Manufacturing and Service Processes Chapter 06 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc All rights reserved Learning Objectives Understand what a production process is Understand the idea of production process mapping Define Little’s law Demonstrate how production processes are organized Describe the product-process matrix Provide an overview of how the different types of production processes are designed Understand how to design and analyze an assembly line 6-2 Types of Firms 6-3 Make-to-Stock Examples of products Essential issue in satisfying customers is to balance the level of inventory against the level of customer service Televisions Clothing Packaged food products Easy with unlimited inventory but inventory costs money Trade-off between the costs of inventory and level of customer service must be made Use lean manufacturing to achieve higher service levels for a given inventory investment 6-4 Assemble-to-Order A primary task is to define a customer’s order in terms of alternative components since these are carried in inventory An example is the way Dell Computer makes their desktop computers One capability required is a design that enables as much flexibility as possible in combining components There are significant advantages from moving the customer order decoupling point from finished goods to components 6-5 Make-to-Order/Engineer-toOrder Boeing’s process for making commercial aircraft is an example Customer order decoupling point could be in either raw materials at the manufacturing site or the supplier inventory Depending on how similar the products are it might not even be possible to preorder parts 6-6 Production Process Mapping Develop a high-level map of a supply chain process Useful to understand how material flows and where inventory is held First step in analyzing the flow of material through a production process 6-7 Inventory Measures Total average value of inventory - the sum of the value (at cost) of the raw material, work-in process, and finished goods inventory Inventory turns - the cost of goods sold divided by the average inventory value Commonly tracked in accounting systems and reported in financial statements Not particularly useful for evaluating the performance of a process Days of supply - the inverse of inventory turns scaled to days 6-8 Organization of Production Processes 6-9 Production System Design 6-10 Production System Design 6-11 Manufacturing Cell Development Group parts into families that follow a common sequence of steps Identify dominant flow patterns for each part family Machines and the associated processes are physically regrouped into cells Workcenter layout – similar machines grouped together 6-12 Regrouped Machines Manufacturing cell layout – dissimilar machines grouped together by product 6-13 Assembly Line Design Workstation cycle time - a uniform time interval in which a moving conveyor passes a series of workstations Also the time between successive units coming off the line Assembly-line balancing - assigning tasks to a series of workstations so that the required cycle time is met and idle time is minimized Precedence relationship - the order in which tasks must be performed in an assembly process 6-14 Mixed-Model Line Balancing Most factories produce a number of different products Inventory can be reduced by building some of each product during every period (e.g day, week, etc.) Mixed-model line balancing is one means of scheduling this varied production 6-15 ... 6-6 Production Process Mapping Develop a high-level map of a supply chain process Useful to understand how material flows and where inventory is held First step in analyzing the flow of material... product-process matrix Provide an overview of how the different types of production processes are designed Understand how to design and analyze an assembly line 6-2 Types of Firms 6-3 Make-to-Stock Examples... customer service Televisions Clothing Packaged food products Easy with unlimited inventory but inventory costs money Trade-off between the costs of inventory and level of customer service