1. 7 - 1© 2011 Pearson Education 2 2 Process Design PowerPoint presentation to accompany Heizer and Render Operations Management, 10e, Global Edition Principles of Operations Management, 8e, Global Edition PowerPoint slides by Jeff Heyl

2. 7 - 2© 2011 Pearson Education Outline  Four Process Strategies  Process Focus  Repetitive Focus  Product Focus  Mass Customization Focus  Comparison of Process Choices

3. 7 - 3© 2011 Pearson Education Outline – Continued  Process Analysis and Design  Flow Charts  Time-Function Mapping  Value-Stream Mapping  Process Charts  Service Blueprinting

4. 7 - 4© 2011 Pearson Education Outline – Continued  Selection of Equipment and Technology  Production Technology  Machine Technology  Automatic Identification Systems (AISs) and RFID  Process Control  Vision Systems  Robots

5. 7 - 5© 2011 Pearson Education Outline – Continued  Production Technology (cont.)  Automated Storage and Retrieval Systems (ASRSs)  Automated Guided Vehicles (AGVs)  Flexible Manufacturing Systems (FMSs)  Computer-Integrated Manufacturing (CIM)

6. 7 - 6© 2011 Pearson Education Learning Objectives When you complete this chapter you should be able to: 1.Describe four production processes 2.Compute crossover points for different processes 3.Use the tools of process analysis

7. 7 - 7© 2011 Pearson Education Learning Objectives When you complete this chapter you should be able to: 4.Describe customer interaction in process design 5.Identify recent advances in production technology 6.Discuss the 4 Rs of sustainability

8. 7 - 8© 2011 Pearson Education Harley-Davidson Repetitive manufacturing works  The leading U.S. motorcycle company  Emphasizes quality and lean manufacturing  Materials as Needed system  Many variations possible  Tightly scheduled repetitive production line

9. 7 - 9© 2011 Pearson Education Process Flow Diagram THE ASSEMBLY LINE TESTING 28 tests Oil tank work cell Shocks and forks Handlebars Fender work cell Air cleaners Fluids and mufflers Fuel tank work cell Wheel work cell Roller testing Incoming parts From Milwaukee on a JIT arrival schedule Engines and transmissionsFrame tube bending Frame-building work cells Frame machining Hot-paint frame painting Crating

10. 7 - 10© 2011 Pearson Education Process Strategies The objective of a process strategy is to build a production process that meets customer requirements and product specifications within cost and other managerial constraints

11. 7 - 11© 2011 Pearson Education Process, Volume, and Variety Process Focus projects, job shops (machine, print, hospitals, restaurants) Arnold Palmer Hospital Repetitive (autos, motorcycles, home appliances) Harley-Davidson Product Focus (commercial baked goods, steel, glass, beer) Frito-Lay High Variety one or few units per run, (allows customization) Changes in Modules modest runs, standardized modules Changes in Attributes (such as grade, quality, size, thickness, etc.) long runs only Mass Customization (difficult to achieve, but huge rewards) Dell Computer Poor Strategy (Both fixed and variable costs are high) Low Volume Repetitive Process High Volume Volume Figure 7.1

12. 7 - 12© 2011 Pearson Education Process Strategies  How to produce a product or provide a service that  Meets or exceeds customer requirements  Meets cost and managerial goals  Has long term effects on  Efficiency and production flexibility  Costs and quality

13. 7 - 13© 2011 Pearson Education Process Strategies Four basic strategies 1.Process focus 2.Repetitive focus 3.Product focus 4.Mass customization Within these basic strategies there are many ways they may be implemented

14. 7 - 14© 2011 Pearson Education Process Focus  Facilities are organized around specific activities or processes  General purpose equipment and skilled personnel  High degree of product flexibility  Typically high costs and low equipment utilization  Product flows may vary considerably making planning and scheduling a challenge

15. 7 - 15© 2011 Pearson Education Process Focus Many inputs (surgeries, sick patients, baby deliveries, emergencies) Many different outputs (uniquely treated patients) Many departments and many routings Figure 7.2(a) (low volume, high variety, intermittent processes) Arnold Palmer Hospital

16. 7 - 16© 2011 Pearson Education Repetitive Focus  Facilities often organized as assembly lines  Characterized by modules with parts and assemblies made previously  Modules may be combined for many output options  Less flexibility than process-focused facilities but more efficient

17. 7 - 17© 2011 Pearson Education Repetitive Focus Raw materials and module inputs Modules combined for many Output options (many combinations of motorcycles) Few modules (multiple engine models, wheel modules) Figure 7.2(b) (modular) Harley Davidson

18. 7 - 18© 2011 Pearson Education Product Focus  Facilities are organized by product  High volume but low variety of products  Long, continuous production runs enable efficient processes  Typically high fixed cost but low variable cost  Generally less skilled labor

19. 7 - 19© 2011 Pearson Education Product Focus Few Inputs (corn, potatoes, water, seasoning) Output variations in size, shape, and packaging (3-oz, 5-oz, 24-oz package labeled for each material) Figure 7.2(c) (low-volume, high variety, continuous process) Frito-Lay

20. 7 - 20© 2011 Pearson Education Product Focus Nucor Steel Plant Continuous caster Continuous cast steel sheared into 24-ton slabs Hot tunnel furnace - 300 ft Hot mill for finishing, cooling, and coiling D E F G H I Scrap steel Ladle of molten steel Electric furnace A B C

21. 7 - 21© 2011 Pearson Education Mass Customization  The rapid, low-cost production of goods and service to satisfy increasingly unique customer desires  Combines the flexibility of a process focus with the efficiency of a product focus

22. 7 - 22© 2011 Pearson Education Mass Customization Table 7.1 Vehicle models140286 Vehicle types181,212 Bicycle types8211,000 Software titles0400,000 Web sites0162,000,000 Movie releases per year267765 New book titles40,530300,000 Houston TV channels5185 Breakfast cereals160340 Items (SKUs) in 14,000150,000 supermarkets LCD TVs0102 Number of Choices Item1970s21 st Century

23. 7 - 23© 2011 Pearson Education Mass Customization Many parts and component inputs Many output versions (custom PCs and notebooks) Many modules (chips, hard drives, software, cases) Figure 7.2(d) (high-volume, high-variety) Dell Computer

24. 7 - 24© 2011 Pearson Education Mass Customization Effective scheduling techniques Rapid throughput techniques Repetitive Focus Flexible people and equipment Process-Focused High variety, low volume Low utilization (5% to 25%) General-purpose equipment Product-Focused Low variety, high volume High utilization (70% to 90%) Specialized equipment Figure 7.3 Modular techniques Accommodating Product and Process Design Responsive Supply Chains

25. 7 - 25© 2011 Pearson Education Mass Customization  Imaginative and fast product design  Rapid process design  Tightly controlled inventory management  Tight schedules  Responsive supply chain partners

26. 7 - 26© 2011 Pearson Education Comparison of Processes Process Focus (low-volume, high-variety) Repetitive Focus (modular) Product Focus (high-volume, low-variety) Mass Customization (high-volume, high-variety) 1.Small quantity and large variety of products are produced 1.Long runs, usually a standardized product with options, produced from modules 1.Large quantity and small variety of products are produced 1.Large quantity and large variety of products are produced 2.Equipment used is general purpose 2.Special equipment aids in use of an assembly line 2.Equipment used is special purpose 2.Rapid changeover on flexible equipment Table 7.2

27. 7 - 27© 2011 Pearson Education Comparison of Processes Process Focus (low-volume, high-variety) Repetitive Focus (modular) Product Focus (high-volume, low-variety) Mass Customization (high-volume, high-variety) 3.Operators are broadly skilled 3.Employees are modestly trained 3.Operators are less broadly skilled 3.Flexible operators are trained for the necessary customization 4.There are many job instructions because each job changes 4.Repetitive operations reduce training and changes in job instructions 4.Work orders and job instructions are few because they are standardized 4.Custom orders require many job instructions Table 7.2

28. 7 - 28© 2011 Pearson Education Comparison of Processes Process Focus (low-volume, high-variety) Repetitive Focus (modular) Product Focus (high-volume, low-variety) Mass Customization (high-volume, high-variety) 5.Raw-material inventories high relative to the value of the product 5.JIT procurement techniques are used 5.Raw material inventories are low relative to the value of the product 6.Work-in- process is high compared to output 6.JIT inventory techniques are used 6.Work-in- process inventory is low compared to output 6.Work-in- process inventory driven down by JIT, kanban, lean production Table 7.2

29. 7 - 29© 2011 Pearson Education Comparison of Processes Process Focus (low-volume, high-variety) Repetitive Focus (modular) Product Focus (high-volume, low-variety) Mass Customization (high-volume, high-variety) 7.Units move slowly through the facility 7.Assembly is measured in hours and days 7.Swift movement of units through the facility is typical 7.Goods move swiftly through the facility 8.Finished goods are usually made to order and not stored 8.Finished goods made to frequent forecast 8.Finished goods are usually made to forecast and stored 8.Finished goods are often build- to-order (BTO) Table 7.2

30. 7 - 30© 2011 Pearson Education Comparison of Processes Process Focus (low-volume, high-variety) Repetitive Focus (modular) Product Focus (high-volume, low-variety) Mass Customization (high-volume, high-variety) 9.Scheduling is complex, concerned with trade- offs between inventory, capacity, and customer service 9.Scheduling is based on building various models from a variety of modules to forecasts 9.Scheduling is relatively simple, concerned with establishing output rate sufficient to meet forecasts 9.Sophisticated scheduling is required to accommodate custom orders 10.Fixed costs tend to be low and variable costs high 10.Fixed costs dependent on flexibility of the facility 10.Fixed costs tend to be high and variable costs low 10.Fixed costs tend to be high, variable costs must be low Table 7.2

31. 7 - 31© 2011 Pearson Education Crossover Charts Fixed costs Variable costs $ High volume, low variety Process C Fixed costs Variable costs $ Repetitive Process B Fixed costs Variable costs $ Low volume, high variety Process A Fixed cost Process A Fixed cost Process B Fixed cost Process C Total cost V1V1 (2,857) V2V2 (6,666) 400,000 300,000 200,000 Volume $ Figure 7.4

32. 7 - 32© 2011 Pearson Education Focused Processes  Focus brings efficiency  Focus on depth of product line rather than breadth  Focus can be  Customers  Products  Service  Technology

33. 7 - 33© 2011 Pearson Education Changing Processes  Difficult and expensive  May mean starting over  Process strategy determines transformation strategy for an extended period  Important to get it right

34. 7 - 34© 2011 Pearson Education Process Analysis and Design  Is the process designed to achieve a competitive advantage?  Does the process eliminate steps that do not add value?  Does the process maximize customer value?  Will the process win orders?

35. 7 - 35© 2011 Pearson Education Process Analysis and Design  Flow Charts - Shows the movement of materials  Time-Function Mapping - Shows flows and time frame

36. 7 - 36© 2011 Pearson Education “Baseline” Time-Function Map Customer Sales Production control Plant A Warehouse Plant B Transport 12 days13 days1 day4 days1 day10 days1 day0 day1 day 52 days Figure 7.5 Move Receive product Product Extrude Wait WIP Product Move Wait WIP Print Wait Order WIP Order product Process order Wait Order

37. 7 - 37© 2011 Pearson Education “Target” Time-Function Map Customer Sales Production control Plant Warehouse Transport 1 day2 days1 day 6 days Figure 7.5 Move Receive product Product Extrude Wait Print Order WIP Product Order product Process order Wait Order

38. 7 - 38© 2011 Pearson Education Process Analysis and Design  Flow Charts - Shows the movement of materials  Time-Function Mapping - Shows flows and time frame  Value-Stream Mapping - Shows flows and time and value added beyond the immediate organization  Process Charts - Uses symbols to show key activities  Service Blueprinting - focuses on customer/provider interaction

39. 7 - 39© 2011 Pearson Education Value-Stream Mapping Figure 7.6

40. 7 - 40© 2011 Pearson Education Process Chart Figure 7.7

41. 7 - 41© 2011 Pearson Education Equipment and Technology  Often complex decisions  Possible competitive advantage  Flexibility  Stable processes  May allow enlarging the scope of the processes

42. 7 - 42© 2011 Pearson Education Production Technology  Machine technology  Automatic identification systems (AISs)  Process control  Vision system  Robot  Automated storage and retrieval systems (ASRSs)  Automated guided vehicles (AGVs)  Flexible manufacturing systems (FMSs)  Computer-integrated manufacturing (CIM)

43. 7 - 43© 2011 Pearson Education Machine Technology  Increased precision  Increased productivity  Increased flexibility  Improved environmental impact  Reduced changeover time  Decreased size  Reduced power requirements

44. 7 - 44© 2011 Pearson Education Automatic Identification Systems (AISs)  Improved data acquisition  Reduced data entry errors  Increased speed  Increased scope of process automation Example – Bar codes and RFID

45. 7 - 45© 2011 Pearson Education Process Control  Real-time monitoring and control of processes  Sensors collect data  Devices read data on periodic basis  Measurements translated into digital signals then sent to a computer  Computer programs analyze the data  Resulting output may take numerous forms

46. 7 - 46© 2011 Pearson Education Vision Systems  Particular aid to inspection  Consistently accurate  Never bored  Modest cost  Superior to individuals performing the same tasks

47. 7 - 47© 2011 Pearson Education Robots  Perform monotonous or dangerous tasks  Perform tasks requiring significant strength or endurance  Generally enhanced consistency and accuracy

48. 7 - 48© 2011 Pearson Education Automated Storage and Retrieval Systems (ASRSs)  Automated placement and withdrawal of parts and products  Reduced errors and labor  Particularly useful in inventory and test areas of manufacturing firms

49. 7 - 49© 2011 Pearson Education Automated Guided Vehicle (AGVs)  Electronically guided and controlled carts  Used for movement of products and/or individuals

50. 7 - 50© 2011 Pearson Education Flexible Manufacturing Systems (FMSs)  Computer controls both the workstation and the material handling equipment  Enhance flexibility and reduced waste  Can economically produce low volume at high quality  Reduced changeover time and increased utilization  Stringent communication requirement between components

51. 7 - 51© 2011 Pearson Education Computer-Integrated Manufacturing (CIM)  Extension of flexible manufacturing systems  Backwards to engineering and inventory control  Forward into warehousing and shipping  Can also include financial and customer service areas  Reducing the distinction between low- volume/high-variety, and high- volume/low-variety production

52. 7 - 52© 2011 Pearson Education Computer- Integrated Manufacturing (CIM) Figure 7.10