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Process Selection and Facility Layout Process Selection and Facility Layout

Process Selection and Facility Layout - PowerPoint Presentation

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Process Selection and Facility Layout - PPT Presentation

Chapter 6 MIS 373 Basic Operations Management Learning Objectives After this lecture students will be able to Compare the four basic processing types Describe product layouts and their main advantages and ID: 515694

operations basic mis management basic operations management mis 373 process time dept tasks product layouts cycle work number layout workstation equipment amp

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Slide1

Process Selection and Facility Layout

Chapter 6

MIS 373: Basic Operations ManagementSlide2

Learning Objectives

After this lecture, students will be able to

Compare the four basic processing types

Describe

product

layouts and their main advantages and disadvantagesDescribe process layouts and their main advantages and disadvantagesDevelop simple product layoutsDevelop simple process layouts

MIS 373: Basic Operations Management

2Slide3

Process Selection

Process selectionDeciding on the way production of goods or services will be organized

Occurs when:Planning of new products or servicesTechnological changes in product or equipment

Competitive pressure

MIS 373: Basic Operations Management

3Slide4

Process Selection and System Design

MIS 373: Basic Operations Management

Forecasting

(demand

)

Product and

Service

Design

Technological

Change

Capacity

Planning

Process

Selection

Facilities and

Equipment

Layout

Work

Design

4Slide5

Process Strategy

Key aspects

of process strategy:Capital Intensity

The mix of equipment and labor that will be used by the organization

Process flexibility

The degree to which the system can be adjusted to changes in processing requirements due to such factors asProduct and service design changesVolume changesChanges in technologyMIS 373: Basic Operations Management5Slide6

New

Process Strategy

HBR 12/6/12

Three Examples of New Process Strategy

There are three fundamental ways that companies can improve their processes in the coming decade:

expand

the scope of work managed by a company to include customers, suppliers, and partners;

Shift to

global, virtual, cross-organizational teams

of specialized entities that are knitted together to serve

customers

To

keep such a multiparty system from degenerating into chaos, virtual process teams must have aligned goals and support systems.

target

the increasing amount of knowledge work; and

Big data analytics

Crowdsourcing, e.g.,

innocentive.com

,

TopCoder.com

&

Heritage

Health

Prize

HBR : Using the Crowd as an Innovation Partnerreduce

cycle times to durations previously considered impossibleAgile processesManagers must speed the flow of information so that decisions can be made faster at all levels, from top to bottom.Slide7

Process Selection

Process choice is demand driven:

Variety: How much?Equipment

flexibility: To

what degree?

Volume: Expected output?Process TypesMIS 373: Basic Operations Management7Slide8

Process Selection

Process choice is

demand driven:

Variety

How

much?Equipment flexibilityTo what degree?VolumeExpected output?

Process Types

Job

shop

Small scale

e.g., doctor, tailor

Batch

Moderate volume

e.g., bakery

Repetitive/assembly line

High volumes of standardized goods or services

e.g., automobiles

Continuous

Very high volumes of non-discrete goodse.g., petroleum products

MIS 373: Basic Operations Management8Slide9

Types of Processing

MIS 373: Basic Operations Management

Job Shop

Batch

Repetitive/

Assembly

Continuous

Description

Customized

goods or

services

Semi-

standardized

goods or

services

Standardized

goods or

services

Highly standardized

goods

or services

Advantages

Able to handle

a

wide variety

of work

Flexibility; easy

to add or change products or services

Low

unit cost, high volume, efficient

Very

efficient, very high volume

Disadvantages

Slow, high cost

per unit,

complex

planning and

scheduling

Moderate cost

per unit,

moderate

scheduling

complexity

Low flexibility,

high cost of downtime

Very rigid, lack of

variety, costly

to change, very high cost of downtime

9Slide10

Product-Process Matrix

The diagonal represents the “ideal” match

Hybrid process are possible (e.g., job-shop & batch)

Process choice may change as products goes through its life-cycles

MIS 373: Basic Operations Management

Volume

Flexibility/Variety

Out of pocket costs

Opportunity costs

10Slide11

Process Choice Effects

Project

: used for work that is none routine with a unique set of objective to be accomplished in a limited time

frame, e.g.,

launching a new

product, publishing a bookMIS 373: Basic Operations Management

Activity/

Function

Projects

Job Shop

Batch

Repetitive

Continuous

Cost estimation

Simple to complex

Difficult

Somewhat routine

Routine

Routine

Cost per unit

Very high

High

Moderate

Low

Low

Equipment

used

Varied

General purpose

General purpose

Special purpose

Special purpose

Fixed costs

Varied

Low

Moderate

High

Very high

Variable costs

High

High

Moderate

Low

Very low

Labor skills

Low to high

High

Moderate

Low

Low to high

Marketing

Promote

capabilities

Promote

capabilities

Promote

capabilities; semi-standardized goods and services

Promote

standardized goods and services

Promote

standardized goods and services

Scheduling

Complex, subject

to change

Complex

Moderately complex

Routine

Routine

11Slide12

Product and Service Profiling

Product or service

profilingLinking key product or service

requirements

to process

capabilitiesKey dimensions relate toRange of products or services that can be processedExpected order sizes

Expected frequency of schedule changes

MIS 373: Basic Operations Management

12Slide13

Discussion

Work with

a partner

and match the following products or services with the best process

Ice-cream manufacturer

Automatic carwash

Steel

Books

Airlines

Surgery

Movie theater

Sugar

Beer

Flour

Job-shop

Repetitive

Continuous

Batch

Products/Services

Processes

Tips: Think in terms of those key dimensions:

Range of products or services that can be processed

Expected order sizes

Expected frequency of schedule

changesSlide14

Technology

Technological InnovationThe discovery and development of new or improved products, services, or processes for producing or providing

themTechnologyThe application of scientific discoveries to the development and improvement of products and services and/or the processes that produce or provide them

Process technology

includes methods, procedures, and equipment used to produce goods and provide services

.RFID, online banking, 3D printing, …MIS 373: Basic Operations Management14Slide15

Facilities Layout

LayoutThe configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system

Facilities layout decisions arise when:Designing new facilities

Re-designing existing facilities

The

basic objective of layout design is to facilitate a smooth flow of work, material, and information through the system. MIS 373: Basic Operations Management15Slide16

Basic Layout Types

Product layout

Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow

Process layout

Layout that can handle

varied processing requirementsFixed position layout

Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as

needed

Combination

layouts

MIS 373: Basic Operations Management

16Slide17

Product Layouts

Product layout

Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flowHow?

MIS 373: Basic Operations Management

Used for Repetitive Processing

Repetitive or Continuous

Raw materials

or customer

Finished item

Station

2

Station

3

Station

4

Material

and/or labor

Material

and/or labor

Material

and/or labor

Material

and/or labor

Station

1

17Slide18

Product Layouts

Although product layouts often follow a straight line, a straight line is not always

the best, and layouts may take an L, O, S, or

U

shape. Why

?L:O:S:U: more compact, increased communication facilitating team work, minimize the material handlingMIS 373: Basic Operations Management

18

Image source: mdcegypt.comSlide19

Non-repetitive Processing: Process Layouts

Process layoutsLayouts that can handle varied processing requirements

MIS 373: Basic Operations Management

Used for Intermittent processing

Job Shop or Batch

Dept. A

Dept. B

Dept. D

Dept. C

Dept. F

Dept. E

19Slide20

Product Layouts

Advantages

High rate of outputLow unit costLabor specializationLow material handling cost per unit

High utilization of labor and equipment

Established routing and scheduling

Routine accounting, purchasing, and inventory controlDisadvantagesCreates dull, repetitive jobsPoorly skilled workers may not maintain equipment or quality of output

Fairly inflexible to changes in volume or product or process design

Highly susceptible to shutdowns

Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses

Individual incentive plans are impractical

MIS 373: Basic Operations Management

20Slide21

Process Layouts

Advantages

Can handle a variety of processing requirementsNot particularly vulnerable to equipment failuresGeneral-purpose equipment is often less costly and easier and less costly to maintain

It is possible to use individual incentive

systems

DisadvantagesIn-process inventories can be highRouting and scheduling pose continual challengesEquipment utilization rates are lowMaterial handling is slow and less efficientComplicates supervisionSpecial attention necessary for each product or customerAccounting, inventory control, and purchasing are more

complex

MIS 373: Basic Operations Management

21Slide22

Fixed Position Layouts

Fixed Position Layout

Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as neededE.g., farming, firefighting, road building, home building, remodeling and repair, and drilling for oil

MIS 373: Basic Operations Management

22Slide23

Combination Layouts

Some operational environments use a combination of the three basic layout types:

HospitalsSupermarketShipyardsSome

organizations are moving away from process layouts in an effort to capture the benefits of product layouts

MIS 373: Basic Operations Management

23Slide24

Line Balancing

Line balancing

The process of assigning tasks to workstations in such a way that the workstations have

approximately equal time

requirements

Goal:Obtain task grouping that represent approximately equal time requirements since this minimizes idle time along the line and results in a high utilization of equipment and laborWhy is line balancing important?It allows us to use labor and equipment more efficiently.

To avoid fairness issues that arise when one workstation must work harder than another.Input

Tasks sequencing (precedence diagram)

Tasks time

Operating time

MIS 373: Basic Operations Management

24Slide25

Precedence Diagram

Precedence diagram

A diagram that shows elemental tasks and their precedence requirementsMIS 373: Basic Operations Management

Task

Duration (min)

Immediate predecessor

a

Select

material

0.1

-

b

Make petals

1.0

a

c

Select rhinestones

0.7

-

d

Glue rhinestones

0.5

b, c

e

Package

0.2

d

25Slide26

Cycle Time

Cycle timeThe maximum time allowed at each workstation to complete its set of tasks on a unit

Minimum Cycle Time = longest task time = 1.0 minMaximum Cycle time = Σt = sum of task time = 2.5 min

MIS 373: Basic Operations Management

26Slide27

Output rate of a line

Cycle time also establishes the output rate of a line

MIS 373: Basic Operations Management

Cycle time

=

Operating time per day

Desired

output rate

Output rate

=

Operating time per day

Cycle time

27Slide28

How Many Workstations are Needed?

The required number of workstations is a function of:Desired output rate

The ability to combine tasks into a workstation(theoretical) Minimum number of stations

MIS 373: Basic Operations Management

N

min

=

t

Cycle time

where

N

min

= theoretical minimum number of stations

t

=

sum of task times

28Slide29

How Many Workstations are Needed?

The required number of workstations is a function of:Desired output rate

The ability to combine tasks into a workstation(theoretical) Minimum number of stations

MIS 373: Basic Operations Management

N

min

=

t

Cycle time

where

N

min

= theoretical minimum number of stations

t

=

sum of task times

29

Q: Why this is a theoretical value?

A: There are often scraps or idle times.

Example:

4 tasks, each require 6

hours to finish

A station can handle 8 hours amount of tasks a day.

You will need 4 stations to complete all tasks, instead of 3.

N

min

= (6+6+6+6) / 8 = 3Slide30

Designing

Product Layouts

Some Heuristic (Intuitive, may not result in optimal solution) Rules:

Assign tasks in order of

most following tasks

Count the number of tasks that followAssign tasks in order of greatest positional weight.

Positional weight is the sum of each task’s time and the times of all following tasks.

MIS 373: Basic Operations Management

30Slide31

Example: Assembly

Line BalancingArrange tasks (shown in the figure)

into three workstationsAssume the cycle time of each workstation is 1.2 min.Assign

tasks in order of

the most number of

followersBreak tie using greatest positional weightMIS 373: Basic Operations Management

31Slide32

Assign tasks in order of the most number of followers

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

a, c

2

3

Start with CT (1.2 min. in this example)

32Slide33

Assign tasks in order of the most number of followers

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

a, c

a

1.1

2

3

33Slide34

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

a, c

c, b

a

1.1

2

3

34Slide35

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

a, c

c, b

a

b

1.1

0.1

2

3

Break tie using greatest positional weight

35Slide36

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

1.1

0.1

2

3

36Slide37

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

-

1.1

0.1

0.1

2

3

37

Can’t assign c to this workstation because the workstation doesn’t have enough time (0.1) to complete c (0.7). Slide38

MIS 373: Basic Operations Management

Start with CT (1.2 min. in this example)

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

-

1.1

0.1

0.1

2

1.2

c

c

0.5

3

38Slide39

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

-

1.1

0.1

0.1

2

1.2

0.5

c

d

c

d

0.5

0

0

3

39Slide40

MIS 373: Basic Operations Management

Start with CT (1.2 min. in this example)

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

-

1.1

0.1

0.1

2

1.2

0.5

c

d

c

d

0.5

0

0.0

3

1.2

e

e

1

1.0

40Slide41

MIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

-

1.1

0.1

0.1

2

1.2

0.5

c

d

c

d

0.5

0

0.0

3

1.2

e

e

1

1.0

Idle time per

cycle

=0.1+0.0+1.0=1.1

41Slide42

Layout

MIS 373: Basic Operations Management

a & b

(0.1+1.0)

c & d

(0.7+0.5)

e

(0.2)

Task

Duration (min)

Immediate predecessor

a

Select

material

0.1

-

b

Make petals

1.0

a

c

Select rhinestones

0.7

-

d

Glue rhinestones

0.5

b, c

e

Package

0.2

d

42Slide43

Measuring Effectiveness

Balance delay (percentage of idle time)

Percentage of idle time of a line

Efficiency

Percentage of busy time of a line

MIS 373: Basic Operations Management

Balance Delay

=

Idle time per cycle

× 100%

N

actual

×

Cycle time

where

N

actual

= actual number of stations

Efficiency

= 100% − Balance Delay

43Slide44

Example:

Measuring

EffectivenessMIS 373: Basic Operations Management

Workstation

Time

Remaining

Eligible

Assign

Task

Revised

Time

Remaining

Station

Idle Time

1

1.2

1.1

0.1

a, c

c, b

c

a

b

-

1.1

0.1

0.1

2

1.2

0.5

c

d

c

d

0.5

0

0.0

3

1.2

e

e

1.0

1.0

Efficiency =

100% – 30.55% = 69.45%

Percentage of

idle time = [(

0.1 + 0 + 1.0

)

÷ (3 ×

1.2

)] ×

100%

= 30.55%

44Slide45

Exercise Problems

(Textbook page 267) Using

the information contained in the table shown, do each of the following

:

Draw

a precedence diagram.

Assuming

an eight-hour workday, compute the cycle time needed to obtain an output of 400 units per day.

Determine

the minimum number of workstations required.

Assign

tasks to workstations using this rule: Assign tasks according to greatest number of following tasks. In case of a tie, use the tiebreaker of assigning the task with the longest processing time first.

Compute the resulting percent idle time and efficiency of the systemSlide46

Exercise Solution

1. Draw

a precedence diagramSlide47

Exercise Solution

2. Assuming

an eight-hour workday

, compute the cycle time needed to obtain an output of

400 units per day

Cycle time

=

Operating time per day

=

480 minutes per day

= 1.2 minutes per cycle

Desired

output rate

400 units per daySlide48

Exercise Solution

3. Determine

the minimum number of workstations required

N

min

=

t

=

Cycle time

where

N

min

= theoretical minimum number of stations

t

=

sum of task times

=

3.17

stations ( round

to 4)

3.8 minutes per

unit

1.2 minutes

per cycle time per stationSlide49

Exercise Solution

4. Assign

tasks to workstations using this rule: Assign tasks according to greatest number of following tasks. In case of a tie, use the tiebreaker of assigning the task with the longest processing time first. Slide50

Exercise Solution

5. Compute the resulting percent idle time and efficiency of the system

Percent idle time

=

Idle time per cycle

=

1.0 min.

× 100%

N

actual

× Cycle time

4

× 1.2 min.

=

20.83%Slide51

Designing

Process Layouts

The main issue in designing process layouts concerns the relative placement of the departments

Measuring effectiveness

key objectives in designing process layouts are to minimize:

transportation costdistancetimeMIS 373: Basic Operations Management51Slide52

Information Requirements

In designing process layouts, the following information is required:

A list of work stations (departments) to be arranged and their dimensions

A projection of future work flows between the pairs of work centers

The distance between locations - and the cost per unit of distance to move loads between

themThe amount of money to be invested in the layoutA list of any special considerationsThe location of key utilities, access and exit points, etc.

MIS 373: Basic Operations Management

52Slide53

Designing Process Layouts

Minimize Transportation Costs

Goal:Assign departments 1, 2, 3 to locations A, B, C in a way that minimizes transportation costs

.

Heuristic

:Assign departments with the greatest interdepartmental work flow first to locations that are closet to each other.MIS 373: Basic Operations Management

A

B

C

53Slide54

Example: Minimize Transportation Costs

MIS 373: Basic Operations Management

Location

From\To

A

BC

A-

20

40

B

-

30

C

-

Department

From\To

1

2

3

1

-

30

170

2-100

3-

PairWork flow1-3

1702-31001-230

Trip

A-B20

B-C30A-C

40

Distance

Work flow

A

B

C

20

40

30

Highest work flow

Closest

Place dept.

1&3

in A&B

54Slide55

Example: Minimize Transportation Costs

MIS 373: Basic Operations Management

Place departments 1&3 in A&B (2 options)

2&3 have higher work flow than 1&2 (100>30)

2&3 should be located closer than 1&2

C

closer to B than to A (30<40)

Solution:

1

3

A

B

C

3

1

A

B

C

A

B

C

20

40

30

1

3

2

30

170

100

A

B

C

Trip

A-B

20

B-C

30

A-C

40

Pair

Work flow

1-3

170

2-3

100

1-2

30

55Slide56

Closeness Ratings

Allows the considerations of multiple

qualitative criteria

Input from management

or

subjective analysisIndicates the relative importance of each combination of department pairsMIS 373: Basic Operations Management

Muther’s

grid

56Slide57

Closeness Ratings

MIS 373: Basic Operations Management

A Absolutely necessary

E

Very important

I ImportantO

Ordinary importance

U Unimportant

X Undesirable

Muther’s

grid

Dept. 1

Dept 2.

Dept 3.

Dept 4.

Dept. 5

Dept 6.

X

O

A

A

U

A

A

X

E

A

O

A

U

I

X

57

Suppose this is the floor plan of your company, how would you arrange the six departments?Slide58

Dept. 1

Dept 2.

Dept 3.

Dept 4.

Dept. 5

Dept 6.

X

O

A

A

U

A

A

X

E

A

O

A

U

I

X

Closeness

Ratings:

Example

MIS 373: Basic Operations Management

1. List critical departments (either

A or X):

A

1-2

1-3

2-6

3-5

4-6

5-6

X

1-4

3-6

3-4

58Slide59

Closeness Ratings: Example

MIS 373: Basic Operations Management

6-

59

2. Form a cluster of A links

(

beginning with the department that appears most frequently)

A

1-2

1-3

2-6

3-5

4-6

5-6

6

2

4

5

3. Take the remaining A links in order and add them to this cluster where possible (rearranging as necessary)

Form separate clusters for departments that do not link with the main cluster.

6

2

4

5

1

3

Dept. 1

Dept 2.

Dept 3.

Dept 4.

Dept. 5

Dept 6.

X

O

A

A

U

A

A

X

E

A

O

A

U

I

XSlide60

Closeness Ratings: Example

MIS 373: Basic Operations Management

4. Graphically portray the X links

4

3

1

6

5. Adjust A

cluster as necessary.

X

1-4

3-6

3-4

6

2

4

5

1

3

(in this case, the A cluster also satisfies

the X cluster).

Dept. 1

Dept 2.

Dept 3.

Dept 4.

Dept. 5

Dept 6.

X

O

A

A

U

A

A

X

E

A

O

A

U

I

X

60Slide61

Closeness Ratings: Example

MIS 373: Basic Operations Management

6

2

4

5

1

3

6. Fit

cluster into arrangement

(e.g., 2x3)

may require some trial and error.

Departments are considered close not only when they touch side to side but also when they touch corner to corner.

7. Check for possible improvements

1

2

6

3

5

4

4

3

1

6

Dept. 1

Dept 2.

Dept 3.

Dept 4.

Dept. 5

Dept 6.

X

O

A

A

U

A

A

X

E

A

O

A

U

I

X

61Slide62

Key Points

Process choice is demand driven.Process type and layout are a function of expected demand volume and the degree of customization that will be needed.

Each process type and layout type has advantages and limitations that should be clearly understood when making process selection and layout decisions.Line balancing helps improving the efficiency of product layouts whereas

Muther’s

grid

helps deciding process layoutsMIS 373: Basic Operations Management62