Lecture Operations management: Creating value along the supply chain (Canadian edition) - Chapter 7

Chapter 7 capacity and facilities design. This chapter includes contents: Capacity planning, basic layouts, designing process layouts, designing service layouts, designing product layouts, hybrid layouts.

OPERATIONS MANAGEMENT: Creating Value Along the Supply Chain, Canadian Edition Robert S Russell, Bernard W Taylor III, Ignacio Castillo, Navneet Vidyarthi CHAPTER Capacity and Facilities Design Learning Objectives — Discuss long-term capacity planning strategies — Indicate the benefits of effective facility layout — Explain the general characters of process, product, and fixed-position facility layouts — Use block diagramming and relationship diagramming to design process layouts — Describe the general considerations for service layouts — Design a simple product layout for efficiency (balance basic assembly line) — Describe three types of hybrid layouts, including cellular layouts, flexible manufacturing systems, and mixed-model assembly lines 7-2 Lecture Outline —Capacity Planning —Basic Layouts —Designing Process Layouts —Designing Service Layouts —Designing Product Layouts —Hybrid Layouts Copyright 2014 John Wiley & 7-3 Capacity —Maximum capability to produce —Capacity planning —establishes overall level of productive resources for a firm —3 basic strategies for timing of capacity expansion in relation to steady growth in demand —Lead —Lag —average Copyright 2014 John Wiley & 7-4 Capacity Expansion Strategies Copyright 2014 John Wiley & 7-5 Capacity —Capacity increase depends on —volume and certainty of anticipated demand —strategic objectives —costs of expansion and operation —Best operating level —% of capacity use that minimizes unit costs —Capacity cushion —% of capacity held in reserve for unexpected occurrences Copyright 2014 John Wiley & 7-6 Economies of Scale —Unit cost decreases as output volume increases —fixed costs can be spread over a larger number of units —production or operating costs not increase linearly with output levels —quantity discounts are available for material purchases —operating efficiency increases as workers gain experience Copyright 2014 John Wiley & 7-7 Best Operating Level for a Hotel Copyright 2014 John Wiley & 7-8 Objectives of Facility Layout —Minimize movement and material-handling costs —Use space efficiently —Use labour efficiently —Eliminate bottlenecks —Facilitate communication and interaction —between workers —between workers and their supervisors —between workers and customers —Reduce manufacturing cycle time and customer service time Copyright 2014 John Wiley & 7-9 Objectives of Facility Layout —Eliminate wasted or redundant movement —Facilitate the entry, exit, and placement of material, products, and people —Incorporate safety and security measures —Promote product and service quality —Encourage proper maintenance activities —Provide a visual control of activities —Provide flexibility to adapt to changing conditions —Increase capacity Copyright 2014 John Wiley & 7-10 Hybrid Layouts —Cellular layouts —group dissimilar machines into work centers (called cells) that process families of parts with similar shapes or processing requirements —Production flow analysis (PFA) —reorders part routing matrices to identify families of parts with similar processing requirements —Flexible manufacturing system —automated machining and material handling systems which can produce an enormous variety of items —Mixed-model assembly line —processes more than one product model in one line Copyright 2014 John Wiley & 7-42 Cellular Layouts —Identify families of parts with similar flow paths —Group machines into cells based on part families —Arrange cells so material movement is minimized —Locate large shared machines at point of use Copyright 2014 John Wiley & 7-43 Parts Families A family of similar parts A family of related grocery items Copyright 2014 John Wiley & 7-44 Original Process Layout Assembly A B 12 10 C 11 Raw materials Copyright 2014 John Wiley & 7-45 Part Routing Matrix Parts A B C D E F G H x x Machines x x x x 10 11 12 x x x x x x x x x x x x x x x x x x x x x Copyright 2014 John Wiley & x 7-46 x x Revised Cellular Layout Assembly 10 12 11 Cell Cell Cell A B C Raw materials Copyright 2014 John Wiley & 7-47 Reordered Routing Matrix Parts Machines 10 A D F C G B H E x x x x x x x x x x x x x x x 11 12 x x x x x x x x x x x x Copyright 2014 John Wiley & x x x 7-48 A Manufacturing Cell with Worker Paths Copyright 2014 John Wiley & 7-49 Cellular Layouts —Advantages —Disadvantages —Reduced material handling and transit time —Reduced setup time —Reduced work-inprocess inventory —Better use of human resources —Easier to control —Easier to automate —Inadequate part families —Poorly balanced cells —Expanded training and scheduling of workers —Increased capital investment Copyright 2014 John Wiley & 7-50 Automated Manufacturing Cell Copyright 2014 John Wiley & 7-51 Flexible Manufacturing Systems (FMS) —Consists of —programmable machine tools —automated tool changing —automated material handling system —controlled by computer network —Combines flexibility with efficiency —Layouts differ based on —variety of parts the system can process —size of parts processed —average processing time required for part completion Copyright 2014 John Wiley & 7-52 Fully-Implemented FMS Copyright 2014 John Wiley & 7-53 Mixed Model Assembly Lines —Produce multiple models in any order on one assembly line —Factors in mixed model lines —Line balancing —U-shaped lines —Flexible workforce —Model sequencing Copyright 2014 John Wiley & 7-54 Balancing U-Shaped Lines Precedence diagram: Cycle time = 12 A (a) Balanced for a straight line C D E (b) Balanced for a U-shaped line A,B C,D E 12 min Efficiency = B A,B 24 24 = = 6666 = 66.7 % 3(12) 36 C,D E Efficiency = 24 24 = = 100 % 2(12) 24 12 Copyright 2014 John Wiley & 12 7-55 Copyright Copyright © 2014 John Wiley & Sons Canada, Ltd All rights reserved Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd The purchaser may make back-up copies for his or her own use only and not for distribution or resale The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein Copyright 2014 John Wiley & 7-56 ... experience Copyright 2014 John Wiley & 7- 7 Best Operating Level for a Hotel Copyright 2014 John Wiley & 7- 8 Objectives of Facility Layout —Minimize movement and material-handling costs —Use space efficiently... department Copyright 2014 John Wiley & 7- 1 2 Manufacturing Process Layout Copyright 2014 John Wiley & 7- 1 3 A Product Layout In Out Copyright 2014 John Wiley & 7- 1 4 Comparison of Product and Process... & 7- 1 0 Basic Layouts —Process layouts —group similar activities together according to process or function they perform —Product layouts —arrange activities in line according to sequence of operations