11 Operation System Design And Planning


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11 Operation System Design And Planning

  1. 1. <ul><li>OPERATION SYSTEM DESIGN and </li></ul><ul><li>PLANNING </li></ul>
  2. 2. Operation System Design <ul><li>The Integration of Product and Service Delivery With the Facilities and Process Technologies Over the Life Cycle of the Operations System , Which Permits Production of Goods and Service at Desired Quality, Volumes, and Cost </li></ul>
  3. 3. Framework <ul><li>Marketing Strategy Capacity Strategy </li></ul><ul><li>Organization Design </li></ul>Operation System Design OS Life Cycle OS Characteristics Process Technology Diffusion
  4. 4. Operation System Life Cycle <ul><ul><li>1. Birth of the Operation System </li></ul></ul><ul><ul><li>2. Product/Service Design and Process Technology Selection </li></ul></ul><ul><ul><li>3. Design of Operation System </li></ul></ul><ul><ul><li>4. Star up of the Operation System </li></ul></ul><ul><ul><li>5. Growth of Volume </li></ul></ul><ul><ul><li>6. Stable State </li></ul></ul><ul><ul><li>7. Decline and Renewal of the System </li></ul></ul>
  5. 5. Product/Service Start-up Growth Stable Decline Volume Low Increasing High Declining Variety Unique Inc.Standard Emergence High Standard Dom. Design Process Technology Organization Project Small Batch Line flow Line flow Job shop Assembly Assembly I nnovation High Medium Medium Low Integration Low Medium Medium High I ndustry Structure Small Consolidation Few large Survivor competitor and fallout competitor Competitive Flexibility Quality and Price(cost) Price(cost) Priority Flexibility Delivery Product/Service and Process Technology Life Cycles
  6. 6. Operation System <ul><li>1. Classical </li></ul><ul><ul><ul><li>Project </li></ul></ul></ul><ul><ul><ul><li>Job Shop </li></ul></ul></ul><ul><ul><ul><li>Flow Shop </li></ul></ul></ul><ul><li>2. Emerging </li></ul><ul><ul><ul><li>Variable Production Line </li></ul></ul></ul><ul><ul><ul><li>Manufacturing Cells </li></ul></ul></ul><ul><ul><ul><li>FMS </li></ul></ul></ul><ul><ul><ul><li>CIM </li></ul></ul></ul>
  7. 7. Equipment and Physical Layout Characteristics <ul><li>Project Job Shop Flow Shop </li></ul><ul><li>Size of Facility Varies Small Large </li></ul><ul><li>Process Flow Circumference Num, Pattern Rigid </li></ul><ul><li>Equipment General General Specialized </li></ul><ul><li>Capital Ints. Varies Low High </li></ul><ul><li>Capital Add. Incremental Small Large Chunk </li></ul><ul><li>Speed of Process Varies Slow Fast </li></ul><ul><li>Control Worker Worker & Process Design </li></ul><ul><li>Tech. Change Slow Average Fast </li></ul>
  8. 8. Direct Labor and Work Force Characteristics <ul><li>Project Job Shop Flow Shop </li></ul><ul><li>Labor value added High Average Very Low </li></ul><ul><li>Job content scope Large Average Small </li></ul><ul><li>Skill level High Average Low </li></ul><ul><li>Wage rate High Average Low </li></ul><ul><li>Worker training V. High High Low </li></ul>
  9. 9. Material and Information Control Characteristics <ul><li>Project Job Shop Flow Shop </li></ul><ul><li>Material Requirement Varies Unpredictable Predictable </li></ul><ul><li>Vertical Integration None Limited Back&Forwd </li></ul><ul><li>Inv. Raw Material None Small Large </li></ul><ul><li>WIP Large Large Small </li></ul><ul><li>Finished Goods None Small High </li></ul><ul><li>QC Responsibility D. Labor D. labor QC Specialist </li></ul><ul><li>Prod/Serv, Information V. High High Low </li></ul><ul><li>Scheduling Uncertain Changes Inflexible </li></ul>
  10. 10. Process Management Characteristic <ul><li>Project Job Shop Flow Shop </li></ul><ul><li>Challenges Estimating Lab.Utilization Avoid Downtime </li></ul><ul><li>Sequencing Debottlenecking Time Expansion </li></ul><ul><li>Pacing Learning Curve Cost Minimizing </li></ul><ul><li>Tools PERT/ Load Chart Line Balancing </li></ul><ul><li>CPM Optimization </li></ul>
  11. 11. Variable Production Line <ul><li>Dedicated High Volume Lines That Are Reconfigured to Permit Some Process Variation and Thus Several Different Products or Service </li></ul>
  12. 12. Manufacturing Cell (MC) <ul><li>Dedicated Subset of Manufacturing System Designed to Process Part Families or Product Group </li></ul><ul><li>Economies of Set-up </li></ul><ul><li>Employee Learning </li></ul><ul><li>Reduced WIP </li></ul><ul><li>Shorter Throughput Time </li></ul><ul><li>Improved Responsiveness to Customer </li></ul>
  13. 13. Flexible Manufacturing System (FMS) <ul><li>Integrates and Enhances the Flexibility of Manufacturing Cell Through the Use of Centralized Control Systems </li></ul><ul><li>Flexibility Approaching Job Shop With Material Handling Capability of a Flow Lines </li></ul>
  14. 14. Computer Integrated Manufacturing (CIM) <ul><li>Application of a computer system to link several separated information systems and technologies at different functional level </li></ul><ul><li>Simplify, Automate and Integrate </li></ul>
  15. 15. Stage Toward A CIM Batch/Lot Process MRPII/SPC JIT &MC Focused factory Stable Flow FMS CAD/CAM Robotics AMH/GT CIM Information System Integration Traditional Mfg. Variable Line Stage 3 Stage 1 Stage 2 Stage 4 To CIM Process Technology Process Control System
  16. 16. Operation Flexibility <ul><li>Ability to Respond the Changes in Customer Requirements </li></ul><ul><li>Product/Service Process Technology </li></ul><ul><li>*Volume * Changeover </li></ul><ul><li>*Mix * Scheduling </li></ul><ul><li>*Modification * Innovation </li></ul>
  17. 17. Product/Service Flexibility <ul><li>Volume </li></ul><ul><li>Ability to respond quickly to changes in the amount of particular product or service that is required </li></ul><ul><li>Mix </li></ul><ul><li>Ability to react quickly to changes in mix or proportion of products of a product family that are produced </li></ul><ul><li>Modification </li></ul><ul><li>Ability to incorporate changes in product characteristics and to develop and produce newly designed product </li></ul>
  18. 18. Process Flexibility <ul><li>Allows the operation manager to deploy or </li></ul><ul><li>re-deploy resources in response to variations in products/services, availability of resources, or process technology </li></ul><ul><li>1. Changeover Flexibility </li></ul><ul><li>2. Scheduling Flexibility </li></ul><ul><li>3. Innovation Flexibility </li></ul>
  19. 19. Process Flexibility <ul><li>Changeover Flexibility </li></ul><ul><li>Ability to respond rapidly to different production set-ups required for various products </li></ul><ul><li>Scheduling Flexibility </li></ul><ul><li>Ability to vary the routing, sequence, or production </li></ul><ul><li>lot-sizes to accommodate required production volume </li></ul><ul><li>Innovation Flexibility </li></ul><ul><li>Ability to define and implement new technologies in production processes with minimal disruption </li></ul>
  20. 20. Characteristics of Process Flexibility <ul><li>Type of Flexibility Respond To Subcategories </li></ul><ul><li>Changeover Product/service Product/service volume </li></ul><ul><li>( market driven) Product/service range </li></ul><ul><li>Product/service mix </li></ul><ul><li>Product/service </li></ul><ul><li>modification </li></ul><ul><li>Scheduling Availability of Material </li></ul><ul><li>resources Equipment </li></ul><ul><li>(resources driven) Labor </li></ul><ul><li>Innovation Product/service Process Technology </li></ul><ul><li>Process Technology Process Control </li></ul><ul><li>or Information Technology </li></ul><ul><li>(technology driven) </li></ul>
  21. 21. Product/Service -Process Technology Continuum
  22. 22. Focus <ul><li>A Clear and sharply defined set of products, technologies, volumes and markets </li></ul><ul><li>Process Focus </li></ul><ul><li>Product/Service Focus </li></ul>
  23. 23. Product/Service -Process Technology Diffusion <ul><li>Process Product/Service Volume </li></ul><ul><li>Technology Low High </li></ul>Project Job Shop Disconnected Line Connected Line Continuous Enhanced Standardization (Right lateral Movement) Flexible Processes (Upward Movement) Enhanced Process Flow( Downward Movement) Modular Structure/ Variable Processing Line (Left lateral Movement )
  24. 24. Operation System Decision Making <ul><li>Position </li></ul><ul><li>Major Technology Choice </li></ul><ul><li>Equipment Selection & Specification </li></ul><ul><li>and </li></ul><ul><li>Layout Design </li></ul><ul><li>Operation Planning </li></ul>
  25. 25. Position <ul><li>1. Competitive Positioning on the Product/Service-Process Technology Continuum </li></ul><ul><li>2. Definition of the Position on the Continuum </li></ul><ul><li>3. Identification of the Direction and Momentum of Movement Which Are Projected </li></ul><ul><ul><li>a. Right Lateral Movement </li></ul></ul><ul><ul><li>b. Left Lateral Movement </li></ul></ul><ul><ul><li>c. Upward Movement </li></ul></ul><ul><ul><li>d. Downward Movement </li></ul></ul>
  26. 26. Major Technology Choice <ul><li>Selecting the Process Technology of the Manufacturing or Service Operation, using: </li></ul><ul><ul><li>Classification Of Manufacturing Processes </li></ul></ul><ul><ul><li>Classification Of Service Processes </li></ul></ul><ul><li>Selecting the Supporting Information System </li></ul>
  27. 27. Classification Of Manufacturing Processes <ul><li>1. Processes for Changing Physical Properties </li></ul><ul><li>2. Processes for Changing the Shape of Material </li></ul><ul><li>3. Processes for Machining Parts to a Fixed Dimension </li></ul><ul><li>4. Processes for Obtaining a Surface Finish </li></ul><ul><li>5. Processes for Joining Parts or Materials </li></ul>
  28. 28. Classification Of Service Processes <ul><li>1. Process for relocating goods </li></ul><ul><li>2. Process for storing goods </li></ul><ul><li>3. Process for exchanging items </li></ul><ul><li>4. Process for physical transformation </li></ul><ul><li>5. Process for physiological transformation </li></ul><ul><li>6. Process for information transformation </li></ul>
  29. 29. Equipment Selection & Specification And Layout Design <ul><li>Selecting Equipment to be used, </li></ul><ul><ul><li>a. General-purpose or Specialized Equipment </li></ul></ul><ul><ul><li>b. Material Handling System </li></ul></ul><ul><li>Allocating Available Facilities </li></ul><ul><li>(Layout Design) </li></ul>
  30. 30. Equipment Selection Alternatives <ul><li>General Purpose Specialized </li></ul><ul><li>Cost Low High </li></ul><ul><li>Operator skill&control High , more control Low, less control </li></ul><ul><li>Output rate Low-human pace High-machine pace </li></ul><ul><li>Setup time Lower-problem pre- High-problem ran- </li></ul><ul><li>dictable &controllable dom & highly tech. </li></ul><ul><li>Maintenance Cost Low-lower skill req’ed High </li></ul><ul><li>Product/service Based on human High-based on </li></ul><ul><li>Quality control machine accuracy </li></ul><ul><li>WIP High Low </li></ul><ul><li>Absolescence Slower High </li></ul>
  31. 31. Material Handling <ul><li>1. Increasing Speed and Precision </li></ul><ul><li>2. Maximizing the Use of Space and Equipment </li></ul><ul><li>3. Increasing Safety and Working Condition </li></ul><ul><li>4. Reducing Damage </li></ul><ul><li>5. Increasing Control </li></ul>
  32. 32. Principles of Material Handling <ul><li>1 . Minimize the Number of Material Moves </li></ul><ul><li>2. Maximize the Unit Load Handled </li></ul><ul><li>3. Maximized Safety of Material Handling Equipment </li></ul><ul><li>4. Simplify the Material Handling Process </li></ul><ul><li>5. Maximize Pace Utilization </li></ul><ul><li>6. Integrate Storage and Handling System </li></ul><ul><li>7. Integrate Materials and Information Flows </li></ul><ul><li>8. Minimize Human Effort </li></ul><ul><li>9. Design for Improved Operability, Reliability, Maintainability and Flexibility </li></ul>
  33. 33. Types of Layout <ul><li>A. Traditional Layout </li></ul><ul><ul><li>1. Fix Position Layout </li></ul></ul><ul><ul><li>2. Process Layout </li></ul></ul><ul><ul><li>3. Product Layout </li></ul></ul><ul><li>B. Automated Layout </li></ul><ul><ul><li>4. Cellular Layout </li></ul></ul><ul><ul><li>5. Modular Layout </li></ul></ul>
  34. 34. Operation Planning <ul><li>Creating Schedule </li></ul><ul><li>Assessing That Schedule Through the Appropriate Capacity Evaluation Method </li></ul>
  36. 36. Vertical Linkages <ul><li>Corporate Strategy </li></ul><ul><li>Business Strategy </li></ul><ul><li>Functional Strategy </li></ul><ul><li>Operation/Production Management </li></ul>
  37. 37. Operation Planning Cycle <ul><li>Sales Target </li></ul><ul><li>Operation Target </li></ul><ul><li>Operation Schedule </li></ul><ul><li>Material Machine Worker </li></ul><ul><li>Operation Plan </li></ul><ul><li>Shop Floor Operation </li></ul><ul><li>Evaluation </li></ul>
  38. 38. Operation Planning System <ul><li>Input : Sales Target </li></ul><ul><li>Output : Operation Schedule </li></ul><ul><li>Method: Traditional, MRP or JIT </li></ul><ul><li>Performance Criteria: QCDFS </li></ul>
  39. 39. Performance Criteria <ul><li>Quality </li></ul><ul><li>Cost </li></ul><ul><li>Delivery </li></ul><ul><li>Flexibility </li></ul><ul><li>Safety </li></ul>
  40. 40. Example of Operation Objective <ul><li>Quality </li></ul><ul><ul><ul><ul><ul><li>This Year 5 Next Year Competitor </li></ul></ul></ul></ul></ul><ul><li>Customer Satisfaction 75 % 85 % 75 % </li></ul><ul><li>Scrap and Reject 15 % 5 % 10 % </li></ul><ul><li>Warranty ( % COGS) 1 % 0.5 % 1% </li></ul><ul><li>Cost </li></ul><ul><li>COGM ( % COGS ) 55 % 45 % 50% </li></ul><ul><li>ITO 41 x 52 x 50 x </li></ul>
  41. 41. Example of Operation Objective <ul><li>Delivery </li></ul><ul><li>This Year 5 Next Year Competitor </li></ul><ul><li>Fill Rate 90% 95% 95% </li></ul><ul><li>Lead Time (week) 3 1 1 </li></ul><ul><li>Flexibility </li></ul><ul><li>Time to Introduce New Product 10 month 6 month 8 month </li></ul><ul><li>Time to Change Over Capacity 3 month 3 month 3 month </li></ul>
  42. 42. Operation Planning Method <ul><li>Traditional MRP JIT </li></ul>
  43. 43. Traditional <ul><ul><ul><ul><ul><li>Push Method </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Statistical and Optimization </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Partial Approach </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Flexible </li></ul></ul></ul></ul></ul>
  44. 44. MRP <ul><ul><ul><ul><ul><li>Pull Method </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Time Phasing </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Logical Approach </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Integrated Approach </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Information Based </li></ul></ul></ul></ul></ul>
  45. 45. JIT <ul><ul><ul><ul><ul><li>Pull Method </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Time Phasing </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Elimination Waste Approach </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Integrated Approach </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Cultural Based </li></ul></ul></ul></ul></ul>