2. © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Chapter 4 Processes and Technology

3. Ch 2 - 16 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Processes & Technology Project –one-time production of product to customer order Batch production –process many jobs at same time in batch Mass production –produce large volumes of standard product for mass market Continuous processes –very high volume commodity product

4. Ch 2 - 17 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Product-Process Matrix Volume Low High Projects Batch production Mass production Continuous production Standardization

5. Ch 2 - 17 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Product-Process Matrix Labor Intensity Low High Professional Service Shop Mass Service Factory Customization

6. Ch 6 - 2 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Process Strategy Overall approach to producing goods & services Defines: –capital intensity –process flexibility –vertical integration –customer involvement

7. Ch 6 - 3 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Types of Processes Projects Batch production Mass production Continuous production

8. Ch 6 - 4 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Project BatchMass Continuous Product Unique Made to order Made to stock Commodity Customer SinglyFew individualsMass marketMass market Demand InfrequentFluctuatesStableVery stable Volume Very lowLow to medHighVery high Variety InfiniteMany, highLowVery low System Long-termIntermittentFlow linesProcess industry Equipment VariedGeneral-purp.Special-purp.Highly automated Type of work ContractsFabricationAssemblyMix, treat, refine Skills ExpertsWide rangeLimited rangeEquipment craftspeople monitors Advantages Custom workFlexibilityEfficiencyHighly efficient qualitysped, low costlarge capacity Disadv.NonrepeatingCostly, slowCapital invest.Difficult to change Example ConstructionPrinting, bakeryAutos, TV’sPaint, oil, food

9. Ch 6 - 5 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Process Selection With Break-Even Analysis c f = fixed cost v = volume c v = variable cost per unit p =price per unit

10. Ch 6 - 6 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Solving For Break-Even Volume

11. Ch 6 - 7 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Break-Even Example Fixed cost = c f =$2,000 Variable cost = c v = $5 per raft Price = $10 per raft

12. Ch 6 - 8 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Break-Even Graph

13. Ch 6 - 9 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Choosing Between Two Processes $3v = $8,000 v = 2,667 rafts $2,000 + $5v = $10,000 + $2v Process AProcess B Below 2,667, choose A Above 2,667, choose B

14. Ch 6 - 10 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Graphical Solution To Process Selection A B

15. Ch 6 - 11 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Point Of Indifference Volume where cost of A = cost of B Rule for choosing process: –Above point of indifference choose process with lowest variable cost –Below point of indifference choose process with lowest fixed cost

16. Ch 6 - 12 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Process Planning Make-or-buy decisions Process selection Specific equipment selection Process plans Process analysis

17. Ch 6 - 16 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Bill Of Material (unstructured) No.Part No.Part name 151292Outlet end 251284Handle 352043Switch 451576Electric cord 551265Rear housing 651268Motor mounting plate

18. Ch 6 - 17 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Product Structure Diagram Upholstery tool Crevice tool Hand-vac Dusting tool Package Packaged Hand-vac Forward housing assembly Screw & lock washer assembly Rear housing assembly

19. Ch 6 - 18 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Operations Process Chart Part nameTable leg Part no.2410 UsageTable Assembly No.437 Oper No.DescriptionDept.MachineTimeTools 10Saw to rough length041 20Plane to size043 30Saw to finished length041 40Measure dimensions051 50Sand052

20. Ch 6 - 19 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Process Analysis Continuous improvement –basic tool is process flowchart Reengineering –basic tool is process map

21. Ch 6 - 20 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Process Flowchart Symbols Operations Inspection Transportation Delay Storage D

22. Ch 6 - 21 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Process Flowchart Step Operation Transport Inspect Delay Storage Distance (feet) Time (min) Description of process 1 2 3 4 5 6 7 8 9 10 11 Unload apples from truck Move to inspection station Weigh, inspect, sort Move to storage Wait until needed Move to peeler Apples peeled and cored Soak in water until needed Place in conveyor Move to mixing area Weigh, inspect, sort TotalPage 1 0f 3480 30 5 20 15 360 30 20 190 ft 20 ft 50 ft 100 ft Date: 9-30-95 Analyst: TLR Location: Graves Mountain Process: Apple Sauce

23. Ch 6 - 24 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Continuous Improvement and Breakthroughs

24. Ch 6 - 27 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Design Principles For Reengineering 1. Organize around outcomes, not tasks 2. Capture information once, at the source 3. Centralize resources with info. tech. 4. Link parallel subprocesses 5. Design to do work right the first time 6. Remove complexity 7. Identify information & technology levers

25. Ch 6 - 29 © 2000by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Information Technology Management information system (MIS) –move large amounts of data Decision support system (DSS) –add decision making support Expert system –recommend decision based on expert knowledge

26. Ch 6 - 30 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Decision Support System Information: reports model results what if? analysis Computer system: data processing Data Quantitative techniques PersonnelAccounting ProductionMarketingDistributionOther areas Decisions Management Information System What -if? analysis Management Decision Support System

27. Ch 6 - 31 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Artificial Intelligence Neural networks –emulate interconnections in brain Genetic algorithms –based on adaptive capabilities in nature Fuzzy logic –simulate human ability to deal with ambiguity

28. Ch 6 - 32 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Advanced Communications Electronic data interchange (EDI) Internet Wireless communications Teleconferencing & telecommuting Bar coding Virtual reality

29. Ch 6 - 33 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Manufacturing Technology Numerically controlled (NC) machines –controlled by punched tape Computer numerical controlled (CNC) –controlled by attached computer Direct numerical control (DNC) –several NC machines controlled by single computer

30. Ch 6 - 34 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 2/e Automated Material Handling Conveyors Automated guided vehicle (AGV) Automated storage & retrieval system (ASRS)

31. Ch 6 - 35 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Flexible Manufacturing Systems (FMS) Programmable machine tools Controlled by common computer network Combines flexibility with efficiency Reduces setup & queue times

32. Ch 6 - 36 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Flexible Manufacturing System Parts Finished goods LoadUnload Computer control room Terminal Machine Tools Conveyor Pallet

33. Ch 6 - 37 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Robotics Programmable manipulators Follow specified path Better than humans with respect to –hostile environments –long hours –consistency

34. Ch 6 - 38 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Robot Parts Controller –hardware, software, power source Manipulator –robot arm End-effector –“hand”

35. Ch 6 - 39 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Computer Integrated Manufacturing (CIM) Integration of design, manufacture & delivery via computer technology CAD - uses software to create & modify designs CAM - uses programmable automation in manufacturing CAE - links functional design to CAD form design CAPP - creates processing instructions for CAM GT- classifies designs to benefit from prior experience

36. Ch 6 - 40 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Components Of CIM CIM Product design Manufacture Process planning Systems management RoboticsFMS NC/CNC/ DNC Cells and centers Automated inspection AGV, ASRS JIT/ kanban DSS/ES/ AI LAN, TOP, satellites TQM Bar codes, EDI MRP GTCAECAD IGES, PDES, DMIS DFM Cellular manufacturing MAP, STEP CAD/CAM CAPP

37. Ch 6 - 41 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Adoption Of Technology Technology Readiness Need well-designed products & efficient processes Technology Design Know what to automate Technology Selection Choose the right level Technology Integration Have a strategy for incremental automation