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Production Processes

Operations Management Dr. Ron Lembke. Production Processes. Price / Quality / Speed? Decoupling Point Make to Stock – ready on the shelf – Breyer’s Assemble to Order – parts waiting for an order – DQ Make to Order – Raw Materials waiting – Cold Stone

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Production Processes

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  1. Operations Management Dr. Ron Lembke Production Processes

  2. Price / Quality / Speed? • Decoupling Point • Make to Stock – ready on the shelf – Breyer’s • Assemble to Order – parts waiting for an order – DQ • Make to Order – Raw Materials waiting – Cold Stone • Engineer to Order – Anything you want – Home made Responsiveness – Supply Chain design Design Produce Assemble Deliver MTS ATO MTO ETO

  3. Assume things are in “steady state,” not startup • Production level = average demand • Inventory = Throughput rate * Flow Time • Flow Time = Inv / Throughput rate • TH rate = Inv / Flow Time • Single workstation, a line, or whole supply chain Little’s Law TH = 5 units/day TH Rate = 100 units/ hr Inv = 24 units Flow Time = 24 /100 = 0.24 hrs Flow Time = 15 days Inv = 5/day * 15 days = 75 units WIP

  4. Process Strategy Variety Process Focus (job shops) High Repetitive (cars, motorcycles) Medium Product Focus (steel, glass) Low Low Medium High Volume

  5. Low volume, high variety, “do it all” “Job shop” environment (e.g. Kinko’s) High amount of flexibility Each job is different Relatively high cost per unit Very high flexibility Process Focus (Job Shop)

  6. 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 Process Selection / Evolution

  7. Process Strategy Variety project Manufacturing Cell High Workcenter Assembly Line Medium Continuous Process Low Low Medium High Volume

  8. 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 workstation Continuous Flow - Undifferentiated flow of product (beer, paper, etc.) Process Flow Structures

  9. Design for Manufacturing -Before

  10. Production Process selection very important • Strategic considerations – decoupling • Volume / Variety tradeoffs • Maturation of processes over life cycle • Little’s Law: FT = TH * INV Summary

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