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Session 5
Vinay Kumar Kalakbandi
Assistant Professor
Operations & Systems Area
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Operations Management - II Post Graduate Program 2015-17
Agenda
• Recap
• Donner company – Recommendations
• Process Selection
• Facility layout planning
• Inventory Management - Basics
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Donner Company – Recommendations
• Tactical chances
• Operational changes
• Strategic changes
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PROCESS SELECTION
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Process Selection
• Deciding on the way production of goods or
services will be organized
• When do you do it?
• Why is it important?
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Key factors
• Key factors that process selection depends on
– Volume of output
– Variety of output
• Other factors to consider
– Flexibility of equipment
– Flow of material
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Remember the Level of analysis?
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Arrange these in the decreasing order of
Volume of output.
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Do you have it?
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Arrange these in the increasing order of
Variety of output.
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Do you have it?
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Observations?
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Volume
Var
iety
To
o
Exp
ensive
No
t
Co
mp
etit
ive
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Product Process Matrix
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Continuous flow
• Highly standardized goods and services
• Very efficient, very high volume
• Very rigid, lack of variety, costly to change, very
high cost of downtime
• Usually continuous flow
• Equipment has very less flexibility
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Repetitive/Assembly
• Standardized goods or services
• Low per unit cost
• High volume, efficient
• Flexibility?
• Flow?
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Batch Process
• Semi-standardized goods and services
• Flexibility
– easy to add or change products or services
• Moderate cost per unit, moderate scheduling
complexity
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Job Shop
• Customized Goods and Services
• Able to handle a wide variety of work
• Slow, high cost per unit, complex planning and
scheduling
• Flexibility?
• Flow?
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Layout Planning
• Layout planning in manufacturing & service organisations
– deals with physical arrangement of various resources that are available in the system
– with an objective to improve the performance of the operating system
• Benefits of good layout design
– Jobs in a manufacturing system travel lesser distance
– Customers spend less time in service systems
– Costs & Lead time come down
– Improved quality
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Types of Layout
• Process Layout
– arrangement of resources on the basis of the process characteristics of the resources available
• Product Layout
– order in which the resources are placed follow exactly the visitation sequence dictated by a product
• Group Technology (GT) Layout
– seeks to exploit commonality in manufacturing and uses this as the basis for grouping components and resources
• Fixed Position Layout
– emphasis is not so much on optimum position of resources required for the process, since the product itself largely dictates this; the focus is on gaining better control of material flow and reducing delays
Process Layout
L L L L
M M
M M
D D
D D
D D
G G G
L L L L
Product A
Product C
Product B
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L L M D G
Product Layout
L M D G
L L D G
Product C
Product A
Product B
Group Technology Layout
L
L
L
L
M M
M M
D D
D D
D D
G G
G
L L
L
L
Cell 1 Cell 2
Cell 3 Cell 4
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Design of GT Layout
• The objective is one of sub-dividing an universe of machines and components into sub-groups
– Each sub-group of components form a part family and is endowed with a corresponding sub-group of machines known as machine groups
– Each sub-group is referred to as a cell
• GT layout design is done with a systematic analysis of a machine-component incident matrix
• Number of methods available for identifying sub-groups
– Production Flow Analysis (PFA)
– Clustering techniques
– Matrix manipulation methods
– Graph theory
– Mathematical programming methods
Machine – Component Incident Matrix
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
A 1 1 1
B 1 1 1
C 1 1 1 1
D 1 1 1
E 1 1 1 1 1 1
F 1 1 1
G 1 1 1 1 1 1
H 1 1 1 1 1 1
I 1 1 1 1 1 1
J 1 1 1 1 1 1
Mac
hin
es
Components
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Machine – Component Incident Matrix
2 3 5 8 1 4 7 20 18 17 15 14 13 6 9 11 12 16 19
B 1 1 1 1
C 1 1 1 1
D 1 1 1
A 1 1 1
F 1 1 1
E 1 1 1 1 1 1
I 1 1 1 1 1 1
G 1 1 1 1 1 1
H 1 1 1 1 1 1
J 1 1 1 1 1 1
Mac
hin
es
Components
Fixed Position Layout
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Layout Design - Performance Measures
Performance Measure Basis for measurement
Distance travelled by jobs in the shop floor Kg - Metres of job movement for each product
Space utilization index Minimum space required to actual space utilised
Material Handling costs Rupees per month
Lead time of the processes Hours per average product
Investment in work-in-progress Rupees per month
Inter-departmental moves Number and quantum of inter-departmental
moves
Utilisation of the resources Percent to total capacity
Ease of production control Number of job cards and control documents
generated; Size of the progress chasing staff
Number of ownership changes Number of times the responsibility for the job
changes hands
Design of Product Layout
• Several Mass Production Systems are in operation today
– Various sub-assemblies in a mass producer need to be configured to match the production rate
– Similarly, the final assembly stations also need to have the required number of resources at each station to meet the targeted demand
• A product layout design
– seeks to identify the minimum number of resources required to meet a targeted production rate and the order in which these resources are to be arranged
– Technique employed for designing of product layout is known as line balancing
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Line Balancing – Decisions and
Tradeoffs • Line balancing
– A method by which the tasks are optimally combined without violating precedence constraints and a certain number of workstations designed to complete the tasks
– Key decision variables are production rate, cycle time and the number of workstations, which are inter-related
– Solving the “line balancing” problem calls for striking the right trade-off between increased production and better utilisation of resources
• Cycle time is the ratio of the available time to the actual (desired) production rate
Line Balancing
oductionDesiredActual
TimeAvailableTimeCycleDesiredActual
Pr)()(
TimeCycle
timestaskallofSumrequiredstationsworkofNoMinimum .
timeCyclensworkstatioofNumber
timestaskallofSumnUtilisatiosourceAverage
*Re
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55000.00
41
80
0.0
0
UpUpTESTING AREA
FOR ACDINING AREA
SUBASSEMBLY
TABLE
FREIGHT
LIFT
DC RAW MATERIAL
STORAGE RACKS
LIFT
BOXING
AREA
DC
QC
AR
EA
RAW MATERIAL
STORAGE RACKS
RACK R&D
AREA
CABINET
STORAGE
AREA CABINET STORAGE
AREA
CO
IL S
TO
RA
GE
AR
EA
MATERIAL STORAGE RACKS
FINISHING STAGES
ASSEMBLY LINE 3
ASSEMBLY LINE 2
ASSEMBLY LINE 1
TEST BAY ARRAY
DC Power Systems – The Current Layout
DC Power Systems – Task distribution
• Cycle time (TAKT time) – 480 Secs
• Output Per day – about 150 (ideal)
• Output Per day – not more than 100 mostly
0
100
200
300
400
500
600
Tim
e (
in s
eco
nd
s)
Task times
Cumm. Task time
Cycle Time
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Issues with the Current System
• High number of stations: – Sixteen stations - sixteen operators work on one work piece.
– Cumulative statistical fluctuation
• Operator fatigue due to excessive movement: – Back and forth to the inventory racks
• Lack of station discipline: – Just fill the gaps
• Absenteeism: – One operator effects 1/3rd of the production
• Lack of flexibility in the line: – No Place to add more stations
• Lack of teamwork and coordination: – 16 is a crowd
• Spiky demand of Product Y: – Lack of Production control
The Proposed layout
Up Up
TESTING AREA
FOR ACDINING AREA
SU
BA
SS
EM
BL
Y
TA
BL
E
FREIGHT
LIFT
DC RAW MATERIAL
STORAGE RACKS
LIFT
BOXING
AREA
DC
QC
AR
EA
RAW MATERIAL
STORAGE RACKS
RACK R&D
AREA
CABINET STORAGE AREA
CABINET STORAGE
AREA
CO
IL S
TO
RA
GE
AR
EA
FINISHING STAGES
TEST BAY ARRAY
KIT MAKING
AREA
WIP
STORAGE
AREA
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Alternative System
0
200
400
600
800
1000
1200
1400
1600
Station 1 Station 2 Station 3 Station 4 Station 5
Cumm. Task times
Cycle time
Comparing the two systems
Attribute Old Layout New Layout
Throughput (ideal) 150 180
Variability High Low
Flexibility to change in process
configuration
No 3 stations could
be added
Manpower 54 54
Material handling High Low
Flexibility to change in demand Low High
Teamwork and coordination 16 member teams 5 member teams
Operator movement High Low
Effect of absenteeism High Low
Shop floor Inventory 50 units inventory Zero
No. of Testing Bays required 8 11
