Forecasting Product and service design Technological Change Process Types Description Advantages Disadvantages OM323 Final Exam Study Guide Chapter 6 Process Selection and Facility Layout Process Strategy Capital Intensity The mix of equipment and labour 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 changes in product or service design changes in volume processed and changes in technology Technology 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 operations processes 1 2 3 Product and Service Technology The discovery and development of new products and services Process technology Methods procedures and equipment used to produce goods and provide services Information technology The science and use of computers and other electronic equipment to store process and send information Capacity Planning Process Selection Facilities and equipment Layout Work Design Process Selection 1 How much variety in products or services will the system need to handle 2 What degree of equipment flexibility will be needed 3 What is expected volume of output Job Shop Customized goods or services Able to handle as wide variety of work Slow high cost per unit complex planning and scheduling Batch Semi standardized goods or services Flexibility Moderate cost per unit moderate scheduling complexity Repetitive Assembly Standardized goods or services Low unit cost high volume efficient Low flexibility high cost of down time Continuous Highly standardized goods or services Very efficient very high volume Very rigid lack of variety costly to change very high cost of downtime Project A non repetitive set of activities directed toward a unique goal within a limited time frame Activity Function Cost estimation Cost per unit Equipment used Fixed costs Variable costs Labour skills Marketing Job Shop Difficult High General purpose Low High High Promote capabilities Scheduling Complex Batch Somewhat routine Moderate General purpose Moderate Moderate Moderate Promote capabilities semi standardized goods and services Moderately complex Repetitive Routine Low Special purpose High Low Low Promote standardized goods services Routine Continuous Routine Low Special purpose Very high Very low Low to high Promote standardized goods services Routine Projects Simple to complex Very high Varied Varied High Low to high Promote capabilities Complex subject to change Varied Work in process inventory Layout The configuration of departments work centres and equipment with particular emphasis on movement of work through the system High High Low Low 1 Require substantial investments of money and effort They involve long term commitments which makes mistakes difficult to overcome They have a significant impact on the cost and efficiency of operations Objectives 2 3 To facilitate attainment of product or service quality To use workers and space efficiently To avoid bottlenecks To minimize material handling costs To eliminate unnecessary movements of workers or materials To minimize production time or customer service time To design for safety Product Layout Layout that uses standardized processing operations to achieve smooth rapid high volume flow Production line Standardized layout arranged according to a fixed sequence of production tasks Assembly Line Standardized layout arranged according to a fixed sequence of assembly tasks Product Layout Advantages o o o A high rate of output Low unit cost due to high volume Labour specialization which reduces training costs and time and results in a wide span of supervision Low material handling cost per unit A high utilization of labour and equipment The establishment of routing and scheduling in the initial design of the system Fairly Routine accounting purchasing and inventory control o o o o Product Layout Disadvantages The intensive division of labour usually creates dull repetitive jobs that provide little opportunity for advancement and may lead to morale problems and to repetitive stress injuries Poorly skilled workers may exhibit little interest in maintaining equipment or in the quality of output The system is fairly inflexible in response to changes in the volume of output or changes in product or process design The system is highly susceptible to shutdowns caused by equipment breakdowns or excessive absenteeism Preventive maintenance the capacity for quick repairs and spare parts inventories are necessary expenses Incentive plans tied to individual output are impractical Process Layout Advantages o o The systems can handle a variety of processing requirements The systems are not particularly vulnerable to equipment failures General purpose equipment is often less costly than the specialized equipment It is possible to use individual incentive systems o o Process Layout Disadvantages In process inventory costs can be high if batch processing is used in manufacturing systems Routing and scheduling pose continual challenges Equipment utilization rates are low Material handling is slow and inefficient and more costly per unit than in product layouts Job complexities often reduce the span or supervision and result in higher supervisory costs than with product layouts Special attention necessary for each product or customer and low volumes result in higher cost than with product layouts Accounting inventory control and purchasing are much more involved than with product layouts Process Layouts Layouts that can handle varied processing requirements Intermittent Processing Non repetitive processing Fixed position layout Layout in which the product or project remains stationary and workers materials and equipment are moved as needed Line Balancing The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements Cycle Time The maximum time allowed at each workstation to complete its set of tasks on a unit Cycletime Operating time per day Desired output rate Desired Output Rate Output Rate Operatingtime per day CycleTime N min t N min Theoreticalnumber of stations CycleTime t of task Precedence Diagram A diagram that shows elemental tasks and their precedence requirements Line Balancing Procedure 1 Determine the cycle time and