ch07

Process Choice and Layout Decisions in Manufacturing and

Services

Chapter Objectives

Be able to: Describe the five classic types of manufacturing processes. Discuss how different manufacturing and service process choices support

different market requirements. Explain how different processes can be linked together via the supply chain. Describe the critical role of customization in manufacturing, including the

degree and point of customization, and upstream versus downstream activities.

Discuss the three dimensions that differentiate services from one another and explain the different managerial challenges driven by these dimensions.

Create and interpret a service blueprint. Position a service on a conceptual model and explain the underlying

managerial challenges. Develop a product-based layout using line balancing and calculate basic

performance measures for the line. Develop a functional layout based on total distance traveled.

Manufacturing Processes

• Engineering and business perspectives

• Classic manufacturing processes

• Choosing between classic types

• The role of customization

Engineering and Business Perspectives

Solid Wood Seat for a Kitchen Chair:

Process A• Saddle Machine• Shaper Machine• Sander A• Sander B• Inspection

Setup Time: 6 hours

Time/Seat 1.1 min.

Yield Rate: 92%

Process B• 5-Axis Router• ----• Sander A• Sander B• Inspection

Setup Time: 10 min.

Time / Seat: 3.5 min.

Yield Rate: 99%

Classic Engineering Viewpoint

Four Transformation Processes

Conversion Fabrication Assembly

Testing

“Advances in Engineering increase and improve the alternatives available”

Example: Making Windows

• Raw lumber• Molten glass

• Frame wood• Window panes

AssembledWindows

Conversion Fabrication Assembly

Business View

• What conversion steps must be done?

• What are the production volumes like?

• How similar are the various products we make (can we standardize)?

• If the product is customized, how late in the process does it occur?

Classic Manufacturing Processes

Process Types(in order of decreasing volume)

• Continuous Flow

• Production Line

• Batch (High Volume)

• Batch (Low Volume)

• Job Shop

• Project

Continuous Flow

• Large production volumes• High level of automation• Basic material passed along,

converted as it moves• Usually cannot be broken into discrete

units• Usually very high fixed costs, inflexible

Oil refinery, fiber formation, public utilities, automotive manufacturing

Production Line

High-volume production of standard products or “design window”

• Processes arranged by product flow• Often “paced” (‘takt’ time discussed later)• Highly efficient, but not too flexible

Batch I

• Somewhere in between job shop and line processes

• Moderate volumes, multiple products

• Production occurs in “batches”

Can manufacturing, carton makers, advertising mailers, etc.

Batch II

Layout is a cross between that found in a line and that found in a job shop:

Group Technology

Some Examples of Batch Manufacturing

• Numerical control (NC) machines– Automated processing of entire batch– Machining center - multiple NC machines

• Flexible manufacturing systems (FMS)– Dedicated to families of parts– NC and automated handling

• Group technology– Similar in concept to FMS, but not as much

automation

Job Shop

• Low volume, one-of-a-kind products• Job shops sell their capability

• Highly flexible equipment, skilled workers• Equipment arranged by function

Project

• Used when a product is:– one-of-a-kind– too large to be moved

• Resources moved to where needed

• Equipment, people, etc. are highly flexible

• Finite duration, often with deadlineConstruction projects, equipment installation

Mixing Together the Process Types Hybrid Process

Spindles

Arms andLegs

SeatsBATCH forfabricatingparts ...

ASSEMBLYLINE forputting togetherfinal product

Choosing BetweenClassic Types

• The product-process matrix

• Product and process life cycles

Comparing Process Types...

Job Shop Batch Line

Volume Very Low High

Variety Very High Low

Skills Broad Limited

Advantage Flexibility Price and Delivery

Product – Process Matrix

One of a Kind Low Volume

Multiple Products Moderate Volumes

Few Major Products

High Volume

Commodity Products

Job Shop

Batch

Line Very Poor Fit

Very Poor Fit

The Role of Customization

What is “Customization”?

An operations-centric view:

“Customization occurs when a customer’s unique requirements directly affect the timing and nature of operations and supply chain activities”

Customization Point Model I

DESIGNSOURCINGMATERIALS

FABRICATIONASSEMBLY/FINISHING

DISTRIBUTION

ETO MTO MTSATO

Definitions:

ETO – engineer to order

MTO – make to order

ATO – assemble-to-order

MTS – make to stock

Upstream: before the customization point, “off-line” activities

Downstream: after the customization point, “on-line” activities

Make-to-Order Windows

Off-line Activities• Design• Buy Materials• Fabricate parts• Assemble

• Ship windows

On-Line Activities• Lead times?• Customizability?• Price?• What type of

manufacturing?• Sell windows

Customization Point Model II

Manufacturing Systems Design

Upstream Downstream

Performance objectives

Technology Investment

Organization structure

Job differentiation

Integration

Discretion

Efficiency

Productivity, consistency

Mechanistic

High

Formal

Low

Responsiveness

Flexibility

Organic

Low

Informal

High

Difficulty versus Customization

BASEBALL CAP WITHSCHOOL NAME ON IT

(MTO)

BASEBALL CAP WITHARKANSAS RAZORBACKS

LOGO AND SCHOOLCOLORS ON IT

(ETO)

PLAIN BASEBALL CAP(MTS)

PLAIN BASEBALL CAP INDIFFERENT COLORS

(ATO)

LOWER DIFFICULTY HIGHER DIFFICULTY

MANUFACTURING VIEW

MARKETING VIEW

LOWER CUSTOMIZATION

HIGHER CUSTOMIZATION

Customization

Job Difficulty

Job Routineness

Operations andSupply Chain Design

An Operations-Centric View

Customization becomes relevant to operations and supply chain managers when a customer’s unique requirements directly affect the timing and nature of operations and supply chain activities

“Mass customization” atJapan’s National Bicycle Co.

CAM

CAM

CAM

TUBE CUTTING

FRONT ASSEMBLY

REAR ASSEMBLY

3-D MEASUREMENT

Quality Assurance

Marketing

ORDER DATAINCLUDING

CUSTOMER’SMEASUREMENTS

AND OPTIONS

CAD

COMPUTERINSTRUCTIONS

PAINTINGASSEMBLY

2-WEEK LEAD TIME

Law of Variability

The earlier customization is introduced in the supply chain, the greater the

random variability of the process and the lower its productivity

Services

• What makes them distinctive?

• High-contact versus low-contact

• Front room versus back room

• Service Blueprinting

Services . . .

• Process and “product” are inseparable• Marketing and sales often tightly integrated• Customer often part of the process• Performance metrics can be harder to define• Nevertheless:

– Focus and process choices / trade-offs still apply

Degree of Customer Contact

Low Contact• “off-line”• Can locate for

efficiency• Can smooth out the

workload

Check clearing, mail sorting

High Contact• “on-line”• Can locate for easy

access• Flexibility to respond

to customers• Harder to manage

Hospitals, food service

Classifying Services

“Front Room” versus “Back Room”

Back room – what the customer does not see

Managed for efficiency andproductivity

Package sorting, car repair, blood test analysis, accounting department

Front room – what the customer can see

Managed for flexibility and customer service

Customer lobbies, bank teller, receptionist

What is it?What is the performance objective?

• Restaurant kitchen

• Software help desk

• Kinko’s copy center

• Airline reservations

• Jet maintenance

Designing Services• Selecting a service focus

– Like manufacturing processes, different services have strengths and weaknesses

• Key is to design a service process that meets the needs of targeted customers

• The “service package”

Service Blueprinting

Processes• Customer actions• Onstage activities• Backstage activities• Support

Separations• Line of interaction• Line of visibility• Line of internal

interaction

Service Blueprint Template(Note similarity to ‘swim lane’ in Chapter 3?)

A Cubical Model of Services(Three Dimensions)

Nature of the Service Package

Primarily Physical Activities

(Airline, trucking firm)

Primarily Intangible Activities

(Law firm, software developer)

Degree of Customization Lower Customization

(Quick-change oil shop)

Higher Customization

(Full-service car repair shop)

Degree of Customer Contact

Lower Contact

(Mail sorting)

Higher Contact

(Physical therapist)

Community Hospital

CONTACT

SERVICEPACKAGE

CUSTOMIZATION

HIGH

HIGH

LOWLOW

PHYSICAL

INTANGIBLE

Public Hospital

Birthing Center

CONTACT

SERVICEPACKAGE

CUSTOMIZATION

HIGH

HIGH

LOWLOW

PHYSICAL

INTANGIBLE

Public Hospital

Layout Decision Models

• Product-based layout– Usually best for a line operation– Cycle time a primary measure

• Functional layout– Usually best for a job shop– Distance between steps a measure

• Cellular layout– Usually best for batch processes

Product-Based Layout

Line Balancing• Improve ‘Takt’ time:

– Use minimum number of workstations– Reduce idle time– Reduce setup time– Reduce unnecessary movement– Identify ‘bottlenecks’

rateoutputrequiredtimeproductionavailable

timeTakt

Process Layout Steps

1) Identify all steps, their relationships, and times required.

2) Draw a precedence diagram3) Determine takt time (time available divided by

desired output rate)4) Determine minimum number of workstations

required (total process time divided by takt time)5) Assign tasks to workstations according to

precedence and total time for each to not exceed takt time.

6) Evaluate solution for times per workstation, % idle time, and efficiency delay (100% - % idle time)

Precedence Diagram Example(with workstation task assignments)

Functional Layout Improvement

A. Minimize the total distance traveled Determine distances between functional units Determine numbers of interactions between units Multiply distances times respective number of

interactions Revise original layout for minimum total distance

after first locating functions best for process material flows

B. Minimize information flow for decisionsC. Use electronic data interchange (EDI) to allow

more flexibility for accomplishing A and B

Case Study in Manufacturing and Service Processes

Loganville Window Treatments