Revista Competitividad: Tendencias en SCM y logística (YOBEL SCM)
SCM 303 Chp 5 Lecture
Transcript of SCM 303 Chp 5 Lecture
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2 The Eli Broad College of Business,
Michigan State University, 2012
Manufacturing and Service
Process Choices
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3 The Eli Broad College of Business,
Michigan State University, 2012
High
Variety
Flexibility
Cost
Low
Cellular
Manufacturing
Mass
Customization
Project
Job Shop
Batch
Continuous
Process
Repetitive
Process
Low Volume High
Product-Process Matrix
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4 The Eli Broad College of Business,
Michigan State University, 2012
Critical Elements of Process Choice
Equipment: Flexibility Staffing and training: Skill level of workers
Volume of output
Product design: Variety of products that can be
produced
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5 The Eli Broad College of Business,
Michigan State University, 2012
Eng ineer to Order (ETO): unique, customizedproducts
Make to Order (MTO): similar design,customized during production
Assemble to Order (ATO): produced fromstandard components and modules
Make to Stock (MTS): goods made and held ininventory in advance of customer orders
Process Structure and Market Orientation
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6 The Eli Broad College of Business,
Michigan State University, 2012
Manufacturing Process Characteristics
Product
Variety
Volume Equip.
Flex.
Skill level Market
orient.
Mfg. cost
Per unit
(Econ. ofScale)
JobShop
Batch
Repeti-
viveProcess
Cont.Flow
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7 The Eli Broad College of Business,
Michigan State University, 2012
Contemporary Processes
Mass Customization
Maintain economies of scale from continuous orrepetitive processes
Increase variety for customers
Cellular Manufacturing
Maintain flexibility of job shop and batch
Increase efficiency
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Michigan State University, 2012
Service Process Matrix
Service
Factory
Service
Shop
Mass
Service
Professional
Service
Low
High
Labor
Intensity
Customization/Customer InteractionLow High
Figure 5-3
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The Eli Broad College of Business,Michigan State University, 2012
Service Processes
Think of an example of each:
Service Factory
Service Shop
Mass Service
Professional Service Think of the last service you purchased:
What category was it?
What changes can you suggest to move it to
another category?
What could be the advantages of the changes?
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The Eli Broad College of Business,Michigan State University, 2012
Supply Chain Technologies
Decisions Support
Computing power and data management
Processing Material and data processing
Communications
Greater connectivity
Integrative
Combine all other capabilities
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The Eli Broad College of Business,Michigan State University, 2012
Indifference Analysis: Example
A pizza company has variable costs (VC) of $3.00 perpizza, and fixed costs (FC) of $30,000 per year. Theaverage selling price is $8.00 per pizza. With a newprocess, fixed costs would increase to $42,000 per
year but variable costs decrease to $2.00 per pizza.
What should they do?
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The Eli Broad College of Business,Michigan State University, 2012
In Supply Chain Management We Are Often
Concerned With Indifference Between Processes
Set the total cost equations for each process equal
to each other and solve for the unknown
Process A Process BFixed Cost + (Variable Cost)(Quantity) = Fixed Cost + (Variable Cost)(Quantity)
$30,000 + ($3.00)Q = $42,000 + ($2.00)Q($3.00)Q ($2.00)Q = $42,000 - $30,000
($1.00) Q = $12,000Q = 12,000 pizzas
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The Eli Broad College of Business,Michigan State University, 2012
Hanks Hamburgers can prepare hamburger patties manually
for a fixed cost of zero and a variable cost of 5 cents ($0.05)per patty. Hanks could also lease a hamburger pressing
machine for a monthly lease cost of $400, This would reducethe variable cost to make each hamburger to 3 cents ($0.03)per patty. Hank expects to sell 15,000 hamburgers permonth. What should Hank do?
Set the two total cost equations equal to one another andsolve for volume.
Comparing Processes with Break even
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Hans Hamburgers Part two
Hanks forecast of 15,000 hamburgers per month was
wrong. Actual demand turned out to be 25,000hamburgers per month. If Hank chose the lowest costoption in the previous problem, how much extra cost isHank incurring because he did not forecast correctly?