MAN 3506: Midterm 2 (FAU)
10. Making Information Transparent:
* Making information transparent (i.e. sharing it with) members of the supply chain- information such as actual and forecasted customer demand, due dates, extensions and responsibilities, etc. * Many information technology (IT) systems used to facilitate information flows within supply chains use electronic data interchange (EDI) * EDI is a technology that facilitated a seamless flow of information to improve the exchange of standardized documents such as customer orders, shipping information, and bill payments between customer systems
6. Having a balanced workflow:
* assemble line balancing * Takt Time (Cycle Time) used to match the pace of production with customer demand Both, internal logistics systems as well as external logistics systems should be considered/ balanced. 1. Internal logistic systems: has to do with management and movement of materials within a manufacturing facility. 2. External logistic system: has to do with the collection, transportation, and distribution of goods between suppliers and the plant, as well as between the plant and the consumers.
Types of basic processes (FIVE):
1. Job Shop Process: high level of customization (requirements are diff. for each product because of each product's uniqueness/differing customer specifications. LOW volume 2. Batch Process: moderate/limited variety (customization) MODERATE volume...desire to benefit somewhat from economies of scale 3. Repetitive Process: standardized product, HIGH volume, specialized equipment 4. Continuous-flow Process: around-the-clock operation, HIGH volume (but output can't be counted individually) 5. Project Process: product is unique and typically produced one at a time, non-routine work, unique set of objectives, stringent time frame and budget constraints
Two rules by which we can balance assembly line
1. Maximum number of following tasks rule 2. Longest task time rule
Eight Common Sources of Waste (Muda):
1. Waste from overproduction and excess inventory 2. Waste from waiting time 3. Waste from unnecessary transportation/movement 4. Waste from defective products 5. Waste from inappropriate processing (using wrong equipment, tools, procedures etc.) 6. Waste from underutilization of workers 7. Waste from unnecessary motion (walking, bending, stretching, lifting, etc.) 8. Misguided effort (producing poorly guided goods or services that do not meet the needs of the customers)
The Three "Fundamental" Questions that must be addressed in managing capacity:
1. What kind of capacity is needed? 2. How much is needed? 3. When is it needed?
Primary Considerations that guide the selection of a process:
1. level of customization (i.e. extent of variety of products or services the system is to handle.) 2. the expected volume of output needed
Some new product development-related concepts & strategies
3. Concurrent engineering: bringing people from different departments and levels of a firm together from the very start to collectively design a new product while considering every aspect of it =s design and development. Its benefits: * enables a better design (through synergy of though/sharing of different perspectives) * reduces product development time and time to bring to market
Beyond these 3 basic layouts: OTHER LAYOUTS
4. Hybrid layout: involves some combination of two or more of the three basic types of layouts 5. Cellular Manufacturing layout: is based on the principles of group technology (GT), a parts coding and classification system in which parts or products having similar characteristics are grouped together into families and then a dedicated manufacturing cell created for the manufacturing of a particular "family" of parts/products.
Some new product development-related concepts & strategies
4. Reverse engineering: dismantling and studying a competitor's product in order to discover ways to improve one's own product.
Some new product development-related concepts & strategies
5. Mass customization: is the mass production of individually customized products through the use of components assembles in several different configurations. Note: mass customization strategically enables a firm to compete simultaneously on the basis of both product customization as well as low cost ...Technology allows to customize products at low costs
Value Engineering
Aims to improve the value of a new product during its development by significantly reducing its cost via an analysis of all product- and process-related components - from its design to its final delivery For example: analyzing a product's initial design to see whether a certain component is "essential" to its design or if can be done without; or examining what material a certain component can be made of (in order to reduce the product's cost by design)
Lean Philosophy states that:
Any activity or process that does NOT add value to the product/service is wasteful and should be eliminated
Economies of Scale:
Average unit cost of production goes down as the volume of output increases
11. Making fewer suppliers and building strong relationships....
Having full cooperation/ interdependency/mutually-beneficial collaboration) with supply chain partners
Short-, Medium-,and Long-Term Capacity Decisions:
Medium-term: hiring pert-time workers, analyzing monthly or quarterly capacity vs. production plans; sub-contracting; etc.
JIT/Lean:
Philosophy that encompasses every aspect of the process, from design to after the sale of a product, in its effort to remove waste and synchronize supply to meet customer demand in smooth uninterrupted flow.
Pull manufacturing:
Production is based on actual customer orders (rather than on demand forecasts) and is typically used when a product's demand is highly variable or its production is complex
3. Setup time Reduction (faster setup times):
Setup (or changeover): the performance of activities needed to change or readjust a process between successive lots of production.
Short-, Medium-,and Long-Term Capacity Decisions:
Short-term: have to do with capacity "control": including scheduling of employees, balancing the workload, analyzing weekly schedules and bottlenecks, etc.
Layout
the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system
Mass Customization Process (another type of process)
"Such a process allows a firm to produce customized products at the speed, volume, cost, and quality of a repetitive or continuous-flow process"... example: production of DELL computers...)
System Capacity
(How many units can the system produce) each day (with a day having 8 hours of production time)?
Push-pull boundary
(also known as decoupling point or point of postponement) -The interface between the parts of a supply chain that can be managed using a push approach and the parts that can be managed using a pull system.
Developing Capacity Strategies (some things to consider):
* Design flexibility into systems * Take into account the stage of the product life cycle * Take the "big picture/systems" approach * Recognize and eliminate/address bottlenecks * Prepare to deal with capacity "chunks" * Attempt to smooth capacity requirements * Identify the Optimal Operating Level (OOL)
Capacity Decisions are strategic (and Important) in that they:
* Impact the ability to meet future demand and compete * Require major capital investment * Can be a source of competitive advantage * Affect operating cost * Involve long term commitment and are difficult and costly to modify or change once implemented (i.e. they can be inflexible Are becoming increasingly complex and important because of globalization
Additional Challenges services face in the planning of capacity:
* many services need to be near the customers * services cannot be stored * volatility of demand
9. Use of Kanban systems:
* this Japanese term means a "sign" or "designated place" * Kanbans are visual signals used to tell workers when it is time to get or make more of something * Kanban systems are manual control systems that use containers and cards
Types of customization (4 categories):
*Engineer-to-order (ETO) *Make-to-order (MTO) *Assemble-to-order(ETO) or (ATO) *Make-to-stock (MTO)
Note:
*If the cycle time (C) is not already given, the first thing you do is calculate the Cycle time. *When solving for "C", always express "P" in that unit of time in which the task times are given. (sec., mins,. hrs.,)
Objectives of assembly Line Balancing:
*Produce a volume of output that meets demand *Achieve smooth workflow *Minimize idle time
Chapter 4: Product Innovations
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Chapter 7: Capacity Planning
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Chapter 9- Process Design and Layout Planning
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Chapter 14 - Lean Operations and Supply Chains
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Some things that motivate or enable product innovation
1. Advances in technology 2. Changes in government regulations (such as those of the FDA and EPA) 3. desire to achieve business growth
Measuring Capacity Performance:
1. Capacity Efficiency: actual output / effective capacity x 100% *A measure of how well the available effective capacity is being used 2. Capacity Utilization: actual output / design capacity x 100% *Capacity utilization is a measure of the extent to which the capacity designed and installed is actually used.
Steps in the Capacity Planning Process
1. Estimate future capacity requirements 2. Evaluate existing capacity and facilities and identify gaps 3. Identify alternatives for meeting requirements 4. Conduct financial analyses of each alternative 5. Assess key qualitative issues for each alternative 6. Select the alternative to pursue that will be best in the long term 7. Implement the selected alternative 8. Monitor results
4 stages of product life cycle
1. Introduction 2. Growth 3. Maturity 4. Decline NOTE: Product life cycles are increasingly becoming shorter... TV's, electronic games, etc.
Strategies for adding capacity:
1. Leading Strategy: process of increasing capacity (Proactively) in anticipation of future in product demand 2. Lagging Strategy: the process of increasing capacity (reactively) only after experiencing a sizeable increase in product demand
Success with a New Product Results From:
1. Meticulous planning- based on an understanding of the market and customer needs; 2. Offering a good value for the price (i.e solid price-value relationship); and 3. Skillful management of the product's development, sales, and marketing. Note: interestingly more than 85% all new product fail!
So, why do new products fail? They fail because of:
1. Misunderstanding (or not identifying) the "Target market" 2. Incorrect product positioning relative to competing products For example: the product being undifferentiated or not based on an understanding of the actual needs of the target market 3. Mismatch between the price of the product and its perceived benefits... for example: blu-ray discs and players
12. Preventative maintenance and housekeeping
1. Preventive maintenance: because lean systems have very little work-in-process and finished goods inventories, equipment breakdowns can be very disruptive. 2. Housekeeping...
3 basic types of layout
1. Product Layout: where components of the production system are arranged according to the sequence in which the product is assembled or service delivered Example: manufacturing units and continuous processes; sugar, paper, cement, automobile industries, electronic appliances like printers, and refrigerators... (a product layout can have a straight line, L, O, S, or U shape) 2. Process Layout: where components of the production system are arranged according to the general function they perform (i.e. they are positioned by "type") Example: restaurants, clothing factories, clothing accessories facilities, and toy factories. 3. Fixed-position layout: where the product itself remains stationary while components of the production system are moved around the product." Example: a ship, a highway, a bridge, a house, and an operating table in a hospital operating room.
Why are layout decisions important?
1. Shaping a layout requires substantial investment of money and effort. 2. Can involve long-term commitments. 3. has significant impact on cost and efficiency of short-term operations.
Economies of scale result from:
1. Spreading of fixed costs 2. Cutting costs of purchased materials (quantity discounts/bargaining power) 3. Finding process advantages such as: * Greater division of labor/specialization * Justifying the expense of better technology * Moving down the learning curve, etc.
Some new product development-related concepts & strategies
1. Understanding the notion of "value" Value= Functioning/Cost In order to understand value, firms engage in Value Analysis and Value Engineering
7. Reducing Inventory:
1. inventories can hide problems and inefficiencies 2. as such, should try to reduce all three types of inventories (raw materials inventory, work-in-process inventory, and finished goods inventory) 3. can reduce storage of raw materials inventories by having deliveries from suppliers go directly to the production floor 4. can reduce storage of WIP inventory by balancing the line 5. can reduce storage of finished goods inventories by shipping out completed units as soon as they are ready
Some new product development-related concepts & strategies
10. Computer-aided design (CAD): using software to design new products electronically rather than drawing them by hand and/or having to build physical prototypes to test * Benefits of CAD: 1. can help eliminate routine mistakes (such as scaling/proportionality problems that can occur if drawing) 2. can increase productivity of designers and reduce design time 3. can facilitate faster launch of products
Some new product development-related concepts & strategies
11. Quality function deployment (QPD): a method companies use to translate customers 'wants and needs into product or service features, to prioritize those features, and to set development targets for the product or service. Involves the House of Quality: represents a planning diagram that resembles a house having six sections.
Some new product development-related concepts & strategies
2. Robust Product Design: designing the product such that its performance is not adversely affected by the conditions (i.e. by diff kinds of minor variations such as by wear and tear of the equipment used to make it with; or variations in environmental conditions like temperature, humidity, dust, etc. that is made or used in. Examples: 1. designing the dashboard of a vehicle so it can withstand (will not crack under) different conditions of temperature and humidity 2. Umbrella fabric that will not deteriorate when exposed to different weather conditions 3. Food products that can have long shelf life 4. Designing replacement parts so they will always fit properly
Some new product development-related concepts & strategies
6. Modular design: is a design approach in which independently created units called modules can be combined with others and easily rearranged replaced, or interchanged to create different products. NOTE: this (concept of modular design) can also by helpful in mass customization
Some new product development-related concepts & strategies
7. Design for manufacturing and assembly (DFMA): has to do with reducing the number of parts a product is made of in order to make it easier to manufacture and assemble and also less expensive to product.
Some new product development-related concepts & strategies
8. Design for reliability: has to do with designing the product so that it can perform its intended function without failure (during its deign life under a prescribed set of conditions) Assuring a product's reliability is a bottom-up approach: * Product reliabiltiy: (rp)=(r1)(r2)...(r3).. parts that go into it by design Where: n- number of parts it is made of (assuming all parts being equal in importance in the functionality of the product)
Some new product development-related concepts & strategies
9. Design for disposal, remanufacturing, and recycling (DFDRR): is about determining parts of the product that can be designed for refurbishing and reuse, and the parts to be designed that re to be discarded, broken down, and recycled.
Example of capacity performance:
A classroom has 120 chairs installed in it. Classes held in this particular classroom are all capped at 50 students. During 2011, average of 40 students enrolled in classes held in this classroom. Compute the efficiency, and utilization of this particular classroom by the university. Design capacity= 120 Effective capacity= 50 Actual output= 40 * Capacity Efficiency: 80%... (40 / 50 x 100%) * Capacity Utilization: 33.33%... (40/120 x 100%)
Workstation
A grouping of one or more tasks assigned to a single employee.
Flexible Manufacturing System (FMS)
A processing method that can produce parts, allow changes to be made to products being manufactured, and handle varying levels of production
Value stream:
A sequence of activities required to design, produce and provide a good or service, and along which information, materials, and value flows (workflow).
Value Analysis
Aims to improve, at a minimum cost, the functionality of a product without affecting its existing functions and standards For example: improving the fuel-efficiency of a vehicle; or improving the quality f a service (say, strength of signal in phone service.
Capacity cushion:
Amount by which capacity exceeds expected demand Businesses, however, often maintain some amount of capacity cushion because of the potential for demand being higher than expected and/or to safeguard against the possibility of temporary losses in production capacity.
Two measures of capacity:
Design Capacity: the maximum output rate or service capacity an operation, process, or facility is designed for and can produce under ideal conditions Effective Capacity: is the design capacity minus allowances for things such as maintenance, employee absences, and customer experience. Note: * Effective capacity is always <= design capacity * Actual capacity is always <= effective capacity
Capacity Gap:
Difference between the amount of capacity required and the amount of capacity available.
Basic Objective of layout design:
Facilitate a smooth, efficient, and safe flow of work, material, and information through the system while also trying to meet demand
4. Use of Group Technology (Manufacturing Cells):
For the manufacture of families of parts that have similar characteristics/ processing requirements.
Example of Capacity Cushion:
If a firm's production capacity is 2,000 units per day and the expected demand is 1,500 units per day, then what is the capacity cushion here? Capacity cushion= 500 units.... (2,000 - 1,500) OR Capacity cushion= 33%.... (500/1500)=0.33
Technology & Automation
Important consideration in process design is determining the kind of technology and extent of automation to use
Why do firms introduce new products and/or make changes to existing products?
In-order to gain market share, stay competitive, and adapt to changes in customer needs as well as to changes in their products life cycles. For example: 1. fast-food providers constantly changing or adding to their food offerings 2. Food packages displaying the food as "organic", "non-GMO", or "natural", Etc. 3. Drawing attention to "calories" - even displaying the calorie-content of each food item
Strategic Capacity Planning
Involves forecasting demand over several years to look at the nature of demand including things like trends and cyclical patterns and then planning for capacity accordingly.
Optimal Operating Level (OOL)
Is that volume of output at which the average cost per unit of production is at a minimum.
Short-, Medium-,and Long-Term Capacity Decisions:
Long-term: decisions that cover/consider at least two years or more of time such as: *Strategic ventures/alliances *Construction of facilities/plants *Purchase of major/expensive equipment *Facility location decisions *Hiring of regular employees, etc.
Numerically Controlled (N/C) Machines
Machines that are programmed with a specific set of instructions that tell the machines the details of the operations (work) to be performed.
Capacity:
Maximum amount of output an operation is capable of producing in a given time period. Capacity should be managed keeping in mind each process or system within an organization and also the supply chain as a whole. Generally expressed in terms of output but, depending on the context, may also be expressed based on availability of inputs.
5. Assuring Quality at the Source (Jidoka)
Means doing things right the first time and stopping production should something go wrong so it can be fixed right there and then. The Japanese use a system of lights at each workstation to signal problems or slowdowns: * Green light: no problem * Amber light: workstation/worker is falling behind * Red light: serious problem Quality can also be assured at the source by using Poka-Yokes (i.1. Fail-Safing or Mistake-Proofing mechanisms)
The Five S's:
Practices that guide worker behavior and management objectives in lean operations: 1. Sort: needed from unneeded items 2. Straighten: arrange, so things are easy to find and work with 3. Shine: keep work area clean and eliminate all forms of contamination, dirt, or discarded materials. 4. Standardize: instructions, operating procedures, and employee training so that any variations/deviations will be obvious 5. Sustain: sustain the above practices by employees through understanding and acceptance.
1. Use of a Pull System of Work Flow:
Pull system: product or service is only produced after it has been ordered. * Example: in the context of food service, a five star restaurant may use the pull method. Push system: product or service is produced based on forecasts. * Example: in the context of food service, a cafeteria uses a push method.
Flexible automation (programmable automation)
Such automation uses high-cost general-purpose machines to allow for variety in output (example: it allows for each unit to be customized)
Fixed Automation:
Such automation uses specialized equipment to produce a product in a fixed sequence of operations.
Push manufacturing:
System in which production is based on forecasted demand or projected sales.
Just-in-time (JIT) System:
System of production in which customer demand, rather than sales forecasts, dictates production levels.
Important Elements/ Characteristics of Lean systems:
The following 13 elements/characteristics are "practices" that can help make a system "lean":
Capacity Planning
The process of determining the capacity that an operations system will need in order to meet demand effectively.
Capacity Requirements Planning (CRP)
The process of doing a detailed comparison of available capacity and required capacity to project your requirements for labor, equipment, and materials, etc.
13. Lean Six sigma:
Through distinct and separate, the lean manufacturing philosophy and six sigma are both vital concepts in eliminating waste and reducing defects...
Cycle time
Time in total between any two consecutive units coming off the assembly line.... P/O P=production time available O=Output required during that production time
8. Uniform Plant Loading (Heijunka):
Uniform plant loading aims to stabilize production schedules by leveling daily production load by both volume and product mix. Mixed model production cycle: a production method where the same mixture of products is produced every day in small quantities. *schedule stability is accomplished through level schedules, frozen windows, and underutilization of capacity. Frozen windows: specific time periods in which production levels cannot be changed.
Bottleneck:
What limits or constraints the workflow in an operation
Capacity Control:
involves analyzing a facility's existing capacity relative to its daily and weekly production schedules
2. Producing in Small Lot Sizes
lot size: specific predetermined quantity of an item that is either manufactured (produced together) or purchased from a supplier.
