Copyright 2006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga Processes and Technology Operations Management - 5 th Edition Chapter 6 Roberta Russell & Bernard W. Taylor, III

Copyright 2006 John Wiley & Sons, Inc.6-2 Process Selection - Manufacturing   Projects one-of-a-kind production of a product to customer order   Batch production systems process many different jobs through the system in groups or batches   Mass production produces large volumes of a standard product for a mass market   Continuous production used for very-high volume commodity products

PROJECTBATCH Types of Processes Type of product Unique Made-to- order (customized) Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 Type of customer One-at-a- time Few individual customers MASS Made-to- stock (standardized ) Mass market CONT. Commodity Mass market Product demand InfrequentFluctuatesStableVery stable

PROJECTBATCH Types of Processes (cont.) Demand volume Very low Low to medium Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 No. of different products Infinite variety Many, varied MASS High Few CONT. Very high Very few Production system Long-term project Discrete, job shops Repetitive, assembly lines Continuous, process industries

PROJECTBATCH Types of Processes (cont.) Equipment Varied General- purpose Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 Primary type of work Specialized contracts Fabrication MASS Special- purpose Assembly CONT. Highly automated Mixing, treating, refining Worker skills Experts, crafts- persons Wide range of skills Limited range of skills Equipment monitors

PROJECTBATCH Types of Processes (cont.) Advantages Custom work, latest technology Flexibility, quality Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210 Dis- advantages Non-repetitive, small customer base, expensive Costly, slow, difficult to manage MASS Efficiency, speed, low cost Capital investment; lack of responsiveness CONT. Highly efficient, large capacity, ease of control Difficult to change, far-reaching errors, limited variety Examples Construction, shipbuilding, spacecraft Machine shops, print shops, bakeries, education Automobiles, televisions, computers, fast food Paint, chemicals, foodstuffs

Copyright 2006 John Wiley & Sons, Inc.6-7 Process Analysis   Process flowcharts (also called process charts) Symbolic representation of processes Incorporate nonproductive activities (inspection, transportation, delay, storage) productive activities (operations – necessary steps in producing a good or service)

Process Flowchart Symbols Operations Inspection Transportation Delay or setup Storage

Process flowchart of apple processing (also called a process chart)

Place order Drink Eat salad or soup Eat dinner Receives check Gives payment to waiter Collect change, leave tip Fill in tip amount Give order to waiter Prepare dinner order Prepare soup or salad order Give order to waiter Is order complete? Give soup or salad order to chef Give dinner order to chef Get drinks for customer Deliver salad or soup order to customer Deliver dinner to customer Deliver check to customer Receive payment for meal Cash or Credit? Bring change to customer Run credit card through Return credit slip to customer Collect tip Y N Credit Cash CustomerWaiter Salad Chef Dinner Chef A Process Map of Restaurant Service

Service Blueprint for an Installment Lending Operation Source: Lynn Shostack, “Service Positioning through Structural Change,” Journal of Marketing 51 (January 1987), p. 36. Reprinted with permission by the American Marketing Association

Copyright 2006 John Wiley & Sons, Inc.6-12 Make-or-Buy Decisions  Compare your capabilities with those of potential suppliers Cost Cost Capacity Capacity Quality Quality Speed Speed Dependable delivery and reliability Dependable delivery and reliability Design expertise Design expertise Production expertise Production expertise

Copyright 2006 John Wiley & Sons, Inc.6-13 Make-or-Buy Decisions (2)  Do not outsource a core competency  Be cautious about revealing proprietary technology  Build long-term, mutually beneficial relationships with suppliers

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 – when should equipment be replaced?  Avoid piecemeal analysis: what is the impact of this decision on the overall process? You need a strategic technology plan.  Risk and uncertainty – particularly market risk and technological risk

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 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 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 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. 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 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)  are computer systems with artificial intelligence that can "see" objects  Vision systems are computer systems with artificial intelligence that can "see" objects Often built into robots. Often built into robots. Used for sorting and positioning parts Used for sorting and positioning parts Used for inspection. Suspect parts can be inspected by a second vision system or by a person Used for inspection. Suspect parts can be inspected by a second vision system or by a person Can recognize images of hands, etc. 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. Used to identify people and grant access to facilities, work areas, equipment, etc. Include a vision system, database, and artificial intelligence. 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). 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. Vision system develops and stores images. Artificial intelligence compares body part of person seeking access with stored image. 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 Machines controlled by software code to perform a variety of operations equipped with automated tool changers equipped with automated tool changers also collect processing information and quality data also collect processing information and quality data controlled by a central computer system controlled by a central computer system can be networked into flexible manufacturing cells and flexible manufacturing systems 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 Monotonous work, such as assembly line work Work that is hard or unhealthy for people, such as painting or nuclear plant cleanup Work that is hard or unhealthy for people, such as painting or nuclear plant cleanup Work that requires great precision Work that requires great precision Making integrated circuits Making integrated circuits Surgery – guided by a surgeon Surgery – guided by a surgeon May include vision systems to identify parts 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. All machines in the system will be under the command of a single computer. The system usually has automatic inspection capability The system usually has automatic inspection capability Automated materials handling Automated materials handling

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 Very little direct labor Less material waste Less material waste Very low work in process inventory 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