Operations Management (MD021)

Process Selection and Facility Layout

Agenda
Defining Process Process Types and the Product-Process Matrix Process Selection Automation Facility Layout

Defining Process

Process Three Definitions

A Manufacturing Process is a configuration of people, technology, systems, and information, used to transform inventories of physical inputs into physical outputs. A Service Process is a configuration of technologies and service delivery personnel (and their associated methods, training, information) used to deliver a serviceproduct

An e-Service Process is a configuration of digital technologies, supporting physical technologies, and human service personnel used to deliver an e-Service

My View of Process Evolution

Eras of Operations Management

10,000 BC 1700 AD 1850 1900 -1975 1975 1990 Mass Customization 2000 Extreme Personalization Collaborative Customization Distributed across WWW

Craft

Job Shop Production

Division of labor Mechanization

Batch Production
Interchangeable parts

Mass Production
Highly repetitive Specialized worker tasks

Process and Quality Improvement

Continual improvement of quality

Skilled artisan Apprentices

Digitally automated technology for needs analysis, product design, production Customization, innovative design quality, modular flexibility

High flexibility High cost Design quality

Low flexibility High efficiency Low cost

Conformance quality

Customer value, great service, fast delivery time, high flexibility

High variety Low volume

Low variety High volume

High variety High volume

Tradeoffs

Elimination of Tradeoffs

Eras of Operations Management

Craft Job Shop Production Batch Production Mass Production
uses Project Job Shop Process Batch Shop Process Flow Shop Process Continuous Flow Process is useful for .. Flow Shop Continuous Flow Flexible Flow Flexible Automation Networked/ Distributed Process

Process and Quality Improvement

Mass Customization

Extreme Personalization Collaborative Customization

Make-to-order

Make-to-order

Make-to-order Assemble-toorder Make-to-stock

Assemble-toorder Make-to-stock

Assemble-toorder Make-to-stock

Assemble-toorder Make-to-order

Make-to-order

Theory Behind the Eras of OM

Evolution of Process Control (Jaikumar 1988)
Mechanization (Machine and Human Control) High Discretion High Scope
Craftsmen (Projects) English system

Intelligent (Computerized Control)

FAB Labs Networks Mass customization Flexible Manuf. Sys. (FMS) CIM Computer NC Numerical Control (NC)

Job shop Batch flow

American system

Low Discretion Low Scope

Taylor Discrete flow Continuous flow

Dynamic

Process Types and the Product-Process Matrix

Project Process Type

Projects
Nonroutine Unique set of objectives/custom Limited time frame Processes, people, materials are brought to the location of the project activities

Examples: house building, ship building, rock concerts

Manufacturing Processes
Hayes and Wheelwright (1979)
Job Shop
Unique items, customized, low volume Low volume High flexibility

Batch Flow
Moderate volume Make many items in a batch at a time

Discrete Flow
Production line, high volume, standardized

Continuous Flow
Very high volumes Extremely standardized process High volume Low flexibility

Product Process Matrix for Manufacturing Operations

Product Types
Process Type Custom Low Volume
Appliance repair Emergency room Commercial bakery Classroom Lecture Automotive assembly Automatic carwash BAD

Broad Demand High Volume

BAD

Job Shop

Batch Shop

Repetitive Flow

Continuous Flow

Oil refinery Water purification

Characteristics of Process Types

Dimension Job variety Process flexibility Job Shop Very High Very High Batch Moderate Moderate Repetitive Low Low Continuous Very low Very low

Unit cost
Volume of output

Very High
Very Low

Moderate
Low

Low
High

Very low
Very high

Problems With The ProductProcess Matrix

The matrix does not account for modern flexible process types
Computer integrated manufacturing Flexible manufacturing systems (FMS) Mass customization/Personalization systems Fabrication laboratories (FAB labs) Networked systems International/cross-organization integrated systems

The matrix also does not represent service processes or e-service processes

Product Process Matrix for Service (Kellogg and Nie 1995)

Product Types
Unique Service Custom Low Volume
Dentist, Doctor, Consulting Higher Education McDonalds, Shouldice Hospital, Package Delivery

Process Type

Generic Service Broad Demand High Volume

BAD

Expert Service Service Shop Service Factory

BAD

Product Process Matrix for e-Service (Heim and Sinha 1997)

Product Types
Process Type Static
Customized Low Volume Static Standardized Broad Demand Dynamic Standardized Dynamic Customized Highest Volume

Service Kiosk

Alaska Choice Seafood

Cellar Homebrew

BAD

Service Mart

Mass Service Customization

Joint Alliance Service Customization

Netgrocer.com Peapod.com BAD Amazon.com

To sum up
There are several different types of processes in each production context (goods, service, e-service) Managers must choose appropriate processes for what they are producing (goods, service, e-service) Process choice should match customers product needs

Inappropriate process choices can put your company in a BAD situation operationally and strategically

Process Selection

Process Selection
Process Selection
Deciding on the way production of goods or services will be organized
How much variety is needed? How much volume is needed? How much flexibility is needed?
These can guide us to a common process type

Once you choose a process type, it affects many other decisions

These affect process choice Process choice determines these

Forecasting

Capacity Planning

Facilities and Equipment

Product and Service Design Process Selection

Layout

Technological Change

Work Design

Automation

Automation
Automation: Machinery with sensing and control devices that enables it to operate automatically
Fixed automation
rigid, high cost, specialized equipment for standard, high-volume production

Programmable automation
higher-cost, general purpose equipment, provides more flexibility

Flexible automation
Most flexible, customizable equipment

Automation in Manufacturing
Numerically controlled (NC) machines Computer-aided design and manufacturing systems (CAD/CAM) Robots Manufacturing cells Flexible manufacturing systems (FMS) Computer-integrated manufacturing (CIM)

Automation in Services/e-Service
Services
ATM machines Cash registers Automated car wash system Automated heating/air conditioning

e-Service
Websites online banking, online travel planning, online shopping, etc. e-mail Cellphone/PDA services E-Z Pass/Smartpass toll payment on tollways

Facilities Layout

Facilities Layout
Facilities Layout: the physical configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system

Basic Facility Layout Types

Product layout
Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow

Process layout
Layout that can handle varied processing requirements

Fixed Position layout

Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed

Combinations of the above

Typical Layout
Craft Job Shop Production Batch Production Mass Production
uses Project Job Shop Process Batch Shop Process Flow Shop Process Continuous Flow Process Flow Shop Continuous Flow Flexible Flow Flexible Automation Networked/ Distributed Process

Process and Quality Improvement

Mass Customization

Extreme Personalization Collaborative Customization

Uses layout ..

Fixed Position Layout

Process Layout

Process Layout

Product Layout

Product Layout

Hybrid Combination

Hybrid Combination

Cellular Production Group Technology Flexible Manufacturing Systems (FMS) Computer Integrated Manufacturing (CIM)

Product Layout

Product Layout

Raw materials or customer

Material and/or labor

Station 1 Material and/or labor

Station 2 Material and/or labor

Station 3 Material and/or labor

Station 4

Finished item

Used for Repetitive or Continuous Processing

Advantages of Product Layout

High rate of output Low unit cost Labor specialization Low material handling cost High utilization of labor and equipment Established routing and scheduling Routing accounting and purchasing

Disadvantages of Product Layout

Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume Highly susceptible to shutdowns Needs preventive maintenance Individual incentive plans are impractical

A U-Shaped Production Line

In

4 5

Workers

6
Out

10

Provides skilled workers with more variety of activities, leading to more interesting job activities; Requires development of multi-tasking skills

Design of Product Layout

Designing Product Layouts: Line Balancing

Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.

Cycle Time

Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit.

Line Balancing Via Parallel Workstations

1 min.

30/hr.

1 min.

30/hr.

2 min.

30/hr.

1 min.

30/hr.

Bottleneck
30/hr. 1 min. 60/hr. 1 min. 30/hr. 2 min. 30/hr. 2 min. 30/hr. 1 min. 60/hr.

Parallel Workstations

Simulation Tools Can Be Used to Design Product Layouts

Most Real-World Product Layouts Are Much Too Complex for The Line Balancing Methods In Your Textbook to be Useful

Process Layout

Process Layout
Process Layout (functional)
Dept. A Dept. C Dept. E

Dept. B

Dept. D

Dept. F

Used for Intermittent processing Job Shop or Batch

Often Used in Service Operations Grocery Stores, Self-Service Restaurants, University Offices, Amusement Parks

Process (Functional) Layout

222 444

Mill

222 111 444

222

Drill
1111 2222

Grind

3333

111 333 111

Assembly
111

333

Lathes

Heat treat

Gear cutting

111 444

Advantages of Process Layouts

Can handle a variety of processing requirements Not particularly vulnerable to equipment failures Equipment used is less costly Possible to use individual incentive plans

Disadvantages of Process Layouts

In-process inventory costs can be high Challenging routing and scheduling Equipment utilization rates are low Material handling slow and inefficient Complexities often reduce span of supervision Special attention for each product or customer Accounting and purchasing are more involved

Design of Process Layout

Designing Process Layouts

Often Focus on Distance Between Processing Resources
Objective: Minimize travel distances of WIP/employees/machines Many heuristics and optimization approaches available to minimize travel times

Identify bottlenecks, resolve

Simulate system using a computer simulation to estimate processing times, system throughput, waiting lines, bottlenecks

Simulation Tools Can Be Used to Design Process Layouts

Today, simulation tools are often used instead of optimization tools Very realistic information can be factored into the simulation Leads to more realistic (believable) results

Other Important Layouts

Fixed Position Layouts (Projects)

Fixed Position Layout
the item being worked on remains stationary workers, materials, and equipment are moved as needed to the production site

Management Issues
focus on timing of materials/equipment delivers so as not to clog up worksite avoid relocation of equipment high administrative burden of scheduling all activities to take place on time/at allocated cost

Cellular Layouts
Cellular Production
Layout in which machines are grouped into a cell that can process items that have similar processing requirements

Group Technology
The grouping into part families of items with similar design or manufacturing characteristics

Cellular Manufacturing Layout

-1111 Lathe Mill Drill Heat treat Heat treat Heat treat

Gear -1111 cut Grind - 2222

Assembly

222222222

Mill

Drill

3333333333

Lathe Mill

Grind - 3333

44444444444444

Mill

Drill

Gear - 4444 cut

Process (Functional) Layout vs. Cellular Layouts

Dimension
Number of moves between departments Travel distances Travel paths Job waiting times Throughput time Amount of work in process Supervision difficulty Scheduling complexity Equipment utilization

Process Layout
many longer variable greater higher higher higher higher lower

Cellular Layout
few shorter fixed shorter lower lower lower lower higher

Flexible Manufacturing Systems

Flexible Manufacturing System
Several machine tools are linked together by a material handling system Has supervisory computer control, automated material handling, robots, automated processing devices

Computer Integrated Manufacturing

Using a computer to link two or more FMS together Potentially also includes engineering design, purchasing, order processing, production planning, production control