• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Process & Capacity 2
 

Process & Capacity 2

on

  • 11,757 views

 

Statistics

Views

Total Views
11,757
Views on SlideShare
11,739
Embed Views
18

Actions

Likes
3
Downloads
300
Comments
0

1 Embed 18

http://www.slideshare.net 18

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Process & Capacity 2 Process & Capacity 2 Presentation Transcript

  • Outline
    • Four Process Strategies
      • Process Focus
      • Repetitive Focus
      • Product Focus
      • Mass Customization Focus
    • Capacity
      • Forecasting Capacity Requirements
      • Selection of Equipment and Technology
      • Managing Demand Uncertainty
    • Break-Even Analysis
      • Single-Product Case
      • Multi-product Case
  • Dell Computer Company
    • “ How can we make the process of buying a computer better?”
    • Sells custom-build PCs directly to consumer
    • Integrated the Web into every aspect of its business
    • Operates with six days inventory
    • Builds computers rapidly, at low cost, and only when ordered
    • Research focus on software designed to make installation and configuration of its PCs fast and simple
  • Process Fit: Volume vs. Variety Process focus: job shops,(machine, print, carpentry) Repetitive (autos, motorcycles) Harley Davidson Product focus (paper, steel, glass) High Variety One or few units per run (customization) Medium Variety (Change product with standardized modules) Low Variety (Similar products with minor changes) Mass Customization (difficult to achieve, but huge rewards) Dell Computer Co. Poor strategy (High variable cost) Low-Volume (Intermittent) Medium-Volume (Modular) High-Volume (Continuous)
  • Types of Process Strategies Classify the process strategies by the level continuum : Repetitive-Focused Product-Focused Process-Focused Continuum
  • Process-Focused Strategy
    • Facilities are organized by process
    • Similar processes are together
      • Example: All drills or lathes are together
    • Low volume, high variety products
    • ‘ Jumbled’ flow
    • Other names
      • Intermittent process
      • Job shop
    Operation Product A Product B 1 2 3
  • Process-Focused Strategy Examples Bank © 1995 Corel Corp. Machine Shop © 1995 Corel Corp. Hospital © 1995 Corel Corp.
  • Process-Focused Production
    • Variances of Process Focused Production
    • University education
    • Swimming pool remodeling
  • Process Focused Strategy - Pros & Cons (p262)
    • Advantages
      • Greater product flexibility
      • Use more general purpose equipment
      • Suitable for customization
    • Disadvantages
      • More highly trained personnel
      • More difficult production planning & control (including inventory, machine and personnel scheduling, maintenance, quality control…)
      • Low equipment utilization (25% to 45%)
  • Process Automation and Flexible Manufacturing System
    • Production Technology
      • Automated Guided Vehicles (AGV)
      • Automated Storage and Retrieval Systems (ASRSs)
    • Flexible Manufacturing Systems (FMS)
      • Programmable process Control
      • Vision Systems and Robots
  • Product-Focused Strategy
    • Facilities are organized to produce a small number of products
    • High volume, low variety products
    • Other names
      • Continuous process manufacturing
      • Line flow production
      • Continuous production
    Operation Products A & B 1 2 3
  • Product-Focused Examples © 1995 Corel Corp. Light Bulbs (Discrete) Paper (Continuous) © 1984-1994 T/Maker Co. © 1995 Corel Corp. Soft Drinks (Continuous, then Discrete)
  • Product Focused Process
  • Product-Focused Strategy Pros & Cons (p242)
    • Advantages
      • Lower variable cost per unit
      • Use more specialized equipments
      • Easier production planning and control
      • Higher equipment utilization (70% to 90%)
    • Disadvantages
      • Lower product flexibility
      • High shut-down cost
      • Usually higher capital investment
  • Repetitive Focused Strategy
    • Facilities often organized by assembly lines
    • Characterized by modules
      • Parts & assemblies made previously
    • Modules combined for many output options
    • Other names
      • Assembly line
      • Production line
  • Repetitive-Focused Strategy - Examples Truck © 1995 Corel Corp. Clothes Dryer © 1995 Corel Corp. Fast Food McDonald’s over 95 billion served © 1984-1994 T/Maker Co.
  • Repetitive Focused Strategy - Considerations
    • More structured than process-focused, less structured than product focused
    • Enables quasi-customization
    • Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model
  • Harley-Davidson
  • Process Fit: Volume vs. Variety Process focus: job shops,(machine, print, carpentry) Repetitive (autos, motorcycles) Harley Davidson Product focus (paper, steel, glass) High Variety One or few units per run (customization) Medium Variety (Change product with standardized modules) Low Variety (Similar products with minor changes) Mass Customization (difficult to achieve, but huge rewards) Dell Computer Co. Poor strategy (High variable cost) Low-Volume (Intermittent) Medium-Volume (Modular) High-Volume (Continuous)
  • Mass Customization
    • Using technology and imagination to rapidly mass-produce products that cater to sundry unique customer desires.
    • Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant.
  • Repetitive Focus Assembly line Modular Design Flexible equipment Mass Customization Process focus Intermittent process High variety, low volume Product focus Continuous Process Low variety, high volume Modular techniques Scheduling techniques Rapid throughput
  • Automated Storage and Retrieval System (ASRS)
    • Provide for automatic placement and withdrawal of parts and products into and from designated places in a warehouse.
    • Improve efficiency of material handling and inventory management in both production, distribution, and retail site
    • Material handling machines
    • Used to move parts & equipment in manufacturing
    • May be used to deliver mail & meals in service facilities
    Automatic Guided Vehicles (AGV) © 1984-1994 T/Maker Co.
    • Using automated machines (DNC) & materials handling equipment together
    • Often connected to centralized computer
    • Also called automated work cell
    Production Technology FMS Computer Machine 1 Machine 2 Robot or AGV Auto Tool Chg. Auto Tool Chg.
  • Computer Integrated Manufacturing (CIM)
  • Process Reengineering
    • The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance
    • Relies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptions
    • Tools for process redesign across boundaries
      • Flow Diagrams
      • Process Charts
      • Time-Function/Process Mapping
      • Service Blueprint
  • Process Strategies (Ikea and McDonalds Examples)
    • Involve determining how to produce a product or provide a service
    • Objective
      • Is the process designed to achieve competitive advantage?
      • Does the process eliminate steps that do not add value?
      • Does the process maximize customer value as perceived by the customer?
      • Will the process win orders?
  • Time Function Map Customer Sales Production control Plant A Warehouse Plant B Transport Order Product Process Order Print Extrude Receive product Wait Move Wait Wait Wait Move Order Order WIP WIP WIP WIP Product Product Product 12 days 1 day 1 day 1 day 1 day 13 days 4 days 10 days 9 days
  • Process Chart Example SUBJECT: Request tool purchase Dist (ft) Time (min) Symbol Description  D  Write order    On desk 75    D  To buyer  D  Examine  = Operation;  = Transport;  = Inspect; D = Delay;  = Storage
  • Showing Sensitivity to the Environment
    • Make products recyclable
    • Use recycled materials
    • Use less harmful ingredients
    • Use light components
    • Use less energy
    • Use less materials
  • Crossover Chart Fixed cost - Process A Fixed cost - Process B Fixed cost - Process C Total cost - Process C Total cost - Process B Total cost - Process A Process A: low volume, high variety Process B: Repetitive Process C: High volume, low variety Process C Process B Process A Lowest cost process
    • How much long-range capacity is needed
    • When more capacity is needed
    • Where facilities should be located (location)
    • How facilities should be arranged (layout)
    Facility and Capacity Planning Facility planning answers:
  • Definition and Measures of Capacity Capacity: Designed Capacity: Effective capacity: The maximum output of a system in a given period The maximum capacity that can be achieved under ideal conditions The percent of design capacity actually expected
    • Measure of planned or actual capacity usage of a facility, work center, or machine
    Utilization Utilization Expected capacity Capacity Planned hours to be used Total hours available = =
    • Measure of how well a facility or machine is performing when used
    Efficiency Efficiency Actual output Effective capacity Actual output in units Standard output in units Average actual time Standard time = = =
  • Capacity Planning Process (Apply to Examples) Forecast Demand Compute Needed Capacity Compute Effective Capacity Evaluate Capacity Plans Implement Best Plan Qualitative Factors (e.g., Skills) Select Best Capacity Plan Develop Alternative Plans Quantitative Factors (e.g., Cost)
  • Approaches to Capacity Expansion Expected Demand Time in Years Demand New Capacity Capacity leads demand with an incremental expansion
  • Approaches to Capacity Expansion Expected Demand Time in Years Demand New Capacity Capacity lags demand with an incremental expansion
  • Approaches to Capacity Expansion Expected Demand Time in Years Demand New Capacity Attempts to have an average capacity, with an incremental expansion
  • Breakeven Analysis Technique for evaluating process & equipment alternatives Objective: Find the point ($ or units) at which total cost equals total revenue Fixed costs: costs that continue even if no units are produced: depreciation, taxes, debt, mortgage payments Variable costs: costs that vary with the volume of units produced: labor, materials, portion of utilities
  • Breakeven Chart Fixed cost Variable cost Total cost line Total revenue line Profit Breakeven point Total cost = Total revenue Volume (units/period) Cost in Dollars (Thousands) Loss
  • Crossover Chart Fixed cost - Process A Fixed cost - Process B Fixed cost - Process C Total cost - Process C Total cost - Process B Total cost - Process A Process A: low volume, high variety Process B: Repetitive Process C: High volume, low variety Process C Process B Process A Lowest cost process
    • Vary staffing
    • Change equipment & processes
    • Change methods
    • Redesign the product for faster processing
    Managing Existing Capacity Capacity Management
    • Vary prices
    • Vary promotion
    • Change lead times (e.g., backorders)
    • Offer complementary products
    Demand Management
  • Complementary Products Time (Months) Sales (Units) Jet Skis Snow-mobiles Total 0 1,000 2,000 3,000 4,000 5,000 J M M J S N J M M J S N J
  • Attaining Lean Production
    • The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance
    • Focus on inventory reduction
    • Modulization, postponed differentiation
    • Develop close relationships with suppliers
    • Eliminate all but value-added activities
    • Reevaluating the process of planning, scheduling, and transportations across boundaries
  • Techniques for Improving Process Efficiency of Service
    • Separation
    • Self-service
    • Postponement
    • Focus
    • Structure service so customers must go where service is offered
    • Self-service so customers examine, compare and evaluate at their own pace
    • Customizing at delivery
    • Restricting the offerings
    Strategy Technique
  • Techniques for Improving Process Efficiency of Service
    • Modulizarion
    • Automation
    • Scheduling
    • Training
    • Modular selection of service. Modular production
    • Separating services that lend themselves to automation
    • Precise personnel scheduling
    • Clarifying the service options
    • Explaining problems
    • Improving employee flexibility