Manufacturing Systems Context of Manufacturing. Manufacturing Systems 1.The Context of Manufacturing 2.Quality Management 3.Project Management 4.Concurrent.
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Manufacturing Systems
1.The Context of Manufacturing
2.Quality Management
3.Project Management
4.Concurrent Engineering
5.Manufacturing System Design and Control
The Context of Manufacturing
Manufacturing is part of a bigger scheme known as operations.
Operations takes in all systems that involve getting work done.
•services •manufacture
The same principles apply to both.
The Context of Manufacturing
Operations is a transformation process.
Inputs are transformed into outputs.
Goal is to create and add value to the inputs during the transformation.
InputsMaterialsLabourEquipmentCapital
InputsMaterialsLabourEquipmentCapital
OutputsGoodsServices
OutputsGoodsServicesTransformation
process
Manufacture: adding value to a raw material by changing its shape or properties.
Manufacturing
Technical terms: manufacturing process is used
to turn raw material into finished items.
Scrap and waste
Starting material
Processed Part
MachineryMachinery
ToolingTooling
PowerPower
LabourLabour
Manufacturing process
Manufacturing process
Manufacturing
Economics terms: the value added to the inputs
is important.
Starting material
Processed Part
Material in process
Manufacturing Process
Manufacturing Process
€ €€ €€€Added Value
Manufacturing
Industries can be grouped into:
• Primary – exploit natural resources
• Secondary – converts primary outputs into
consumer goods - manufacturing
• Tertiary – contributes to the service sector
Business Strategies
•Companies exist to make a profit
•Products offered by more than one company
•Companies compete for market share
•Company needs a strategy
Direction
Focus
Business Strategies
A strategy consists of four steps:
1.Define a primary task
2.Assess core competencies
3.Determine order qualifiers and order winners
4.Position the firm
Business Strategies
1. Define a primary task
Represents the purpose of the firm - what is its business
Identifies the area in which it will be competing - stated in broad terms.
e.g. Iarnrod Eireann is in the business of Transportation, not Railways
Often expressed as a mission statement.
Amazon.com - ‘To provide the fastest, easiest, most enjoyable shopping experience’
Business Strategies
2. Assess core competencies
Identify what the company does best
Usually based on knowledge or processes
Rarely single product or technology – easily copied
Dell Computer: is the ability to quickly assemble computers to order and to deliver them to customers without delay.
Business Strategies
3. Determine order qualifiers and order winners
An order qualifier is a characteristic of a product that will make a consumer consider buying it.
An order winner is the characteristic of a product that will make the consumer purchase it.
Buying a car: Order qualifier - priceOrder winner - model with the most features
Business Strategies
4. Position the firm
Choose one or two important things to concentrate on and do extremely well.
Defines:•how well the firm competes in the marketplace•what unique value it will deliver to the consumer
Relative strengths of competitors must be taken into account
Apple computers do not compete with companies such as Dell for its market – they concentrate on a niche market for innovative products such as the iPhone, IPod where they are often first to the market.
Manufacturing Strategies
Different ways of offering a product:
•Make to stockProducts are designed, produced and delivered to customer specifications in response to an order
•Make to orderProducts are designed and produced for a ‘standard’ customer in anticipation of demand.
•Assemble to orderBase unit or module is produced onto which options can be added according the specification of the customer.
Manufacturing Strategies
Types of Production Processes:
1.Project
• Long time to complete
• Large investment in resources
• One item to customer order
2.Batch production
• Product produced in batches
• Volume relatively low
• Demand for item can fluctuate
Manufacturing Strategies
Types of Production Processes:
3.Mass Production
• Large volume of standard product
• Demand is stable
• Demand is high
4.Continuous Production
• Very high volume products
• Highly standardised
• Highly automated systems
Product Process Matrix
Relationship between volume levels and standardisation of a product and its manufacturing process
StandardisationLow High
Volume of products
High
Low
Projects
Batch Production
Mass Production
Continuous Production
Functional Organisation of a
Manufacturing Enterprise
OrdersQuality requirementsDesign SpecsMaterial availabilityQuality data etc.
Manufacturing
Hiring/FiringTrainingLegal requirements Job designUnion negotiations etc.
BudgetsStockholder requirementsCost AnalysisProduction and Inventory data
Sales ForecastsCustomer ordersCustomer feedbackPromotionsStatus of order
Suppliers
Human Resources
Finance / Accounting
Marketing
Key Success Factors in Manufacturing
Competitiveness
Global market means more customers but also more competition
Companies will usually compete on:
•Cost - Ryanair, Penneys
•Quality - Toyota, Mercedes
•Flexibility - Dell
•Speed - Dell, McDonalds
Simple System for Costing
Often a choice is available:
•Make the product individually
→Costs more
→No setup cost
•Set up tooling and mass produce
→Setup cost
→Cost less to make once set up
Simple System for Costing
Break even Analysis
Used to choose the most economical method for making a given number of parts.
or
Finding the least number of parts to justify setting up a mass production system
Simple System for Costing
Break even Analysis
Co
st
Number of units made
Total Cost of process A
Total Cost of process B
Choose Process A
Choose Process B
Break Even Quantity
Simple System for Costing
Example:
Qty: 500 required
•Skilled labour costs €2.50 per item to manufacture
using the lathe.
•Unskilled labour costs €0.50 to manufacture using
the automated press.
•The setup cost of the press tool is €500
Simple Systems for Costing
€0
€100
€200
€300
€400
€500
€600
€700
€800
€900
€1,000
0 50 100 150 200 250 300 350 400
Quantity Made
Co
st
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