BA341 2nd EditionExam # 2 Study Guide Lectures: 7-12Lecture 7 (September 22)Chapter 7 – Process Strategies- A process strategy is an organization’s approach to transforming resources into goods and services- The object is to produce products that meets customer requirements within cost and other managerial constraintsCommon strategies- Process Focusedo Volume: low product volumeo Variety: supports a high degree of product flexibility and customizationo Equipment type: general purpose equipment and skilled personnelo Utilization: high variable costs and low equipment utilization- Repetitive Focuso Volume: high product volumeo Variety: less product flexibility then process-focusedo Equipment type: characterized by modules with parts, they may be combined in different ways, facilities often organized as assembly lineso Utilization: low variable costs- Product Focusedo Volume: high volumeo Variety: low varietyo Equipment type: highly specialized equipment and generally less skilled laboro Utilization: high fixed costs but low variable costs- Mass Customizationo Volume: high volumeo Variety: high varietyo Equipment: many modules with flexible operatorso Utilization: aims to combine the efficiency of the product focus with the flexibilityof the process focusLecture 8 (September 24th) Chapter 9 – Layout Strategies- Fixed-Position (project) Layouto Characteristics: product in a fixed locationo Production Volume: specific to unique, large scale products/projects. Low volumeo Pattern of workflow: equipment and workers moved close to the product, constantly changing workforce- Process-oriented (Job Shop) layouto Characteristics: products move from department to department, according to custom characteristicso Volume: job shop compete on quality, customization, speed of new production introductiono Workflow: similar equipment is grouped together, equipment is usually general purpose, but flexible and capable of extensive customization. Employees highly skilled and can operate a variety of machines- Cellular Layout (Work Cell)o Characteristics: Dedicated area containing various equipment needed to produceonly a limited range of products from start to finisho Volume: high volume with lower inventory levels and lower space requirementso Workflow: higher equipment utilization and higher employee productivity- Repetitive and Product oriented Layouto Characteristics: low unit costs for high volume operationso Volume: high volume, standardized operationso Workflow: linear layout whereby production follows a fixed sequence of steps, parts move at a controlled rate, usually by a mechanized conveyor system. Equipment is mostly special purpose- Continuous Process Layouto Characteristics: operated on a continuous basis to produce a few standardized productso Volume: high volumeo Workflow: similar to an assembly line, but the product flow is continuous rather than discrete Lecture 9 (September 29th) Chapter 16- Lean PrinciplesLean production is a set of integrated activities designed to achieve high-volume production while minimizing waste in the production process- Ways to minimize sources of waste:o Reduce inventories of raw materials, WIP and finished products (overproduction)o Reduce defects and rework due to poor qualityo Reduce waiting due to resource or part unavailabilityo Reduce unnecessary transportation and motion (when working on a unit, only dothe needed movement, no more)o Reduce overprocessing – work that doesn’t add value- Classification of Lean prinicpleso Process Flow – represents the logical sequence of steps (transform inputs into outputs) needed to deliver the product/service to the customer. It may include the passing of information or materials from one step to the nexto Managing the Flow: Make-to-Stock (Push) - output is pushed to the next station as it is completed (based on Demand Forecast) Make-to-Order (Pull) - a workstation pulls output from the preceding station as needed (based on Demand- fixed inventory)o Controlling Flow – Drum-Buffer-Rope Drum – represents the system bottleneck, gives the beat for the whole system  Buffer – a protection for the drum, measured in time – all resources that feed the bottleneck must be given enough time to overcome any delays  Rope – release materials only when needed- Prevents early release of materials- Prevents accumulation of WIPo Little’s Law: WIP=THt x THr WIP – represents amount of work in process THt – is the throughput time (i.e., time in system) THr – is the throughput rate Lecture 10 (October 1st) Continuing Chapter 16 – Lean Principles Elements of Lean production- How much WIP should we have?- High inventory (WIP) hides problems - Lower levels of (WIP) expose problemso If you adopt lean operations then lower inventory gradually- Emphasize JIT productiono Employ a Pull production system How are WIP and Throughput Time in a Pull system compared to a Push System? – Better to adopt the pull system because there is lower inventory and a shorter throughput time. A pull system is demand driven.- Use one-piece flow o Move products one unit at a time, if possible, between workstations to improve throughputo Requires constant effort to reduce setup timesDetermining the Number of Kanban Cards/Containers- each container represents the minimum production lot size and - the number of such containers determines directly the amount of WIP in system- K = (Expected demand during lead time + Safety Stock) / Size of the container = (DL+S)/Co D = average demand per period (for assembly line, downstream)o L = lead time to replenish an order (upstream)o S = safety stock expressed in days (hours, etc.) of demando C = Container size- Determining max allowable WIPLecture 11 (October 6th) Lean in Services Lean principles- Successfully applied in various service settings, such as fast-food, retail, transportation, banking, insurance, legal services, etc. o Focus on improved process standardization, lower inventory, better quality, shorter turn-around times, improved scheduling (capacity buffering)- Making inroads in other services such as healthcare and administration Service BlueprintThe “F” is a reminder to not forget something in the systemService is broken into 3 levelsLevel 1 – only has to do with the customerLevel 2 – Customer and service provider interact Level 3 – the service is performedLecture 12 (October 8th) Review for the test during this