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UNIT-1UNIT-1UNIT-1UNIT-1

Operations Technologies &Operations Technologies &AutomationAutomation

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OverviewOverviewOverviewOverview

q IntroductionIntroductionq Types of Manufacturing AutomationTypes of Manufacturing Automation

q Automated Production SystemsAutomated Production Systems

q

Software Systems for AutomationSoftware Systems for Automationq Automation in ServicesAutomation in Services

q Automation IssuesAutomation Issues

q

Deciding Among Automation AlternativesDeciding Among Automation Alternativesq Wrap-Up: What World-Class Companies DoWrap-Up: What World-Class Companies Do

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IntroductionIntroductionIntroductionIntroduction

q In the past, automation meant the replacement ofIn the past, automation meant the replacement ofhuman effort with machine effort, to save labor costs.human effort with machine effort, to save labor costs.

q Today,Today, automationautomation means integrating a full range ofmeans integrating a full range of

advanced information and engineering discoveriesadvanced information and engineering discoveries

into operations processes for strategic purposes.into operations processes for strategic purposes.

q Today, automation is applied not only for labor costToday, automation is applied not only for labor cost

savings, but also for:savings, but also for:q

Improved qualityImproved qualityq Faster production and delivery of products/servicesFaster production and delivery of products/servicesq Increased flexibilityIncreased flexibility

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Types of Manufacturing AutomationTypes of Manufacturing AutomationTypes of Manufacturing AutomationTypes of Manufacturing Automation

q

Machine AttachmentsMachine Attachmentsq Inexpensive add-ons to machinesInexpensive add-ons to machinesq Represent oldest technology in automationRepresent oldest technology in automationq Typically perform one or a few simple operationsTypically perform one or a few simple operationsq Examples:Examples:

q Strip feedersStrip feedersq Quick centering and grasping devicesQuick centering and grasping devices

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q

Numerically Controlled (N/C) MachinesNumerically Controlled (N/C) Machinesq Have a control system that receives/reads instructionsHave a control system that receives/reads instructions

and translates them into machine operationsand translates them into machine operationsq N/C machines have evolved:N/C machines have evolved:

q

CN/C computer numerically controlledCN/C computer numerically controlledq DN/C direct numerically controlled (severalDN/C direct numerically controlled (several

machines controlled by a single computer)machines controlled by a single computer)q Examples:Examples:

q

Weaving machinesWeaving machinesq LathesLathes

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q

RobotsRobotsq Human-like machines performing production tasksHuman-like machines performing production tasksq Brain of these machines is a microcomputerBrain of these machines is a microcomputerq Have grippers (vacuum, magnetized, adhesive)Have grippers (vacuum, magnetized, adhesive)q Have sensors (tactile, proximity, vision/optical)Have sensors (tactile, proximity, vision/optical)q Can operate in environments hostile to humansCan operate in environments hostile to humans

(heat, noise, dust, darkness, skin irritants, )(heat, noise, dust, darkness, skin irritants, )q

Perform precisely and repeatedly without fatiguePerform precisely and repeatedly without fatigueq Weld, assemble,paint, inspect, transport, ..Weld, assemble,paint, inspect, transport, ..

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q

Automated Quality Control InspectionAutomated Quality Control Inspectionq Take physical dimensions of partsTake physical dimensions of partsq Compare measurements to standardsCompare measurements to standardsq Determine if parts conform to specificationsDetermine if parts conform to specificationsq Also check performance (ex. - electronic circuits)Also check performance (ex. - electronic circuits)q Making 100% inspection economically feasibleMaking 100% inspection economically feasible

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q

Automated Process ControlsAutomated Process Controlsq Use sensors to obtain measures of performanceUse sensors to obtain measures of performanceq Compare measures to standardsCompare measures to standardsq Might use expert system to determine if/whatMight use expert system to determine if/what

process adjustment is necessaryprocess adjustment is necessaryq If necessary, change settings of processIf necessary, change settings of processq Long used in chemical processing, petroleumLong used in chemical processing, petroleum

refining, paper productionrefining, paper production

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Automated Production SystemsAutomated Production SystemsAutomated Production SystemsAutomated Production Systems

q

Automation technology becoming more sophisticatedAutomation technology becoming more sophisticatedq Focus has shifted away from individual machinesFocus has shifted away from individual machines

q More common are whole systems of automatedMore common are whole systems of automated

machines linked together for broader purposesmachines linked together for broader purposes

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q

Automated Flow LinesAutomated Flow Linesq In-line, automated processing machines linked byIn-line, automated processing machines linked by

automated material transferautomated material transfer

q

Perform without need for human attendancePerform without need for human attendance

q Used to produce an entire componentUsed to produce an entire component

q Also calledAlso called fixed automationfixed automation ororhard automationhard automation

q Used when product demand is high and stableUsed when product demand is high and stable

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q

Automated Assembly SystemsAutomated Assembly Systemsq Automated assembly machines linked byAutomated assembly machines linked by

automated material transferautomated material transfer

q

Operations are component insertion and joiningOperations are component insertion and joining

q Produce major assemblies or complete productsProduce major assemblies or complete products

q Often use standard (lower cost) robotsOften use standard (lower cost) robots

q Product design appropriate for assembly byProduct design appropriate for assembly by

humans is not fitting for automated assemblyhumans is not fitting for automated assembly

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Redesigning Products for Automated AssemblyRedesigning Products for Automated AssemblyRedesigning Products for Automated AssemblyRedesigning Products for Automated Assembly

q

Reduce the amount of assembly requiredReduce the amount of assembly requiredq Reduce the number of fasteners requiredReduce the number of fasteners requiredq Design components to be automatically delivered andDesign components to be automatically delivered and

positionedpositionedq Design products for layered assembly and verticalDesign products for layered assembly and vertical

insertion of partsinsertion of partsq Design parts so that they are self-aligningDesign parts so that they are self-aligningq

Design products into major modules for productionDesign products into major modules for productionq Increase component quality to avoid machine jamsIncrease component quality to avoid machine jams

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q

Flexible Manufacturing Systems (FMS)Flexible Manufacturing Systems (FMS)q Kits of materials/parts for a product are loaded onKits of materials/parts for a product are loaded on

the materials-handling systemthe materials-handling systemq Code is entered into computer identifying productCode is entered into computer identifying product

and its location in the sequenceand its location in the sequenceq Each production machine (without a worker):Each production machine (without a worker):

q Receives settings/instructions from computerReceives settings/instructions from computerq

Automatically loads/unloads required toolsAutomatically loads/unloads required toolsq Carries out its processing instructionsCarries out its processing instructions

q Product automatically transferred to next machineProduct automatically transferred to next machine

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Flexible Manufacturing System (FMS)Flexible Manufacturing System (FMS)Flexible Manufacturing System (FMS)Flexible Manufacturing System (FMS)

Machine 1Machine 1

ToolsTools

X

X

Machine 2Machine 2ToolsTools

X

X

Machine 3Machine 3

ToolsTools

X

X

ComputerComputer

WorkerWorker

X

X

X

X

X

X

X

UnloadUnloadLoadLoad

PalletPallet

TransferTransfer

SystemSystem

PartsParts

Pallet withPallet with

workpieceworkpiece

attachedattached

WorkpieceWorkpiece

in queuein queue

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q

Automated Storage & Retrieval Systems (ASRS)Automated Storage & Retrieval Systems (ASRS)q Main benefits of ASRS are:Main benefits of ASRS are:

q Increased storage capacityIncreased storage capacityq

Increased system throughputIncreased system throughputq Reduced labor costsReduced labor costsq Improved product qualityImproved product quality

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Software Systems for AutomationSoftware Systems for AutomationSoftware Systems for AutomationSoftware Systems for Automation

q

Three complex computer-based systemsThree complex computer-based systemsq Computer-Aided Design and Computer-AidedComputer-Aided Design and Computer-Aided

Manufacturing (CAD/CAM)Manufacturing (CAD/CAM)

q

Computer-Integrated Manufacturing (CIM)Computer-Integrated Manufacturing (CIM)

q Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP)

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q

Computer-Aided Design and Computer-AidedComputer-Aided Design and Computer-AidedManufacturing (CAD/CAM)Manufacturing (CAD/CAM)

q CAD/CAM is a merger of two systems, CAD andCAD/CAM is a merger of two systems, CAD and

CAM (described next)CAM (described next)

q It is the automation of the transition from productIt is the automation of the transition from product

design to manufacturingdesign to manufacturing

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q

Computer-Aided Design (CAD)Computer-Aided Design (CAD)q Concerned with the automation of certain phasesConcerned with the automation of certain phases

of product designof product designq Use of computer in interactive engineeringUse of computer in interactive engineering

drawing and storage of designsdrawing and storage of designsq CAD systems are installed to:CAD systems are installed to:

q Increase designers productivityIncrease designers productivityq Improve the quality of designsImprove the quality of designsq Improve product standardizationImprove product standardizationq Improve design documentationImprove design documentationq Create a manufacturing databaseCreate a manufacturing database

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q

Computer-Integrated Manufacturing (CIM)Computer-Integrated Manufacturing (CIM)q All of the firms operations related to productionAll of the firms operations related to production

are incorporated in an integrated computer systemare incorporated in an integrated computer system

to assist, augment, or automate the operations.to assist, augment, or automate the operations.

q Covers the chain of events from sales order toCovers the chain of events from sales order to

product shipmentproduct shipment

q Output of one activity becomes the input to theOutput of one activity becomes the input to the

next activitynext activity

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Computer Integrated Manufacturing (CIM)Computer Integrated Manufacturing (CIM)Computer Integrated Manufacturing (CIM)Computer Integrated Manufacturing (CIM)

q

Incorporates all manufacturing-related functionsIncorporates all manufacturing-related functions

ProcessProcess

ControlsControls

MRP IIMRP II

ASRSASRS

CAD/CAMCAD/CAM

AutomatedAutomated

AssemblyAssemblyERPERP

SystemsSystems

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q

Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP)q A complex set of software programsA complex set of software programs

q Integrates most of the business functions in anIntegrates most of the business functions in an

organizationorganizationq AccountingAccountingq Human resourcesHuman resourcesq PurchasingPurchasingq ProductionProductionq LogisticsLogisticsq E-BusinessE-Businessq and moreand more

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q

Enterprise Resource Planning (ERP)Enterprise Resource Planning (ERP)q Five leading ERP software companies are:Five leading ERP software companies are:

q SAP ( their R/3 software is top seller)SAP ( their R/3 software is top seller)q

OracleOracleq J.D. EdwardsJ.D. Edwardsq PeopleSoftPeopleSoftq

BaanBaan

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Automation in ServicesAutomation in ServicesAutomation in ServicesAutomation in Services

ExampleExampleq Airlines air traffic control, passenger reservationAirlines air traffic control, passenger reservation

q Banks ATMs, computerized bank statementsBanks ATMs, computerized bank statements

q

Gas Stations automated payment (pay-at-the-pump)Gas Stations automated payment (pay-at-the-pump)q Health Care MRI system, AGVS for waste disposalHealth Care MRI system, AGVS for waste disposal

q Grocery Store self-service checkout stationsGrocery Store self-service checkout stations

q

Real Estate web based house-for-sale tour videoReal Estate web based house-for-sale tour video

f C C i S iD f C C i S i

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Degree of Customer Contact in ServicesDegree of Customer Contact in Services

and the Use of Automated Equipmentand the Use of Automated Equipment

Degree of Customer Contact in ServicesDegree of Customer Contact in Services

and the Use of Automated Equipmentand the Use of Automated Equipment

Degree ofDegree ofCustomer ContactCustomer Contact

CapitalCapitalIntensityIntensity

HighHigh

HighHigh

LowLow

LowLow

Manual OperationsManual Operations

Mechanized OperationsMechanized Operations

AutomatedAutomatedOperationsOperations

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Automation IssuesAutomation IssuesAutomation IssuesAutomation Issues

q

Not all automation projects are successful.Not all automation projects are successful.q Automation cannot make up for poor management.Automation cannot make up for poor management.

q Economic analysis cannot justify automation of someEconomic analysis cannot justify automation of some

operations.operations.

q Not technically feasible to automate some operations.Not technically feasible to automate some operations.

q Automation projects may have to wait in small andAutomation projects may have to wait in small and

start-up businesses.start-up businesses.

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Automation QuestionsAutomation QuestionsAutomation QuestionsAutomation Questions

q

What level of automation is appropriate?What level of automation is appropriate?q How would automation affect the flexibility of anHow would automation affect the flexibility of an

operation system?operation system?

q How can automation projects be justified?How can automation projects be justified?

q How should technological change be managed?How should technological change be managed?

q What are some of the consequences of implementingWhat are some of the consequences of implementing

an automation project?an automation project?

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Building Manufacturing FlexibilityBuilding Manufacturing FlexibilityBuilding Manufacturing FlexibilityBuilding Manufacturing Flexibility

q

Manufacturing flexibility has become the cornerstoneManufacturing flexibility has become the cornerstoneof operations strategy in the 2000s.of operations strategy in the 2000s.

q The ability to improve/maintain market share becauseThe ability to improve/maintain market share becauseq Customer orders can be delivered soon afterCustomer orders can be delivered soon after

receipt of the orderreceipt of the orderq Production can quickly be shifted from product toProduction can quickly be shifted from product to

productproductq

Production capacity can be increased rapidlyProduction capacity can be increased rapidlyq New products can be developed and introducedNew products can be developed and introduced

into production quickly and inexpensivelyinto production quickly and inexpensively

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Justifying Automation ProjectsJustifying Automation ProjectsJustifying Automation ProjectsJustifying Automation Projects

q

Payback period, NPV, IRR, and other conventionalPayback period, NPV, IRR, and other conventionalapproaches alone are inadequate tools on which toapproaches alone are inadequate tools on which to

base product/process design/redesign decisionsbase product/process design/redesign decisions

q Product/process technology must be seen as a long-Product/process technology must be seen as a long-

term strategic choiceterm strategic choiceq Returns on investment include:Returns on investment include:

q Improved product/service qualityImproved product/service qualityq

Faster order deliveryFaster order deliveryq Increased flexibilityIncreased flexibilityq Reduced production costReduced production costq Increased market shareIncreased market share

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Managing Technological ChangeManaging Technological ChangeManaging Technological ChangeManaging Technological Change

q

Have a master plan for automation.Have a master plan for automation.q Recognize the risks in automating.Recognize the risks in automating.

q Establish a new production technology departmentEstablish a new production technology department

q

Allow ample time for completion of automation.Allow ample time for completion of automation.q Do not try to automate everything at once.Do not try to automate everything at once.

q People are the key to making automation successful.People are the key to making automation successful.

q

Dont move too slowly in adopting new technology.Dont move too slowly in adopting new technology.

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Worker Displacement and Training/ RetrainingWorker Displacement and Training/ RetrainingWorker Displacement and Training/ RetrainingWorker Displacement and Training/ Retraining

q

One result of automation is the elimination of jobsOne result of automation is the elimination of jobsq Some say that new jobs are created in engineering,Some say that new jobs are created in engineering,

manufacturing, programming, selling, and servicingmanufacturing, programming, selling, and servicing

the new-technology productsthe new-technology products

q Many firms realize they cannot afford NOT to trainMany firms realize they cannot afford NOT to train

and retrain their current workersand retrain their current workers

q Firms are providing more training than ever beforeFirms are providing more training than ever before

q Still, US firms spend little on training compared to,Still, US firms spend little on training compared to,say, German firms (4% of payroll cost on training)say, German firms (4% of payroll cost on training)

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Deciding Among Automation AlternativesDeciding Among Automation AlternativesDeciding Among Automation AlternativesDeciding Among Automation Alternatives

q

Economic factorsEconomic factorsq Effect on market shareEffect on market share

q Effect on product/service qualityEffect on product/service quality

q

Effect on manufacturing flexibilityEffect on manufacturing flexibilityq Effect on labor relationsEffect on labor relations

q Amount of time required for implementationAmount of time required for implementation

q Effect of implementation on ongoing productionEffect of implementation on ongoing production

q Amount of capital requiredAmount of capital required

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q

Economic AnalysisEconomic Analysisq Economic analysis will always be an important, ifEconomic analysis will always be an important, if

not a predominant, factor in deciding amongnot a predominant, factor in deciding among

alternativesalternatives

q Frequently used approaches are:Frequently used approaches are:q Break-even analysisBreak-even analysisq Financial analysisFinancial analysis

q By using only economic analysis, other importantBy using only economic analysis, other importantfactors are ignoredfactors are ignored

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Example: Valley HospitalExample: Valley HospitalExample: Valley HospitalExample: Valley Hospital

q

Economic AnalysisEconomic AnalysisValley Hospital is planning to install a new linenValley Hospital is planning to install a new linen

retrieval system. Two alternatives being consideredretrieval system. Two alternatives being considered

are: a continuous vacuum (CV) system and a batchare: a continuous vacuum (CV) system and a batch

robotic/chute (BR/C) system. The followingrobotic/chute (BR/C) system. The followingestimates were prepared:estimates were prepared:

CVCV BR/CBR/C

Annual Fixed Costs ($000)Annual Fixed Costs ($000) $2,690$2,690 $975$975Average Variable Cost per Ton $1,660Average Variable Cost per Ton $1,660 $2,590$2,590

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q

Economic AnalysisEconomic AnalysisAt a forecast annual operating level of 2,000 tonsAt a forecast annual operating level of 2,000 tons

of linen, which alternative should be chosen basedof linen, which alternative should be chosen based

only on total annual cost?only on total annual cost?

TCTCCVCV

= 2,690,000 + 1,660(2,000) = $6,010,000= 2,690,000 + 1,660(2,000) = $6,010,000

TCTCBR/CBR/C

= 975,000 + 2,590(2,000) = $6,155,000= 975,000 + 2,590(2,000) = $6,155,000

The continuous vacuum (CV) alternative has a lowerThe continuous vacuum (CV) alternative has a lowertotal annual cost.total annual cost.

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q

Economic AnalysisEconomic AnalysisThe annual volume of linen has to increase orThe annual volume of linen has to increase or

decrease to what level in order for the BR/Cdecrease to what level in order for the BR/C

alternative to be favored?alternative to be favored?

TCTCCVCV

= TC= TCBR/CBR/C

2,690,000 + 1,660(Q) = 975,000 + 2,590(Q)2,690,000 + 1,660(Q) = 975,000 + 2,590(Q)

830Q = 1,715,000830Q = 1,715,000

Q = 1,844.1 tonsQ = 1,844.1 tons

Annual volume must decrease to 1,844 tons or less.Annual volume must decrease to 1,844 tons or less.

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Example: Security BankExample: Security BankExample: Security BankExample: Security Bank

q

Economic AnalysisEconomic Analysis CumulativeCumulativeAfter-TaxAfter-Tax After-TaxAfter-Tax

YearYear Cash InflowCash Inflow Cash InflowCash Inflow

11 $87,500$87,500 $ 87,500$ 87,50022 79,60079,600 167,100167,10033 75,30075,300 242,400242,40044 71,60071,600 314,000314,00055 69,40069,400 383,400383,400

Payback period = 3 + (250,000 242,400)/71,600Payback period = 3 + (250,000 242,400)/71,600= 3.106 years= 3.106 years

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q

Rating Scale ApproachRating Scale ApproachAutomation alternatives are rated using, say, a 5-Automation alternatives are rated using, say, a 5-

point scale on a variety of factors such as:point scale on a variety of factors such as:q Economic measuresEconomic measuresq Effect on market shareEffect on market shareq Effect on product qualityEffect on product qualityq Effect on manufacturing flexibilityEffect on manufacturing flexibilityq Effect on labor relationsEffect on labor relationsq Amount of time required for implementationAmount of time required for implementationq Effect on ongoing productionEffect on ongoing production

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q

Relative-Aggregate-Scores ApproachRelative-Aggregate-Scores ApproachSimilar to Rating Scale Approach, but weightsSimilar to Rating Scale Approach, but weights

are formally assigned to each factor which permitsare formally assigned to each factor which permits

the direct calculation of an overall rating for eachthe direct calculation of an overall rating for each

alternative.alternative.

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Example: Brownell CleanersExample: Brownell CleanersExample: Brownell CleanersExample: Brownell Cleaners

q

Relative-Aggregate-Scores ApproachRelative-Aggregate-Scores ApproachAn analyst at Brownell Cleaners is consideringAn analyst at Brownell Cleaners is considering

two alternatives for a new garment conveyor system,two alternatives for a new garment conveyor system,

GCS1 and GCS2.GCS1 and GCS2.

He has interviewed several managers in the firmHe has interviewed several managers in the firm

and conducted extensive analysis of the problem. Heand conducted extensive analysis of the problem. He

has collected the information shown on the next slide.has collected the information shown on the next slide.

Which alternative do you recommend, based onWhich alternative do you recommend, based onthe relative-aggregate-scores approach?the relative-aggregate-scores approach?

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q

Relative-Aggregate-Scores ApproachRelative-Aggregate-Scores ApproachFactorFactor

Automation FactorsAutomation Factors WeightWeight GCS1GCS1 GCS2GCS2

Economic factorsEconomic factors

Annual savingsAnnual savings .30.30 $21,600$21,600 $26,700$26,700Other factorsOther factors ScoreScore ScoreScore

Market shareMarket share .30.30 .700.700 .800.800

Service qualityService quality .15.15 .600.600 .700.700

Labor relationsLabor relations .15.15 .500.500 .800.800Implementation time .10Implementation time .10 .700.700 ..600600

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q

Relative-Aggregate-Scores ApproachRelative-Aggregate-Scores ApproachGCS1GCS1 GCS2GCS2

FactorFactor Wgt.Wgt. Wgt.Wgt.

Automation FactorsAutomation Factors WeightWeight ScoreScore ScoreScore ScoreScore ScoreScore

Economic factorsEconomic factors Annual savingsAnnual savings .30 1.000 .300 .809 .243.30 1.000 .300 .809 .243

Other factorsOther factors

Market shareMarket share .30 .700 .210.30 .700 .210 .800 .240.800 .240

Service qualityService quality .15 .600 .090.15 .600 .090 .700 .105.700 .105

Labor relationsLabor relations .15 .500 .075.15 .500 .075 .800 .120.800 .120

Implementation time .10Implementation time .10 .700 .070.700 .070 .600.600.060.060

Total Aggregate ScoreTotal Aggregate Score .745.745 .768.768

21,600/26,70021,600/26,700

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Wrap-Up: World-Class PracticeWrap-Up: World-Class PracticeWrap-Up: World-Class PracticeWrap-Up: World-Class Practice

q

World-Class companies utilize the latestWorld-Class companies utilize the latesttechnologies/practices. For example:technologies/practices. For example:q Design products to be automation-friendlyDesign products to be automation-friendlyq Use CAD/CAM for designing productsUse CAD/CAM for designing productsq Convert fixed automation to flexible automationConvert fixed automation to flexible automationq Move towards smaller batch sizesMove towards smaller batch sizesq Plan for automationPlan for automationq

Build teams to develop automated systemsBuild teams to develop automated systemsq Justify automation based on multiple factorsJustify automation based on multiple factors

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End of Chapter 6End of Chapter 6

unit 1 unit 1

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