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Manufacturing Processes

Learn how firms categorize production processes, the product-process matrix, trade-offs in design, and positioning inventory in the supply chain. Discover examples from make-to-stock, assemble-to-order, make-to-order, and engineer-to-order firms. Understand how manufacturing processes are organized - project, workcenter, manufacturing cell, assembly line, and continuous process.

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Manufacturing Processes

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  1. Manufacturing Processes CHAPTER 6

  2. Learning Objectives • Demonstrate how production processes are organized. • Explain the trade-offs that need to be considered when designing a production processes. • Describe the product-process matrix.

  3. Types of Firms • Make-to-stock firms: firms that serve customers from finished goods inventory • Assemble-to-order firms: firms that combine a number of preassembled modules to meet a customer’s specifications • Make-to-order firms: firms that make the customer’s product from raw materials, parts, and components • Engineer-to-order firm: firm that will work with the customer to design and then make the product LO 1

  4. Positioning Inventory in the Supply Chain LO 1

  5. Make-to-Stock • Examples of products • Televisions • Clothing • Packaged food products • Essential issue in satisfying customers is to balance the level of inventory against the level of customer service • Easy with unlimited inventory but inventory costs money • Trade-off between the costs of inventory and level of customer service must be made • Use lean manufacturing to achieve higher service levels for a given inventory investment LO 1

  6. Assemble-to-Order • A primary task is to define a customer’s order in terms of alternative components since these are carried in inventory • An example is the way Dell Computer makes their desktop computers • One capability required is a design that enables as much flexibility as possible in combining components • There are significant advantages from moving the customer order decoupling point from finished goods to components LO 1

  7. Make-to-Order and Engineer-to-Order • Boeing’s process for making commercial aircraft is an example • Customer order decoupling point could be in either raw materials at the manufacturing site or the supplier inventory • Depending on how similar the products are it might not even be possible to pre-order parts LO 1

  8. How Production Processes are Organized • Project: the product remains in a fixed location • Manufacturing equipment is moved to the product • Workcenter (job shop): similar equipment or functions are grouped together • Manufacturing cell: a dedicated area where products that are similar in processing requirements are produced • Assembly line: work processes are arranged according to the progressive steps by which the product is made • Continuous process: assembly line only the flow is continuous such as with liquids LO 2

  9. Product–Process Matrix: Framework Describing Layout Strategies LO 4

  10. End of Chapter 6Any Questions?

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