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Transcript of Processes, Technology, and Capacity. 6-2 Lecture Outline Process Planning Process Analysis ...
Processes, Technology, and CapacityProcesses, Technology, and Capacity
6-6-22
Lecture OutlineLecture Outline
Process Planning Process Analysis Process Innovation Technology Decisions Capacity Decisions
6-6-33
Process PlanningProcess Planning
Process a group of related tasks with specific inputs and
outputs Process design
tasks need to be done and coordinated among functions, people, and organizations
Process planning converts designs into workable instructions for
manufacture or delivery Process strategy
an organization’s overall approach for physically producing goods and services
6-6-44
Process Selection
Projects one-of-a-kind production of a product to customer order
Batch production systems process many different jobs through the system in
groups or batches Mass production
produces large volumes of a standard product for a mass market
Continuous production used for very-high volume commodity products
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PROJECTPROJECT BATCHBATCH
Types of Processes
Type of product
Type of customer
MASSMASS CONTCONT..
Product demand Infrequent Very stable
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PROJECTPROJECT BATCHBATCH
Types of Processes (cont.)
Demand volume
No. of different products
Infinite variety
MASSMASS CONTCONT..
Production system
Long-term project
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PROJECTPROJECT BATCHBATCH
Types of Processes (cont.)
Equipment
Primary type of work
MASSMASS CONTCONT..
Worker skills
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PROJECTPROJECT BATCHBATCH
Types of Processes (cont.)
Advantages
Dis-advantages
Non-repetitive, small customer base, expensive
MASSMASS CONTCONT..
ExamplesConstruction, shipbuilding, spacecraft
6-6-99
Cost Fixed costs
constant regardless of the number of units produced Variable costs
vary with the volume of units produced Revenue
price at which an item is sold Total revenue
is price times volume sold Profit
difference between total revenue and total cost
Process Selection with Process Selection with Break-Even AnalysisBreak-Even Analysis
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Process Selection with Process Selection with Break-Even Analysis (cont.)Break-Even Analysis (cont.)
Total cost Total cost = fixed cost + total variable cost= fixed cost + total variable costTC = TC = ccff + + vcvcvv
Total revenue =Total revenue = volume x price volume x priceTR = TR = vpvp
Profit Profit = total revenue - total cost= total revenue - total costZ = TR – TC = Z = TR – TC = vpvp - ( - (ccff + + vcvcvv))
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Process Selection with Process Selection with Break-Even Analysis (cont.)Break-Even Analysis (cont.)
Solving for Break-Even Volume
TRTR = TC= TCvpvp = = ccff + + vcvcvv
vpvp - - vcvcvv = = ccff
vv((p - cp - cvv)) = = ccff
vv ==
ccff
p p -- c cvv
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Break-Even Analysis: ExampleBreak-Even Analysis: Example
Fixed costFixed cost = = ccff = $2,000 = $2,000
Variable costVariable cost = = ccvv = $5 per raft = $5 per raft
PricePrice = = pp = $10 per raft = $10 per raft
Break-even point isBreak-even point is
v v = = = rafts= = = raftsccff
p p - - ccvv
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Break-Even Analysis: GraphBreak-Even Analysis: Graph
Total cost line
Total revenue
line
Break-even point400 Units
$3,000 —
$2,000 —
$1,000 —
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Process SelectionProcess Selection
Below , chooseBelow , chooseAbove , chooseAbove , choose
$2,000 + $5$2,000 + $5vv = $10,000 + $2= $10,000 + $2vv==
vv = rafts= rafts
Process AProcess A Process BProcess B
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Process Process Selection: Selection: GraphGraph
Example 4.2Example 4.2
| | | |1000 2000 3000 4000 Units
$20,000 —
$15,000 —
$10,000 —
$5,000 —
Total cost of process A
Total cost of process B
Choose process A
Choose process B
Point of indifference = 2,667 Units
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Process Planning and Analysis Tools
Process Planning: set of documents that detail manufacturing and service delivery specifications assembly charts operations sheets quality-control check-sheets process flow chart process map
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Sesame seed top bunSesame seed top bun
Beef pattyBeef pattySaltSaltCheeseCheese
LettuceLettuceSauceSauceOnionsOnions
Middle bunMiddle bun
Beef pattyBeef pattySaltSaltCheeseCheese
LettuceLettuceSauceSauceOnionsOnionsPicklesPickles
Bottom bunBottom bun
WrapperWrapper
SASA
SASA
First-layer assemblyFirst-layer assembly
Second-layer assemblySecond-layer assembly
Completed Big MacCompleted Big Mac
Assembly Chartfor a Big Mac
Assembly Chartfor a Big Mac
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Part name Crevice Tool
Part No. 52074
Usage Hand-Vac
Assembly No. 520
Oper. No. Description Dept. Machine/Tools Time
10 Pour in plastic bits 041 Injection molding 2 min
20 Insert mold 041 #076 2 min
30 Check settings 041 113, 67, 650 20 min& start machine
40 Collect parts & lay flat 051 Plastics finishing 10 min
50 Remove & clean mold 042 Parts washer 15 min
60 Break off rough edges 051 Plastics finishing 10 min
An Operations Sheet for a Plastic Part
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Process Analysis
Process flowcharts Symbolic representation of processes Incorporate
nonproductive activities (inspection, transportation, delay, storage)
productive activities (operations)
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Process Flowchart Process Flowchart SymbolsSymbols
OperationsOperations
InspectionInspection
TransportationTransportation
DelayDelay
StorageStorage
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Place order
Drink
Eat salad or soup
Eat dinner
Receives check
Gives payment to waiter
Collect change, leave tip
Fill in tip amount
Give order to waiter
Prepare dinner order
Prepare soup or salad order
Give order to waiter
Is order complete?
Give soup or salad order to chef
Give dinner order to chef
Get drinks for customer
Deliver salad or soup order to customer
Deliver dinner to customer
Deliver check to customer
Receive payment for meal
Cash or Credit?
Bring change to customer
Run credit card through
Return credit slip to customer
Collect tip
YY
NN
CreditCredit
CashCash
CustomerCustomer WaiterWaiter Salad Chef Salad Chef Dinner Chef Dinner Chef
A Process Map of
Restaurant Service
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Technology Decisions
Financial justification of technology Purchase cost Operating Costs Annual Savings Revenue Enhancement Replacement Analysis Risk and Uncertainty Piecemeal Analysis
6-6-2323
A Technology Primer
Computer-aided design (CAD)
Group technology (GT)
Computer-aided engineering (CAE)
Collaborative product commerce (CPC)
Computer-aided design (CAD)
Group technology (GT)
Computer-aided engineering (CAE)
Collaborative product commerce (CPC)
Creates and communicates designs electronically
Classifies designs into families for easy retrieval and modification
Tests functionality of CAD designs electronically
Facilitates electronic communication and exchange of information among designers and suppliers
Product Technology
6-6-2424
Standard for exchange of product model data (STEP)
Computer-aided design and manufacture (CAD/CAM)
Computer aided process (CAPP)
E-procurement
Standard for exchange of product model data (STEP)
Computer-aided design and manufacture (CAD/CAM)
Computer aided process (CAPP)
E-procurement
Set standards for communication among different CAD vendors; translates CAD data into requirements for automated inspection and manufacture
Electronic link between automated design (CAD) and automated manufacture (CAM)
Generates process plans based on database of similar requirements
Electronic procurement of items from e-marketplaces, auctions, or company websites
Process Technology
A Technology Primer (cont.)
6-6-2525
Computer numerically control (CNC)
Flexible manufacturing system (FMS)
Robots
Conveyors
Computer numerically control (CNC)
Flexible manufacturing system (FMS)
Robots
Conveyors
Machines controlled by software code to perform a variety of operations with the help of automated tool changers; also collects processing information and quality data
A collection of CNC machines connected by an automated material handling system to produce a wide variety of parts
Manipulators that can be programmed to perform repetitive tasks; more consistent than workers but less flexible
Fixed-path material handling; moves items along a belt or overhead chain; “reads” packages and diverts them to different directions; can be very fast
Manufacturing Technology
A Technology Primer (cont.)
6-6-2626
Automatic guided vehicle (AGV)
Automated storage and retrieval system (ASRS)
Process Control
Computer-integrated manufacturing (CIM)
Automatic guided vehicle (AGV)
Automated storage and retrieval system (ASRS)
Process Control
Computer-integrated manufacturing (CIM)
A driverless truck that moves material along a specified path; directed by wire or tape embedded in floor or by radio frequencies; very flexible
An automated warehouse—some 26 stores high—in which items are placed in a carousel-type storage system and retrieved by fast-moving stacker cranes; controlled by computer
Continuous monitoring of automated equipment; makes real-time decisions on ongoing operation, maintenance, and quality
Automated manufacturing systems integrated through computer technology; also called e-manufacturing
Manufacturing Technology
A Technology Primer (cont.)
6-6-2727
Business – to –Business (B2B)
Business – to –Customer (B2C)
Internet
Intranet
Extranet
Business – to –Business (B2B)
Business – to –Customer (B2C)
Internet
Intranet
Extranet
Electronic transactions between businesses usually over the Internet
Electronic transactions between businesses and their customers usually over the Internet
A global information system of computer networks that facilitates communication and data transfer
Communication networks internal to an organization; can be password (i.e., firewall) protected sites on the Internet
Intranets connected to the Internet for shared access with select suppliers, customers, and trading partners
Information Technology
A Technology Primer (cont.)
6-6-2828
Bar Codes
Radio Frequency Identification tags (RFID)
Electronic data interchange (EDI)
Extensive markup language (XML)
Enterprise resource planning (ERP)
Bar Codes
Radio Frequency Identification tags (RFID)
Electronic data interchange (EDI)
Extensive markup language (XML)
Enterprise resource planning (ERP)
A series of vertical lines printed on most packages that identifies item and other information when read by a scanner
An integrated circuit embedded in a tag that can send and receive information; a twenty-first century bar code with read/write capabilities
A computer-to-computer exchange of business documents over a proprietary network; very expensive and inflexible
A programming language that enables computer – to - computer communication over the Internet by tagging data before its is sent
Software for managing basic requirements of an enterprise, including sales & marketing, finance and accounting, production & materials management, and human resources
Information Technology
A Technology Primer (cont.)
6-6-2929
Supply chain management (SCM)
Customer relationship management (CRM)
Decision support systems (DSS)
Expert systems (ES)
Artificial intelligence (AI)
Supply chain management (SCM)
Customer relationship management (CRM)
Decision support systems (DSS)
Expert systems (ES)
Artificial intelligence (AI)
Software for managing flow of goods and information among a network of suppliers, manufacturers and distributors
Software for managing interactions with customers and compiling and analyzing customer data
An information system that helps managers make decisions includes a quantitative modeling component and an interactive component for what-if analysis
A computer system that uses an expert knowledge base to diagnose or solve a problem
A field of study that attempts to replicate elements of human thought in computer processes; includes expert systems, genetic algorithms, neural networks, and fuzzy logic
Information Technology
A Technology Primer (cont.)
6-6-3030
Capacity Decisions
Capacity maximum
capability to produce rated
capacity is theoretical
effective capacity includes efficiency and utilization
Capacity utilization percent of available time spend
working Capacity efficiency
how well a machine or worker performs compared to a standard output level
Capacity load standard hours of work assigned
to a facility Capacity load percent
ratio of load to capacity
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Capacity Expansion Strategies
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Capacity Decisions (cont.)
Capacity increase depends on volume and certainty of anticipated demand strategic objectives costs of expansion and operation
Best operating level % of capacity utilization that minimizes unit costs
Capacity cushion % of capacity held in reserve for unexpected
occurrences
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Economies of ScaleEconomies of Scale
it costs less per unit to produce high levels of output 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 operating efficiency increases as workers gain
experience
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Diseconomies of Scale
Occur above a certain level of output Diseconomies of Distribution Diseconomies of Bureaucracy Diseconomies of Confusion Diseconomies of Vulnerability
6-6-3535
Best Operating Level for a Hotel