Processes, Technology, Capacity

Chapter 6, Part 2

Global Outsourcing Issues(pages 13 – 16)

Supply chain logistics – getting parts or products on time

Quality problems Loss of capabilities (issue in both domestic and global

outsourcing) Safety, security, and stability Changes in the value of currency Cultural differences and communication issues Corporate image

Financial Justification of Technology

Revenue enhancement Maintenance of business: how much business will we

lose without the new technology? Purchase cost Operating costs Annual savings Replacement analysis Avoid piecemeal analysis: what is the impact of this

decision on the overall process? You need a strategic technology plan.

Risk and uncertainty

Technology PrimerProduct Design

Computer-aided design (CAD): use of computer software to design products

Computer-aided engineering (CAE): use of computer software to evaluate and improve product designs

Group technology (GT): Classifies designs into families for easy retrieval and modification. Also used to classify parts for Just-in-time manufacturing.

Collaborative product commerce (CPC): Permits electronic exchange of information among product designers and suppliers

Technology PrimerComputer-Aided Process Planning

(CAPP)

Generates process plans based on CAD/CAE data and a database of products with similar manufacturing requirements (pages 230-231)

Assembly charts show how the product is put together Operations sheets list the manufacturing operations to

be performed, with details on machines, tools, time, and possibly worker skills

Quality checksheets specify quality standards and quality data to be recorded.

Process plans are used to generate manufacturing instructions for computer-aided manufacturing (CAM)

Data Flow in Manufacturing Technology

Computeraided design (CAD)

Computeraidedengineering(CAE)

Productdesigndata Final

design?

No

YesFinaldesigndata

Computeraidedprocessplanning(CAPP)

Manufacturinginstructions

Computeraidedmanufacturing(CAM)

Finishedgoods

Technology PrimerInformation Technology

Bar codes: used for product identification, product tracking, and package tracking

Radio frequency identification (RFID): An integrated circuit embedded in a tag that can send, receive, and record information

Can detect and identify products without opening shipping containers

Technology PrimerInformation Technology (2)

Enterprise resource planning (ERP) systems: Software for managing basic requirements of an enterprise, including sales & marketing, finance and accounting, production & materials management, and human resources. All applications use a common "data warehouse".

Extended ERP (ERP II) systems: Extends ERP to include suppliers and customers.

Technology PrimerInformation Technology (3)

Vision systems are computer systems with artificial intelligence that can "see" objects Often built into robots. Used for sorting and positioning parts Used for inspection. Suspect parts can be

inspected by a second vision system or by a person

Can recognize images of hands, etc.

Technology PrimerInformation Technology (4)

Biometrics Used to identify people and grant access to

facilities, work areas, equipment, etc. Include a vision system, database, and artificial

intelligence. Stored image of some portion of each user's

body. May use hand, thumb, or iris (colored part of eye).

Vision system develops and stores images. Artificial intelligence compares body part of

person seeking access with stored image.

Technology PrimerManufacturing Technology

Computer numerically controlled (CNC) machines: Machines controlled by software code to

perform a variety of operations equipped with automated tool changers also collect processing information and

quality data controlled by a central computer system can be networked into flexible manufacturing

cells and flexible manufacturing systems

Technology PrimerManufacturing Technology (2)

Robots: reprogrammable manipulators that can perform repetitive tasks. They are more consistent than workers but less flexible. Used for

Monotonous work, such as assembly line work

Work that is hard or unhealthy for people, such as painting or nuclear plant cleanup

Work that requires great precision Making integrated circuits Surgery – guided by a surgeon

May include vision systems to identify parts

Technology PrimerManufacturing Technology (3)

Flexible manufacturing system (FMS): A collection of CNC machines and/or robots connected by an automated material handling system to produce a wide variety of parts All machines in the system will be under the

command of a single computer. The system usually has automatic

inspection capability Automated materials handling is usually

done by a conveyor belt

Parts Finishedgoods

Load Unload

Computer control room

Machine Machine

Machine

Machine Machine

Machine

Tools Tools

Conveyor

Flexible Manufacturing System

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7s-20 © 1998 by Prentice Hall, Inc.

A Simon & Schuster CompanyUpper Saddle River, N.J. 07458

Advantages of FMS Technology

Fast response - short manufacturing lead time

High product flexibility High quality Very efficient if total production

volume is high

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7s-20 © 1998 by Prentice Hall, Inc.

A Simon & Schuster CompanyUpper Saddle River, N.J. 07458

Advantages of FMS Technology (2)

Low unit costsVery little direct laborLess material wasteVery low work in process inventory

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7s-20 © 1998 by Prentice Hall, Inc.

A Simon & Schuster CompanyUpper Saddle River, N.J. 07458

Disadvantages of FMS Technology

High capital cost - need high total product volume to justify investment

Expertise required to design and maintain the system

Computer Integrated Manufacturing (CIM)

CAD, CAE, and CAPP Flexible Manufacturing System Production planning and inventory

management Purchasing Common databases and control systems for all

these functions Provides product flexibility, cost savings, and

short manufacturing lead times

Components of e-Manufacturing

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

Capacity Expansion Strategies

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

Economies 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 More efficient process technology can be used

Best Operating Level for a Hotel

Diseconomies of Scale

Occur above a certain level of output Diseconomies of distribution Diseconomies of bureaucracy (more

management overhead) Diseconomies of confusion (complexity) Diseconomies of vulnerability (risk)

Diseconomies of Confusion

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