PRODUCTION MANAGEMENT Prepared by V.PRABAKARAN
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PRODUCTION MANAGEMENTPrepared by
V.PRABAKARAN
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What is Production?
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Production…
“It is the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user”
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Why should we study?
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Objectives of any business?
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PROFIT MAKING
&
SUSTAINABLE GROWTH
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Profit = Price - cost
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COND…
Which involves Planning Organizing Controlling
How?
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MODEL OF PRODUCTION SYSTEM…
Supplier
Input
Conversion/Creation process
Output
Customer
Men, Machine, Money & Method
Goods &
Services
Who control/monitor this?
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Goods Services
Tangible Intangible
Can be stored Cannot be stored
Low customer contact High customer contact
Longer response time Shorter response time
Production may be separate from consumption
Produced & consumed at same place
Ownership can be transfer ?
Some aspects of quality is measurable
Quality of service is difficult to measure
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OBJECTIVES OF PM…
Right quality Right quantity Optimal time Optimal cost
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CLASSIFICATIONS OF PRODUCTION SYSTEM…
Output / Product Variety
Pro
du
cti
on
V
olu
me
Continuous Production
Mass Production
Batch Production
Job Shop Production
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CONTINUOUS PRODUCTION…
Production facilities are arranged as per the sequence of production operations
The items are made to flow through the sequence of operations through material handling devices such as conveyors, transfer devices
chemical and petrochemical industries
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CHARACTERISTICS…
Material handling is fully automated. Process follows a predetermined sequence of
operations. Planning and scheduling is a routine action Dedicated plant and equipment with zero
flexibility
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ADVANTAGES..
Standardization of product and process sequence.
Higher rate of production with reduced cycle time.
Manpower is not required for material handling as it is completely automatic.
Person with limited skills can be used on the production line.
Unit cost is lower due to high volume of production.
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DISADVANTAGES…
Very high investment for setting flow lines. Product differentiation is limited
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MASS PRODUCTION…
Manufacture of discrete parts or assemblies using a continuous process
The technique was first implemented by US automobile pioneer Henry Ford in 1908, for the manufacture of the Model T Ford automobile.
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CHARACTERISTICS…
Dedicated special purpose machines having higher production capacities and output rates.
Large volume of products. Shorter cycle time of production. Flow of materials, components and parts is
continuous Production planning and control is easy. Material handling can be completely
automatic.
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ADVANTAGES…
Higher rate of production with reduced cycle time.
Less skilled operators are required. Low process inventory. Manufacturing cost per unit is low.
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LIMITATIONS…
Breakdown of one machine will stop an entire production line.
Line layout needs major change with the changes in the product design.
High investment in production facilities
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BATCH PRODUCTION…
It is the manufacturing technique of creating a group of components at a workstation before moving the group to the next step in production
It is characterized by the manufacture of limited number of products produced at regular intervals
Eg:-beverages, pharmaceutical products, paint, fertilizer, and cement
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ADVANTAGES…
Better utilization of plant and machinery. Promotes functional specialization. Cost per unit is lower as compared to job
order production. Lower investment in plant and machinery. Flexibility to accommodate and process
number of products. Job satisfaction exists for operators
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LIMITATIONS…
Material handling is complex because of irregular and longer flows.
Production planning and control is complex Higher set up costs due to frequent changes
in set up.
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JOB SHOP PRODUCTION…
Manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost
The distinguishing feature of this is low volume and high variety of products
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CHARACTERISTICS…
High variety of products and low volume. Highly skilled operators who can take up
each job as a challenge because of uniqueness.
Large inventory of materials, tools, parts. Detailed planning is essential for sequencing
the requirements of each product, capacities for each work centre and order priorities
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LIMITATIONS…
Higher cost due to frequent set up changes. Production planning is complicated. Larger space requirements
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OPERATIONS FUNCTIONS…
Location of facilities Plant layouts and material handling Product design Process design Production and planning control Quality control Materials management Maintenance management.
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1. LOCATION FACILITIES…
It’s a geographical factor 3M have their corporate activity including R
& D in Texas BMW assembles the Z3 sports car in South
Carolina
What made them to choose it?
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TEXAS…
Place for high intellectual capital Approximately $4.0 billion of federal R&D
funds are spent each year in Texas One of the top 50 states in terms of the
amount of federal R&D dollars received annually
US geological survey The Southern Plains Agricultural Research
Center The Brazos Field Research Station is a unit of
the Columbia Environmental Research Center…etc
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COND…
Proximity of customer Business climate Total cost Infrastructure Quality of labour Competitive advantage Political issues/involvement
"We deliberately chose a country within the EU with a politically and
economically stable climate ...the good relationship we have with the NFIA (Netherlands Foreign Investment
Agency)and the Dutch government is very much appreciated and respected
by Eastman!" Godefroy A. Motte, Vice President and Managing Director, Eastman Chemical
(EMEA)
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2. PLANT LAYOUT & MATERIAL HANDLING
“Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipments and all other supporting services along with the design of best structure to contain all these facilities”.
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3. PRODUCT DESIGN…
Conversion of idea into reality It’s a survival and growth strategy Need identification
Marketing Product development Manufacturing
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4, PROCESS DESIGN…
Process design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods
selection of a process, choice of technology, process flow analysis
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5. PRODUCTION PLANNING & CONTROLLING
Planning - what to do, how to do it, when to do it and who is to do it. Planning bridges the gap from where we are, to where we want to go
Scheduling - determines the programme for the operations. Scheduling may be defined as ‘the fixation of time and date for each operation’ as well as it determines the sequence of operations
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COND…
Aggregate planning Master Production Schedule Materials Requirement Planning Capacity Planning Scheduling & Control
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6. QUALITY CONTROL…
‘a system that is used to maintain a desired level of quality in a product or service’.
It is a systematic control of various factors that affect the quality of the product
Quality control aims at prevention of defects at the source, relies on effective feed back system and corrective action procedure
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7. MAINTENANCE MANAGEMENT…
To achieve minimum breakdown and to keep the plant in good working condition at the lowest possible cost.
To keep the machines and other facilities in such a condition that permits them to be used at their optimal capacity without interruption.
To ensure the availability of the machines, buildings and services required by other sections of the factory for the performance of their functions at optimal return on investment
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CONCEPT OF PRODUCTIVITY
Different things to different person Universal concept: Output to Input
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SIGNIFICANCE OF PRODUCTIVITY
Importance towards economic growth & development
Three sources of growth1. Traditional source of growth2. Institutional innovation3. Technological progress
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IMPACT OF PRODUCTIVITY
Large supply of consumer goods and capital goods
High earnings Strengthening the economic foundation of
human well being Improvement in working and living conditions
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MODEL OF LOW PRODUCTIVITY TRAP
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MEASUREMENT OF PRODUCTIVITY
productivity measurement is the quantification of both the output and input resources of a productive system
Problem here is : input – aggregate one Traditional method: index-number approach
- A measure or index of aggregate output divided by the observed quantity of a single input thus became the earliest approach to productivity measurement
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COND…
Latest Methodology: Total Factor Productivity (TFP)
Aggregate of all inputs & outputs
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IMPROVE PRODUCTIVITY…
Increase output for the same input Decreased input for the same output Proportionate increase in the output is more
than the proportionate increase in the input Proportionate decrease in the input is more
than the proportionate increase in the output Simultaneous increase in the output with
decrease in the input
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EVOLUTIONS OF OM
From craft or job shops to conventional mass production and then to flexible design and production systems
In two directions1. Variety in Product design2. Use of automation
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COND…
Craft production- non standard input/output/process- high skilled labour- produced unique product
Later 1800’s – economies of scale- standard input/output/process- less skilled labour- less production cost- similar kind of product
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COND…
Difficult to change the experience of Ford and its Model T
production facilities in the 1920s to demonstrate how a company can face bankruptcy by pushing process rationalization and scale economies too far -- for example
NIRMA washing powder
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COND..
Moved from Economies of scale to Economies of scope- developing interchangeable components- dividing and specializing labor- automating tasks- Use of CAD/CAM, FMS, CIM- Production cost is reduced
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LEAN MANUFACTURING…
Lean is about doing more with less Taiichi Ohno focused on eliminating waste and
empowering workers, reduced inventory and improved productivity
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10 RULES OF LEAN PRODUCTION…
1. Eliminate waste 2. Minimize inventory 3. Maximize flow 4. Pull production from customer demand 5. Meet customer requirements 6. Do it right the first time 7. Empower workers 8. Design for rapid changeover 9. Partner with suppliers 10. Create a culture of continuous improvement
(Kaizen)
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TYPES OF WASTE…
Defects Waiting Over production Transportation Inventory Complexity Unused creativity
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OPERATIONS STRATEGY
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DEFINITION…
Strategy specifying how the firm will employ its production capabilities to support its corporate strategy.
Operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy, through the reconciliation of market requirements with operations resources.
Operations strategy is the total patterns of decisions and actions which set the role, objectives and activities of the operation so that they contribute to, and support, the organisation’s business strategy
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ORDER – WINNERS & QUALIFIERS
To be present in the market
QualityPrice
ReputationReliability
To be a winner in the marketBest Quality
Low PriceConsistant Reliability
Timely delivery
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COMPETING PRIORITIES
Quality Lead Time Cost Flexibility
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DIMENSIONS OF QUALITY
PerformanceDoes the product or service do what it is supposed to do, within its defined tolerances?
FeaturesDoes the product or services possess all of the features specified, or required for its intended purpose?
ReliabilityWill the product consistently perform within specifications?
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COND…
DurabilityHow long will the product perform or last, and under what conditions?
ServiceabilityIs the product relatively easy to maintain and repair?
AestheticsThe way a product looks is important to end-users
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COND…
PerceptionPerception is reality. The product or service may possess adequate or even superior dimensions of quality, but still fall victim to negative customer or public perceptions
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TIME…
Manufacturing Lead Time Product Introduction Delivery Lead Time Frequency of Delivery
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PRICE & COST
producing high volumes of standardized products in hopes of taking advantage of economies of scale and experience curve effects
Involves Manufacturing Cost Running cost Service cost Value added
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FLEXIBILITY…
Customization Variety Volume Flexibility Material quality - ability to cope with
incoming materials of varying quality. New product - ability to cope with the
introduction of new products. Modification - ability to modify existing
products.
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DEVELOPING OPERATIONS STRATEGY…
Corporate Mission
Product/Service Plan
Competitive PrioritiesCost, Time, Quality,
and Flexibility
Elements of Operations Strategy• Positioning the Production System• Product/Service plans• Outsourcing Plans• Process and technology Plans• Strategic allocation of Resources• Facility Plans: Capacity, Location, and Layout
Business Strategy
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POSITIONING THE PRODUCTION SYSTEM
Select the type of product design Standard Custom
Select the type of production processing system Product focused Process focused
Select the type of finished-goods inventory policy Produce-to-stock Produce-to-order
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PRODUCT/SERVICE PLANS
As a product is designed, all the detailedcharacteristics of the product are established.
Each product characteristic directly affects how the product can be made.
How the product is made determines
the design of the production system.
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OUTSOURCING PLANS
Outsourcing refers to hiring out or subcontracting some of the work that a company needs to do.
This strategy is being used more and more as companies strive to operate more efficiently.
Outsourcing has many advantages and disadvantages.
Companies try to determine the best level of out-sourcing to achieve their operations & business goals.
More outsourcing requires a company to have less equipment, fewer employees, and a smaller facility.
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COND…
A company might outsource any of the following manufacturing related functions: Designing the product Purchasing the basic raw materials Processing the subcomponents, subassemblies,
major assemblies, and finished product Distributing the product
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COND…
Many companies even outsource some service functions such as: Payroll Billing Order processing Developing/maintaining a website Employee recruitment Facility maintenance
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STRATEGIC ALLOCATION OF RESOURCES
For most companies, the vast majority of the firm’s resources are used in production/operations.
Some or all of these resources are limited. The resources must be allocated to products,
services, projects, or profit opportunities in ways that maximize the achievement of the operations objectives.
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FACILITY PLANS
How to provide the long-range capacity to produce the firm’s products/services is a critical strategic decision.
The location of a new facility may need to be decided.
The internal arrangement (layout) of workers, equipment, and functional areas within a facility affects the ability to provide the desired volume, quality, and cost of products/services.
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OPERATIONS STRATEGY IN GLOBAL ECONOMY
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CASE
KMART & WALL MART 1987 Kmart was clearly dominating the
discount chain race sales of $25.63 billion to Wal-Mart’s $15.96
billion – Twice as many as supply chain/stores January 1991, Wal-Mart had overtaken Kmart,
with sales of $32.6 billion to Kmart’s sales of $29.7 billion
At this stage WALL MART had 1721 to Kmart’s 2330
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COND…
dominant discount chain, with sales of $188.1 billion to Kmart’s $36.4 billion
During 1995 Kmart’s market share declined from 34.5 percent to 22.7 percent, while Wal-Mart’s increased from 20.1 percent to 41.6 percent
Reason…Guess?
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REASON FOR SUCCESS…
Invest heavily in national television campaigns using high-profile spokespeople
invested heavily in operations in an effort to lower costs
Wal-Mart developed a companywide computer system to link cash registers to headquarters,
Further, the use of scanners at the checkout stations eliminated the need for price checks
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COND…
Kmart adopted a new strategy to compete with Wal-Mart—merging with Sears, Roebuck & Co. in March 2005 to gain potential synergies through cross-selling and other retail sales techniques
Nothing was worked out By year-end 2007, Wal-Mart rang up sales of
$379 billion while Sears sales were $51 billion
Wal-Mart had 7262 while Sears stayed at 3800
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STRATEGY & COMPETETIVENESS Competitiveness for a nation is the degree to
which it can, under free and fair market conditions, produce goods and services that meet the test of international markets
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FACTORS AFFECTING TODAY’S GLOBAL BUSINESS CONDITIONS
Reality of global competition Quality, customer service, and cost
challenges Rapid expansion of advanced technologies Continued growth of the service sector Scarcity of operations resources Social responsibility issues
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REALITY OF GLOBAL COMPETITION
Changing nature of world business Multinational companies Strategic alliances and production sharing Fluctuation of international financial
conditions
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CHANGING NATURE OF WORLD BUSINESS
The US gross domestic product (GDP) is, at $10 trillion, the largest in the world.
Companies all over the globe are aggressively exporting their products/services to the US
Many US companies are targeting foreign markets to shore up profits.
The global economy that interconnects the economies of all nations has been termed the global village.
One of the most important new markets is China.
STRATEGIC ALLIANCES Strategic alliances are joint ventures among
international companies to exploit global business opportunities.
Alliances are often motivated by Product or production technology Market access Production capability Pooling of capital
STRATEGIC ALLIANCES
General Motors (US) &Kia Motor Corp. (S.K.)
Kia might help selland market GM carsin South Korea
Renault (France) &City of Moscow
Manufacture 100,000vehicles annually near Moscow
Sino Aerospace Invest-ment Corp. (Taiwan) &Swearingen Aircraft (US)
Forming Texas-basedSino SwearingenAircraft Co.
STRATEGIC ALLIANCES
Japanese companies have long practiced keiretsu, the linking of companies into industrial groups. A financial keiretsu links companies together
with cross-holding of shares, sales and purchases within the group, and consultation.
A production keiretsu is a web of interlocking relationships between a big manufacturer (Toyota) and its suppliers.
PRODUCTION SHARING
Production sharing means that a product might be designed and financed in one country, its materials produced in other countries, assembled in another country, and sold in yet other countries.
The country that is the highest-quality, lowest-cost producer for a particular activity would perform that portion of the production of the product.
PRODUCTION SHARING
The Mercury Capri automobile is an example: Designed in Italy most of its components made in Japan assembled in Australia sold in the U.S NOKIA
PROS AND CONS OF GLOBALIZATION Pros (Pluses)
Productivity grows more quickly (living standards can go up faster)
Global competition and cheap imports keep a lid on prices
Open economy spurs innovation (with fresh ideas from abroad)
Export jobs often pay more than other jobs US has more access to foreign investment (keeps
interest rates low)
PROS AND CONS OF GLOBALIZATION
Cons (Minuses) Jobs lost due to imports or production
shifts abroadMost displaced workers find new jobs that
pay lessWorkers face pay-cuts demands from
employersService and white-collar jobs are
increasingly vulnerable
INTERNATIONAL FINANCIAL CONDITIONS
International financial conditions are complex due to: inflation fluctuating currency exchange rates turbulent interest rates volatility of international stock markets huge national debts of some countries
INTERNATIONAL FINANCIAL CONDITIONS
The Dollar Versus the Yen and the Mark
Year Yen per Dollar Mark per Dollar 1975 305 2.7 1980 215 2.0 1985 210 2.4 1990 135 1.6 1995 85 1.4 2000 108 2.2
INTERNATIONAL FINANCIAL CONDITIONS
Example of Currency Exchange Rate Changes A product produced and sold in the US for $1
would have sold in Japan for 135 yen in 1990 and 85 yen in 1995, a price decrease of 37%.
A product produced and sold in Japan for 135 yen in 1990 and sold for $1 in the US would have sold in the US for $1.57 in 1995, a 57% price increase.
INTERNATIONAL FINANCIAL CONDITIONS Due, in part, to the fall in the value of the dollar
between 1975 and 1995, the following occurred: Prices of US products/services abroad fell and
demand increased Japan and other countries built factories in US Japanese manufacturers moved upscale toward
higher priced products
QUALITY, SERVICE, AND COST CHALLENGES
Quality The goal of adequate quality must be replaced
with the objective of perfect product and service quality.
The entire corporate culture must be redirected and committed to the ideal of perfect quality.
All employees must be empowered to act. A commitment to continuous improvement has
to be organization-wide.
QUALITY, SERVICE, AND COST CHALLENGES Customer Service
Companies must quickly develop innovative products and respond quickly to customers’ needs.
Organizational structures must be made more horizontal to quickly accommodate change.
Multidisciplined teams must have decision-making authority, responding better to the marketplace.
Large, unwieldy companies are spinning off whole business units making them autonomous businesses that can compete with small, aggressive competitors.
Agilent Technologies spun out of Hewlett-Packard in 1999, formed from HP's former test-and-measurement equipment division
QUALITY, SERVICE, AND COST CHALLENGES
CostCost-cutting measures being used
include:Moving production to low-labor-cost countries
Negotiating lower labor rates with unions and workers
Automating processes to reduce the amount of labor needed, particularly processes that are labor intensive.
ADVANCED TECHNOLOGIES
The use of automation is one of the most far-reaching developments to affect manufacturing and services in the past century.
The initial cost of these assets is high. The benefits go far beyond a reduction in
labor costs. Increased product/service quality Reduced scrap and material costs Faster responses to customer needs Faster introduction of new products and services
ADVANCED PRODUCTION TECHNOLOGY
Computer-aided design (CAD) - allows engineers to design products directly on computer terminals
Computer-aided manufacturing (CAM) - translates CAD information into machinery instructions
Flexible manufacturing systems (FMS) - clusters of automated machinery produce a variety of products
Automated storage & retrieval systems (ASRS) - computer-controlled warehouses
Automatic identification systems (AIS) - data is “read” into computers using bar coding and the like
CONTINUED GROWTH OF SERVICE SECTOR A robust service sector helps support the
manufacturing sector. There is much opportunity for quality
improvement in US service firms. Many operations managers are being
employed in services. Planning, analyzing, and controlling
approaches from manufacturing are being adapted to service systems.
The US service sector, like the manufacturing sector, must streamline and improve operations if it is to survive.
SCARCITY OF OPERATIONS RESOURCES
Raw materials like titanium, nickel, coal, natural gas, water, and petroleum products are periodically unavailable or in short supply.
A shortage of any necessary input to a conversion subsystem, including skilled personnel, can be a challenge for an operations manager.
An important issue in the formation of business strategy is how to allocate scarce resources among business opportunities.
SOCIAL-RESPONSIBILITY ISSUES Corporate attitudes are evolving from doing
what companies have a legal right to do, to doing what is right.
Factors influencing this evolution include: Consumer attitude -- Consumers are expressing
their likes/dislikes by such means as stockholder meetings, liability suits, and buying preferences.
Self-interests -- Companies realize that profits will be greater if they act responsibly.
SOCIAL-RESPONSIBILITY ISSUES
Environmental Impact Product-Safety Impact Employee Impact
SOCIAL-RESPONSIBILITY ISSUES
Environmental ImpactConcerns about the global environment include: Landfill waste reduction Recycling Energy conservation Chemical spills Acid rain Radioactive waste disposal … and more
SOCIAL-RESPONSIBILITY ISSUES
Environmental Impact There is a need for standardizing government
regulations of the environment. Otherwise, companies will gravitate to the less-
regulated countries. The International Organization for
Standardization has developed a set of environmental guidelines called ISO 14000.
SOCIAL-RESPONSIBILITY ISSUES
Product-Safety ImpactHarm to people or animals that results from poor product design can: Damage a company’s reputation Require a large expense to remedy Cause governments to impose more regulations
SOCIAL-RESPONSIBILITY ISSUES Employee Impact
Employee benefits and policies include: Safety and health programs Fair hiring and promotion practices Family leave Health care Retirement benefits Educational assistance … and more
LINKING OPERATIONS AND MARKETING STRATEGIES
Operations Strategy Product-focused Make-to-stock Standardized products High volume
Marketing Strategy Low production cost Fast delivery of products Quality
Example: TV sets
LINKING OPERATIONS AND MARKETING STRATEGIES
Operations Strategy Product-focused Make-to-order Standardized products Low volume
Marketing Strategy Low production cost Keeping delivery promises Quality
Example: School buses
LINKING OPERATIONS AND MARKETING STRATEGIES
Operations Strategy Process-focused Make-to-stock Custom products High volume
Marketing Strategy Flexibility Quality Fast delivery of products
Example: Medical instruments
LINKING OPERATIONS AND MARKETING STRATEGIES
Operations Strategy Process-focused Make-to-order Custom products Low volume
Marketing Strategy Keeping delivery promises Quality Flexibility
Example: Large supercomputers
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StrategyFormulation &Implementation
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ORGANIZATION’S BUSINESS STRATEGY
set of objectives, plans, and policies for the organization to compete successfully
The business strategy specifies what an organization’s competitive advantage will be and how this advantage will be achieved and sustained markets
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STRATEGY FORMULATION
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COND…
Vision statements are used to express the organization’s values and aspirations
Mission statements express the organization’s purpose or reason for existence
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COCA-COLA COMPANY’S MISSION STATEMENT
We exist to create value for our share owners on a long-term basis by building a business that enhances the Coca-Cola Company’s trademarks. This also is our ultimate commitment.
As the world’s largest beverage company, we refresh the world. We do this by developing superior soft drinks, both carbonated and noncarbonated, and profitable nonalcoholic beverage systems that create value for our Company, our bottling partners and our customers.
In creating value, we succeed or fail based on our ability to perform as steward of several key assets:
Coca-Cola, the world’s most powerful trademark, and other highly valuable trademarks.
The world’s most effective and pervasive distribution system. Satisfied customers, who make a good profit selling our products. Our people, who are ultimately responsible for building this
enterprise. Our abundant resources, which must be intelligently allocated. Our strong global leadership in the beverage industry in particular
and in the business world in general
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STRATEGY…
Mintzberg identifies five major strategy schools of thought:
1. Strategy as a plan - the required choices relate to the paths or courses of action
2. Strategy as a pattern - view focuses on the consistency of the choices made over time
3. Strategy as a position - focuses on choices about products and markets
4. Strategy as a perspective - view is concerned about choices related to the way activities are accomplished
5. Strategy as a ploy – relates to choices made to outmaneuver the competition
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BUSINESS MODEL…
A business model can be viewed as a representation of an organization’s core logic and strategic choices for creating value and capturing returns from the value created
strategy is primarily concerned with making sets of choices and the resulting business models that reflect the choices made are tools to help further analyze the strategy and communicate the strategy
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HALOID XEROX INC
It was Haloid Company Model 914 was used Followed low cost method with latest
technology
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PRODUCT LIFE CYCLE…
Introductory State Growth Stage Maturity Stage Decline Stage One approach to categorizing an
organization’s business strategy is based on its timing of introductions of new outputs. Two researchers, Maidique and Patch (1979), suggest the following four product development strategies
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COND…
First to Market Second to Market Cost Minimization or Late to Market Market Segmentation
STAGES OF A PRODUCT’S LIFE CYCLE
Introduction Growth Maturity Decline
B&W TV
Video Recorder
CD PlayerColor Copier
Cell Phone
Internet Radio
Fax MachineDot-Matrix Printer
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INNOVATION
Something new to market anything which is new to the business and its
product range is counted as innovation, even if similar products are available elsewhere
Innovation is frequently defined as an iterative process aiming at the creation of new products, processes, knowledge or services by using new or existing scientific or technological knowledge.
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YOU CAN'T INNOVATE LIKE APPLE
APPLE = INNOVATION Two types of people in this world1. There are those who open their presents
before Christmas morning.2. There are those who wait. They set their
presents under the tree and, like a child, agonize over the enormous anticipation of what will be in the box when they open it on Christmas morning.
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SUCCESS STRATEGY
10 to 3 to 1 Paired design meetings Brainstorm meeting Apple does not do market research Apple has a very small team who designs
their major products Apple owns their entire system Apple focuses on a select group of products
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PRODUCTS.. MAC PRODUCTS : 6 iPOD PRODUCTS : 5 iPHONE PRODUCTS : 2 SOFTWARE PRODUCTS : 17 ACCSESSORIES : 16
TOTAL Products: 46
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WHAT DRIVES INNOVATION
Research & Development Engineer as – King - Customer is king concept Reason for failure of some product in the
market Technology
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TO CLASSIFY THE INNOVATIONS BY TYPE
A modified version of an existing product range
A new model in the existing product range A new product outside the existing range but
in a similar field of technology A totally new product in a new field of
technology.
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PROCESS FOCUS
Process: Is any part of an organization that takes inputs and transforms them into outputs
Cycle Time: Is the average successive time between completions of successive units
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PROCESS PLANNING
Process planning is the systematic determination of methods by which a product is to be manufactured, economically and competitively.
Process planning has been defined as the subsystem responsible for the conversion of design data to work instruction
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INFORMATION REQUIRED TO DO PROCESS PLANNING
Qty of work to be done along with product specifications.
Quality of work to be completed. Availability of equipments, tools and personnel. Sequence in which operations will be performed
on the raw material. Name of the machine and equipments on which
the operations will be performed. Standard time for each operation. When the operation will be performed?
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PROCESS FLOW DESIGN A process flow design can be defined as a
mapping of the specific processes that raw materials, parts, and subassemblies follow as they move through a plant
The most common tools to conduct a process flow design include assembly drawings, assembly charts, and operation and route sheets
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PROCESS FLOWCHARTING
Process flowcharting is the use of a diagram to present the major elements of a process
The basic elements can include tasks or operations, flows of materials or customers, decision points, and storage areas or queues
It is an ideal methodology by which to begin analyzing a process
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PROCESS CHARTS SYMBOLS
Event Symbol1. Operation
2. Storage
3. Delay (or) Temporary Storage
4. Transport
5. Inspection
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COND…
6. Operation -cum - Transportation
7. Inspection –cum - Operation
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PROCESS CHART – REFILL OF A BALL POINT PEN
Unscrew cap Unscrew neck Remove old refill Place the refill in the barrel Screw the neck Check if ball pen writes Screw the cap
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POLISHING A MATERIAL
Start polishing machine Sprinkle solution of polishing Compound on the rotating table Hold the specimen in hand Place the specimen gently on the Rotating table and polish it Wait for few seconds Take away specimen to wash basin Wash the specimen Etch the specimen Wash the specimen again Dry it Check under microscope Keep specimen in the container
Flow DiagramA flow diagram is a drawing or a diagram
which is drawn to scale. It shows the relative position of production machineryand marks the paths followed by men and materials.
B A
C
D
STORE1
1
12 2
3 14
1 5
A Flow Diagram
STRING DIAGRAM String Diagram is a model or a scale plan of the shop,
in which every machine or equipment is marked and a peg or pin is struck by or in the area representing a facility. A continuous coloured thread or string traces the path taken up by the materials or workers while performing a particular operation. The thread when measured gives approximately the total distance traveled by a worker or the material.
M-1
M-2
M-3
M-4
M-5
M-6
Stock Room
Stores
String
Peg
String Diagram
TYPES OF PROCESSES
Single-stage Process
Stage 1
Stage 1 Stage 2 Stage 3
Multi-stage Process
TYPES OF PROCESSES (CONTINUED)
Stage 1 Stage 2
Buffer
Multi-stage Process with Buffer
A buffer refers to a storage area between stages where the output of a stage is placed prior to being used in a downstream stage
OTHER PROCESS TERMINOLOGY
Blocking Occurs when the activities in a stage must
stop because there is no place to deposit the item just completed
If there is no room for an employee to place a unit of work down, the employee will hold on to it not able to continue working on the next unit
Starving Occurs when the activities in a stage must
stop because there is no work If an employee is waiting at a work station
and no work is coming to the employee to process, the employee will remain idle until the next unit of work comes
OTHER PROCESS TERMINOLOGY (CONTINUED) Bottleneck
Occurs when the limited capacity of a process causes work to pile up or become unevenly distributed in the flow of a process
If an employee works too slow in a multi-stage process, work will begin to pile up in front of that employee. In this is case the employee represents the limited capacity causing the bottleneck.
PacingRefers to the fixed timing of the
movement of items through the process
PROCESS PERFORMANCE METRICS
Operation time = Setup time + Run time
Throughput time = Average time for a unit tomove through the system
PROCESS PERFORMANCE METRICS (CONTINUED)
Cycle time = Average time betweencompletion of units
Throughput rate = 1 . Cycle time
Efficiency = Actual output Standard Output
PROCESS PERFORMANCE METRICS (CONTINUED)
Productivity = Output
Input
PRODUCT-FLOW CHARACTERISTICS
Types of Product Flow Line Flow Batch Flow Project Flow
LINE FLOW
WS 1 WS 2 WS 3
WS Task or work station
Product flow
BATCH FLOW
WS 1 WS 3 WS 5
WS Task or work station
Product flows
WS 2 WS 4
PROJECT FLOW
Start
Task 1 Task 3
Task Task or activity
Precedence relationship
Task 2 Task 4
End
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FACTORS AFFECTING PROCESS CHOICE
Market conditions and competition Capital requirements Labor supply and cost Management skills Materials supply and cost State of technology
PRODUCT-PROCESS STRATEGY
Product-Process Matrix Product Life Cycle (PLC) stages Process Life Cycle stages Modified Product-Process Matrix Cross functional decision making and
product-process strategy
PRODUCT LIFE CYCLE STAGES
Low volume-low standardization, one of a kind
Multiple products, low volume Few major products, higher volume High volume-high standardization,
commodity product
PROCESS LIFE CYCLE STAGES
Jumbled flow (job shop) Disconnected line flow (batch) Connected line flow (assembly line) Continuous flow
PROCESS LIFE CYCLEProcess life cycles are related to product life cycles as
shown in
the following figure.
Over a period of time, manufacturing cost per unit diminishes in mature products. The product life cycle starts from the stage of ‘start up’ and ends in the stage of ‘decline’. From product start-up to decline, manufacturing processes undergo a change from job shop production through batch production, assembly line production and continuous flow production. The through-put volume, rates of process innovation and degree of automation will also change from the Stage of start-up to the stage of decline.Through-put volumes and automation are low at start-up and high during the Maturity stage.
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