Operations Management Ch. 7

Flexible Manufacturing System (FMS)

programmable equipment connected by an automated material-handling system and controlled by a central computer

Cycle Time

the maximum amount of time an item is allowed to spend at each workstation if the targeted production rate is to be achieved; also, the time between successive product completions -divide time available by for production/desired units of output

Capacity

the maximum capability to produce

Best Operating Level

the percent of capacity utilization at which unit costs are lowest

Unit Load

the quantity in which material is normally moved, such as a unit at a time, a pallet, or a bin of material -used for block diagramming- process layouts

Balance Delay

the total idle time of an assembly line - (1-efficiency)

Mixed-model assembly line

An assembly line that processes more than one product model

Production Flow Analysis (PFA)

a group technology technique that reorders part routing matrices to identify families of parts with similar processing requirements

How much to increase capacity depends on

(1) the volume and certainty of anticipated demand; (2) strategic objectives in terms of growth, customer service, and competition; and (3) the costs of expansion and operation.

Outsourcing

-one large step -suppliers absorb risk of demand uncertainty

Nonadjacent loadings reduction

A heuristic method for locating departments with the objective of minimizing the total number and amount of nonadjacent loadings

Fixed-position layout

A layout in which the product remains at a stationary site for the entire manufacturing cycle -used when product cannot be moved- too heavy, bulky, fragile i.e. ships, houses, aircrafts

Product Layout

A layout that arranges activities in a line according to the sequence of operations that are needed to assemble a particular product -assembly line

Capacity Lead Strategy

Capacity is expanded in anticipation of demand growth. This aggressive strategy is used to lure customers from competitors who are capacity constrained or to gain a foothold in a rapidly expanding market. It also allows companies to respond to unexpected surges in demand and to provide superior levels of service during peak demand periods.

Capacity Average Strategy

Capacity is expanded to coincide with average expected demand. This is a moderate strategy in which managers are certain they will be able to sell at least some portion of expanded output, and endure some periods of unmet demand. Approximately half of the time capacity leads demand, and half of the time capacity lags demand.

Capacity Lag Strategy

Capacity is increased after an increase in demand has been documented. This conservative strategy produces a higher return on investment but may lose customers in the process. It is used in industries with standard products and cost-based or weak competition. The strategy assumes that lost customers will return from competitors after capacity has expanded.

Incremental expansion

Less risky but more costly

Facility Layout

The arrangement of machines, departments, workstations, and other areas within a facility.

Muther's grid

a format for displaying manager preferences for department locations

Diseconomies of Scale

When higher levels of output cost more per unit to produce -too much of a good thing can lead to problems too

Economies of Scale

When its costs less per unit to produce higher levels of output -reduced unit cost due to increased volume -Fixed costs can be spread over a larger number of units, ●Production or operating costs do not increase linearly with output levels, ●Quantity discounts are available for material purchases, and ●Operating efficiency increases as workers gain experience

Line Balancing

a layout technique that attempts to equalize the amount of work assigned to each workstation on an assembly line -technique of assigning tasks to work stations, in order to get a balanced load throughout the assembly line

Cellular Layout

a layout that creates individual cells to process parts or customers with similar requirements

Process Layout

a layout that groups similar activities together into work centers according to the process or function they perform -optimizing nonadjacent loadings

Capacity Planning

a long-term strategic decision that establishes the overall level of productive resources for a firm

Precedence Diagram

a network, with work elements represented by circles or nodes and precedence relationships represented by directed line segments connecting the nodes.

Capacity Cushion

a percent of capacity held in reserve for unexpected occurrences

Relationship Diagram

a schematic diagram that denotes location preference with different line thicknesses

Block Diagram

a schematic layout diagram that includes the size of each work area

Capacity can be increased...

incrementally or in one large step, as shown in Figure 7.1d. Incremental expansion is less risky but more costly. An attractive alternative to expanding capacity is outsourcing, in which suppliers absorb the risk of demand uncertainty.

Best operating level

minimizes unit costs

Precedence Requirements

physical restrictions on the order in which operations are performed- assembly line