© 2000 by prentice-hall inc russell/taylor oper mgt 3/e chapter 4 processes and technology

© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e

Chapter 4

Processes and Technology

Ch 2 - 16© 2000 by Prentice-Hall IncRussell/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


Product-Process MatrixV

olu

me

LowLow High

High

Projects

Batchproduction

Massproduction

Continuousproduction

Standardization


Product-Process MatrixL

abo

r In

ten

sity

LowLow High

High

Professional Service

ServiceShop

MassService

ServiceFactory

Customization


Process Strategy

• Overall approach to producing goods & services• Defines:

–capital intensity–process flexibility–vertical integration–customer involvement


Types of Processes

• Projects• Batch production• Mass production• Continuous production


Project Batch Mass Continuous

Product Unique Made to order Made to stock Commodity

Customer Singly Few individuals Mass market Mass market

Demand Infrequent Fluctuates Stable Very stable

Volume Very low Low to med High Very high

Variety Infinite Many, high Low Very low

System Long-term Intermittent Flow lines Process industry

Equipment Varied General-purp. Special-purp. Highly automated

Type of work Contracts Fabrication Assembly Mix, treat, refine

Skills Experts Wide range Limited range Equipment

craftspeople monitors

Advantages Custom work Flexibility Efficiency Highly efficient

quality sped, low cost large capacity

Disadv. Nonrepeating Costly, slow Capital invest. Difficult to change

Example Construction Printing, bakery Autos, TV’s Paint, oil, food


Process Selection With Break-Even Analysis

Total cost = total fixed cost + total variable costTC = cf vcv

Total revenue = volume x priceTR =vp

Total profit = total revenue - total costZ = TR- TC

= vp - (cf vcv)

cf = fixed costv = volumecv = variable cost per unitp =price per unit


Solving For Break-Even Volume

TR TC

vp vc

vp vc

v p c

vp c

v

v

v

v

( )

( )

c

c

c

c

f

f

f

f


Break-Even Example

v cf

p cv

200010 5

400 rafts

Fixed cost = cf =$2,000Variable cost = cv = $5 per raftPrice = $10 per raft


Break-Even Graph

$0

$1,000

$2,000

$3,000

$4,000

$5,000

400

Units

Do

llars


Choosing Between Two Processes

$3v = $8,000

v = 2,667 rafts

$2,000 + $5v = $10,000 + $2v

Process A Process B

Below 2,667, choose AAbove 2,667, choose B


Graphical Solution To Process Selection

$0

$5,000

$10,000

$15,000

$20,000

$25,000

0 1000 2000 3000 4000

Units

Do

llars

A B


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


Process Planning

• Make-or-buy decisions• Process selection• Specific equipment selection• Process plans• Process analysis


Bill Of Material(unstructured)

No. Part No. Part name1 51292 Outlet end2 51284 Handle3 52043 Switch4 51576 Electric cord5 51265 Rear housing

6 51268 Motor mounting plate


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


Operations Process ChartPart name Table legPart no. 2410Usage TableAssembly No. 437

Oper No. Description Dept. Machine Time Tools10 Saw to rough length 04120 Plane to size 04330 Saw to finished length 04140 Measure dimensions 05150 Sand 052


Process Analysis

• Continuous improvement–basic tool is process flowchart

• Reengineering–basic tool is process map


Process Flowchart Symbols

Operations

Inspection

Transportation

Delay

Storage

D


Process Flowchart

Ste

p

Ope

ratio

nT

rans

port

Insp

ect

Del

ayS

tora

ge

Dis

tanc

e(f

eet)

Tim

e(m

in)Description

ofprocess

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 3 480

30

5

20

15

360

30

20

190 ft

20 ft

20 ft

50 ft

100 ft

Date: 9-30-95

Analyst: TLR

Location: Graves Mountain

Process: Apple Sauce


Continuous Improvement and Breakthroughs


Design Principles For Reengineering

1. Organize around outcomes, not tasks2. Capture information once, at the source3. Centralize resources with info. tech.4. Link parallel subprocesses5. Design to do work right the first time6. Remove complexity7. Identify information & technology levers

Ch 6 - 29© 2000by Prentice-Hall IncRussell/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


Decision Support System

Information:reportsmodel resultswhat if? analysis

Computersystem:dataprocessing

Data

Quantitativetechniques

Personnel

Accounting

Production

Marketing

Distribution

Other areas

Decisions

Management Information System

What -if? analysis

ManagementDecision Support System


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


Advanced Communications

• Electronic data interchange (EDI)• Internet• Wireless communications• Teleconferencing & telecommuting• Bar coding• Virtual reality


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


Automated Material Handling

• Conveyors• Automated guided vehicle (AGV)• Automated storage & retrieval system (ASRS)


Flexible Manufacturing Systems (FMS)

• Programmable machine tools• Controlled by common computer network• Combines flexibility with efficiency• Reduces setup & queue times


Flexible Manufacturing System

PartsFinished

goods

Load Unload

Computercontrolroom

Terminal

Machine Machine

Tools

Conveyor

Pallet


Robotics

• Programmable manipulators• Follow specified path• Better than humans with respect to

–hostile environments–long hours–consistency


Robot Parts

• Controller–hardware, software, power source

• Manipulator–robot arm

• End-effector–“hand”


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


Components Of CIM

CIM

Productdesign

Manufacture

Processplanning

Systemsmanagement

RoboticsFMSNC/CNC/

DNCCells

and centersAutomatedinspection

AGV,ASRS

JIT/kanban

DSS/ES/AI

LAN, TOP,satellites

TQM

Bar codes,EDI

MRP

GTCAECADIGES,PDES,DMIS

DFM

Cellularmanufacturing

MAP,STEP

CAD/CAM

CAPP


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

© 2000 by prentice-hall inc russell/taylor oper mgt 3/e chapter 4 processes and technology

Documents

variable cost

efixed cost

incproductprocess matrixch

incprocess selection

breakeven analysisch

breakeven volumech

goods servicesdefines

fixed costv