processes and technology
TRANSCRIPT
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Processes and Technology
Beni AsllaniUniversity of Tennessee at Chattanooga
Operations Management - 6thEdition
Chapter 6
Roberta Russell & Bernard W. Taylor, III
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Lecture outline
Process planning
Process analysis
Process innovation Technology decisions
6-2
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Process Planning
Process - a group of related tasks with specificinputs and outputs
Process design - what tasks need to be done
and how they are coordinated among functions,people, and organizations
Process planning - converts designs intoworkable instructions for manufacture or delivery
Process strategy - an organizations overallapproach for physically producing goods andservices
6-3
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Process Strategy
Vertical integration extent to which firm will produce inputs and control
outputs of each stage of production process
Capital intensity
mix of capital (i.e., equipment, automation) andlabor resources used in production process
Process flexibility
ease with which resources can be adjusted inresponse to changes in demand, technology,products or services, and resource availability
Customer involvement
role of customer in production process 6-4
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Outsourcing
Cost
Capacity
Quality
Speed
Reliability
Expertise
6-5
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Process Selection
Projects one-of-a-kind production of a product to customer
order
Batch production processes many different jobs at the same time in
groups or batches
Mass production
produces large volumes of a standard product for amass market
Continuous production used for very-high volume commodity products
6-6
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Sourcing Continuum
6-7
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Product-Process Matrix
6-8
Source:Adapted from Robert Hayes and Steven Wheelwright,Restoring the Competitive Edge Competing
through Manufacturing(New York, John Wiley & Sons, 1984), p. 209.
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Types of Processes
6-9
Type of
product
Unique
PROJECT BATCH
Made-to-order
(customized)
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for CompetitiveAdvantage (New York:McGraw-Hill, 2001), p. 210
Type ofcustomer
One-at-a-time
Fewindividual
customers
MASS
Made-to-stock
(standardized )
Mass
market
CONT.
Commodity
Mass
market
Productdemand Infrequent Fluctuates Stable Very stable
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Types of Processes (cont.)
6-10
Demand
volume
Very low
PROJECT BATCH
Low to
medium
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for CompetitiveAdvantage (New York:McGraw-Hill, 2001), p. 210
No. ofdifferentproducts
Infinitevariety
Many, varied
MASS
High
Few
CONT.
Very high
Very few
Productionsystem
Long-termproject
Discrete, jobshops
Repetitive,assembly
lines
Continuous,process
industries
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Types of Processes (cont.)
6-11
Equipment Varied
PROJECT BATCH
General-
purpose
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for CompetitiveAdvantage (New York:McGraw-Hill, 2001), p. 210
Primarytype ofwork
Specializedcontracts
Fabrication
MASS
Special-
purpose
Assembly
CONT.
Highly
automated
Mixing,treating,refining
Workerskills
Experts,crafts-
persons
Wide rangeof skills
Limitedrange of
skills
Equipmentmonitors
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Types of Processes (cont.)
6-12
Advantages Custom work,latest technology
PROJECT BATCH
Flexibility,quality
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (NewYork:McGraw-Hill, 2001), p. 210
Dis-advantages
Non-repetitive,small customerbase, expensive
Costly, slow,
difficult to
manage
MASS
Efficiency,
speed,
low cost
Capital
investment;
lack of
responsiveness
CONT.
Highly efficient,
large capacity,
ease of control
Difficult to change,
far-reaching errors,
limited variety
ExamplesConstruction,shipbuilding,spacecraft
Machine shops,
print shops,
bakeries,
education
Automobiles,
televisions,
computers,
fast food
Paint, chemicals,foodstuffs
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Process Selection with Break-Even Analysis
Examines cost trade-offs associated withdemand volume
Cost
Fixed costs constant regardless of the number of unitsproduced
Variable costs vary with the volume of units produced
Revenue - price at which an item is sold
Total revenue - price times volume sold
Profit - difference between total revenue and totalcost
6-13
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Process Selection withBreak-Even Analysis (cont.)
6-14
Total cost = fixed cost + total variable costTC = cf+ vcv
Total revenue = volume x priceTR = vp
Profit = total revenue - total costZ = TR TC = vp- (c
f
+ vcv
)
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Process Selection with
Break-Even Analysis (cont.)
6-15
Solving for Break-Even Point (Volume)
TR = TC
vp= cf+ vcvvp- vcv= cf
v(p - cv) = cf
v= cf
p -cv
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Break-Even Analysis: Example
6-16
Fixed cost = cf= $2,000Variable cost = cv= $5 per raft
Price =p= $10 per raft
Break-even point is
v = = = 400 raftscf
p - cv2000
10 - 5
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Break-Even Analysis: Graph
6-17
Totalcostline
Totalrevenue
line
Break-even point400 Units
$3,000
$2,000
$1,000
Dollars
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Process Plans
Set of documents that detail manufacturingand service delivery specifications
assembly charts
operations sheets quality-control check-sheets
6-18
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Process Selection
6-19
Below or equal to 4,000, choose A
Above or equal to 4,000, choose B
$2,000 + $5v = $10,000 + $3v$2v= $8,000
v= 4,000 rafts
Process A Process B
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Process Analysis
6-20
systematic
examination of
all aspects ofprocess to
improve
operation
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6-21
Part name Crevice Tool
Part No. 52074
Usage Hand-Vac
Assembly No. 520
Oper. No. Description Dept. Machine/Tools Time
10 Pour in plastic bits 041 Injection molding 2 min20 Insert mold 041 #076 2 min
30 Check settings 041 113, 67, 650 20 min& start machine
40 Collect parts & lay flat 051 Plastics finishing 10 min
50 Remove & clean mold 042 Parts washer 15 min
60 Break off rough edges 051 Plastics finishing 10 min
An Operations Sheet for a Plastic Part
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Process Analysis
Building a flowchart Determine objectives
Define process boundaries
Define units of flow
Choose type of chart
Observe process and collect data
Map out process Validate chart
6-22
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Process Flowcharts
Look at manufacture of product ordelivery of service from broadperspective
Incorporate
nonproductive activities (inspection,transportation, delay, storage)
productive activities (operations)
6-23
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Process Flowchart Symbols
6-24
Operations
Inspection
Transportation
Delay
Storage
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Process Flowchart
6-25
Processflowchartof apple
processing
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6-26
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Simple Value Chain Flowchart
6-27
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Process Innovation
6-28
BreakthroughImprovement
Continuous improvementrefines the breakthrough
Continuous improvement activities
peak; time to reengineer process
Total redesign of
a process for
breakthrough
improvements
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From Function to Process
6-29
Manufacturing
Accounting
Sales
Purchasing
Product Development
Order Fulfillment
Supply Chain Management
Customer Service
Function Process
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6-30
StrategicDirectives
Goals for ProcessPerformance
Pilot Studyof New Design
DetailedProcess Map
High - levelProcess map
GoalsMet?
InnovativeIdeas Design
Principles
ModelValidation
CustomerRequirements
KeyPerformance
Measures
Full ScaleImplementation
Baseline Data
BenchmarkData
No Yes
Process Innovation
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High-Level Process Map
6-31
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Principles for RedesigningProcesses
Remove waste, simplify, and consolidatesimilar activities
Link processes to create value
Let the swiftest and most capable enterpriseexecute the process
Flex process for any time, any place, any way
Capture information digitally at the source andpropagate it through process
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Principles for RedesigningProcesses (cont.) Provide visibility through fresher and richer
information about process status Fit process with sensors and feedback loops
that can prompt action Add analytic capabilities to process Connect, collect, and create knowledge around
process through all who touch it Personalize process with preferences and
habits of participants
6-33
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Techniques for GeneratingInnovative Ideas
Vary the entry point to a problem in trying to untangle fishing lines, its best to start
from the fish, not the poles
Draw analogies a previous solution to an old problem might work
Change your perspective think like a customer bring in persons who have no knowledge of
process
6-34
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Techniques for GeneratingInnovative Ideas (cont.)
Try inverse brainstorming what would increase cost what woulddisplease the customer
Chain forward as far as possible if I solve this problem, what is the next problem
Use attribute brainstorming how would this process operate if. . .
our workers were mobile and flexible
there were no monetary constraints we had perfect knowledge
6-35
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Technology Decisions
Financial justification of technology
Purchase cost
Operating Costs
Annual Savings
Revenue Enhancement
Replacement Analysis
Risk and Uncertainty
Piecemeal Analysis
6-36
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6-37
Components of e-Manufacturing
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A Technology Primer
Computer-aideddesign (CAD)
Group technology(GT)
Computer-aidedengineering (CAE)
Collaborativeproduct commerce
(CPC)
6-38
Creates and communicates designselectronically
Classifies designs into families for easyretrieval and modification
Tests functionality of CAD designselectronically
Facilitates electronic communication and
exchange of information among designersand suppliers
Product Technology
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A Technology Primer (cont.)
6-39
Product datamanagement
(PDM) Product life cycle
management(PLM)
Productconfiguration
Keeps track of design specs and revisionsfor the life of the product
Integrates decisions of those involved inproduct development, manufacturing, sales,customer service, recycling, and disposal
Defines products configured by customers
who have selected among various options,usually from a Web site
Product Technology
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A Technology Primer (cont.)
Standard forexchange of
product model data(STEP)
Computer-aideddesign andmanufacture(CAD/CAM)
Computer aidedprocess (CAPP)
E-procurement
6-40
Set standards for communication amongdifferent CAD vendors; translates CAD data
into requirements for automated inspectionand manufacture
Electronic link between automated design(CAD) and automated manufacture (CAM)
Generates process plans based ondatabase of similar requirements Electronic purchasing of items from e-
marketplaces, auctions, or companywebsites
Process Technology
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A Technology Primer (cont.)
Computernumerically control(CNC)
Flexiblemanufacturingsystem (FMS)
Robots
Conveyors
6-41
Machines controlled by software code to perform avariety of operations with the help of automated
tool changers; also collects processing informationand quality data
A collection of CNC machines connected by anautomated material handling system to produce awide variety of parts
Manipulators that can be programmed to perform
repetitive tasks; more consistent than workers butless flexible
Fixed-path material handling; moves items along abelt or overhead chain; reads packages and
diverts them to different directions; can be very fast
Manufacturing Technology
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A Technology Primer (cont.)
Automatic guidedvehicle (AGV)
Automated storageand retrieval system(ASRS)
Process Control
Computer-integratedmanufacturing (CIM)
6-42
A driverless truck that moves material along aspecified path; directed by wire or tape embeddedin floor or by radio frequencies; very flexible
An automated warehousesome 26 stores highin which items are placed in a carousel-typestorage system and retrieved by fast-movingstacker cranes; controlled by computer
Continuous monitoring of automated equipment;
makes real-time decisions on ongoing operation,maintenance, and quality
Automated manufacturing systems integratedthrough computer technology; also called e-manufacturing
Manufacturing Technology
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A Technology Primer (cont.)
BusinesstoBusiness (B2B)
Businessto
Consumer (B2C)
Internet
Intranet
Extranet
6-43
Electronic transactions between businesses
usually over the Internet
Electronic transactions between businesses and
their customers usually over the Internet
A global information system of computer networks
that facilitates communication and data transfer
Communication networks internal to an
organization; can be password (i.e., firewall)
protected sites on the Internet
Intranets connected to the Internet for shared
access with select suppliers, customers, and
trading partners
Information Technology
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A Technology Primer (cont.)
Bar Codes
Radio Frequency
Identification tags(RFID)
Electronic datainterchange (EDI)
Extensive markuplanguage (XML)
Enterpriseresource planning(ERP)
6-44
A series of vertical lines printed on most packages thatidentifies item and other information when read by ascanner
An integrated circuit embedded in a tag that can sendand receive information; a twenty-first century bar codewith read/write capabilities
A computer-to-computer exchange of businessdocuments over a proprietary network; very expensiveand inflexible
A programming language that enables computerto -
computer communication over the Internet by taggingdata before its is sent
Software for managing basic requirements of anenterprise, including sales & marketing, finance andaccounting, production & materials management, andhuman resources
Information Technology
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A Technology Primer (cont.)
Supply chainmanagement (SCM)
Customer relationshipmanagement (CRM)
Decision supportsystems (DSS)
Expert systems (ES)
Artificial intelligence(AI)
6-45
Software for managing flow of goods and informationamong a network of suppliers, manufacturers anddistributors
Software for managing interactions with customers andcompiling and analyzing customer data
An information system that helps managers makedecisions; includes a quantitative modeling componentand an interactive component for what-if analysis
A computer system that uses an expert knowledge baseto diagnose or solve a problem
A field of study that attempts to replicate elements ofhuman thought in computer processes; includes expertsystems, genetic algorithms, neural networks, and fuzzylogic
Information Technology
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