IE 271Operations Analysis and DesignLecture 1Introduction

What is Production?

Production is transformation of inputs into outputs

Production

CuttingDrillingCastingMoldingAssemblingPainting...

Production is transformation of inputs into outputsSome examples of the transformation processes in manufacturing systems.

Production vs Manufacturing?Production is a broader term that corresponds to all activities required in a transformation process until a valuable good or service is obtainedProduction and Manufacturing are not equivalent termsManufacturingProduction

Manufacturing and Production SystemsManufacturing is the ability to make goods and services to satisfy societal needsManufacturing processes are strung together to create a manufacturing system (MS)Production system is the total company and includes manufacturing systems

The manufacturing system converts inputs to outputs using processes to add value to the goods for the external customer.

Manufacturing - Technologically

The functions and systems of the production system, which includes (and services) the manufacturing system.

Manufacturing SystemsRaw material can be stored in the warehouse (Raw Materials Inventory)Subparts can be stored during the process, between the departments (Work-In-Process Inventory)Finished Goods can be stored at the warehouse (Finished Goods Inventory)

Types of ManufacturingManufacturing can be discrete or continuous.

Continuous process industries involve the continuous production of product, often using chemical rather than physical or mechanical means, e.g. sugar, paper, glass

Discrete parts production involves the production of individual items, e.g. cars, appliances, etc.

Discrete Manufacturing LayoutProduct Layout (Flow Shop): arrange activities in a line according to the sequence of operations that need to be performed to assemble a particular product

Process Layout (Job Shop): group similar activities, together in departments or work centers according to the process or function they perform

Project Shop: Immobile item being manufactured (e.g planes, ships, etc)

P - Q Relationship in Plant Layout

Process LayoutLayout in which equipment is arranged according to functionSuited to low and medium production quantities and medium to high product varietyDifferent parts or products are processed through different operations in batchesEach batch follows its own routing No common work flow followed by all work unitsMaterial handling activity is significant

Process Layout

Process Layout (Job Shop)

Product LayoutLayout in which workstations and equipment are located along the line of flow of the work unitsSuited to high production quantities and low product varietyWork units typically moved by powered conveyorAt each workstation, a small amount of the total work content is accomplished on each work unitEach station specializes in its task, thus achieving high efficiency

Product Layout for Assembled Product

Product Layout (Flow Shop)

Flow ShopFigure 1-8 The moving assembly line for cars is an example of the flow shop.

Assembly workers on an engine assembly line (photo courtesy of Ford Motor Company).

Product LayoutProcess LayoutDescriptionSequential arrangement of activitiesFunctional grouping of activitiesType of ProcessContinuous, mass production, assemblyIntermittent, job shop, batch productionProductStandardized, made to stockVaried, made to orderDemandStableFluctuatingVolumeHighLowEquipmentSpecial PurposeGeneral PurposeWorkersLimited SkillsVaried SkillsInventoryLow WIP, High FGHigh WIP, Low FGStorage SpaceSmallLargeMaterial HandlingFixed Path (conveyor)Variable Path (Forklifts)AislesNarrowWideSchedulingPart of BalancingDynamicLayout DecisionsLine BalancingMachine LocationGoalEqualize work at each stationMin. Mat. Handling CostsAdvantageEfficiencyFlexibility

Fixed-Position LayoutLayout in which product remains in one location during fabrication, and workers and equipment are brought to the productSuited to low production quantities and high product varietyReason for keeping product in one location: Product is big and heavyTypical plants: assembly and fabricationMuch manual laborEquipment is portable or mobile

Fixed-Position Layout

Assembly operations on the Boeing 777 (photo courtesy of Boeing Commercial Airplane Co.).

Hybrid LayoutsCellular - attempts to combine the best features of process and product layoutsCombinations of fixed position and either Process layout or Product layout

Cellular LayoutLayout in which work units flow between stations, as in a production line, but each station can cope with a variety of part styles without the need for time-consuming changeoversCombination of product and process layoutsTries to combine efficiency of product layout with versatility of process layoutNeither objective is achieved perfectly, but it is more efficient than a process layout and more versatile than a product layoutBased on principles of group technology

Cellular Layout

A machining cell consisting of two horizontal machining centers supplied by an in-line pallet shuttle (photo courtesy of Cincinnati Milacron).

Cellular LayoutA robotic arm performs unloading and loading operation in a turning center using a dual gripper (photo courtesy of Cincinnati Milacron).

Other Combination LayoutsFixed-position and process layoutShipyard - ships made in modulesParts fabricated in process layoutModules built in fixed-position layoutFixed-position and product layoutCommercial airplanes (e.g., Boeing 747)Fabrication begins with fuselage and proceeds through 7 or so stations where specialized workers assemble parts and modules to airplane

Layout Types for P-Q Combinations

Project LayoutUsually refers to construction projectWork teams and equipment are brought to the work siteLayout is temporary because project has scheduled completion dateProject layout vs. fixed-position layout:Product is large and heavyIn fixed-position layout, when product is completed, it is transported awayIn project layout, product remains, workers and equipment are transported away

Mass Production to Lean ProductionThe traditional subassembly lines can be redesigned into U-shaped cells as part of the conversion of mass production to lean production.

New Manufacturing SystemsToyota Production SystemLean manufacturing system100% good units flow without interruptionIntegrated quality controlResponsibility for quality is given to manufacturingConstant quality improvement

Order Driven vs. Stock Driven Manufacturing SystemsMake to stock (MTS)Assemble to order (ATO)Make to order (MTO)Engineer to order (ETO)

Order and Stock Driven SystemsMake to Stock (MTS)Customer demand is forecasted for future periods.Finished goods are produced in large quantities and stored in a warehouse.When customer order is received, the item is sold from the stocks (warehouse).When the quantity remaining in the stocks falls down under critical levels, the item is produced again.Suitable when the demand is large and more or less predictable.Delivery of the product to the customer is determined by the availability in the warehouse and the stock replenishment mechanism.

Order and Stock Driven Manuf. SystemsMake to Order (MTO)Products are selected by the customers based on a catalog of available designsManufacturing of the finished good starts only after the customer order is receivedGenerally, there are time lags between the delivery time of the product to the customer and the time order is placedKitchen Furniture

Order and Stock Driven SystemsAssemble to Order (ATO)Similar to MTOProducts are configured or assembled to customer order from a set of core subassemblies or componentsCustomer makes a contact with the manufacturer through their sales organizationLaptop computer

Order and Stock Driven SystemsEngineer to Order (ETO)Customer order requires that a new engineering design be developedThe product is designed specifically for the needs of the customerETO products are one of a kind products

New Manufacturing Environment Increased product diversity

Greatly reduced product life cycles

Environmental impact of manufacturing systems

Changing cost patterns

Changing social expectations

Industrial Revolution

Mechanization is the replacement of human labor by machineAutomation is replacement of human control of machines by automatic controlCNC (Computer Numerical Control) MachinesPerforms computerized manufacturing operationsComputer Aided Drawing (CAD)ERP Systems:Very large scaled information system software which automates various operational activities in the production systemRobotsReprogrammable multi-functional manipulator, designed to move material, parts, tools or specialized devices through variable programmed motions for the performance of a variety of tasks.

Industrial Engineering - DefinitonsThe engineering approach applied to all factors, including the human factor, involved in the production and distribution of products or services

Industrial Engineering is concerned with the design, improvement and installation of integrated systems of people, material, equipment and energy. It draws upon specialized knowledge and skills in the mathematical, physical and social sciences together with the principles and methods of enginering analysis and design to specify, predict and evaluate the results to be obtained from such systems

Industrial Engineering

Finding ways of utilizing input resources in a more cost-effective manner

Has been originated out of the need of businesses and military organizations.

History of Industrial EngineeringMatthew Bolton and James Watt (around 1795)Modern, closely integrated factory to produce steam enginesStandards for detecting waste and inefficiencyUsed methods for forecasting, plant location and layout, wage incentives100-150 years ahead of their time

History of Industrial EngineeringApplied economists and industrialists in England around 1800Adam Smith specialization of laborDevelopment of new skills when a single task is performedSaving of time lost in changing from one task to anotherInvention of new, special-purpose tools and equipmentCharles BabbageNot necessary to pay for skill levels used only during a fraction of the total job

History of Industrial EngineeringDevelopments in AmericaFrederick W. Taylor (early 1900s)The Principles of Scientific ManagementFrank and Lillian GilbrethHenry GanttGantt chart still used by today as a preliminary scheduling aid.

History of Operations ResearchWorld War IIGroups of mathematicians, economists and other scientists formed in England and in the USNavy employing more than 70 scientistsVariety of problems such as radar installations, search for enemy submarines, deploy aerial mines in the seas around Japan, determining optimal size of merchant convoy fleets,development of maneuver strategies for ships under attack...

History of Operations ResearchAfter World War IIIndustrial firms in England and the US attempting to apply it to their operational and managerial problemsIssues attacked by people such as Taylor and Gantt being addressed using more quantitative and systems-oriented proceduresGeorge DantzigDevelopment of linear programming

IE OR Traditional IE and OR can be considered as a continuum where IE is at one end and OR is at the otherTraditional IE tends to be more applicable to problems in a manufacturing environmentOR has a broader scopeOR has more mathematical approaches than traditional IE

IE vs ORSomewhat separate historiesCommon missionProviding effective, efficient answers to questions relating to design, analysis and evaluation.N. Barish saysOR is the applied science for managerial systems, whereas IE is the engineering of managerial systems.Each student will develop their own philosophy of the relationship between the two areas in time.

Examples of IE/OR Activities

DescriptionActivityCoursesDetermining the most appropriate manufacturing operations and tooling to use to produce a particular productManufacturing ProcessesIE262Setting time standards for various manufacturing jobs, such as welding two plates togetherWork MeasurementIE271Designing efficient and effective methods for work tasksWork MethodsIE271Evaluating the economic costs and benefits of one or more investment alternativesEngineering EconomyIE342Designing the best layout of a facility so that travel distances are minimizedFacility LayoutIE271 + ElDetermining the location of fewest number of fire stations required to provide a response time of no greater than 5 minutesFacility LocationElectiveDetermine how much to produce and when to produceProduction PlanningIE375

Examples of IE/OR Activities

Determining the best system for moving goods within a set of facilitiesMaterial HandlingIE271Mathematical modeling of decision problems involving allocation of scarce resources, finding optimal solutionsMathematical ProgrammingIE202 IE303 Estimation of average waiting times in front of a bank tellerQueueingIE325Determining optimal reorder and order quantities of inventoriesInventoryIE325 + ElForecasting future demand figuresForecastingIE375Determining the sequence of jobs in order to meet due datesSchedulingIE375 + ElDesigning acceptance tests to ascertain a quality levelQuality ControlIE380Determining the method of cutting the maximum number of shirt patterns from a large piece of cloth to minimize scrapCutting StockIE202 + ElectiveDetermining the most efficient procedures of assembling a bicycleMethods ImprovementIE271

Industrial EngineeringIE uses engineering concepts, mathematics, economics, and principles of human behavior to design and implement more efficient, more productive systems.

What is more efficient? What is more productive? How can you quantify them?

WorkIs our primary means of livelihoodServes an important economic function in the global world of commerceCreates opportunities for social interactions and friendshipsProvides the products and services that sustain and improve our standard of living

The Nature of WorkWork is an activity in which one exerts physical and mental effort to accomplish a given task or perform a dutyTask or duty has some useful objective Worker applies skills and knowledge for successful completionThe activity has commercial valueThe worker is compensated

The Pyramidal Structure of WorkWork consists of tasksTasks consist of work elementsWork elements consist of basic motion elements

TaskAn amount of work that is assigned to a worker or for which a worker is responsibleRepetitive task as in mass productionTime required = 30 seconds to several minutesNon-repetitive task performed periodically, infrequently, or only onceTime required usually much longer than for repetitive task

Work ElementA series of work activities that are logically grouped together because they have a unified function in the taskExample: assembling a component to a base part using several nuts and boltsRequired time = six seconds or longer

A Work System as a Physical Entity

ProductivityThe level of output of a given process relative to the level of inputProcess can refer to Individual production or service operationsA national economy Productivity is an important metric in work systems becauseImproving productivity is the means by which worker compensation can be increased without increasing the costs of products and services they produce

Labor ProductivityThe most common productivity measure is labor productivity, defined by the following ratio:LPR =where LPR = labor productivity ratio, WU = work units of output, LH = labor hours of input

Labor Factor in ProductivityLabor itself does not contribute much to improving productivity More important factors:Capital - substitution of machines for human laborTechnology - fundamental change in the way some activity or function is accomplished

Measuring ProductivityNot as easy as it seems because of the following problems:Non-homogeneous output units Multiple input factors Labor, capital, technology, materials, energyPrice and cost changes due to economic forcesProduct mix changes Relative proportions of products that a company sells change over time

Labor Productivity IndexMeasure that compares input/output ratio from one year to the next

LPI =

where LPI = labor productivity index, LPRt = labor productivity ratio for period t, andLPRb = labor productivity ratio for base period

Example: Productivity MeasurementDuring the base year in a small steel mill, 326,000 tons of steel were produced using 203,000 labor hours. In the next year, the output was 341,000 tons using 246,000 labor hours. Determine: (a) the labor productivity ratio for the base year, (b) the labor productivity ratio for the second year, and (c) the productivity index for the second year.

Example: Solution(a) In the base year, LPR = 326,000 / 203,000= 1.606 tons per labor hour(b) In the second year, LPR = 341,000 / 246,000= 1.386 tons per labor hour(c) Productivity index for the second yearLPI = 1.386 / 1.606 = 0.863 Comment: No matter how its measured, productivity went down in the second year.

Productive Work ContentA given task performed by a worker can be considered to consist of Basic productive work contentTheoretical minimum amount of work required to accomplish the taskExcess nonproductive activitiesExtra physical and mental actions of workerDo not add value to the taskDo not facilitate the productive work contentTake time

Excess Nonproductive ActivitiesCan be classified into three categories:Excess activities due to poor design of product or serviceExcess activities caused by inefficient methods, poor workplace layout, and interruptionsExcessive activities cause by the human factor

ProductivityProductivity measures the capability of processing inputs to convert to outputs. It simply measures how much output is produced relative to the inputs of labor, capital (plant and equipment), and technologyA process may be productive but may not be efficient

EfficiencyEfficiency denotes the maximum utilization on ones given resourcesEfficiency is generally a relative term, used for comparison. Its focus is on the best utilization of resources. Elimination of some adjacent bank branches as a result of merge of two banks would attain greater efficiency, while a termination of employment due to teller machines would cause greater productivity.

Standard Time-Based Performance Index100 employees produce 5000 units of a given product in one day. The productivity is 50 units/employee per day.

Standard time to assemble: a grinder=2min/unit; an operator assembles 275 grinders/day,work duration is 8 hrs/day (480 min/day).Performance Index = (2*275)/480 = 114.6 %

Factors that facilitate productivity improvement:Technological Innovation: faster machines, eliminate heavy physical work and repetitive operationsincreased capital investment, complex machinery, skilled operatorsEffective ManagementEmployee motivation, better marketing, etc.

Questions we will deal with in this course:How is work done?What is a better way of doing it? (Setup times, loading/unloading, inspection, actual operations)How long does the work take to complete?What is the frequency of work?We will useWork Study: Time Study (Taylor) and Motion Study (Gilbreths) Plant Layout

Work Study for Increased ProductivityMotion StudyEliminate unnecessary workDesign efficient and effective methods and procedures most suitable to the employees

Time StudyMeasurement of work to determine standard times.