reduced (flow time=WIP/throughput) and flow time is reduced for a giventhroughput.
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SMED/OTED
Internal tasks (stop-time activities)- machine has to be stopped
External tasks(run-time activities )- machine can be running.
Stage 1: Identify internal and external activities perform external activities while
machine is working on another batch- instead of during the set-up time.
Stage 2: convert as many internal activities to external activities- (takes a number of
months and some expenditure in tooling and equipment)
Stage 3: strive to eliminate /improve each elemt of the remaining internal and
external activities-(takes 2-3 years or even longer-considerable expenditure)
(return)
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Reliability Centered Maintenance
Reliability Centered Maintenance.
Stage 1: what failures might occur, what effect these failures would have, and how
critical each would be in respect of both safety and economical consequence
(FMEA).
Stage 2: for each failure risk identified, deciding what action needs to be taken
either to remove the risk of the failure occurring, or to minimize its effects (RCM
diagram maximizing safety and obtain best value for money from maintenance
activity.)
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Reliability Centered Maintenance
FMEA:
1. Define equipment to be analyzed
2. Construct block diagrams
3. Identify failure modes and effects.
4. Determine criticality of each failure mode.
5. Identify failure detection methods.
6. Identify action required.
7. Assess effects of action taken.
8. Documentation
RCM diagram:
Preparing the RCM maintenance schedules
Reducing the maintenance workload