Operations Management Dr Ron Lembke Process Strategies Price Quality Speed Decoupling Point Make to Stock ready on the shelf Breyers Assemble to Order parts waiting for an order DQ ID: 594891
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Slide1
Processes and facility selection
Operations Management
Dr.
Ron
LembkeSlide2
Process Strategies
Price / Quality / Speed?
Decoupling Point
Make to Stock – ready on the shelf – Breyer’sAssemble to Order – parts waiting for an order – DQ Make to Order – Raw Materials waiting – Cold Stone
Design Produce Assemble Deliver
MTS
ATOMTOSlide3
Make to Stock
Storable products, most efficient processes, high-volume production
Customers perceive delivery as instantaneous
Harder to do with services: bus system, airline flights?
Stock
Stock
Processing
Materials
Finished
GoodsSlide4
Make to Order
Demand is known. Longer Lead Time.
No stockpile of finished goods. Delivered directly to consumer
Customizable product, or where Freshness is importantServices more likely MTO. Costs higher.
Stock
Processing
Materials
Finished
GoodSlide5
Assemble to Order
Combination of MTS, MTO, benefits of both
Offer variety to customer, but quick delivery
Efficiencies of MTS, work ahead on components during slow timesPre-cooked burgers, French fries
Stock
Processing
MaterialsFinished Good
Stock
WIPsubassemblies
ProcessingSlide6
Remanufacturing
Re-use components
Can be ATO?Slide7
Process Strategy
Variety
Low
Medium
High
Volume
Low
Medium
High
Process Focus (job shops)
Repetitive (cars, motorcycles)
Product Focus (steel, glass)Slide8
Process Focus (Job Shop)
Low volume, high variety, “do it all”
“Job shop” environment (e.g. Kinko’s)
High amount of flexibilityEach job is differentRelatively high cost per unitVery high flexibilitySlide9
Process Selection / Evolution
Products tend to move through the four stages over life cycle.
Unit costs decrease as standardization increases, and production increases.
Flexibility decreases as volume, standardization increase Slide10
Process Strategy
Variety
Low
Medium
High
Volume
Low
Medium
High
project
Manufacturing
Cell
Workcenter
Assembly
Line
Continuous
ProcessSlide11
Process Flow Structures
Job Shop - low standardization, every order is a different product, new design
Batch Shop - Stable line of products, produced in batches
Assembly Line - Discrete parts moving from workstation to workstationContinuous Flow - Undifferentiated flow of product (beer, paper, etc.)Slide12
Assembly-Line Balancing
Situation: Assembly-line production.
Many tasks must be performed, and the sequence is flexible
Parts at each station same time
Tasks take different amounts of timeHow to give everyone enough, but not too much work for the limited time.Slide13Slide14
Chipotle Production Line- Experience
Order
Meat
Sour Cream /Guacamole
Cheese/ Lettuce
Wrap Tortilla
Cashier
Beans & Rice
Warm Tortilla
44
29
44
29
29
29
67
94
Salsa
29Slide15
Chipotle Production Line- Experience
Order
Meat
Sour Cream /Guacamole
Cheese/ Lettuce
Wrap Tortilla
Cashier
Beans & Rice
Warm Tortilla
44
29
44
29
29
29
67
94
Salsa
29
174
125
CT = 174 sec
TH = 60*60 sec/
hr
= 20.7/
hr
174 secSlide16
Chipotle Production Line- Experience
Order
Meat
Sour Cream /Guacamole
Cheese/ Lettuce
Wrap Tortilla
Cashier
Beans & Rice
Warm Tortilla
44
29
44
29
29
29
67
94
Salsa
29
145
154
CT = 154 sec
TH = 60*60 sec/
hr
= 23.4/
hr
154 sec
Increase (23.4-20.7)/20.7 = 13%Slide17
Chipotle Production Line- Efficient Probability
Order
Meat
Sour Cream /Guacamole
Cheese/ Lettuce
Wrap Tortilla
Cashier
Beans & Rice
Warm Tortilla
44
29
44
2
9
29
29
Salsa
29
73
67
87
73
94
CT = 94 sec
TH = 60*60 sec/
hr
= 38.3/
hr
154 secSlide18
Target Cycle Times – 4 Stations
Ord44
Mt 29
SC&G 29
Ch&L
29
Wrap
67
Pay 94
B&R 44
Tlla
29
Sls
29
73
125
102
Ord44
Mt 29
SC&G 29
Ch&L
29
Wrap
67
Pay 94
B&R 44
Tlla
29
Sls
29
117
96
87
CT = 117
CT = 125Slide19
Target Cycle Times- 5 Stations
Ord44
Mt 29
SC&G 29
Ch&L
29
Wrap
67
Pay 94
B&R 44
Tlla
29
Sls
29
73
67
73
87
CT = 94Slide20
Cycle Time
The more units you want to produce per hour, the less time a part can spend at each station.
Cycle time = time spent at each spot
D =400 units, OT = 12 hrs
– 30 min setup, 90 min delivery = 10 hrsCT = 10 hrs/400 units = 0.025 hrs/unit0.025
hrs * 60 min/hr = 1.5 min = 90 sec
CT
=
Production Time in each day
Required output per day (in units)
=
OT
DSlide21
Number of Workstations
Given required cycle time, find out the theoretical minimum number of stations
Theoretical Minimum # Workstations
= ST / CT = 325/90 = 3.611 = 4 (Always round up)
N
t
=
Sum of task times (T)
Cycle Time (C)Slide22
Scenario 1c-
Precedence Diagram
(
times in seconds)
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
1
0
I
6
0Slide23
Scenario 1c
(
times in seconds
) A&B candidates
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
1
0
I
6
0
B is longer, so it gets chosen
C can’t be considered yet,
A has to be done before CSlide24
Scenario 1c
A&C one station, C next candidate, AB 90 sec
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
10
I
60
C start of new position
D,E,F next possibilities
D too big to add with C
F can work, added to CSlide25
Scenario 1c
C&F now combined
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
10
I
6
0
D, E, G eligible
D,E too big, G will fit
H now eligible, but too bigSlide26
Scenario 1c
CFG combined
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
1
0
I
6
0
D, E, H eligible
D biggest
I not eligible until E & H done
E
biggest
H can be addedSlide27
Scenario 1c
DEH combined
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
1
0
I
6
0
I is finally eligible,
But can’t be added to DEHSlide28
Scenario 1c
Summary
I is finally eligible,
But can’t be added to DEH
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
1
0
I
6
0
4 stations
Longest time 90 sec
Efficiency =
Slide29
Scenario 1d
Efficiency = ST / (CT * N) = 325 / (4*90) = 90.3%
Balance Delay = 1 – 0.903 = 0.0972 = 10%
Theoretical Minimum # Workstations= ST / CT = 325/90 = 3.611 = 4 (Always round up)
A, B
C, F, G
D, E, H
I
A
3
0
B
6
0
C
45
D
6
0
E
2
0
F
3
0
G
1
0
H
1
0
I
6
0Slide30
Precedence Requirements
Why not put J with F&G?
A
C
F
D
B
E
H
G
I
J
20
5
15
12
5
10
8
3
7
12
AB
CDE
FG J
HISlide31
Legal arrangements
AC|BD|EG|FH|IJ = max(25,15,23,15,19) = 25
ABG|CDE|FHI|J = max(40,23,27,7) = 40
C|ADB|FG|EHI|J = max(5,35,18,32,7) = 35
CT = maximum of workstation times
AC BD EG FH IJ
A
C
F
D
B
E
H
G
I
J
20
5
15
12
5
10
8
3
7
12Slide32
Handling Long Tasks
Long tasks make it hard to get efficient combinations.
Consider splitting tasks, if physically possible.
If not:Parallel workstationsuse skilled (faster) worker to speed upSlide33
Process Layout
+
Allows specialization - focus on one skill
+
Allows economies of scale - worker can watch several machines at once+ High level of product flexibility-- Encourages large lot sizes-- Difficult to incorporate into JIT
-- Makes cross-training difficultSlide34
Process Layout
8! = 8 * 7 * 6 * 5 * 4 * 3 *2 * 1 = 40,320 possible arrangements
Rectilinear (taxi-cab) distances
Minimize load-distance totalSlide35
Process Example
High Rack 1 10 HR2, 10 HR3, 30 Staging
High Rack 2 10 HR1, 10 HR3, 30 Staging
High Rack 3 10 HR1, 10 HR2, 30 StagingStaging Area 30 HR1, 30 HR2, 30 HR3, 50 Tent, 50 SoftTent Storage 50 Staging
Soft Goods Storage 50 StagingAdministrative Office noneTool Crib noneSlide36
Process Example
Tents
Staging
Soft Goods
High
Rack 1
High
Rack 2
High
Rack 3
Admin
Offices
Tool
CribSlide37
Process Example Cost
Tents
Staging
Soft Goods
High
Rack 1
High
Rack 2
High
Rack 3
Admin
Offices
Tool
Crib
10
10
10
3
0
3
0
3
0
5
0
50
10*2+10+10+30*2 +30*2+30 + 50 + 50 = 290Slide38Slide39Slide40
REL Diagram
High Rack Storage 3
Staging Area
Soft Goods Storage
Tool Crib
Administrative Office
Tent Storage
High Rack Storage 1
High Rack Storage 2
A
A
E
U
U
X
U
A
E
U
U
X
U
E
U
U
X
U
A
A
X
A
I
U
A
U
A
X
Rating
Points
A 100
E 50
I 25
O 5
U 0
Z -100Slide41
REL chart
HR1
HR2
HR3
Office
Tent
Staging
Soft
Tools
A
A
X
U
A
A
A
EU
X
5
A (100) + E(50) + 2X(-100) = 350Slide42
REL chart
HR1
HR2
Tent
Office
HR3
Staging
Tools
Soft
A
U
U
A
E
A
A
EA
5
A (100) + E(50) = 600
USlide43
Fixed-Position
Design is for stationary project
Workers & equipment come to
site
Limited space at siteChanging material needsShip building (18,400 TEU, 2014)
Highway constructionSlide44
Summary
Production Process selection very important
Strategic considerations – decoupling
Volume / Variety tradeoffsMaturation of processes over life cycleLittle’s Law: FT = TH * INV