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Process Selection and Facility Layout

Process Selection and Facility Layout. Chapter 6. Learning Objectives. After this lecture, students will be able to Compare the four basic processing types Describe product layouts and their main advantages and disadvantages

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Process Selection and Facility Layout

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  1. Process Selection and Facility Layout Chapter 6 MIS 373: Basic Operations Management

  2. Learning Objectives • After this lecture, students will be able to • Compare the four basic processing types • Describe product layouts and their main advantages and disadvantages • Describe process layouts and their main advantages and disadvantages • Develop simple product layouts • Develop simple process layouts MIS 373: Basic Operations Management

  3. Process Selection • Process selection • Deciding on the way production of goods or services will be organized • Occurs when: • Planning of new products or services • Technological changes in product or equipment • Competitive pressure MIS 373: Basic Operations Management

  4. CapacityPlanning ProcessSelection Process Selection and System Design Facilities andEquipment Forecasting (demand) Layout Product andService Design WorkDesign TechnologicalChange MIS 373: Basic Operations Management

  5. 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 as • Product and service design changes • Volume changes • Changes in technology MIS 373: Basic Operations Management

  6. 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 Partner • reduce cycle times to durations previously considered impossible • Agile processes • Managers must speed the flow of information so that decisions can be made faster at all levels, from top to bottom.

  7. Process Selection Process choice is demand driven: • Variety: How much? • Equipment flexibility: To what degree? • Volume: Expected output? • Process Types MIS 373: Basic Operations Management

  8. Process Selection Process choice is demand driven: • Variety • How much? • Equipment flexibility • To what degree? • Volume • Expected 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 goods • e.g., petroleum products MIS 373: Basic Operations Management

  9. Types of Processing MIS 373: Basic Operations Management

  10. Product-Process Matrix Flexibility/Variety • 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 Opportunity costs Volume Out of pocket costs MIS 373: Basic Operations Management

  11. 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 book MIS 373: Basic Operations Management

  12. Product and Service Profiling • Product or service profiling • Linking key product or service requirements to process capabilities • Key dimensions relate to • Range of products or services that can be processed • Expected order sizes • Expected frequency of schedule changes MIS 373: Basic Operations Management

  13. Discussion • Work with a partner and match the following products or services with the best process Products/Services Processes Ice-cream manufacturer Job-shop Automatic carwash Batch Steel Repetitive Books Continuous Airlines Surgery Movie theater Sugar • Tips: Think in terms of those key dimensions: • Range of products or services that can be processed • Expected order sizes • Expected frequency of schedule changes Beer Flour

  14. Technology • Technological Innovation • The discovery and development of new or improved products, services, or processes for producing or providing them • Technology • The 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 Management

  15. Facilities Layout • Layout • The 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 Management

  16. 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 requirements • Fixed 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

  17. Product Layouts • Product layout • Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow • How? Raw materials or customer Station 2 Station 3 Station 4 Finished item Station 1 Material and/or labor Material and/or labor Material and/or labor Material and/or labor Used for Repetitive Processing Repetitive or Continuous MIS 373: Basic Operations Management

  18. 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 handling Image source: mdcegypt.com MIS 373: Basic Operations Management

  19. Non-repetitive Processing: Process Layouts • Process layouts • Layouts that can handle varied processing requirements Dept. A Dept. C Dept. E Dept. B Dept. D Dept. F Used for Intermittent processing Job Shop or Batch MIS 373: Basic Operations Management

  20. Product Layouts Advantages • High rate of output • Low unit cost • Labor specialization • Low material handling cost per unit • High utilization of labor and equipment • Established routing and scheduling • Routine accounting, purchasing, and inventory control Disadvantages • Creates dull, repetitive jobs • Poorly 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

  21. Process Layouts Advantages • Can handle a variety of processing requirements • Not particularly vulnerable to equipment failures • General-purpose equipment is often less costly and easier and less costly to maintain • It is possible to use individual incentive systems Disadvantages • In-process inventories can be high • Routing and scheduling pose continual challenges • Equipment utilization rates are low • Material handling is slow and less efficient • Complicates supervision • Special attention necessary for each product or customer • Accounting, inventory control, and purchasing are more complex MIS 373: Basic Operations Management

  22. Fixed Position Layouts • Fixed Position Layout • Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed • E.g., farming, firefighting, road building, home building, remodeling and repair, and drilling for oil MIS 373: Basic Operations Management

  23. Combination Layouts • Some operational environments use a combination of the three basic layout types: • Hospitals • Supermarket • Shipyards • Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts MIS 373: Basic Operations Management

  24. 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 labor • Why 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

  25. Precedence Diagram • Precedence diagram • A diagram that shows elemental tasks and their precedence requirements MIS 373: Basic Operations Management

  26. Cycle Time • Cycle time • The maximum time allowed at each workstation to complete its set of tasks on a unit • Minimum Cycle Time = longest task time = 1.0 min • Maximum Cycle time = Σt = sum of task time = 2.5 min MIS 373: Basic Operations Management

  27. Output rate of a line • Cycle time also establishes the output rate of a line MIS 373: Basic Operations Management

  28. 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

  29. 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 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. Nmin = (6+6+6+6) / 8 = 3 MIS 373: Basic Operations Management

  30. 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 follow • Assign 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

  31. Example: Assembly Line Balancing • Arrange tasks (shown in the figure) into three workstations • Assume the cycle time of each workstation is 1.2 min. • Assign tasks in order of the most number of followers • Break tie using greatest positional weight MIS 373: Basic Operations Management

  32. Assign tasks in order of the most number of followers Start with CT (1.2 min. in this example) MIS 373: Basic Operations Management

  33. Assign tasks in order of the most number of followers MIS 373: Basic Operations Management

  34. MIS 373: Basic Operations Management

  35. Break tie using greatest positional weight MIS 373: Basic Operations Management

  36. MIS 373: Basic Operations Management

  37. Can’t assign c to this workstation because the workstation doesn’t have enough time (0.1) to complete c (0.7). MIS 373: Basic Operations Management

  38. Start with CT (1.2 min. in this example) MIS 373: Basic Operations Management

  39. MIS 373: Basic Operations Management

  40. Start with CT (1.2 min. in this example) MIS 373: Basic Operations Management

  41. Idle time per cycle =0.1+0.0+1.0=1.1 MIS 373: Basic Operations Management

  42. Layout a & b (0.1+1.0) c & d (0.7+0.5) e (0.2) MIS 373: Basic Operations Management

  43. 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

  44. Example:Measuring Effectiveness Percentage of idle time = [(0.1 + 0 + 1.0) ÷ (3 × 1.2)] × 100% = 30.55% Efficiency = 100% – 30.55% = 69.45% MIS 373: Basic Operations Management

  45. 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 system

  46. Exercise Solution 1. Draw a precedence diagram

  47. Exercise Solution 2. Assuming an eight-hour workday, compute the cycle time needed to obtain an output of 400 units per day

  48. Exercise Solution 3. Determine the minimum number of workstations required = 3.17 stations ( round to 4)

  49. 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.

  50. Exercise Solution 5. Compute the resulting percent idle time and efficiency of the system = 20.83%

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