Operation Management - OPM 530

1. Operations Management Process Strategies and Layout Strategies Chapter 5 5- OPM 533

11. Process Strategies 5- OPM 533 Rapid throughput techniques Mass Customization Modular techniques Repetitive Focus Modular design Flexible equipment Product-focused Low variety, high volume High utilization (70% - 80%) Specialized equipment Process-focused High variety, low volume Low utilization (5% - 20%) General purpose equipment Effective scheduling techniques

12. A Comparison (1) 5- OPM 533 Process Focus (Low volume, High variety) Repetitive Focus (Modular) Product focus (High-volume, low-variety) Mass Customization (High-volume, high-variety 1. Small quantity, large variety of products Long runs, standardized product, from modules Large quantity, small variety of products Large quantity, large variety of products 2. General purpose equipment Special equipment aids in use of assembly line Special purpose equipment Rapid changeover on flexible equipment

13. A Comparison (2) 5- OPM 533 Process Focus Repetitive Focus Product focus Mass Customization 3 Broadly skilled operators Modestly trained employees Operators less broadly skilled Flexible operators trained for customization 4 Many instructions because of change in jobs Reduced training and number of job instructions Few work orders and job instructions Custom orders require many instructions 5 Raw material high relative to product value JIT techniques used Raw material low relative to product value Raw material low relative to product value

14. A Comparison (3) 5- OPM 533 Process Focus Repetitive Focus Product focus Mass Customization 6 WIP high relative to output JIT techniques used WIP low relative to output WIP driven down by JIT, kanban, lean production 7 Units move slowly thru plant Movement measured in hours & days Units move swiftly thru facility Goods move swiftly thru facility 8 Finished goods made to order, not stored Finished goods made to frequent forecasts Finished goods made to forecast, then stored Finished goods made to order

15. A Comparison (4) 5- OPM 533 Process Focus Repetitive Focus Product focus Mass Customization 9 Scheduling complex and concerned with trade-off between inventory, capacity, and customer service Scheduling based on building models from a variety of forecasts Scheduling relatively simple, concerns establishing sufficient rate of output to meet forecasts Scheduling sophisticated to accommodate customization 10 Fixed costs low, variable costs high Fixed costs dependent on flexibility of facilities Fixed costs high, variable costs low Fixed costs high; variable costs must be low

16. A Comparison (5) 5- OPM 533 Process Focus Repetitive Focus Product focus Mass Customization 11 Costing, done by job, is estimated prior to doing job but only known after doing job Costs usually known based on experience Because of high fixed costs, cost dependent on utilization of capacity High fixed costs and dynamic variable costs

20. Production Process Flow Diagram 5- OPM 533 Shipping Customer Customer sales representative take order Prepress Department (Prepare printing plates and negatives) Printing Department Collating Department Gluing, binding, stapling, labeling Polywrap Department Purchasing (order inks, paper, other supplies) Vendors Receiving Warehousing (ink, paper, etc.) Accounting Information flow Material flow

21. Process Chart Example 5- OPM 533 SUBJECT: Request tool purchase Dist (ft) Time (min) Symbol Description  D  Write order  D   On desk 75    D  To buyer  D  Examine  = Operation;  = Transport;  = Inspect; D = Delay;  = Storage

22. Time Function Map (Target) 5- OPM 533 1 day 1 day 1 day 1 day 2 days Customer Sales Production control Plant Warehouse Transport Order Product Process Order Print Extrude Receive product Wait Wait Move Order Order Product Product WIP 6 days

24. Techniques for Improving Service Productivity Strategy Technique Example Separation Structure service so customers must go where service is offered Bank customers go to a manager to open a new account, to loan officers for loans, and to tellers for deposits Self-service Self-service so customers examine, compare, and evaluate at their own pace Supermarkets and department stores, internet ordering

25. Improving Service Productivity Strategy Technique Example Postponement Customizing at delivery Customizing vans at delivery rather than at production Focus Restricting the offerings Limited-menu restaurant Modules Modular selection of service, modular production Investment and insurance selection, prepackaged food modules in restaurants

26. Improving Service Productivity Strategy Technique Example Automation Precise personnel scheduling Automatic teller machines Scheduling Precise personnel scheduling Scheduling ticket counter personnel at 15-minute intervals at airlines Training Clarifying the service options, explaining how to avoid problems Investment counselor, funeral directors, after-sale maintenance personnel

43. Improving Layouts by Moving to the Work Cell Concept 5- OPM 533

45. Work Cell Floor Plan 5- OPM 533 Office Tool Room Work Cell Saws Drills

54. Assembly Line Balancing Equations 5- OPM 533 Cycle time = Production time available Demand per day Minimum number of work stations  Task times Cycle time Efficiency = =  Task times * (Cycle time) (Actual number of work stations)

56. Copier Example (longest task time approach) This means that tasks B and E cannot be done until task A has been completed Performance Task Must Follow Time Task Listed Task (minutes) Below A 10 — B 11 A C 5 B D 4 B E 12 A F 3 C, D G 7 F H 11 E I 3 G, H Total time 66

57. Copier Example Figure 9.13 Performance Task Must Follow Time Task Listed Task (minutes) Below A 10 — B 11 A C 5 B D 4 B E 12 A F 3 C, D G 7 F H 11 E I 3 G, H Total time 66 I G F C D H B E A 10 11 12 5 4 3 7 11 3

58. Copier Example 480 available mins per day 40 units required I G F C D H B E A 10 11 12 5 4 3 7 11 3 Figure 9.13 Performance Task Must Follow Time Task Listed Task (minutes) Below A 10 — B 11 A C 5 B D 4 B E 12 A F 3 C, D G 7 F H 11 E I 3 G, H Total time 66 Cycle time = Production time available per day Units required per day = 480 / 40 = 12 minutes per unit Minimum number of workstations = ∑ Time for task i Cycle time n i = 1 = 66 / 12 = 5.5 or 6 stations

59. Copier Example Figure 9.14 480 available mins per day 40 units required Cycle time = 12 mins Minimum workstations = 5.5 or 6 Performance Task Must Follow Time Task Listed Task (minutes) Below A 10 — B 11 A C 5 B D 4 B E 12 A F 3 C, D G 7 F H 11 E I 3 G, H Total time 66 I G F H C D B E A 10 11 12 5 4 3 7 11 3 Station 1 Station 2 Station 3 Station 5 Station 4 Station 6

60. Copier Example Performance Task Must Follow Time Task Listed Task (minutes) Below A 10 — B 11 A C 5 B D 4 B E 12 A F 3 C, D G 7 F H 11 E I 3 G, H Total time 66 480 available mins per day 40 units required Cycle time = 12 mins Minimum workstations = 5.5 or 6 Efficiency = ∑ Task times (actual number of workstations) x (largest cycle time) = 66 minutes / (6 stations) x (12 minutes) = 91.7%