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2. Production & Operations Management Chapter : The Role of Operations Management Business Process Reengineering Inventory Management Operations Strategy Total Quality Management Supply Chain Management ✓ Planning & Control Analyzing Operations New Product/process development Project Management Issues For International Operations Time Based Competition Cost Elements 8 8 9 9 10 11 12 13

3. Start Questioning operations productivity Eliminating unuseful operations CombinIing operations Improving Operations Productivity (Re) Design of new processes Discussing the 9 primary approches to Operations Analysis Lecture Outlines 1.Operation Purpose 2.Part Design 3.Tolerances and Specs 4.Material 5.Manufacturing Sequence and Process 6.Setup and Tools 7.Material Handling 8.Plant Layout 9.Work Design

4. Operation Purpose Ask: –“Does this operation serve a useful purpose?” –“Is this operation really needed?” Try to: –Eliminate operations –Combine operations As many as 25% of operations in American Industry can be eliminated.

5. Example 1 : Operation Elimination Many stores have dropped the requirement that customers sign their credit slip for small totals: less than $15 - $50. This makes the payment transaction very fast! –E.g. in coffee shop study, Average payment transaction time: 27 sec

6. Example 2 : Operation Elimination Outsource operations Ask: “Can a supplier an operation more economically than we can in-house?” Operation: pack ball bearings in grease Modification: purchase sealed bearings from supplier.

7. Example 3 : Operation Elimination Eliminate re-work Coffee shop worker: Worker pours milk into stainless steel beaker, Steams milk, pours into cup. Runs out of milk – must pour and steam more while customer waits impatiently. Solution: Add measuring lines to inside of beaker so worker does not have to estimate how much milk to pour.

8. Part Design Design for manufacturing and life-Cycle Reduce parts – simplify designs Reduce processing operations Utilize better material Loosen tolerances where possible Design for manufacturing: choose an easy to manufacture shape over a difficult one.

9. Minimum cost design It helps designers if they understand processes such as: casting, molding, bending, etc. Example: instead of: –Four bends in sheet metal to make part, –Make lower cost extrusion with 4 bends already in it. This type of thinking is called “Design for Manufacturing”

10. Tolerances and specifications Designers tend to incorporate tolerances that are more rigid than necessary Why? To be extra sure that product will function in all situations. It is perceived to reduce risk, but it can add much unnecessary cost, Need to consider risk/cost trade-off. Taguchi (86) methods develop quality products and reduce cost.

11. Material Incorporate better, more economical material in designs: –Less expensive –Easier to process –Use materials more economically –Use supplies and tools more economically, –Standardize materials –Find best vendor: price, stock. Can achieve 10% to 15% reductions by shopping around, sometimes every year.

12. Example: New material Replace stamped gear with plastic gear in assembly.  saved $0.13 per unit, $10,000 per year. Keiretsu: (Japanese term) interlocking relationship between manufacturers and suppliers.

13. Manufacturing Sequence and Tools Re-sequence operations Group operations that can share common fixturing Mechanize manual operations where economically feasible (see section on setup) Use more efficient facilities (see section on layout) Example, substitute Super automatic cappuccino machines for old style. Manufacture near-net shape. Use Robots (where economically feasible – usually for long product runs, small product variability)

14. Example: re-sequencing Original sequence: Paint part 1 Paint part 2 Paint part 3 Paint part 4 Rivet parts together New sequence: Rivet parts together Paint one assembly

15. Setup, Tools and Fixtures Carefully consider economic trade-offs: –Will the setup, fixtures, or tools be used enough to justify their expense? Prevalent mistake of tool makers and planners: –Too much specialized tooling and fixturing

16. Example: Tooling Good choice: –Tooling that saves 10% on each job and is used frequently. Poor choice: –Tooling that saves 90% on each job but is used only twice a year. (Will not recover expense of creating and storing tooling).

17. Material Handling The best way to handle material is NOT to handle it. Moving, storing, positioning, tracking. Insuring that materials get where they need to be when they are needed. Material Handling Institute survey says 35 to 85% of the cost of getting a product to market is associated with material handling.

18. Better Material Handling Reduces cost, time Increases safety, health and well being of workers: –40% of plant accidents happen during material handling –25% are caused by lifting and shifting material

19. Approach to reducing material handling time Reduce time spent picking up material Use mechanized of automated equipment (where economically feasible) Make better use of existing handling facilities Handle material with greater care Consider bar coding

20. Plant Layout Poor layout can result in major costs through increased travel time, increased material handling, etc. Two types of layouts for plants: Product layout: machines placed in the order used in the manufacturing process. Advantage: reduces travel time Process layout: machines grouped by type: e.g. all lathes together, all drill presses together, etc. Advantage: makes training easier. Later we will discuss Muther’s Systematic Layout Process (SLP).

21. Work Design Eliminate operations, Re-sequence, re-design operations Many of our remaining chapters focus on many different types of work design!

22. Muther’s (1973) Systematic Layout Process (SLP) Goal: identify how to rearrange space to make it more effective for a task.  Chart out relationships between areas based on magnitude of material handling,  Establish space requirements,  Make activity relationship diagrams  Space relationship layout  Evaluate alternative layouts  Select best layout, plan installation.

23. Decision Matrices “Goodness” score for each option i is Σ (importance weight j * performance score i j) Renovation Cost Material handling costUse of SpaceAesthetics Goodness Score importance (1 - least, 10 - most)81057 Option 1334288 Option 2434189 Option 3243392 Performance Parameters A PM is whatever is important to the decision maker in the situation,

24. Select the best layout for your purposes Choose the Layout with the highest “score” from your decision matrices 1. 2. 3. 88 89 92 Best!

25. THANK YOU! Ahmed BELAFQUIH