Process Selection and Facility Layout

Part 1

Chapter 6

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6-2

Agenda

Introduce Your New Professor

Discuss Process Selection and Flow Structures

Discuss Process & Info Technology Impacts

Discuss Facility Layout Design Considerations

Introduce Line Balancing Concepts

6-3

Agenda

Introduce Your New Professor

Discuss Process Selection and Flow Structures

Discuss Process & Info Technology Impacts

Discuss Facility Layout Design Considerations

Introduce Line Balancing Concepts

6-4

Process Selection and System Design

Forecasting

Product andService Design

TechnologicalChange

CapacityPlanning

ProcessSelection

Facilities andEquipment

Layout

WorkDesign

LO 6.1

Process Strategy driven by (1) Capital Intensity & (2) Required Process Flexibility

6-5

Two key questions in process selection:1. How much variety will the process need to

be able to handle?2. How much volume will the process need to

be able to handle?

Process Selection: Drivers of Flexibility Reqs

Job Shop

Repetitive

Batch

Continuous

LO 6.2

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Process Flow Structures Job shop (or project)

- Copy center making a single bound copy of a term paper- Interior configuration of Air Force one

Batch (workcenter or cell)- Copy making 10,000 copies of an ad piece - Luby's cafeteria prepping bread for the line

Assembly Line- Ford Motor- Kawasaki Bikes

Continuous (Flow) Process- Miller Brewing- Exxon Chemical Plant

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IV.Continuous

Flow

III.Assembly

Line

II.Batch

(W/C or Cell)

I.Job Shop

(or Project)

LowVolumeOne of a

Kind

MultipleProducts,

LowVolume

FewMajor

Products,HigherVolume

HighVolume,

HighStandard-

izationAir Force 1

Commercial PrinterFrench Restaurant

(a la carte)

Delta 777 order/Southwest 757 orderHeavy Equipment

Coffee Shop

Honda Trail-BikeAutomobile Assembly

‘Burger King’

Miller 12ozSugar Refinery

Flexibility (High)Unit Cost (High)

Flexibility (Low)Unit Cost (Low)

Source: Modified from Robert Hayes and Steven Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New York: John Wiley & Sons, 1984). p. 209.

These are the major stages of product and process life cycles

Poor Strategy(High variable

costs)

Product-Process Matrix

Poor Strategy(Fixed costs and cost changing to other products

are high)

6-8

Agenda

Introduce Your New Professor

Discuss Process Selection and Flow Structures

Discuss Process & Info Technology Impacts

Discuss Facility Layout Design Considerations

Introduce Line Balancing Concepts

6-9

Process and Information TechnologyProcess and Information technology can

have a major impact on costs, productivity and competitiveness: Process technology

Methods, procedures, and equipment used to produce goods and provide services

Examples: Numerically controlled (NC) machines, Machining centers, Industrial robots, Automated material handling systems, Flexible manufacturing systems (FMS)

Often a function of trade-offs between fixed and variable costs

Information technologyThe science and use of computers and other electronic

equipment to store, process, and send informationExamples: CAD systems, Electronic Data Interchanges

(EDI), Bar Coding, Radio Frequency ID (RFID), Tranportation or Warehouse Management Systems (TMS) or (WMS) and Enterprise Resource Planning suits (ERP)

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Numerically controlled (NC) machines- Machines controlled by computer program

Process Technology/Automation Examples

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Machining centers- Any CNC milling and drilling machine that includes an automatic toolchanger and a table that clamps the workpiece in place. - On a machining center, the tool rotates, but the work does not.

Process Technology/Automation Examples

6-12

Industrial robots

Process Technology/Automation Examples

6-13

Automated material handling systems

Process Technology/Automation Examples

https://www.youtube.com/watch?v=lWsMdN7HMuA

http://www.youtube.com/watch?v=Oc9YLhxC9rM

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Computer Aided Design (CAD) systems- CAD software replaces manual drafting with an automated process.

Information Technology Examples

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Electronic Data Interchanges (EDI)

Information Technology Examples

Similar Processes for other transaction flows: Shipping Notification, Invoicing, Payments, etc,

Legacy Information Flow: Purchase Order

Order manually entered into buyer’s procurement system

Purchaseorder

generated

Purchaseorder

transmitted

Purchaseorder

Received

Order manually entered into sellers finance

system

EDI Enabled Process: Purchase Order

Order entered into buyer’s procurement

system manually or via replenishment system

Purchase Order File Transmittedto Seller’sEDI server

Buyer’sEDI

RoutineInitiated

Seller’sEDI ServerReceives

Order

Order fulfillment activities initiated

at seller

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Electronic Data Interchanges (EDI)

Information Technology Examples

Similar Processes for other transaction flows: Shipping Notification, Invoicing, Payments, etc,

Legacy Information Flow: Purchase Order

Order manually entered into buyer’s procurement system

Purchaseorder

generated

Purchaseorder

transmitted

Purchaseorder

rreceived

Order manually entered into sellers finance

system

EDI Enabled Process: Purchase Order

Order entered into buyer’s procurement

system manually or via replenishment system

Sometimes, a third party service is used

to broker the EDI transactions

Buyer’sEDI

RoutineInitiated

Seller’sEDI ServerReceives

Order

Order fulfillment activities initiated

at seller

EDI VANValue Added

Network

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Bar Coding

Information Technology Examples

9

• Sequence of machine-readable parallel bars derive the 1 dimensional (1D) barcodes

• Patterns of squares, dots, hexagons and other geometric patterns within images termed 2 dimensional (2D) barcodes

• Widely applicable to logistics• Automate inventory• Sorting and routing• Updating information systems

• Enables quick data capture• More information being encoded & captured• Radio frequency (RF) tagging becoming

commonplace

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Radio Frequency ID (RFID)

Information Technology Examples

• RFID tags use radio frequency to transmit data for human or machine processing

• Objects can “talk” to a network without human intervention

• Breaks line-of-sight requirement for product identification & reduces data latency

• Passive: Operational power scavenged from reader radiated power

• Semi-passive: Operational power provided by battery

• Active: Operational power provided by battery - transmitter built into tag

• Mandates from major retailers & DoD are accelerating proliferation of RFID

PASSIVE

PASSIVE

SEMI-PASSIVE

ACTIVE

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Transportation Management Systems (TMS)

Information Technology Examples

• Software that functionally provides:– Load building– Optimization– Dynamic routing– Carrier selection– Tendering– Tracking– Event triggering– Reporting

• Often integrates with larger ERP application suite

• May be delivered by outsourced 3rd party logistics (3PL) provider

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Warehouse Management Systems (WMS) Basics

Information Technology Examples

• WMS facilitate the control of material movement & storage & the processingof shipping, receiving, putaway, picking transactions in a warehouse

• WMS continue to expand into supply chain execution systems to tap the value that comes from collaborating with supply chain partners

• The distinction between WMS and TMS is already blurred and will only get fuzzier as these products evolve.

Slotting Receiving Putaway Replenishment Parcelmanifesting

Labormanagement Pick Pack Quality

assurance TMS

EDI interfacesand Internet Ship Cycle

countInventory

management RF module

YardManagement

Value-addedservices

Material HandlingIntegration

Order Mgmtsystem integration

Planningintegration

ERPintegration

RFID

Adapted from Peters, J. Eric and Andrew J. Hogenson (1999), “New Directions for the Warehouse,” Supply Chain Management Review, Global Supplement Spring, pp. 23-26.

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Enterprise Resource Planning suits (ERP)

Information Technology Examples

Source SAP AG

• ERP systems are multimodule application software platforms that help organizations manage the important parts of their businesses.

• ERP systems branch out to include supplier relationship management, customer relationship management, and other supply chain components

• ERP systems provide a mechanism for supply chain members to efficiently share information

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Agenda

Introduce Your New Professor

Discuss Process Selection and Flow Structures

Discuss Process & Info Technology Impacts

Discuss Facility Layout Design Considerations

Introduce Line Balancing Concepts

6-23

Facility Layout Defined

Facility layout can be defined as the process by which the placement of: Stock-holding points

Machines Workstations

Workgroups Departments

within a facility are determined.

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Example Facility Layout

6-25

Basic Objective Facilitate a smooth flow of work, material, and information through

the system Supporting objectives

1. Facilitate product or service quality2. Use workers and space efficiently3. Avoid bottlenecks4. Minimize material handling costs5. Eliminate unnecessary movement of workers or material6. Minimize production time or customer service time7. Design for safety

Layout Design Objectives and Basic Types

LO 6.5

Layout Types

Product Layout: uses standardized processing operations to achieve smooth, rapid, high volume flow.

Process Layout: can handle varied or intermittent processing requirements

Fixed-Position Layout: product or project remains stationary, and workers, materials, and equipment are moved as needed.

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Product layout Layout that uses standardized processing

operations to achieve smooth, rapid, high-volume flow

Product Layouts: Repetitive Processing

Used for Repetitive ProcessingRepetitive or Continuous

Raw materialsor customer Finished

itemStation

2 Station

3Station

4

Material and/or labor

Material and/or labor

Material and/or labor

Material and/or labor

Station 1

LO 6.6

6-27

Product Layout Examples

LO 6.6

Facilities are organized by product, product flow is dominant consideration

Typically High volume, low variety products Found in discrete unit manufacturing or continuous process

manufacturing settings

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Product-Focused Strategy Pros & Cons

LO 6.6

Advantageslower labor skillseasier production planning and controlhigher equipment utilization

Disadvantageslower product flexibilitymore specialized (customized)

equipmentusually higher capital investment

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Process layoutsLayouts that can handle varied processing

requirements

Process Layouts: Non-repetitive Processing

Used for Intermittent processingJob Shop or Batch

Dept. A

Dept. B Dept. D

Dept. C

Dept. F

Dept. E

LO 6.7

6-30

Process Layouts: Position of equipment is dominant consideration Similar process / equipment are group together (eg. all drill

presses grouped) Typically Low volume, high variety products ‘Jumbled’ flow, may also be called "Intermittent process" or "Job

shop"

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Advantagesgreater process flexibilitymore general purpose equipmentlower initial capital investment

Disadvantagesmore “specialist” trained personnel

requiredmore difficult production planning and

control

Process-Focused Strategy Pros & Cons

6-32

Fixed Position layout Layout in which the product or project remains

stationary, and workers, materials, and equipment are moved as needed

Fixed Position Layouts

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Combination LayoutsSome operational environments use a

combination of the three basic layout types: Hospitals Supermarket Shipyards

Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts Cellular manufacturing - Layout in which workstations

are grouped into a cell that can process items that have similar processing requirements.

The cells become, in effect, miniature versions of product layouts

6-34

Agenda

Introduce Your New Professor

Discuss Process Selection and Flow Structures

Discuss Process & Info Technology Impacts

Discuss Facility Layout Design Considerations

Introduce Line Balancing Concepts

6-35

The goal of a product layout is to arrange workers or machines in the sequence that operations need to be performed

Designing Product Layouts:Line Balancing

LO 6.8

6-36

Line Balancing: Key Criteria = Cycle TimeCycle time

The maximum time allowed at each workstation to complete its set of tasks on a unit

Cycle time also establishes the output rate of a line

timeCycledayper timeOperating rateOutput

rateoutput Desireddayper timeOperating timeCycle

LO 6.8

6-37

Station 1Minutes per Unit 6

Station 2

7

Station 3

3

Assembly Line Balancing ConceptsQuestion: Suppose you load work into the three work stations below such that each will take the corresponding number of minutes as shown. What is the minimum possible cycle time of this line?

A) 6 minutes?B) 7 Minutes?C) 16 minutes?D) 10 minutes?

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Station 1Minutes per Unit 6

Station 2

7

Station 3

3

Assembly Lines Balancing ConceptsQuestion: Suppose you load work into the three work stations below such that each will take the corresponding number of minutes as shown. What is the minimum possible cycle time of this line?

Answer: The minimum cycle time of the line is always determined by the work station taking the longest time. In this problem, the minimum cycle time of the line is 7 minutes. If these stations are running in series, there is also going to be idle time at the other two work stations.

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Point of Line BalancingThrough an analysis of production lines,

managers can:

Nearly equally divides work between workstations while meeting required output

This will help maximize efficiency and minimize number of work stations

6-40

Agenda

Introduce Your New Professor

Discuss Process Selection and Flow Structures

Discuss Process & Info Technology Impacts

Discuss Facility Layout Design Considerations

Introduce Line Balancing Concepts

Next Time

6-41

Assignment

Read Chapter 6 and 8

Complete problems assigned on Blackboard