Processes, Technology, Capacity Chapter 6, Part 2

Global Outsourcing Issues (pages 13 – 16) Supply chain logistics – getting parts or products on time Quality problems Loss of capabilities (issue in both domestic and global outsourcing) Safety, security, and stability Changes in the value of currency Cultural differences and communication issues Corporate image

Financial Justification of Technology Revenue enhancement Maintenance of business: how much business will we lose without the new technology? Purchase cost Operating costs Annual savings Replacement analysis Avoid piecemeal analysis: what is the impact of this decision on the overall process? You need a strategic technology plan. Risk and uncertainty

Technology Primer Product Design Computer-aided design (CAD): use of computer software to design products Computer-aided engineering (CAE): use of computer software to evaluate and improve product designs Group technology (GT): Classifies designs into families for easy retrieval and modification. Also used to classify parts for Just-in-time manufacturing. Collaborative product commerce (CPC): Permits electronic exchange of information among product designers and suppliers

Technology Primer Computer-Aided Process Planning (CAPP) Generates process plans based on CAD/CAE data and a database of products with similar manufacturing requirements (pages ) Assembly charts show how the product is put together Operations sheets list the manufacturing operations to be performed, with details on machines, tools, time, and possibly worker skills Quality checksheets specify quality standards and quality data to be recorded. Process plans are used to generate manufacturing instructions for computer-aided manufacturing (CAM)

Data Flow in Manufacturing Technology Computer aided design (CAD) Computer aided engineering (CAE) Product design data Final design? No Yes Final design data Computer aided process planning (CAPP) Manufacturing instructions Computer aided manufacturing (CAM) Finished goods

Technology Primer Information Technology Bar codes: used for product identification, product tracking, and package tracking Radio frequency identification (RFID): An integrated circuit embedded in a tag that can send, receive, and record information Can detect and identify products without opening shipping containers

Technology Primer Information Technology (2) Enterprise resource planning (ERP) systems: Software for managing basic requirements of an enterprise, including sales & marketing, finance and accounting, production & materials management, and human resources. All applications use a common "data warehouse". Extended ERP (ERP II) systems: Extends ERP to include suppliers and customers.

Technology Primer Information Technology (3) Vision systems are computer systems with artificial intelligence that can "see" objects Often built into robots. Used for sorting and positioning parts Used for inspection. Suspect parts can be inspected by a second vision system or by a person Can recognize images of hands, etc.

Technology Primer Information Technology (4) Biometrics Used to identify people and grant access to facilities, work areas, equipment, etc. Include a vision system, database, and artificial intelligence. Stored image of some portion of each user's body. May use hand, thumb, or iris (colored part of eye). Vision system develops and stores images. Artificial intelligence compares body part of person seeking access with stored image.

Technology Primer Manufacturing Technology Computer numerically controlled (CNC) machines: Machines controlled by software code to perform a variety of operations equipped with automated tool changers also collect processing information and quality data controlled by a central computer system can be networked into flexible manufacturing cells and flexible manufacturing systems

Technology Primer Manufacturing Technology (2) Robots: reprogrammable manipulators that can perform repetitive tasks. They are more consistent than workers but less flexible. Used for Monotonous work, such as assembly line work Work that is hard or unhealthy for people, such as painting or nuclear plant cleanup Work that requires great precision Making integrated circuits Surgery – guided by a surgeon May include vision systems to identify parts

Technology Primer Manufacturing Technology (3) Flexible manufacturing system (FMS): A collection of CNC machines and/or robots connected by an automated material handling system to produce a wide variety of parts All machines in the system will be under the command of a single computer. The system usually has automatic inspection capability Automated materials handling is usually done by a conveyor belt

Parts Finished goods Load Unload Computer control room Machine Tools Conveyor Flexible Manufacturing System

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7s-20 © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J Advantages of FMS Technology Fast response - short manufacturing lead time High product flexibility High quality Very efficient if total production volume is high

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7s-20 © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J Advantages of FMS Technology (2) Low unit costs  Very little direct labor  Less material waste  Very low work in process inventory

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7s-20 © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J Disadvantages of FMS Technology High capital cost - need high total product volume to justify investment Expertise required to design and maintain the system

Computer Integrated Manufacturing (CIM) CAD, CAE, and CAPP Flexible Manufacturing System Production planning and inventory management Purchasing Common databases and control systems for all these functions Provides product flexibility, cost savings, and short manufacturing lead times

Components of e-Manufacturing

Capacity Decisions Capacity maximum capability to produce rated capacity is theoretical effective capacity includes efficiency and utilization Capacity utilization percent of available time spend working Capacity efficiency how well a machine or worker performs compared to a standard output level Capacity load standard hours of work assigned to a facility Capacity load percent ratio of load to capacity

Capacity Expansion Strategies

Capacity Decisions (cont.) Capacity increase depends on volume and certainty of anticipated demand strategic objectives costs of expansion and operation Best operating level % of capacity utilization that minimizes unit costs Capacity cushion % of capacity held in reserve for unexpected occurrences

Economies of Scale It costs less per unit to produce high levels of output fixed costs can be spread over a larger number of units production or operating costs do not increase linearly with output levels quantity discounts are available for material purchases operating efficiency increases as workers gain experience More efficient process technology can be used

Best Operating Level for a Hotel

Diseconomies of Scale Occur above a certain level of output Diseconomies of distribution Diseconomies of bureaucracy (more management overhead) Diseconomies of confusion (complexity) Diseconomies of vulnerability (risk)

Diseconomies of Confusion

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