Sept 22 ISMT162/ Weixin Shang 1

Process selection:
The importance
Basic processing types
Facility layout:
The basic layout types
Their advantages and disadvantages
Line-balancing problems
Reading: 226-264
Process Selection and Facility Layout
Sept 22 ISMT162/ Weixin Shang 2
A Case Study
Sam Walton (1918-1992) opened the first
Wal-Mart general store in Arkansas, USA in
1963.
It is now the largest retail company in the
world. It has more than 4000 stores globally.
Revenue in 2005:
Ranking in Global 100:
Sept 22 ISMT162/ Weixin Shang 3
A Case Study
"The secret of successful retailing is to give
your customers what they want. And really, if
you think about it from your point of view as a
customer, you want everything: a wide
assortment of good-quality merchandise; the
lowest possible prices; guaranteed satisfaction
with what you buy; friendly, knowledgeable
service; convenient hours; free parking; a
pleasant shopping experience."
- Sam Walton (1918-1992)
Sept 22 ISMT162/ Weixin Shang 4
A Case Study
Wal-Mart currently has 46 stores in 17 provinces
of China. It has 11 stores in Shenzhen. It plans
to open another 42 new stores in China this
year.
But Wal-Mart has no store in Hong Kong. Why?
If Wal-Mart decides to open a store in Hong
Kong, what decisions do they need to make?
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What Is This?
Sept 22 ISMT162/ Weixin Shang 6
A Layout Design for a Supermarket
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Importance of Facilities Planning
Large investment is involved.
In a developed country, on average, about 10% of the gross
national product (GNP) is invested on new facilities.
In China, it is even more.
Large proportion in production cost
20-50% of the total operating cost of a finish product is material
handling cost.
Better designs of products and material handling systems can
reduce at least 10-30% of the total material handling cost.
Interactions with production/service management
A well-designed facility is easier to manage.
Expandability is very important.
Safety and health
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Process selection
Deciding on the way production of goods or services
will be organized
Major implications
Capacity planning
Layout of facilities
Equipment
Design of work systems
Introduction
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Forecasting
Product and
Service Design
Technological
Change
Capacity
Planning
Process
Selection
Facilities and
Equipment
Layout
Work
Design
Figure 6.1
Process Selection and System Design
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Key aspects of process strategy
Capital intensive equipment/labor
Process flexibility
Technology
Adjust to changes
Design
Volume
technology
Process Strategy
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Technology
Technology: The application of scientific
discoveries to the development and
improvement of products and services and
operations processes.
Technology innovation: The discovery and
development of new or improved products,
services, or processes for producing or providing
them.
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Kinds of Technology
Operations management is primarily concerned
with three kinds of technology:
Product and service technology
Process technology
Information technology
All three have a major impact on:
Costs
Productivity
Competitiveness
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Technology Competitive Advantage
Innovations in
Products and services
Cell phones
PDAs
Wireless computing
Processing technology
Increasing productivity
Increasing quality
Lowering costs
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Technology Acquisition
Technology can have benefits but
Technology risks include:
What technology will and will not do
Technical issues
Economic issues
Initial costs, space, cash flow, maintenance
Consultants and/or skilled employees
Integration cost, time resources
Training, safety, job loss
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Variety
How much
Flexibility
What degree
Volume
Expected output
Job Shop
Batch
Repetitive
Continuous
Process Selection
Sept 22 ISMT162/ Weixin Shang 16
J ob shop
Small scale
Batch
Moderate volume
Repetitive/assembly line
High volumes of standardized goods or services
Continuous
Very high volumes of non-discrete goods
Process Types
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Examples: J ob Shop
A job shop process: A midwestern hospital
medical team performs a diagnostic procedure
involving a cardiac catheterization.
Sept 22 ISMT162/ Weixin Shang 18
Examples: Batch
A batch process: Food is prepared, one menu
item at a time, in the kitchen of the Spago
Restaurant in the Forum at Caesars Palace, Las
Vegas, Nevada.
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Examples: Repetitive
A repetitive process: Binney & Smith, maker of Crayola
products, produces nearly 3 billion crayons each year in
its Easton, PA, manufacturing facility.
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Examples: Continuous
A continuous process. An oil refinery performs a
continuous process, breaking down crude oil into
petroleum, chemicals, and many other products.
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Figure 6.2
Product and Service Processes
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Dimension Job Shop Batch Repetitive Continuous
Job variety Very High Moderate Low Very low
Process
flexibility
Very High Moderate Low Very low
Unit cost Very High Moderate Low Very low
Volume of
output
Very Low Low High Very high
Figure 6.2 (contd)
Product Process Matrix
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Product and Process Profiling
Process selection can involve substantial investment in
Equipment
Layout of facilities
Product profiling: Linking key product or service
requirements to process capabilities
Key dimensions
Range of products or services
Expected order sizes
Pricing strategies
Expected schedule changes
Order winning requirements
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Automation: Machinery that has sensing and
control devices that enables it to operate
Fixed automation
Programmable automation
Automation
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Computer-aided design and manufacturing
systems (CAD/CAM)
Numerically controlled (NC) machines
Robot
Manufacturing cell
Flexible manufacturing systems(FMS)
Computer-integrated manufacturing (CIM)
Automation
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Layout: the configuration of departments,
work centers, and equipment, with particular
emphasis on movement of work (customers
or materials) through the system
Product layouts
Process layouts
Fixed-Position layout
Combination layouts
Facilities Layout
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Objective of Layout Design
1. Facilitate attainment of product or service
quality
2. Use workers and space efficiently
3. Avoid bottlenecks
4. Minimize unnecessary material handling costs
5. Eliminate unnecessary movement of workers
or materials
6. Minimize production time or customer service
time
7. Design for safety
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Requires substantial investments of money
and effort
Involves long-term commitments
Has significant impact on cost and
efficiency of short-term operations
Importance of Layout Decisions
Sept 22 ISMT162/ Weixin Shang 29
Inefficient operations
For Example:
High Cost
Bottlenecks
Changes in the design
of products or services
The introduction of new
products or services
Accidents
Safety hazards
The Need for Layout Decisions
Sept 22 ISMT162/ Weixin Shang 30
Changes in
environmental
or other legal
requirements
Changes in volume of
output or mix of
products
Changes in methods
and equipment
Morale problems
The Need for Layout Design
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Product layouts
Process layouts
Fixed-Position layout
Combination layouts
Basic Layout Types
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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
Basic Layout Types
Sept 22 ISMT162/ Weixin Shang 33
Raw
materials
or customer
Finished
item
Station
2
Station
2
Station
3
Station
3
Station
4
Station
4
Material
and/or
labor
Station
1
Material
and/or
labor
Material
and/or
labor
Material
and/or
labor
Used for Repetitive or Continuous Processing
Figure 6.4
Product Layout
Sept 22 ISMT162/ Weixin Shang 34
High rate of output
Low unit cost
Labor specialization
Low material handling cost
High utilization of labor and equipment
Established routing and scheduling
Routing accounting and purchasing
Advantages of Product Layout
Sept 22 ISMT162/ Weixin Shang 35
Creates dull, repetitive jobs
Poorly skilled workers may not maintain
equipment or quality of output
Fairly inflexible to changes in volume
Highly susceptible to shutdowns
Needs preventive maintenance
Individual incentive plans are impractical
Disadvantages of Product Layout
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1
2 3 4
5
6
7
8 9 10
In
Out
Workers
Figure 6.6
A U-Shaped Production Line
Sept 22 ISMT162/ Weixin Shang 37
Dept. A
Dept. B Dept. D
Dept. C
Dept. F
Dept. E
Used for Intermittent processing
Job Shop or Batch Processes
Process Layout
(functional)
Figure 6.7
Process Layout
Sept 22 ISMT162/ Weixin Shang 38
Work
Station 1
Work
Station 2
Work
Station 3
Figure 6.7
Product Layout
(sequential)
Used for Repetitive Processing
Repetitive or Continuous Processes
Product Layout
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Can handle a variety of processing
requirements
Not particularly vulnerable to equipment
failures
Equipment used is less costly
Possible to use individual incentive plans
Advantages of Process Layouts
Sept 22 ISMT162/ Weixin Shang 40
In-process inventory costs can be high
Challenging routing and scheduling
Equipment utilization rates are low
Material handling slow and inefficient
Complexities often reduce span of supervision
Special attention for each product or customer
Accounting and purchasing are more involved
Disadvantages of Process Layouts
Sept 22 ISMT162/ Weixin Shang 41
Fixed Position Layouts
Fixed Position Layout: Layout in which the
product or project remains stationary, and
workers, materials, and equipment are moved
as needed.
Nature of the product dictates this type of layout
Weight
Size
Bulk
Large construction projects
Sept 22 ISMT162/ Weixin Shang 42
Cellular Production
Layout in which machines are grouped into a
cell that can process items that have similar
processing requirements
Group Technology
The grouping into part families of items with
similar design or manufacturing characteristics
Cellular Layouts
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A Comparison
Sept 22 ISMT162/ Weixin Shang 44
Dimension Functional Cellular
Number of moves
between departments
many few
Travel distances longer shorter
Travel paths variable fixed
J ob waiting times greater shorter
Throughput time higher lower
Amount of work in
process
higher lower
Supervision difficulty higher lower
Scheduling complexity higher lower
Equipment utilization lower higher
Table 6.3
Functional vs. Cellular Layouts
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Warehouse and storage layouts
Retail layouts
Office layouts
Service layouts must be aesthetically
pleasing as well as functional
Service Layouts
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Line Balancing is the process of assigning
tasks to workstations in such a way that the
workstations have approximately
equal time requirements.
Design Product Layouts: Line
Balancing
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Cycle time is the maximum time
allowed at each workstation to
complete its set of tasks on a unit.
Cycle Time
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D
OT
= time cycle = CT
rate output Desired = D
day per time operating OT
CT
OT
= rate Output
=
Determine Maximum Output
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task time of sum = t
CT
t) (
= N

Determine the Minimum Number

of Workstations Required
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Precedence diagram: Tool used in line balancing to display
elemental tasks and sequence requirements
A Simple Precedence
Diagram
a
b
c d
e
0.1 min.
0.7 min.
1.0 min.
0.5 min. 0.2 min.
Figure 6.11
Precedence Diagram
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Arrange tasks shown in Figure 6.11 into
three workstations.
Use a cycle time of 1.0 minute (Suppose
OT=D=480 minutes)
Assign tasks in order of the most number of
followers
Example 1: Assembly Line Balancing
Sept 22 ISMT162/ Weixin Shang 52
Workstation
Time
Remaining Eligible
Assign
Task
Revised
Time
Remaining
Station
Idle Time
1 1.0
0.9
0.2
a, c
c
none
a
c
-
0.9
0.2
0.2
2 1.0 b b 0.0 0.0
3 1.0
0.5
0.3
d
e
-
d
e
-
0.5
0.3 0.3
0.5
Example 1 Solution
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Percent idle time =
Idle time per cycle
(N)(CT)
Efficiency = 1 Percent idle time
Calculate Percent Idle Time
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Assign tasks in order of most following
tasks.
Count the number of tasks that follow
Break the tie: assign tasks in order of
greatest positional weight.
Positional weight is the sum of each tasks time
and the times of all following tasks.
Some Heuristic (intuitive) Rules:
Line Balancing Rules
Sept 22 ISMT162/ Weixin Shang 55
c d
a b e
f g h
0.2 0.2 0.3
0.8 0.6
1.0 0.4 0.3
Example 2
OT=480 minutes, D=400 minutes, CT=1.2
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Station 1 Station 2 Station 3 Station 4
a b
e
f
d
g
h
c
Solution to Example 2
Sept 22 ISMT162/ Weixin Shang 57
1 min. 2 min. 1 min. 1 min.
30/hr. 30/hr. 30/hr.
30/hr.
Bottleneck
Bottleneck Workstation
Sept 22 ISMT162/ Weixin Shang 58
Parallel Workstations
1 min.
2 min.
1 min. 1 min.
60/hr.
30/hr.
30/hr.
60/hr.
2 min.
30/hr.
30/hr.
Parallel Workstations
Sept 22 ISMT162/ Weixin Shang 59
Information Requirements:
1. List of departments
2. Projection of work flows
3. Distance between locations
4. Amount of money to be invested
5. List of special considerations
6. Location of key utilities
Designing Process Layouts
Sept 22 ISMT162/ Weixin Shang 60
Example 3
Distance between locations
Interdepartmental work flow
Sept 22 ISMT162/ Weixin Shang 61
1
3
2
30
170 100
A B C
Figure 6.13
Example 3: Interdepartmental Work Flows
for Assigned Departments
Sept 22 ISMT162/ Weixin Shang 62
Review Problems
Problem 1 at page 269
Problem 2 at page 269
Problem 7 at page 271