1 Introduction to Operations Management Process Selection and
Facility Layout (Ch.6) Hansoo Kim ( ) Dept. of Management
Information Systems, YUST
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2 What you should do! Review Capacity Planning Read Chapter 6
and 6s
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3 OM Overview Class Overview (Ch. 0) Project Management (Ch.
17) Strategic Capacity Planning (Ch. 5, 5S) Operations,
Productivity, and Strategy (Ch. 1, 2) Mgmt of Quality/ Six Sigma
Quality (Ch. 9, 10) Supply Chain Management (Ch 11) Location
Planning and Analysis (Ch. 8) Demand Mgmt Forecasting (Ch 3)
Inventory Management (Ch. 12) Aggregated Planning (Ch. 13)
Queueing/ Simulation (Ch. 18) MRP & ERP (Ch 14) JIT & Lean
Mfg System (Ch. 15) Term Project Process Selection/ Facility
Layout; LP (Ch. 6, 6S) X X X X
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4 Key Terms Assembly line Line balancing Automation Numerically
controlled(N/C)machines Balance delay Precedence diagram Cellular
production Process layout Computer-aided manufacturing Production
line Computer-integrated manufacturing Product layout Cycle time
Product or service profiling Fixed-position layout Project Flexible
manufacturing system Robot Group technology Technological
innovation Intermittent processing technology
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5 Learning Objectives Explain the strategic importance of
process selection. Explain the influence that process selection has
on an organization. Describe the basic processing types. Discuss
automated approaches to processing. Explain the need for management
of technology. List some reasons for redesign of layouts. Describe
the basic layout types. List the main advantages and disadvantages
of product layouts and process layouts. Solve simple line-balancing
problems. Develop simple process layouts.
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6 Capacity and Process Selection Process Strategy (Key Aspects)
1.Capital Intensity 2.Process Flexibility
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7 Process Selection Strategy ( , ) Process Selection ( )
Deciding on the way production of goods or services will be
organized ? Process = Transformation ( ) Objective( ) Meet or
exceed customer requirements ( ) Meet cost & managerial goals !
Long-term effect ( ) Product & Volume Flexibility Costs &
Quality
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8 (or ) ? (Which types of process strategy can exist?) (or ) ?
Which factors should be considered to select the process
strategy?
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9 4 (Four Process Strategies) Process Focus ( ) Product Focus (
) Repetitive Focus ( ) (Assembly Line) Mass Customization Focus (
)
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10 Machining Process Process Time ( ) = Setup Time ( ) +
Machining Time ( ) How is the utilization of the Machine? Machine
S-A-A-A-A-S-B-B-B-B S-A-S-B-S-A-S-B-S-A-S-B-S-A-S-B S = Setup Time
?
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11 Process-Focused Strategy ( ) process Facilities( ) are
organized by process Similar processes are together Example: All
drill presses are together Low volume, high variety products ( )
Jumbledflow Jumbled flow ( ) Other names Intermittent process Job
shop* Job shop* Operation Product A Product B 112233
13 Process Focus (job shop) L L L L L L L L L L M M M M D D D D
D D D D G G G G G G A AA Receiving and Shipping Assembly Painting
Department Lathe Department Milling Department Drilling Department
Grinding Department P P
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14 Process Focused Strategy Greater product flexibility ( )
general purposeequipment More general purpose equipment ( ) Lower
initial capital investment ( ) High variable costs ( ) More highly
trained personnel ( ) More difficult production planning &
control ( ) Low equipment utilization (5% to 25%) ( )
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15 Product Focused Strategy ( ) product Facilities( ) are
organized by product High volume, low variety products ( ) Where
found Discrete unit manufacturing Continuous process manufacturing
Other names Flow Line production Flow Line production Continuous
production Products A & B 1 1 2 2 3 3 Operation 2 2 4 4 3
3
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16 Product Focused Examples 1995 Corel Corp. Light Bulbs
(Discrete) Paper (Continuous) 1984-1994 T/Maker Co. 1995 Corel
Corp. Soft Drinks (Continuous, then Discrete) Mass Flu Shots
(Discrete) 1995 Corel Corp.
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17 Product Focus L A L M D MD LG L In Out M A L S D GD GP L In
Out Product A Product B
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18 Product Focused Strategy Lower variable cost per unit ( )
Lower but more specialized labor skills Easier production planning
and control ( ) Higher equipment utilization (70% to 90%) ( ) Lower
product flexibility ( ) More specialized equipment ( ) Usually
higher capital investment ( )
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19 Repetitive Focused Strategy ( ) Facilities often organized
by assembly lines ( ) modules Characterized by modules Parts &
assemblies made previously options Modules combined for many output
options Other names Assembly line Production line
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20 Repetitive Focus Modules Parts or components of a product
previously prepared
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21 Repetitive Focused Strategy - Considerations ( ) More
structured than process-focused, less structured than product
focused quasi-customization Enables quasi-customization Using
modules, it enjoys economic advantage of continuous process, and
custom advantage of low-volume, high-variety model ( )
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22 Repetitive-Focused Strategy Examples Truck 1995 Corel Corp.
Clothes Dryer 1995 Corel Corp. Fast Food McDonalds over 95 billion
served 1984-1994 T/Maker Co.
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23 Mass-Customization Focused Strategy ( ) Rapid, low-cost
production that caters to constantly changing unique customer
desires : Customization ( Needs ) : Low-cost rapid Production ( )
OM
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24 Process Strategies Rapid throughput techniques Mass
Customization Modular techniques Repetitive Focus Modular design
Flexible equipment Product-focused Low variety, high volume High
utilization (70% - 80%) Specialized equipment Process-focused High
variety, low volume Low utilization (5% - 20%) General purpose
equipment Effective scheduling techniques
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25 A Comparison (1) Process Focus (Job Shop) (Low volume, High
variety) Repetitive Focus (Modular) Product focus (High-volume,
low-variety) Mass Customization (High-volume, high-variety) 1.
Small quantity, large variety of products Long runs, standardized
product, from modules Large quantity, small variety of products
Large quantity, large variety of products 2. General purpose
equipment ( ) Special equipment aids in use of assembly line
Special purpose equipment Rapid changeover on flexible
equipment
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26 A Comparison (2) Process FocusRepetitive FocusProduct
focusMass Customization 3 Broadly skilled operators ( ) Modestly
trained employees Operators less broadly skilled Flexible operators
trained for customization 4 Many instructions because of change in
jobs Reduced training and number of job instructions Few work
orders and job instructions Custom orders require many instructions
5 Raw material high relative to product value JIT techniques used
Raw material low relative to product value
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27 A Comparison (3) Process FocusRepetitive FocusProduct
focusMass Customization 6 WIP high relative to output JIT
techniques used WIP low relative to output WIP driven down by JIT,
kanban, lean production 7 Units move slowly thru plant Movement
measured in hours & days Units move swiftly thru facility Goods
move swiftly thru facility 8 Finished goods made to order, not
stored Finished goods made to frequent forecasts Finished goods
made to forecast, then stored Finished goods made to order
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28 A Comparison (4) Process FocusRepetitive FocusProduct
focusMass Customization 9 Scheduling complex and concerned with
trade-off between inventory, capacity, and customer service
Scheduling based on building models from a variety of forecasts
Scheduling relatively simple, concerns establishing sufficient rate
of output to meet forecasts Scheduling sophisticated to accommodate
customization 10 Fixed costs low, variable costs high Fixed costs
dependent on flexibility of facilities Fixed costs high, variable
costs low Fixed costs high; variable costs must be low
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29 A Comparison (5) Process FocusRepetitive FocusProduct
focusMass Customization 11 Costing, done by job, is estimated prior
to doing job but only known after doing job Costs usually known
based on experience Because of high fixed costs, cost dependent on
utilization of capacity High fixed costs and dynamic variable
costs
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30 Volume and Variety of Products Volume and Variety of
Products Low Volume High Variety Process (Intermittent) Repetitive
Process (Modular) High Volume Low Variety Process (Continuous) One
or very few units per lot Projects Very small runs, high variety
Job Shops Modest runs, modest variety Disconnected Repetitive Long
runs, modest variations Connected Repetitive Very long runs,
changes in attributes Continuous Equipment
utilization5%-25%20%-75%70%-80% Poor Strategy (High variable costs)
Mass Customization
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31 Areas of Technology Machine technology Automatic
identification systems (AIS) Bar-code, RFID Process control Vision
system Robot Automated storage and retrieval systems (ASRS)
Flexible manufacturing systems (FMS) Computer-integrated
manufacturing (CIM)
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32 FMS 1 2 3 4 5 6 7 8
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33 FMS
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34 FMS
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35 FMS
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36
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37 Types of Robot Cylindrical Polar Cartesian Joint Arm
44 Objectives of Facility Layout Develop an economical layout
which will meet the requirements of: product design and volume
(product strategy) process equipment and capacity (process
strategy) quality of work life (human resource strategy) building
and site constraints (location strategy)
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45 What is Facility Layout Location or arrangement of
everything within & around buildings Objectives are to maximize
Customer satisfaction Utilization of space, equipment, & people
Efficient flow of information, material, & people Employee
morale & safety
47 Emergency Room Layout (Process-Oriented Layout) Surgery
Radiology E.R. bedsPharmacyBilling/exit E.R.Triage room E.R.
Admissions Patient B - erratic pacemaker Patient A - broken leg
Hallway
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48 Steps in Developing a Process-Oriented Layout 1Construct a
from-to matrix 2Determine space requirements for each department
3Develop an initial schematic diagram 4Determine the cost of this
layout 5By trial-and-error (or more sophisticated means), try to
improve the initial layout 6Prepare a detailed plan that evaluates
factors in addition to transportation cost
54 Interdepartmental Flow Graph Showing Number of Weekly Loads
213 654 10050 30 10 20 50 20 100 50 (Adjacent Cost)= $1,
(Non-Adjacent C.)=$2 Total Cost =
50+100+20+60+50+10+40+100+50=$480
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55 Computer Programs to Assist in Layout CRAFT SPACECRAFT CRAFT
3-D MULTIPLE CORELAP ALDEP COFAD FADES - expert system
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56 Cellular Layout - Work Cells A temporary product-orient
arrangement of machines and personnel in what is ordinarily a
process-oriented facilities
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57 Work Cell Floor Plan Office Tool Room Work Cell
SawsDrills
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58 Improving Layouts by Moving to the Work Cell Concept
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59 Work Cell Advantages Inventory Floor space Direct labor
costs Equipment utilization Employee participation Quality
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60 Office Layout Design positions people, equipment, &
offices for maximum information flow Arranged by process or product
Example: Payroll dept. is by process Relationship chart used
Examples Insurance company Software company
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61 Relationship Chart ( ) 1 President O 2 CostingU AA 3
EngineeringI O 4 Presidents Secretary 1 2 3 Ordinary closeness:
President (1) & Costing (2) Absolutely necessary: President (1)
& Secretary (4) 4
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62 Office Relationship Chart 1 President 2 Chief Technology
Officer 3 Engineers Area 4 Secretary 5 Office entrance 7 Equipment
cabinet 8 Photocopy equipment 9 Storage room UIIAUOEUIIAUOE I O E I
OAOAXOUEOAOAXOUE A I E U A IIEAXIIEAX UUOUUO OUOU O Val. Closeness
A Absolutely necessary E Especially important I Important O
Ordinary OK U Unimportant X Not desirable
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63 Retail /Service Layout - Grid Design Office Carts Check- out
Grocery Store MeatBread Milk Produce Frozen Foods
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64 Store Layout - with Dairy, Bread, High Drawer Items in
Corners
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65 Warehouse Layout Design balances space (cube) utilization
& handling cost Similar to process layout Items moved between
dock & various storage areas Optimum layout depends on Variety
of items stored Number of items picked
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66 An Assembly Line Layout
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67 Line Balancing Precedence diagram Precedence diagram Network
showing order of tasks and restrictions on their performance
Network showing order of tasks and restrictions on their
performance Cycle time Cycle time Maximum time product spends at
any one workstation Maximum time product spends at any one
workstation
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68 Line Balancing Precedence diagram Precedence diagram Network
showing order of tasks and restrictions on their performance
Network showing order of tasks and restrictions on their
performance Cycle time Cycle time Maximum time product spends at
any one workstation Maximum time product spends at any one
workstation C d = production time available desired units of output
Cycle time example C d = (8 hours x 60 minutes / hour) (120 units)
C d = = 4 minutes 480 120
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69 Flow Time vs Cycle Time Cycle time = max time spent at any
station Cycle time = max time spent at any station Flow time = time
to complete all stations Flow time = time to complete all
stations
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70 Flow Time vs Cycle Time Cycle time = max time spent at any
station Cycle time = max time spent at any station Flow time = time
to complete all stations Flow time = time to complete all stations
123 4 minutes Flow time = 4 + 4 + 4 = 12 minutes Cycle time = max
(4, 4, 4) = 4 minutes
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71 Efficiency of Line i i = 1 titititi nC a E =E =E =E = i i =
1 titititi CdCdCdCd N =N =N =N = Efficiency Minimum number of
workstations where t i = completion time for element i j = number
of work elements n = actual number of workstations C a = actual
cycle time C d = desired cycle time
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72 Line Balancing Process 1. Draw and label a precedence
diagram. 2. Calculate the desired cycle time required for the line.
3. Calculate the theoretical minimum number of workstations. 4.
Group elements into workstations, recognizing cycle time and
precedence constraints. 5. Calculate the efficiency of the line. 6.
Stop if theoretical minimum number of workstations on an acceptable
efficiency level reached. If not, go back to step 4.
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73 Line Balancing WORK ELEMENTPRECEDENCETIME (MIN) APress out
sheet of fruit0.1 BCut into stripsA0.2 COutline fun shapesA0.4
DRoll up and packageB, C0.3 Desired unit of output : 6,000 units
Available working hour a day : 40 Hrs
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74 Line Balancing WORK ELEMENTPRECEDENCETIME (MIN) APress out
sheet of fruit0.1 BCut into stripsA0.2 COutline fun shapesA0.4
DRoll up and packageB, C0.3 0.10.20.4 0.3 D B C A
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75 Line Balancing WORK ELEMENTPRECEDENCETIME (MIN) APress out
sheet of fruit0.1 BCut into stripsA0.2 COutline fun shapesA0.4
DRoll up and packageB, C0.3 0.10.20.4 0.3 D B C A C d = = = 0.4
minute 40 hours x 60 minutes / hour 6,000 units 2400 6000 N = = =
2.5 workstations 1.0 0.4 0.1 + 0.2 + 0.3 + 0.4 0.4
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76 Line Balancing WORK ELEMENTPRECEDENCETIME (MIN) APress out
sheet of fruit0.1 BCut into stripsA0.2 COutline fun shapesA0.4
DRoll up and packageB, C0.3 0.10.20.4 0.3 D B C A C d = = = 0.4
minute 40 hours x 60 minutes / hour 6,000 units 2400 6000 N = = =
2.5 workstations 1.0 0.4 0.1 + 0.2 + 0.3 + 0.4 0.4 3
workstations
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77 Line Balancing WORK ELEMENTPRECEDENCETIME (MIN) APress out
sheet of fruit0.1 BCut into stripsA0.2 COutline fun shapesA0.4
DRoll up and packageB, C0.3 0.10.20.4 0.3 D B C A C d = 0.4 N =
2.5
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78 Line Balancing 0.10.20.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS
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79 Line Balancing 0.10.20.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C
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80 Line Balancing 0.10.20.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C B0.1C, D
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81 Line Balancing 0.10.20.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C B0.1C, D
2C0.0D
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82 Line Balancing 0.10.20.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C B0.1C, D 2C0.0D
3D0.1none
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83 Line Balancing 0.10.20.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C B0.1C, D 2C0.0D
3D0.1none A, B C D Work station 1 Work station 2 Work station 3 0.3
minute 0.4 minute 0.3 minute
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84 Line Balancing 0.1 0.2 0.4 0.3 D B C A C d = 0.4 N = 2.5
REMAINING WORKSTATIONELEMENTTIMEELEMENTS 1A0.3B, C B0.1C, D 2C0.0D
3D0.1none A, B C D Work station 1 Work station 2 Work station 3 0.3
minute 0.4 minute 0.3 minute E = = = 0.833 = 83.3% 0.1 + 0.2 + 0.3
+ 0.4 3(0.4) 1.0 1.2
Slide 85
85 Announcement Next week Exam I Concepts, Terms Calculation
Problems Examples, Solved problems, and HW HW ( ) Example 1, 2
Solved Problem 1