Mazda L2

04/10/23 1Texas A&M Industrial Engineering

ISEN 220ISEN 220Introduction to Introduction to Production and Production and Manufacturing Manufacturing

SystemsSystems

ProductivityProductivity

Figure 1.5 (B)Figure 1.5 (B)

30 30 –

25 25 –

20 20 –

15 15 –

10 10 –

5 5 –

0 0 –19501950 19701970 19901990 20102010

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– 125125

– 100100

– 7575

– 5050

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Manufacturingemployment

Industrial production

Estimate

Productivity ChallengeProductivity Challenge

Productivity is the ratio of outputs (goods Productivity is the ratio of outputs (goods and services) divided by the inputs and services) divided by the inputs

(resources such as labor and capital)(resources such as labor and capital)

The objective is to improve this The objective is to improve this measure of efficiencymeasure of efficiency

Important Note!Production is a measure of output

only and not a measure of efficiency

Measure of process improvementMeasure of process improvement

Represents output relative to inputRepresents output relative to input

Only through productivity increases Only through productivity increases can our standard of living improvecan our standard of living improve

ProductivityProductivity

Productivity =Productivity =Units producedUnits produced

Input usedInput used

Productivity CalculationsProductivity Calculations

Productivity =Productivity =Units producedUnits produced

Labor-hours usedLabor-hours used

= = = = 44 units/labor-hour units/labor-hour1,0001,000

250250

Labor ProductivityLabor Productivity

Multi-Factor Productivity Multi-Factor Productivity

OutputOutput

Labor + Material + Energy Labor + Material + Energy + Capital + Miscellaneous+ Capital + Miscellaneous

Productivity =Productivity =

Also known as total factor productivityAlso known as total factor productivity

Output and inputs are often expressed Output and inputs are often expressed in dollarsin dollars

Collins Title ProductivityCollins Title Productivity

Staff of Staff of 44 works works 8 8 hrs/dayhrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day

Old System:Old System:

==Old labor Old labor

productivityproductivity


Staff of Staff of 44 works works 8 8 hrs/dayhrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day


1414 titles/day titles/day Overhead = Overhead = $800$800/day/day

New System:New System:

==Old labor Old labor


==New labor New labor



Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day




==Old multifactor Old multifactor



Staff of Staff of 44 works works 88 hrs/day hrs/day 88 titles/day titles/dayPayroll cost = Payroll cost = $640$640/day/day Overhead = Overhead = $400$400/day/day




==Old multifactor Old multifactor


==New multifactor New multifactor


Productivity Measurement Productivity Measurement IssuesIssues

Service ProductivityService Productivity

Typically labor intensiveTypically labor intensive

Frequently focused on unique Frequently focused on unique individual attributes or desiresindividual attributes or desires

Often an intellectual task performed by Often an intellectual task performed by professionalsprofessionals

Often difficult to mechanizeOften difficult to mechanize

Often difficult to evaluate for qualityOften difficult to evaluate for quality

Global StrategiesGlobal Strategies

Boeing – sales and production are Boeing – sales and production are worldwideworldwide

Benetton – moves inventory to stores Benetton – moves inventory to stores around the world faster than its around the world faster than its competition by building flexibility into competition by building flexibility into design, production, and distributiondesign, production, and distribution

Sony – purchases components from Sony – purchases components from suppliers in Thailand, Malaysia, and around suppliers in Thailand, Malaysia, and around the worldthe world

Global StrategiesGlobal Strategies

Volvo – considered a Swedish company Volvo – considered a Swedish company but it is controlled by an American but it is controlled by an American company, Ford. The current Volvo S40 is company, Ford. The current Volvo S40 is built in Belgium and shares its platform built in Belgium and shares its platform with the Mazda 3 built in Japan and the with the Mazda 3 built in Japan and the Ford Focus built in Europe.Ford Focus built in Europe.

Haier – A Chinese company, produces Haier – A Chinese company, produces compact refrigerators (it has one-third of compact refrigerators (it has one-third of the US market) and wine cabinets (it has the US market) and wine cabinets (it has half of the US market) in South Carolinahalf of the US market) in South Carolina

Other ExamplesOther Examples

Boeing Suppliers (787)Boeing Suppliers (787)FirmFirm CountryCountry ComponentComponent

DassaultDassault FranceFrance Design and Design and PLM softwarePLM software

Messier-BugattiMessier-Bugatti FranceFrance Landing gearLanding gear

ThalesThales FranceFrance Electrical power Electrical power conversion system conversion system and integrated and integrated standby flight displaystandby flight display

DiehlDiehl GermanyGermany Interior lightingInterior lighting

FR-HiTempFR-HiTemp UKUK Fuel pumps Fuel pumps and valvesand valves

Smiths AerospaceSmiths Aerospace UKUK Central computer Central computer systemsystem


BAE SYSTEMSBAE SYSTEMS UKUK ElectronicsElectronics

Alenia AeronauticsAlenia Aeronautics ItalyItaly Upper center Upper center fuselage & fuselage & horizontal stabilizerhorizontal stabilizer

Toray IndustriesToray Industries JapanJapan Carbon fiber for Carbon fiber for wing and tail unitswing and tail units

Fuji Heavy Fuji Heavy JapanJapan Center wing boxCenter wing box IndustriesIndustries

Kawasaki Heavy Kawasaki Heavy JapanJapan Forward fuselage, Forward fuselage, IndustriesIndustries fixed section of wing, fixed section of wing,

landing gear welllanding gear well


Teijin SeikiTeijin Seiki JapanJapan Hydraulic actuatorsHydraulic actuators

Mitsubishi Heavy Mitsubishi Heavy JapanJapan Wing boxWing box IndustriesIndustries

Chengdu Aircraft Chengdu Aircraft ChinaChina RudderRudderGroupGroup

Hafei AviationHafei Aviation ChinaChina PartsParts

Reasons to GlobalizeReasons to Globalize

Cultural and Ethical IssuesCultural and Ethical Issues

Cultures can be quite differentCultures can be quite differentAttitudes can be quite different Attitudes can be quite different

towards towards PunctualityPunctuality

Lunch breaksLunch breaks

EnvironmentEnvironment

Intellectual Intellectual propertyproperty

ThieveryThievery

BriberyBribery

Child laborChild labor

Product Life CycleProduct Life Cycle

Best period to Best period to increase market increase market shareshare

R&D engineering is R&D engineering is criticalcritical

Practical to change Practical to change price or quality price or quality imageimage

Strengthen nicheStrengthen niche

Poor time to Poor time to change image, change image, price, or qualityprice, or quality

Competitive costs Competitive costs become criticalbecome criticalDefend market Defend market positionposition

Cost control Cost control criticalcritical

Introduction Growth Maturity Decline

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InternetInternet

Flat-screen Flat-screen monitorsmonitors

SalesSales

DVDDVD

CD-ROMCD-ROM

Drive-through Drive-through restaurantsrestaurants

Fax machinesFax machines

3 1/2” 3 1/2” Floppy Floppy disksdisks

Color printersColor printers

Figure 2.5Figure 2.5

Product Life CycleProduct Life Cycle

Product design Product design and and development development criticalcritical

Frequent Frequent product and product and process design process design changeschanges

Short production Short production runsruns

High production High production costscosts

Limited modelsLimited models

Attention to Attention to qualityquality

Introduction Growth Maturity Decline

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Forecasting Forecasting criticalcritical

Product and Product and process process reliabilityreliability

Competitive Competitive product product improvements improvements and optionsand options

Increase capacityIncrease capacity

Shift toward Shift toward product focusproduct focus

Enhance Enhance distributiondistribution

StandardizationStandardization

Less rapid Less rapid product changes product changes – more minor – more minor changeschanges

Optimum Optimum capacitycapacity

Increasing Increasing stability of stability of processprocess

Long production Long production runsruns

Product Product improvement and improvement and cost cuttingcost cutting

Little product Little product differentiationdifferentiation

Cost Cost minimizationminimization

Overcapacity Overcapacity in the in the industryindustry

Prune line to Prune line to eliminate eliminate items not items not returning returning good margingood margin

Reduce Reduce capacitycapacity

Figure 2.5Figure 2.5

What is Forecasting?What is Forecasting? Process of Process of

predicting a future predicting a future eventevent

Underlying basis of Underlying basis of

all business all business decisionsdecisions ProductionProduction

InventoryInventory

PersonnelPersonnel

FacilitiesFacilities

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Forecasting ApproachesForecasting Approaches

Forecasting ApproachesForecasting Approaches Overview of Qualitative MethodsOverview of Qualitative Methods Overview of Quantitative MethodsOverview of Quantitative Methods

Forecasting Discussion Forecasting Discussion FocusFocus

Time-series ForecastingTime-series Forecasting Decomposition of a Time SeriesDecomposition of a Time Series Naïve ApproachNaïve Approach Moving AveragesMoving Averages Exponential SmoothingExponential Smoothing Exponential Smoothing with Trend Exponential Smoothing with Trend

AdjustmentAdjustment Trend ProjectionsTrend Projections Seasonal Variations in DataSeasonal Variations in Data Cyclical Variations in DataCyclical Variations in Data

Forecasting Discussion Forecasting Discussion FocusFocus

Associative Forecasting Methods: Associative Forecasting Methods: Regression And Correlation Regression And Correlation AnalysisAnalysis Using Regression Analysis to Using Regression Analysis to

ForecastForecast

Short-range forecastShort-range forecast Up to 1 year, generally less than 3 monthsUp to 1 year, generally less than 3 months Purchasing, job scheduling, workforce Purchasing, job scheduling, workforce

levels, job assignments, production levelslevels, job assignments, production levels Medium-range forecastMedium-range forecast

3 months to 3 years3 months to 3 years Sales and production planning, budgetingSales and production planning, budgeting

Long-range forecastLong-range forecast 33++ years years New product planning, facility location, New product planning, facility location,

research and developmentresearch and development

Forecasting Time HorizonsForecasting Time Horizons

Features of time horizonsFeatures of time horizons

Medium/long rangeMedium/long range forecasts deal with forecasts deal with more comprehensive issues and support more comprehensive issues and support management decisions regarding management decisions regarding planning and products, plants and planning and products, plants and processesprocesses

Short-termShort-term forecasting usually employs forecasting usually employs different methodologies than longer-term different methodologies than longer-term forecastingforecasting

Short-termShort-term forecasts tend to be forecasts tend to be accurate than longer-term forecastsaccurate than longer-term forecasts

Types of ForecastsTypes of Forecasts

Economic forecastsEconomic forecasts Address business cycle – inflation rate, Address business cycle – inflation rate,

money supply, housing starts, etc.money supply, housing starts, etc.

Technological forecastsTechnological forecasts Predict rate of technological progressPredict rate of technological progress Impacts development of new productsImpacts development of new products

Demand forecastsDemand forecasts Predict sales of existing productPredict sales of existing product

Automotive

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