Design of Process

Mahadevan (2007), “Operations Management: Theory & Practice”, © Pearson Education

Operations Management

Design of Process


Factors Influencing Process Choices Volume: Average quantity of the products produced in a

manufacturing system Low volume: Turnkey project management firms such as

L&T and BHEL High volume: Consumer non-durable and FMCG sector

firms, Automobile, Chemical Processing Mid-volume: Consumer durables, white goods and several

industrial products Variety: Number of alternative products and variants of

each product that is offered by a manufacturing system Variety of product offerings is likely to introduce variety at

various processes in the system; alternative production resources, materials, and skill of workers

Flow: Flow indicates the nature and intensity of activities involved in conversion of components and material from raw material stage to finished goods stage


Relationship between volume and variety

Volume Variety

Mass Production

Petrochemicals, Automobile

ProjectOrganisations

Turnkey ProjectExecution

Mid volume Mid variety

Motor Manufacturing Pharmaceuticals

High High


Processes & Operations SystemsAvailable Alternatives

Process characteristics are largely determined by the flow of products in the operating system

Three types of flows occur in operating systems: Continuous Intermittent Jumbled


Continuous Flow System Characterised by a streamlined flow of products in the

operating system Conversion process begins with input of raw material at

one end, progresses through the system in an orderly fashion to finally become finished goods at the final stage

Production process is sequential and the required resources are organised in stages Examples:

several chemical processing industries such as manufacture of petrochemicals, steel, pharmaceutical, cement and glass

In a discrete manufacturing industry high volume production of very few varieties (such as electrical bulbs or spark plugs)


Paper ManufacturingAn example of process industry

Logs and chipsof wood stored

Crushing oflogs and chips

Processing of the wood

Cleaning & Bleaching

Refining theWood pulp

Drying the wood pulp

StretchingPaper rolling

CuttingFinal packing

Paper making

Pulp making

Preparatory


Process IndustriesInvestment in spare parts

Industry Segment 3/90 3/91 3/92 3/93 3/94 3/95 3/96

Chemicals & Plastics 26.5 26.7 24.5 23.9 22.9 20.8 18.2

Polymers 38.3 35.0 35.5 39.3 39.3 36.2 34.0

Petroleum Products 14.0 11.8 12.9 11.3 9.9 12.0 10.8

Synthetic Textiles 21.5 18.6 21.1 23.7 18.4 15.4 16.1

Inorganic Chemicals 32.7 21.9 23.6 25.3 29.9 24.1 20.1

Steel 33.5 32.8 28.6 27.6 28.0 25.9 23.4

Paper & Paper products

39.5 39.2 35.0 36.5 36.2 33.2 31.4

Source: Corporate Sector, Centre for Monitoring Indian Economy, July 1997.


Oil & Gas Exploration & Production

Refining & Marketing

LPG Naptha GasolineATF

Kerosene Diesel Sulphur Fuel Oil Bitumen

Cracker

Fuel Gas Ethylene C4s Propylene Toluene Xylene Benzene Salt

Caustic Unit

EDC

VCM

PVCPoly PropyleneMEG

EO Oxygen

Polyethylene

LAB

N-Parafins

PFYPSF

Polyester resinPolyester chips

Texturised Yarn Spun Yarn

Fabric Wool, Silk

Retailing

Textiles

Polymers& Chemicals

Refining

Oil & Gas

PG Complex

PTA PX

Hazira Complex

Jamnagar Complex

BombayHigh

Naroda Complex

Backward Integration at Reliance


Operations Management Issues Process Industry

The notion of capacity Flow rate determines capacity Bottleneck easily identifiable

Nature of inventories Work in Progress will be minimal Inventory of Spares & Maintenance will be

high Importance of maintenance Relevance of vertical integration

Joint & Bye Products are many Exploiting processing opportunities of these

important


Continuous Flow SystemMass production in discrete manufacturing

In discrete manufacturing various components are manufactured in discrete fashion and the final product is obtained through an assembly process

In a mass production system, the volume of production is very high and the number of variations in the final product is low Examples:

Automobile and two wheeler manufacturers, Manufacturers of electrical components such as switches

and health care products such as disposable syringes The entire manufacturing is organised by arranging the

resources one after the other as per the manufacturing sequence (known as product line structure)


Process Design for Mass Production Systems

Pre manufacturing Activities

Machining

Fabrication

Assembly

Testing

Dedicated & Decentralised Manufacturing Support

Machining

Fabrication

Assembly

Testing

Machining

Fabrication

Assembly

Testing

Product A Product B Product C

Machine 1

Machine 2

Machine 3

Machine m

. . . Product A


Intermittent Flow System Characterised by mid-volume, mid-variety

products/services Increases the flow complexities Flow and capacity balancing are difficult but

important Process industries use batch production methods Discrete industries use alternative methods of

designing layout issues Capacity Estimation is hard Production Planning & Control is complex


Pre-manufacturing activities

Gear Components

Prismatic Components

Other rotating parts

Sheet Metal parts

Housings

Shafts

Assembly & Test Assembly & Test Assembly & TestProduct A Product B Product C

Dedicated Manufacturing Support for the products

Process Design for Intermittent Flow in Discrete Manufacturing


Layout redesign to minimise complexity in Intermittent flow: An example


Intermittent Flow SystemSources of Problems

A bad choice on structure & people issues

Leads toLeads to Complicated Material & Information Flows

TherebyThereby Making Production Planning & Control Complex

Which DemandsWhich Demands Special mechanisms to bring order out of chaos


Special Mechanisms To bring order out of Chaos

Lot of paper work Enormous supervision/Co-ordination Progress Chasing/Expedition

All these finally result in All these finally result in Long Lead Times/Poor Delivery

Reliability Excess and Unwanted Inventory High Overhead/High Cost


Jumbled Flow System Occurs on account of non-standard and complex flow

patterns characteristic in certain systems Highly customised items customer orders for one or a few

Examples turnkey project executor such as BHEL or L&T customised manufacturing systems such as PCB

fabricators, sheet metal fabricators, tool room operators and printing and publishing

Operational complexity arising out of jumbled flow is high

Discrete manufacturing with Jumbled flow uses a Job Shop structure


Process flow in Job Shops

Machine 1

Machine 2

Machine 3

Machine 6

Machine 5

Machine 4

Machine 7

Job 1

Job 2

Job 3


Jumbled Flow System Complex issue is capacity management

Considerable time is lost due to repeated setup of processes

Due to jumbled flow, crisscrossing of jobs in the system results in poor visibility. Problems are often hidden and build up of work

in process inventory takes place Cost accounting and estimation systems

are crucial as there is a constant need to quote for specific customer orders


Process design for operationsSalient feature of alternative choices

Flow Characteristics Continuous Intermittent JumbledProduct Characteristics

High Volume, Very low variety

Mid volume, Mid variety Very high variety, low volume

Examples of production systems

Process Industry, Mass production systems in discrete manufacturing

Batch production in Process and discrete manufacturing

Project Organisations, Tool Rooms, General purpose fabricators

Issues of importance Flow Balancing, Maintenance, Capacity utilisation and debottlenecking, Backward integration

Manufacturing system and layout design, Changeover management, Capacity planning and estimation

Capacity Estimation, Scheduling, Production Control, Cost estimation

Operations Management Tools & Techniques

Line Balancing, Maintenance management, Process

optimisation, Product layout design, Flow shope scheduling, Pull type scheduling, Single piece flow design

Forecasting, Capacity Planning and estimation, Optimised production planning and product sequencing, Group Technology layout design, Materials Management

Project Management & Scheduling, Capacity planning and

optimisation, Job shop scheduling, Functional Layout design, Job order costing, Work in Process Management


Product – Process MatrixLow Volume

Low StandardisationOne of a kind

Multiple ProductsLow Volume

Few Major ProductsHigher Volume

High VolumeHigh StandardisationCommodity Products

Continuous Flow

Connected LineFlow (Assembly

Line)

Disconnected Line Flow

(Batch)

Jumbled Flow

(Job Shop)

Satellite Launch Vehicle

Machine Tools

Auto electric parts

PolyethyleneNone

None

Source: Adapted from Hayes, R.H. and Wheelright, S.C., (1979), “Link manufacturing process and product life cycles”, Harvard Business Review, 57 (1), 133 – 140.


Process Design Issues Service Systems Customer contact signifies

the extent to which customer participates in the preparation and consumption of service

the nature and intensity of interaction that the customer has with the entities and service personnel

the level of exposure that the customer has of the various facets of the service system while the customer is receiving the service

Degree of complexity refers to the steps and sequences in the process measured by the number and intricacy of the steps

Degree of divergence indicates the executional latitude or variability of these steps and sequences

All the three influence the service process design


Degree of Customer ContactDesign implications

Low: Quasi- Manufacturing Medium: Mixed Service High: Pure Service


Customer ContactImplications

Efficiency of Operations Capacity Decisions Facility Location Choices Control of Operations Effectiveness Vs Efficiency Goals


Degree of Complexity & Degree of Divergence: An illustration

Low complexity/Divergence Process Description High Complexity/Divergence

No reservation Table ReservationSpecific table selection options offered

Self seating, Menu on the board Seating Guests, Offering MenusRecite Menu, Describe in detail all starters & other special items in offer for the day

EliminateServe Water & Starters at the beginning of the service

Assortment of salads, chips and fruit juices offered

Customer calls out his requirements Order taking processOrder takers interact with the customers at the table in constructing the menu for the guests

Pre-prepared: Fixed set of offering Salads, PapadsIndividually prepared and served at the table as per request

Just 2 or 3 choices offered StartersCustomers can choose from 20 alternatives

Only South Indian (Vegetarian) Main MenuSouth Indian, Jain, Tandoori, Chinese, Continental, Brazilian (Both vegetarian & non-vegetarian)

Payment at the counter while leaving (Cash only)

Cash PaymentMultiple choices of payments (Cash, Card, Coupons etc.)

Source: Adapted from Shostack, G.L., “Service Positioning through Structural Change”, Journal of Marketing, 51: 34 – 43.


Service Process Matrix

Source: Schmenner, R.G. (1986), “How can service business survive and prosper?”, Sloan Management Review, Spring 1986, 21 – 32.

Service Factory•Low cost airlines•Trucking•Hotels

Service Shop•Automobile garage•Large Hospitals•Repair services

Mass Service•Retailing•Education (Schools)•Wholesale business

Professional Service•Legal services•Medicare •Home Design

Low

High

HighDegree of interaction/customisation

Degre

e o

f la

bour

inte

nsi

ty


Flexible Manufacturing SystemDefinition

A Flexible Manufacturing Systems (FMS) is A system consisting usually of numerical control (NC)

machines Connected by an automated material handling

system. Operated under a central computer control Capable of simultaneously processing a family of

parts with low to medium demand, different process cycles and operation sequences

It is an attempt to solve the process complexities arising out of mid-volume and mid-variety parts


Typical Machines used in FMS


Structure of an FMS

Information flow Material flow

System Controller

Load Unload

Machine Tools

Auxiliary Equipment

Primary MHS

Secondary MHS


Flexibilities in FMS Machine flexibility: the ease of making changes required to

produce a given set of part types Process flexibility or mix flexibility: the ability to produce a

given set of part types, each possibly using different materials in several ways

Product flexibility: the ability to produce a new set of products very economically and quickly

Routing flexibility: is the ability to handle breakdowns and to continue processing the given set of part types

Volume flexibility: is a measure of the ability to operate an FMS profitably at different production volumes

Expansion flexibility: is the capability of building a system, and expanding it as need arises, easily and in a modular fashion


Material Handling in FMSs An automated storage system is used for large scale

bulk storage as well as for small in line buffer storage Automated Storage and Retrieval System (AS/RS) Horizontal & Vertical Carousels

An automated transport system is used to move parts and products from the storage systems to the production operations Automated Guided Vehicle (AGV) system Conveyors in a wide variety of forms such as overhead,

monorail, carry and free, power and free and under floor drag chain

Gantry and Pick & Place Robots


Planning Premises in Process Design

Three generic planning premises are in use in operations management; Make-to-Stock: more amenable for systems with

fewer product varieties and high production volume as in the case of continuous and streamlined flow systems

Assemble-to-order: useful for intermittent flow systems catering to the mid-volume mid-variety situations

Make-to-order: organisations typically belong to manufacturer of high product variety (jumbled flow process systems) use this planning methodology


Complexity of Operations ManagementSome indicators

Greater Variety in

• Products, Models,

• Process Routings,

• Technology choices

High

Low

Jumbled Flow

Intermittent Flow

Continuous Flow

Made to Order

Assemble to Order

Made to Stock

More stagesin Production


Design of ProcessesChapter Highlights

Volume, variety and flow exert significant influence on process design in organisations.

Process industries and mass production systems generally have a streamlined flow of products.

Mid-volume and mid-variety manufacturing systems have intermittent flow. Capacity estimation is difficult in such systems compared to a continuous flow systems.

Project organisations and customised manufacturing systems have jumbled flow. Capacity estimation and scheduling of jobs are quite difficult. Therefore operations management complexity is high in jumbled flow systems.

A process – product matrix depicts the relationship between process flow characteristics and volume of production in any manufacturing organisation.


Design of ProcessesChapter Highlights…

Process design of service systems differs vastly from that of manufacturing systems. Degree of customer contact and the complexity and diversity of service offerings have a significant bearing on process design in service systems.

New technology manufacturing such as Flexible Manufacturing Systems (FMS) have the potential to simplify the flow complexities in mid-volume, mid-variety manufacturing organisations due to increased flexibility.

Made to stock, Made to order and Assemble to order approaches to planning are specifically employed in organisations having certain flow characteristics.

Volume, variety and flow characteristics determine the complexity of operations management. By a careful design of the process, some of the complexities can be minimised.

Design of Process

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