Bus Log Chapter 5: Manufacturing

What is production?

the transformation of raw materials, components, and operational inputs, into outputs that when distributed, meet the needs of customers.

Six Sigma's goal is

to achieve a process standard deviation that is six times smaller than the range of outputs allowed by the product's design specification

What is lean systems?

- a philosophy that is focused on the customer - Defining principle is the elimination of "waste". Waste is anything that does not add value for the customer

Six Sigma

- approach is to identify sources of variability and then systematically reduce them. Get to the "root cause"

Variety

- involves frequent product runs and high repetition of small lot sizes ─ Processes that can rapidly switch production from one product to another while retaining efficiency are said to have economy of scope

Total Quality Management (TQM)

- is a philosophy focused on meeting customer expectations with respect to all needs, across all company functions, and recognizing all customers, both internal and external - It is a total, organization-wide activity versus a technical task

Volume

- is traditionally treated according to the principle of economies of scale. ─Average cost to produce product declines as manufacturing volume increases

Make-to-Stock (MTS)

- literally means to manufacture products for stock based on demand forecasts. This is a push system. - One issue of ____ is to avoid having excess inventory

The Elements of Lean Productions

1.Waste Reduction 2.Lean Supply Chain Relationships 3.Lean Layouts 4.Inventory & Setup Time Reduction 5.Small Batch Scheduling 6.Continuous Improvement 7.Workforce Empowerment

Manufacturing - Strategies

As companies seek to create the products customers desire, they must consider when and how those items will be created and stored. Effectively, the market you choose will drive your decision.

Perceived Quality

Based on customer's experience before, during and after they purchase a product

Features

What different functions or tasks can the product perform

Serviceability

What is the ease of fixing or repairing the product if it fails

Mass Customization - Drawbacks

- Communication: Getting information from customers is not an easy job - Logistics: The logistics of distributing the right product, to the right customer, at the right time, at a reasonable price, is very difficult - Process: The production process must be flexible. Since usually only certain stages of production are flexible, only some attributes of the product can be customized. - Costs: Increase in material and manufacturing costs

Job Shop Production

- Creates a custom product for each customer ex: -Architects :Custom Home Construction -Ship Builders -Road Builders

Cellular Layout

- Group products based on similar processing characteristics and arrange workstations to form a number of small assembly lines called work cells.

Process Layout

- Groups resources, people, and equipment performing similar functions together in the same physical area. - Product is moved between grouping based on need.

Product Layout

- Resources are arranged in sequence to enable efficient production of the product. - Used to achieve a smooth and rapid flow of large volume of goods and customer orders

Logistical Interfaces with Manufacturing

- Resources must be procured, positioned, and coordinated as needed to support the manufacturing strategy selected

Batch production advantages & disadvantages

Advantages: - Cost savings can be achieved by buying in bulk - Still allows customers some choice - Products can be worked on by specialist staff or equipment at each stage - Allows a firm to handle unexpected orders Disadvantages: -Takes time to switch production of one batch to another - Requires the business to maintain higher stocks of raw materials and work-in-progress - Tasks may become boring (repetitive) - reducing motivation - Size of the batch is dependent on the capacity allocated

Lean Production: The Eight Wastes

D - Defects O - Overproduction W - Waiting N - Non-Utilized Talent T - Transportation I - Inventory M - Motion/ Movement E - Extra- Processing

Six Sigmas two methodolgies

DMADV Methodology: DMAIC Methodology:

TCM -vs- Strategic Alternatives: As volume goes up: Transportation costs per unit go _____, but level off at high volumes as the shipping container gets filled to capacity and another container must be used

DOWN

TCM -vs- Strategic Alternatives: As volume goes up: Manufacturing and Procurement costs per unit go _____due to economies of scale. Generally-step function applies as more capital is required to produce.

DOWN

Conformance

Does the product meet its specifications as designed

Performance

How well the product performs in comparison to how it was designed to perform

International Environmental Standard is

ISO 14000

International Quality Standard is

ISO 9000

Design for Logistics Concept

Incorporates the requirements and framework for logistical support of the product in the early phases of product development

Constraints

Interact with volume and variety to create realistic manufacturing plans ─Capacity is how much can you produce in a given unit of time

Aesthetics

Is the styling, color, workmanship pleasing to the customer

Reliability

Likelihood that the product will perform throughout its expected life

What are the Manufacturing Strategies

Make-to-Stock (MTS) Make-to-Order (MTO) Assemble-to-Order (ATO) Engineer-to-Order (ETO)

Manufacturing is also known as

Production

World War II

The International Organization for Standards (ISO) was formed after

Durability

The actual life expectancy of the product

Manufacturing Strategy -vs- Performance Cycle

The choice of strategy determines which performance cycles (i.e., lead time) the customer experiences

ISO 9000

The standards provide guidance and tools for companies and organizations who want to ensure that their products and services consistently meet customer's requirements, and that quality is consistently improved. ─Shows commitment to providing a high level of customer satisfaction ─Demonstrates the existence of an effective quality management system that satisfies the rigors of an independent, external audit ─Can boost your organization's brand reputation and be a useful promotional tool, especially when going up against competitors who aren't certified.

What is a Production System?

Those activities of an organization where; - resources flowing within a defined system, - are combined and transformed, - in a controlled manner, to add value, - in accordance with the policies communicated by the management of the organization.

What is manufacturing?

To process or make raw materials or components into a finished product, especially by means of a large-scale industrial operation, i.e., mass production.

Companies must develop a manufacturing strategy that suits the __________that they produce, their __________, and their __________.

Type(s) of products Customer's exceptions Strengths

TCM -vs- Strategic Alternatives: As volume goes up: Inventory and Warehousing costs per unit go ____

UP

Assemble-to-Order (ATO)

is a manufacturing strategy where products ordered by customers are produced quickly and are customizable to a certain extent. ___ is a hybrid strategy

Intermittent Processes

used to produce a large variety of products with different processing requirements in lower volumes. ("stop and go")

Repetitive Processes

used to produce one, or a few, standardized products in high volumes. (Ongoing/ Continuous)

Mass Customization: Where Does It Work? Product/Process Characteristics:

─Modular or adjustable product building blocks

What do the following stakeholders want/expect from manufacturing?

─Sales & Marketing ─Design/Development ─Finance ─Quality

Mass Customization: Where Does It Work? Market Characteristics:

─Sufficiently large customer segment that values "translatable variety"

Make-to-Order (MTO)

- a manufacturing strategy that typically allows customers to purchase products that are customized to their specifications. This is a pull system. The _____ strategy relieves the problems of excessive inventory that is common with the traditional Make-to-Stock strategy.

Engineer to Order (ETO)

- a manufacturing strategy in which the product is designed, engineered, and built to specifications only after the order has been received. - In the ____ world, the cost of poor quality can be very high.

Continuous flow production

- High capital investment: frequently dedicated to one specific product - Involves a series of processes which raw materials flow through. These processes are very inflexible. - Generally highly automated, and workers act as monitors rather than as active participants. Examples: ─Oil Refining / Gasoline ─Cement ─Laundry Detergent ─Chemicals

What is mass customization?

- Individually customized products being produced at the low cost of standardized, mass produced goods. -Mass customization produces a unique product quickly and at a low cost using a high-volume production process -Examples: Dell, M&M's, Reebok

Types of Manufacturing Processes

- Job Shop - Batch Production - Line Flow Production - Continuous Flow Production

Batch Production

- Manufacturing of a small fixed quantity of an item in a single production run. Examples: -Bakeries -Textiles -Furniture -Pharmaceuticals

Contemporary Developments in Manufacturing

- Mass Customization - Lean Systems - Six Sigma - Logistical Interfaces with Manufacturing - Just-in-Time - Material Requirements Planning - Design-for-Manufacture - Design-for-Logistics

Materials Requirements Planning (MRP) Interfaces

- Procurement has a key role in insuring all the components are obtained on time to make an end item ─Key information requirement is the Bill of Materials (BOM) - Particularly for more complex manufacturing (i.e., MTO, ETO) where large numbers of components or subassemblies are used to produce a final product

Line-flow production

- Product moves on an assembly line through various stages of production Examples: -Automobile Assembly -Cell Phones -Toilet Paper

Just-in-time (JIT) Interfaces

- Purchased materials and components arrive at the manufacturing or assembly point just at the time they are required for the transformation process

Facility Layout Strategy

- The physical arrangement of all resources within a facility. - Facility layout has a significant impact on performance, especially production costs, time, and flexibility.

Fixed Position Layout

- Used when a product cannot be moved during production. Instead, processes are moved to the product. - Best suited for producing large products such as: »Ships »Airplanes »Spacecraft »Buildings and Houses

ISO 14000

-Intended to assist organizations to manage the environmental effect of their business practices. -Deal with how a company manages the environment inside its facilities and the immediate outside environment. -Call for analysis of the entire life cycle of a product, from raw material to eventual disposal. -They do not mandate a particular level of pollution or performance but focus on awareness of the processes and procedures that can effect the environment. -Adherence to the ISO 14000 standards does not release a company from any national or local regulations regarding specific performance issues regarding the environment.

Quality can be defined through five principal approaches:

1)Transcendent quality is an ideal, a condition of excellence. 2)Product-based quality is based on a product attribute. 3)User-based quality is fitness for use. 4)Manufacturing-based quality is conformance to requirements. 5)Value-based quality is the degree of excellence at an acceptable price

What are the four distinct layout strategies?

1. Fixed Position Layout 2. Product Layout 3.Process Layout 4. Cellular Layout

Two broad categories of Manufacturing Process

1. Intermittent Processes 2. Repetitive Processes

Four approaches to achieve Logistical Interfaces with Manufacturing

1. Just-in-Time (JIT) 2. Materials Requirements Planning (MRP) 3. Design for Manufacture (DFM) 4. Design for Logistics (DFL)

Total Cost of Manufacturing (TCM) Includes

1. Manufacturing and Procurement activities 2. Inventory and Warehousing activities 3. Transportation activities

What are the Key Dimensions of Product Quality?

1. Performance 2. Reliability 3. Durability 4. Conformance 5. Features 6. Aesthetics 7. Serviceability 8. Perceived Quality

What are the 5 P's?

1. Product(s) 2. Plant(s) 3. Processes 4. Programs 5. People

5 components of Manufacturing Perspective

1. Volume 2.Variety 3. Constraints 4. Lead Time 5. Product Quality

What are the primary objectives of Lean systems

1.Produce only the products that customers want 2.Produce products only as quickly as customers want them 3.Produce products with perfect quality 4.Produce in the minimum possible lead times 5.Produce products with features that customers want and no others 6.Produce with no waste of labor, materials or equipment; designate a purpose for every movement to leave zero idle inventory. 7.Produce with methods that reinforce the occupational development of workers

Line Flow Production Advantages & Disadvantages

Advantages: - Cost per unit of production reduced through improved work and material flow - Suitable for manufacture of large quantities - Capital intensive which means it can work consistently - Less need for training and skills Disadvantages: - Very long set up time and reliant on high quality machinery - High raw materials and finished stocks unless lean production is used - Goods are mass produced - less differentiation for the customer - Production is shut down if flow is stopped

Job Shop Production Advantages & Disadvantages

Advantages: - Customer requirements and changes can be easily handled - Generally associated with higher quality - Employees can be better motivated - more job satisfaction - A very flexible production method Disadvantages: - Cost of each individual unit may be high - Often labor intensive = high labor costs - Requires close consultation with the client - Usually reliant on highly skilled workers

Continuous flow production Advantages and Disadvantages

Advantages: - Processes can normally be automated which reduces unit costs - Large quantities can be produced - Ideal for products which have to be of a consistent quality Disadvantages: - Heavy investment required in process design and production equipment/facilities - Difficult and disruptive if the production process has to be stopped - Little opportunity to make different version of the product

DMADV Methodology

Define, Measure, Analyze, Design, Verify: which is a data-driven quality strategy for designing products & processes. ─This methodology is used when the company wants to create a new product design or process that is more predictable and defect free.

DMAIC Methodology:

Define, Measure, Analyze, Improve, Control: which is a data-driven quality strategy for improving products & processes. ─This methodology is used when the company wants to improve an existing business process. ─DMAIC is the most widely adopted and recognized Six Sigma methodology in use.

Manufacturing Process

is a strategy involves developing a manufacturing process that can create the exact product that has been designed.

Product Quality

is the conformance to requirements (defined by the absence of defects) or fitness for use (measured by the degree of customer satisfaction with a product's characteristics and features).

Manufacturing Management

is the management of all of those processes which are involved in manufacturing.

Lead Time

is the measure of elapsed time between release of a work order to the shop floor and completion of all work on the product to achieve ready-to-ship status

The Role of Production in Business

the activity of providing goods and services involving various financial, commercial, and industrial aspects.

Total Cost of Manufacturing (TCM)

the complete cost of producing and delivering products to your customers TCM is generally expressed as cost per unit