1. Manufacturing Process Selection and Design
Chapter 6
Manufacturing Process Selection and Design

2. OBJECTIVES Process Selection Break-Even Analysis
Types of processes
Process flow structures
Product-process matrix
Break-Even Analysis
Manufacturing Process Flow Design 2

3. Types of Processes Conversion (e.g., Iron ore to steel)
Converts natural resources to raw materials
Provides inputs to others
Fabrication (e.g., Changes sheet metal to car fenders)
Changes raw materials into a specific form
Assembly (e.g., Assembles the fender into cars)
Assembles final products
Testing (e.g., For quality of products) 3

4. Process Flow Structures
Job shop (e.g., Copy center making a single copy of a student term paper)
Small batches of a large number of different products
Batch shop (e.g., Copy center making 10,000 copies of an ad piece for a business)
Standardized job shop, products follow the same flow pattern
Assembly Line (e.g., Automobile manufacturer)
Discrete parts manufactured on a line, following a sequence
Continuous Flow (e.g., Petroleum manufacturer)
Production of undifferentiated materials (foods, chemicals)
Often runs 24 hours/day 4

5. Product-Process Matrix
IV.
Continuous
Flow
III.
Assembly
Line
II.
Batch I.
Job
Shop
Low
Volume,
One of a
Kind
Multiple
Products,
Volume
Few
Major
Higher
High
Standard-
ization
Commercial
Printer
French Restaurant
Heavy
Equipment
Automobile
Burger King
Sugar
Refinery
Flexibility (High)
Unit Cost (High)
Flexibility (Low)
Unit Cost (Low)
Exhibit 6.2
These are the major stages of product and process life cycles 5

6. Break-Even Analysis
A standard approach to choosing among alternative processes or equipment
Model seeks to determine the point in units produced (and sold) where we will start making profit on the process or equipment
Model seeks to determine the point in units produced (and sold) where total revenue and total cost are equal 14

7. Break-Even Analysis Visually presents alternative profit/losses
As a function of units produced/sold
Choice depends on anticipated demand
Most suitable when alternative entails large fixed costs
Variable costs are proportional to number of units produced

8. Break-Even Analysis (Continued)
Break-even Demand =
Purchase cost of process or equipment
Price per unit - Cost per unit or
Total fixed costs of process or equipment
Unit price to customer - Variable costs per unit
This formula can be used to find any of its components algebraically if the other parameters are known 14

9. Break-Even Analysis TR $
PROFIT
BEP VC TC FC
LOSS Q*
Quantity

10. Break-Even Analysis (Continued)
Example: Suppose you want to purchase a new computer that will cost $5,000. It will be used to process written orders from customers who will pay $25 each for the service. The cost of labor, electricity and the form used to place the order is $5 per customer. How many customers will we need to serve to permit the total revenue to break-even with our costs?
Break-even Demand:
= Total fixed costs of process or equipment
Unit price to customer – Variable costs
= 5,000/(25-5)
= 250 customers 14

11. Manufacturing Process Flow Design
A process flow design can be defined as a mapping of the specific processes that raw materials, parts, and subassemblies follow as they move through a plant
The most common tools to conduct a process flow design include assembly drawings, assembly charts, and operation and route sheets 15

12. Process Flow Design Assembly drawing Assembly chart
Exploded view of the product
Shows its component parts
Assembly chart
Uses information in assembly drawing
Defines how parts go together
Shows their order of assembly
Operation and route sheet
Specifies operations and process routing
Shows types of equipment/tools requirements

13. Example: Assembly Chart (Gozinto)
From Exhibit 6.6
A-2
SA-2 4 5 6 7
Lockring
Spacer, detent spring
Rivets (2)
Spring-detent
A-5
Component/Assy Operation
Inspection 16

14. Example: Process Flow Chart
Material Received from Supplier
No, Continue…
Inspect Material for Defects
Defects found?
Yes
Return to Supplier for Credit 4

15. Global Product Design and Manufacturing Strategies
Joint Ventures
Two companies form a third independent company
For example, GM/Toyota
Facilitates globalization
Strategic Suppliers
Suppliers with operations matching parent company’s foreign operation
Provide materials and manufacturing know-how
Global Product Design Strategy
Develop standard modules common to all units sold globally (Honda Accord chassis) 17