dr akarte nitie perspectives in manufacturing management
TRANSCRIPT
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National Institute of Industrial Engineering
Mumbai – 400 087 Maharashtra
By
Dr. Akarte Milind M.Associate Professor, IE Group
Perspectives In
Manufacturing Management
Objective:
• To understand:
• Role of manufacturing
• Linkages between different Decision Areas in
Manufacturing.
• The manufacturing capability
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Contents:
Manufacturing:
As an Important function
Environments & Production Systems
Outputs
Subsystems/Decision Areas in Value Chain
Layouts Lead Time Inventory, TCO Concurrent Product Design
Business Strategy
Finance
Business strategy of a firm =
Sum of individual strategies of its component functions
Ex: finance, manufacturing, marketing, product
development, service, etc
Company Business Strategy
Product Development
Manufacturing
Marketing Service
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Introduction
• In successful firms all functional strategies
– Must be interlock for maximum competitive advantage –
– That is -
• No function is left out and no function dominates
• In sum firms the business strategy is dominated by non-manufacturing function
– Result – “throw over the wall” to manufacturing
Manufacturing Techniques
• A variety of new techniques and technologies are introduced –such as”
√ Concurrent Engineering, DF “x”
√ Benchmarking
√ Standardization
√ Cycle time reduction
√ CAD, CAM. CAE, PDM, SCM, CRM, ERP
• Each presented as a way of dramatically improve manufacturing capability.
Six Sigma
TQM
FMS
JIT
AGV
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Why Manufacturing Is Important?
• Manufacturing Changes slowly
– Take long time to –
• Build facilities
• Develop new suppliers
• Change operating procedures
• Train personal
• While – Customer requirements changes quickly – as
• New products appears
• Technology changes
• Economic conditions fluctuates
• New competitors emerges
• Changes in government regulations
Why Manufacturing Strategy?
Slow movement of manufacturing
function
Fast changing marketplace
Need to be aligned
This needs – Manufacturing to take number of decisions
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Why Manufacturing Strategy?
• When Formal Manufacturing strategy exists:
– Decisions follow a neat logical pattern
• When No Manufacturing strategy exists:
– Pattern of decisions is erratic and unpredictable
• Hence – Objective of MS is
– To understand how manufacturing decisions to be made
– To provide long term competitive advantage.
MS – Process Formulation Consideration
• Process of formulating MS should consider the following:
– Take into account customer requirements
– Take into account competitors
– Take into account manufacturing capabilities
– Consider all options available to manufacturing
– List the outputs that the manufacturing will provide and
specify them.
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Key Points for successful Strategy
• The firm must know where it will specifically attack in market
(product or region) and then must focus its resources and
capabilities to succeed.
• The firm must anticipate other competitors and defend the
same - once it has made an attack on a particular market
segment
• Equally, The firm must know where it will not attack and stay out
of the dangerous area in which it cannot compete.
• Everybody in the organization must know and understand the
strategy
Choosing Market Segment
The firm matches market requirements with its present or future (by strategic search) and attack the appropriate market segments and avoid others. Market segments may be defined in terms of geographical area, or by
product grouping
Avoid Avoid
Avoid
Avoid
Avoid
Attack
Attack
Attack
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Functional Layout• Equipment of same type grouped together in same department
• Example – machine shop
• Lathe in one department, drilling, Grinding, Milling, in another
• Operator work in one department - highly skilled in the area of work
• Equipment, tooling are of general purpose and capable of performing wide range of work
L L
L L
M M
M M
G G
G G
D D
D D
line Layout
• One line of different equipment for each product or family
• Equipment / tooling are customized for the product features
• Used when volume is large to justify the large investment in customized equipment and tooling
• Operator perform simple tasks as most of the work is performed by the machine.
L M
D
L M
D
M
L G
D
G
L D
M
D
M
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Cellular Layout
• Different equipment/processes are located in the same department
• Department is also called “cell”
• Worker flexible to operate all equipment in the cell
• One cell for each product family
• Equipment, tooling are of general purpose and capable of performing wide range of work - but often specialized to range of requirements.
L M
D G
M L
G D
G L
D M
D L
G M
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Manufacturing Environment
Manufacturing Environment
• Engineer to Order (ETO)
• Make to Order (MTO)
• Assemble to Order (ATO)
• Make to Stock (MTS)
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Pro
du
ct V
arie
ty
Product Volume High
Engineer-to-Order
Make-to-Order
Assemble-to-Order
Make-to-Stock
High
Low
Low
Manufacturing Environment
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Manufacturing and Lead Time
The definition of Lead Time is:
“ The time that is required to process a customer order from order entry through shipping the product to the customer”.
Start Finish
Lead Time
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Manufacturing and Lead Time
What are the components of lead time?
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Manufacturing and Lead Time
Components of Lead Time
• Product development (design) lead time
• Sourcing (procurement) lead time
• Manufacturing (production) lead time
• Assembly & testing lead time
• Order processing lead time
• Distribution lead time
• Other (ex, decision making, coordination)
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Manufacturing EnvironmentEngineer-to-Order
<------------------ Customer Delivery Lead Time -------------------->
Design Purchase Manufacture Assemble Pack and
Ship
Customer Order
Manufacturing Environment
<---------- Customer Delivery Lead Time ------------------>
Stock standard Parts as
Inventory
Purchase Manufacture Assemble Pack and
Ship
Customer Order
Make-to-Order
Design
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Manufacturing EnvironmentAssemble-to-Order
Delivery Lead Time ->
Stock standard Parts as
Inventory
Purchase ManufactureFinal
Assemble Pack and
Ship
Customer Order
Design
Manufacturing Environment
Make-to-Stock
Delivery
Lead Time ->
Stock as Inventory
Purchase Manufacture Assemble Pack and
Ship
Customer Order
Design
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• Seven Production System can be grouped into:• Craft production
– Job shop production system (JSPS)– Batch flow production system (BFPS)
• Mass production– Operator paced line flow production system (OPLFPS)– Equipment paced line flow production system (EPLFPS)– Continuous Flow production System (CFPS)
• Lean production system– JIT production system– FMS production system
• Broad classification is enough for many purposes, but for precious decision like manufacturing strategy detailed classification essential.
Production Systems
Order Qualifiers and Order Winner
• Order qualifiers: - minimum requirement
– Generally – supplier must meet set of minimum requirements to be consider a viable Competitor in the market place.
– Customer requirements may be based on price, quality, delivery, etc.
– Order qualifiers can bring the firm in competition but may or may not provide business
– Example – for the supplier to be considered.
– the price for a certain type of product must fall within a range
– to become a supplier, firm must have ISO 9000 certification
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Order Qualifiers and Order Winner
• Order Winner:
– But, being considered does not mean winning the order,
– That is - for Order Winner – firms must need to be better than competitor.
– To win orders a supplier must have characteristics that encourage customers to choose its product and services over competitor
– Those competitive characteristic that persuade customer to choose product / service are called order winners.
Inventory Management
• Inventory models
– Mathematical formula for economical solution – applicable in different paradigm
– Objective –» How much to order and » When to order
» Subject To:• To minimize inventory costs
• Costs of ordering inventory• Cost of carrying inventory
• To achieve satisfactory levels of customer service
Fundamental Inventory Decisions
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Need
• Can 100 % service on all item be given?
• Then how many items?
– High Service level – high safety stock – high cost of inventory – low profit
• Can we afford stock out on some item
– Too many stock out on too many items
– Over a period – reputation – company value
• Design a system
– 95 % service level on some item
– 85 – 95 % Majority of stocks
– 60 – 85 % on slow moving & high cost items
Types of Inventory
1. Raw materials - Purchased parts
2. Work-in-process (partially completed) products (WIP)
3. Finished goods
4. Maintenance, Repair and Operating (MRO)
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Inventory Positions in the Supply Chain
Raw
Materials
Works
in
Process
Finished
Goods
Finished
Goods
in Field
Reducing amounts of raw materials, purchased parts and
subassemblies by having suppliers deliver them directly.
Reducing the amount of works-in process by using just-in-
time production.
Reducing the amount of finished goods by shipping to
markets as soon as possible.
Right & wrong reasons for carrying inventory
• The right reasons for carrying inventory
– Support production requirements – WIP
– Support operational requirement – MRO
– Support customer service requirements
– Hedge against market place uncertainties
– Take advantage of quantity discounts
• The wrong reasons for carrying inventory
• Poor quality and material yield
• Unreliable supplier delivery
• Extended buyer-supplier order cycle time
• Inaccurate or uncertain demand forecast
• Specifying custom item for standard application
• Extended material in pipelines
• Insufficient manufacturing processes
Forecasting inaccuracies
Inconsistent logistic
Supply chain variability
Demand variability
Uncertainty
Greater safety stock
More inventory costs
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Manufacturing Issues Related to
Inventory Management
Manufacturing Type – ETO, MTO, ATO, MTS Layouts - Functional, Line, Cellular Manufacturing Systems – Job, Batch, Mass Production Batch Size influence on WIP Understanding Capacity Analysis / Bottleneck Concept Purchase / Supplier Related Issues Inventory in Supply Chain
Advantage of Small Batch• Alternative 1
• Batch size = 100 units
• Batch completed after = 3000 min
Batch 1
Batch 1
Batch 1
Batch 1
Batch 1
Batch 1
1
2
3
4
5
6
0 500 1000 1500 2000 2500 3000
Machin
es
Elapsed Time in Minute
B1 B2
B1 B2
B1 B2
B1 B2
B1 B2
B1 B2
1
2
3
4
5
6
0 500 1000 1500 2000 2500
Machin
es
• Alternative 2• Batch size = 50 units• Batch completed after = 1750
min
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• Functionality• Aesthetics• Ergonomics• Energy efficiency• Maintenance• Manufacturability• Easy of assembly• Ease of testing• Ease of handling• Ease of packaging• Eco-friendly
The above are clubbed as Design for X or simply DFX
Castability
Machaniability
Moldability
Weldability
Formability
……
Sand
Shell
Investment
Gravity Die
……
Design for ‘x’