Processes and Technology

8/13/2019 Processes and Technology

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Processes and Technology

Beni AsllaniUniversity of Tennessee at Chattanooga

Operations Management - 6thEdition

Chapter 6

Roberta Russell & Bernard W. Taylor, III


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Lecture outline

Process planning

Process analysis

Process innovation Technology decisions

6-2


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Process Planning

Process - a group of related tasks with specificinputs and outputs

Process design - what tasks need to be done

and how they are coordinated among functions,people, and organizations

Process planning - converts designs intoworkable instructions for manufacture or delivery

Process strategy - an organizations overallapproach for physically producing goods andservices

6-3


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Process Strategy

Vertical integration extent to which firm will produce inputs and control

outputs of each stage of production process

Capital intensity

mix of capital (i.e., equipment, automation) andlabor resources used in production process

Process flexibility

ease with which resources can be adjusted inresponse to changes in demand, technology,products or services, and resource availability

Customer involvement

role of customer in production process 6-4


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Outsourcing

Cost

Capacity

Quality

Speed

Reliability

Expertise

6-5


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Process Selection

Projects one-of-a-kind production of a product to customer

order

Batch production processes many different jobs at the same time in

groups or batches

Mass production

produces large volumes of a standard product for amass market

Continuous production used for very-high volume commodity products

6-6


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Sourcing Continuum

6-7


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Product-Process Matrix

6-8

Source:Adapted from Robert Hayes and Steven Wheelwright,Restoring the Competitive Edge Competing

through Manufacturing(New York, John Wiley & Sons, 1984), p. 209.


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Types of Processes

6-9

Type of

product

Unique

PROJECT BATCH

Made-to-order

(customized)

Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for CompetitiveAdvantage (New York:McGraw-Hill, 2001), p. 210

Type ofcustomer

One-at-a-time

Fewindividual

customers

MASS

Made-to-stock

(standardized )

Mass

market

CONT.

Commodity

Mass

market

Productdemand Infrequent Fluctuates Stable Very stable


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Types of Processes (cont.)

6-10

Demand

volume

Very low

PROJECT BATCH

Low to

medium


No. ofdifferentproducts

Infinitevariety

Many, varied

MASS

High

Few

CONT.

Very high

Very few

Productionsystem

Long-termproject

Discrete, jobshops

Repetitive,assembly

lines

Continuous,process

industries


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6-11

Equipment Varied

PROJECT BATCH

General-

purpose


Primarytype ofwork

Specializedcontracts

Fabrication

MASS

Special-

purpose

Assembly

CONT.

Highly

automated

Mixing,treating,refining

Workerskills

Experts,crafts-

persons

Wide rangeof skills

Limitedrange of

skills

Equipmentmonitors


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6-12

Advantages Custom work,latest technology

PROJECT BATCH

Flexibility,quality

Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (NewYork:McGraw-Hill, 2001), p. 210

Dis-advantages

Non-repetitive,small customerbase, expensive

Costly, slow,

difficult to

manage

MASS

Efficiency,

speed,

low cost

Capital

investment;

lack of

responsiveness

CONT.

Highly efficient,

large capacity,

ease of control

Difficult to change,

far-reaching errors,

limited variety

ExamplesConstruction,shipbuilding,spacecraft

Machine shops,

print shops,

bakeries,

education

Automobiles,

televisions,

computers,

fast food

Paint, chemicals,foodstuffs


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Process Selection with Break-Even Analysis

Examines cost trade-offs associated withdemand volume

Cost

Fixed costs constant regardless of the number of unitsproduced

Variable costs vary with the volume of units produced

Revenue - price at which an item is sold

Total revenue - price times volume sold

Profit - difference between total revenue and totalcost

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Process Selection withBreak-Even Analysis (cont.)

6-14

Total cost = fixed cost + total variable costTC = cf+ vcv

Total revenue = volume x priceTR = vp

Profit = total revenue - total costZ = TR TC = vp- (c

f

+ vcv

)


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Process Selection with

Break-Even Analysis (cont.)

6-15

Solving for Break-Even Point (Volume)

TR = TC

vp= cf+ vcvvp- vcv= cf

v(p - cv) = cf

v= cf

p -cv


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Break-Even Analysis: Example

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Fixed cost = cf= $2,000Variable cost = cv= $5 per raft

Price =p= $10 per raft

Break-even point is

v = = = 400 raftscf

p - cv2000

10 - 5


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Break-Even Analysis: Graph

6-17

Totalcostline

Totalrevenue

line

Break-even point400 Units

$3,000

$2,000

$1,000

Dollars


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Process Plans

Set of documents that detail manufacturingand service delivery specifications

assembly charts

operations sheets quality-control check-sheets

6-18


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Process Selection

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Below or equal to 4,000, choose A

Above or equal to 4,000, choose B

$2,000 + $5v = $10,000 + $3v$2v= $8,000

v= 4,000 rafts

Process A Process B


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Process Analysis

6-20

systematic

examination of

all aspects ofprocess to

improve

operation


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6-21

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 min20 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

Building a flowchart Determine objectives

Define process boundaries

Define units of flow

Choose type of chart

Observe process and collect data

Map out process Validate chart

6-22


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Process Flowcharts

Look at manufacture of product ordelivery of service from broadperspective

Incorporate

nonproductive activities (inspection,transportation, delay, storage)

productive activities (operations)

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Process Flowchart Symbols

6-24

Operations

Inspection

Transportation

Delay

Storage


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Process Flowchart

6-25

Processflowchartof apple

processing


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6-26


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Simple Value Chain Flowchart

6-27


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Process Innovation

6-28

BreakthroughImprovement

Continuous improvementrefines the breakthrough

Continuous improvement activities

peak; time to reengineer process

Total redesign of

a process for

breakthrough

improvements


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From Function to Process

6-29

Manufacturing

Accounting

Sales

Purchasing

Product Development

Order Fulfillment

Supply Chain Management

Customer Service

Function Process


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6-30

StrategicDirectives

Goals for ProcessPerformance

Pilot Studyof New Design

DetailedProcess Map

High - levelProcess map

GoalsMet?

InnovativeIdeas Design

Principles

ModelValidation

CustomerRequirements

KeyPerformance

Measures

Full ScaleImplementation

Baseline Data

BenchmarkData

No Yes

Process Innovation


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High-Level Process Map

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Principles for RedesigningProcesses

Remove waste, simplify, and consolidatesimilar activities

Link processes to create value

Let the swiftest and most capable enterpriseexecute the process

Flex process for any time, any place, any way

Capture information digitally at the source andpropagate it through process

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Principles for RedesigningProcesses (cont.) Provide visibility through fresher and richer

information about process status Fit process with sensors and feedback loops

that can prompt action Add analytic capabilities to process Connect, collect, and create knowledge around

process through all who touch it Personalize process with preferences and

habits of participants

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Techniques for GeneratingInnovative Ideas

Vary the entry point to a problem in trying to untangle fishing lines, its best to start

from the fish, not the poles

Draw analogies a previous solution to an old problem might work

Change your perspective think like a customer bring in persons who have no knowledge of

process

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Techniques for GeneratingInnovative Ideas (cont.)

Try inverse brainstorming what would increase cost what woulddisplease the customer

Chain forward as far as possible if I solve this problem, what is the next problem

Use attribute brainstorming how would this process operate if. . .

our workers were mobile and flexible

there were no monetary constraints we had perfect knowledge

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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

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Components of e-Manufacturing


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A Technology Primer

Computer-aideddesign (CAD)

Group technology(GT)

Computer-aidedengineering (CAE)

Collaborativeproduct commerce

(CPC)

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Creates and communicates designselectronically

Classifies designs into families for easyretrieval and modification

Tests functionality of CAD designselectronically

Facilitates electronic communication and

exchange of information among designersand suppliers

Product Technology


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A Technology Primer (cont.)

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Product datamanagement

(PDM) Product life cycle

management(PLM)

Productconfiguration

Keeps track of design specs and revisionsfor the life of the product

Integrates decisions of those involved inproduct development, manufacturing, sales,customer service, recycling, and disposal

Defines products configured by customers

who have selected among various options,usually from a Web site

Product Technology


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Standard forexchange of

product model data(STEP)

Computer-aideddesign andmanufacture(CAD/CAM)

Computer aidedprocess (CAPP)

E-procurement

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Set standards for communication amongdifferent CAD vendors; translates CAD data

into requirements for automated inspectionand manufacture

Electronic link between automated design(CAD) and automated manufacture (CAM)

Generates process plans based ondatabase of similar requirements Electronic purchasing of items from e-

marketplaces, auctions, or companywebsites

Process Technology


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Computernumerically control(CNC)

Flexiblemanufacturingsystem (FMS)

Robots

Conveyors

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Machines controlled by software code to perform avariety of operations with the help of automated

tool changers; also collects processing informationand quality data

A collection of CNC machines connected by anautomated material handling system to produce awide variety of parts

Manipulators that can be programmed to perform

repetitive tasks; more consistent than workers butless flexible

Fixed-path material handling; moves items along abelt or overhead chain; reads packages and

diverts them to different directions; can be very fast

Manufacturing Technology


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Automatic guidedvehicle (AGV)

Automated storageand retrieval system(ASRS)

Process Control

Computer-integratedmanufacturing (CIM)

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A driverless truck that moves material along aspecified path; directed by wire or tape embeddedin floor or by radio frequencies; very flexible

An automated warehousesome 26 stores highin which items are placed in a carousel-typestorage system and retrieved by fast-movingstacker cranes; controlled by computer

Continuous monitoring of automated equipment;

makes real-time decisions on ongoing operation,maintenance, and quality

Automated manufacturing systems integratedthrough computer technology; also called e-manufacturing

Manufacturing Technology


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BusinesstoBusiness (B2B)

Businessto

Consumer (B2C)

Internet

Intranet

Extranet

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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


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Bar Codes

Radio Frequency

Identification tags(RFID)

Electronic datainterchange (EDI)

Extensive markuplanguage (XML)

Enterpriseresource planning(ERP)

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A series of vertical lines printed on most packages thatidentifies item and other information when read by ascanner

An integrated circuit embedded in a tag that can sendand receive information; a twenty-first century bar codewith read/write capabilities

A computer-to-computer exchange of businessdocuments over a proprietary network; very expensiveand inflexible

A programming language that enables computerto -

computer communication over the Internet by taggingdata before its is sent

Software for managing basic requirements of anenterprise, including sales & marketing, finance andaccounting, production & materials management, andhuman resources



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Supply chainmanagement (SCM)

Customer relationshipmanagement (CRM)

Decision supportsystems (DSS)

Expert systems (ES)

Artificial intelligence(AI)

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Software for managing flow of goods and informationamong a network of suppliers, manufacturers anddistributors

Software for managing interactions with customers andcompiling and analyzing customer data

An information system that helps managers makedecisions; includes a quantitative modeling componentand an interactive component for what-if analysis

A computer system that uses an expert knowledge baseto diagnose or solve a problem

A field of study that attempts to replicate elements ofhuman thought in computer processes; includes expertsystems, genetic algorithms, neural networks, and fuzzylogic



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