OPMA 3306 Chapter 1-4/6-8 w/ quizzes
Make-to-Order/Engineer-to-Order
-Boeing's process for making commercial aircraft is an example -Customer order decoupling point could be in either raw materials at the manufacturing site or the supplier inventory -Depending on how similar the products are, it might not even be possible to pre-order parts (ETO)
Work center design
-most common approach is to arrange them in a way that optimizes the movement of material -sometimes referred to as a department and is focused on a particular type of operation
Mixed-model line balancing
-most factories produce a number of different product - inventory can be reduced by building some of each product during every period (ex. day, week) -is one means of scheduling this varied production
Process players
-new processes -new skills -new duties -new metrics -empowerment
Make-to-Stock
-process activated to meet expected or forecast demand -customer orders are serves from target stocking level
Process owner: responsibilities
-process design -process measurement -process performance -process improvement
Production process types
-project -work center (job shop) -manufacturing cell -assembly line -continuous process
Process owner: key ingredients
-senior manager -credibility within the company -clout
Make to Stock Examples (products)
-televisions -clothing -packaged food products
Inventory turns
-the cost of goods sold divided by the average inventory value -not particularly useful for evaluating the performance of a process
Customer contact
-the physical presence of the customer in the system -service systems with a degree of customer contact are more difficult to control
Neo-classical reengineering concepts
-the process owner -the process-centric enterprise
Project layout
-the product remains in a fixed location -a high degree of task ordering is common -the layout may be developed by arranging materials according to their assembly priority
Total average value of inventory
-the sum of the value (at cost) of the raw material, work-in process, and finished goods inventory -commonly tracked in accounting systems and reported in financial statements
Process flow charting
-the use of a diagram to present the major elements of a process -an ideal methodology
Dominant issue: SOD
-too much capacity generates excessive costs -insufficient capacity leads to lost customers -marketing can influence demand
Reengineering is NOT
-total quality management -continuous improvement -six sigma -cost-based restructuring
Influencer
-understand the process -identify the leader -help the leader grasp the problem -become part of the solution
Break-even analysis
-understanding how profits (and losses) change for each option as the total number of units varies -useful when processes have a significant initial investment and production costs vary in proportion to the number of units produced
Production processes
-used to make any manufactured item -step 1: source the parts needed -step 2: make the product -step 3: deliver the product
Top 10 don'ts of reengineering
1. leadership gap 2. functional focus 3. as-is overdose 4. timid redesign 5. reengineer in name only 6. big bang 7. reengineer slowly 8. scared cows 9. too much detail 10. ignore people's concerns
The eight wastes (MUDA)
1. overproduction 2. inappropriate processing 3. waiting 4. transportation 5. motion 6. inventory 7. defects 8. underutilization of employees
Reducing process flow time
1. perform activities in parallel 2. change the sequence of activities 3. reduce interruptions
Three takeaways (6b)
1. reengineering and its progeny live on 2. process-centric management can be win-win for all stakeholders 3. professionals in all disciplines will be involved in reengineering
Bundle of service packages
1. supporting facility 2. facilitating goods 3. information 4. explicit services 5. implicit services
Reengineering by any other name 1. classic reengineering 2. what's new 3. pass or play
1. why did it go underground? 2. and what do we call it today? 3. what's in it for you?
Manufacturing cell design
1: group parts into families that follow a common sequence of steps 2: identify dominant flow patterns for each part family 3: machines and the associated processes are physically regrouped into cells
Little's law equation
Inventory = (throughput) x (flow time) throughput: long term average rate of flow through the process flow time: time for a single unit to traverse the entire process inventory: materials held by the firm for future use
Manufacturing cell: system design
formed by allocating dissimilar machines to cells that are designed to work on similar products
Assemble-to-order: Capability required
is a design that enables as much flexibility as possible in combining components
Dr. Michael Hammer said....
it's not a process unless it's capable of making at least three people mad
Make-to-order
make the customers products from raw materials, parts, and components
Overproduction
manufacturing an item before it is needed
Work center: Optimal placement
means placing them with large interdepartmental traffic adjacent to each other
Assemble-to-order: Advantages are gained by...
moving the customer order decoupling point from finished foods to sub-assemblies and components
Blocking
occurs when the activities in a stage must stop because there is no place to deposit the item
Starving
occurs when the activities in a stage must stop because there is no work
Make-to-Order
only activated in response to an actual order -both work-in-process and finished goods inventory kept to a minimum
Information
operations data or information that is provided by the customer to enable efficient and customized services
Defects
quality defects result in rework and scrap and add wasteful costs to the system in the form of lost capacity, rescheduling effort, increased inspection, and loss of customer goodwill.
Utilization
ratio of the time that a resource is active to its time available for use
Make-to-stock
serve customers from finished goods inventory
Services: operational classes
service organizations are classified according to the customers they serve and the services they provide (customer contact/ creation of the service)
Work center (job shop)
similar equipment of functions are grouped together
Bottleneck
stage that limits the capacity of the process
Process analysis
studying elements of a process in order to improve its performance
Cycle time
the average time between completions of successive units of outputs in a process
Explicit services
the benefits that are readily observable and which make up the essential features of the service
Little's law
the flow of items through a production process
Reengineering is...
the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, service, and speed
Days of supply
the inverse of inventory turns scaled to days
Facilitating goods
the material purchased or consumed by the buyer or the items provided to the customer
Precedence relationship
the order in which tasks must be performed in the assembly process
Supporting facility
the physical resources that must be in place before a service can be offered
Project
the product remains in a fixed location, equipment is moved to the product
Implicit services
the psychological benefits or other extrinsic features of the service
Lead time
the time needed to respond to a customer order
Creation of the service
the work process involved in providing the service itself
Make-to-stock: Essential issue in satisfying customers is....
to balance the level of inventory against the level of customer service - Easy with unlimited inventory but inventory costs money - Trade-off between the costs of inventory and level of customer service must be made
Assemble-to-order: Primary task
to define and product in terms of alternative components that are carried in inventory
Mixed-model example: -processing must be completed for both Model J and Model K -equal number of each model are required cycle-time: 6 minutes for Model J and 4 minutes for Model K -in an 8 hour day, how should the models be processed?
total processing time= 6K + 4J = 480 -since K=J, we can produce 48 of each per day (6 of each per hour)
Motion
unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking
Order accuracy (reengineering)
up 25%
Inappropriate processing
using expensive high precision equipment when simpler machines would suffice
Waiting
wasteful time incurred when product is not being moved or processed.
Customer order decoupling point
where inventory is positioned to allow entities in the supply chain to operate independently
Assembly line
work processes are arranged according to the progressive steps by which the product is made
Engineer-to-order
work with the customer to design and then make the product
underutilization of employees
failure of the firm to learn from and capitalize on its employees' knowledge and creativity impedes long-term efforts to eliminate waste
Production Process Mapping
-Develop a high-level map of a supply chain process -Useful to understand how material flows and where inventory is held -First step in analyzing the flow of material through a production process
Task splitting possibilities
-Split the task -Share the task -Use parallel workstations -Use a more skilled worker -Work overtime -Redesign
Process design team
-assign the A players -multiple disciplines -process training -creative thinking -hard to go back
Leader
-define the enterprise -assess readiness -commit resources -walk the walk -communicate
Just-in-time system
-incorporates the generic elements of lean -the key is that excess capacity or inventory hides process problems
Types of inventory flows
-make-to-stock -assemble-to-order -make-to-order -engineer-to-order
Assemble-to-order
Combine a number of preassembled modules to meet a customer's specifications
Manufacturing cell
a dedicated area where products that are similar in processing requirements are produced
Lean manufacturing
a means of achieving high levels of customer service with minimal inventory investment
Waiting line models
a quantitative tool for analyzing common service situations
Buffer
a storage area between stages where the output of a stage is placed prior to being used
Benchmarking
a systematic procedure that compares a firm's processes, services, and products against another firm
Workstation cycle time
a uniform time interval in which a moving conveyor passes a series of workstations
Make-to-stock uses lean manufacturing to
achieve higher service levels for a given inventory investment
Lean systems
affect a firm's internal linkages between its core and supporting processes and its external linkages with its customers and suppliers
Process
any part of an organization that takes inputs and transforms them into outputs
Continuous process
assembly line only the flow is continuous such as with liquids
Assembly-line balancing
assigning tasks to a series of workstations so that the required cycle time is met and idle time is minimized
Competitive benchmarking
based on comparisons with a direct competitor
Basic elements of process flow charting
can include tasks/operations, flows of materials/customers, decision points, and storage areas/queues
Services _____ be stored in ______
can't
Internal benchmarking
compares an organizational unit with superior performance with other units
Functional benchmarking
compares areas with those of outstanding firms in any industry
Fulfillment time (reengineering)
cut 60%-90%
Product development time (reengineering)
cut 75%
Transaction costs (reengineering)
cut 80%
Procurement time (reengineering)
cut 90%
Assembly line/Continuous layout design
designed for the special purpose of building a product by going through a series of progressive steps
Inventory
excess inventory hides problems on the shop floor, consumes space, increases lead time, and inhibits communication
Transportation
excessive movement and material handling of product between processes