MARINA (Reviewer) Chapter Two: Operations Strategy (Converting strategies into results) Strategy provides direction.

It is a common vision that unites an organization, provides consistency in decisions, and keeps the organization moving in the right direction. Strategy formulation consists of four basic steps: 1. Defining a primary task. Primary task represents the purpose of the firm-what is the firm in the business of doing? It is usually expressed in the mission statement and can be accompanied a vision statement, that describes what the organization sees itself becoming. 2. Accessing core competencies. Core competency is what a firm does better than anyone else, its distinctive competence. It represents sustainable competitive advantages. It is more likely a process, a companys ability to do certain things better than a competitor; the ability to transform technology rapidly into new products and process over time. 3. Determining order winners and order qualifiers-determinants of customers purchase decision. Order qualifiers are the characteristics of a product or service that qualify it to be considered for purchase by a customer. Order winner is the characteristic of a product or service that wins orders in the market place. When purchasing CD player, customers may determine a price range (order qualifier) and then choose the product with the most features (order winner) within the price range. Firms distinctive competence should match the markets order winner. 4. Positioning the firm. Positioning involves choosing one or two important things on which to concentrate and doing them extremely well. Positioning: How will the firm compete in the market place?-what unique value it will deliver to the customers. COMPETITIVE PRIORITIES Competing on Cost ---cost cutting A long term productivity portfolio is required that trades off current expenditures for future reductions in operating cost: investment on updated facilities, equipments, training and development that enhances the skills and capabilities of workers. Competing on Quality Quality is confined to minimizing defect rates or confirming to design specifications.opportunity to please customers. Competing on Flexibility--- ability to respond to variation Flexibility is the ability to adjust to changes in product mix, production volume, or design. Mass customization: the mass production of customized products. Competing on Speed immediate response and rapid product shipment Competing on speed requires an organization characterized by fast moves, fast adaptation, and tight linkages. Forming alliance is one of the most effective avenues for competing on speed. OPERATION ROLES IN CORPORATE STRTEGY

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It can provide support for a differentiated strategy, and it can serve as a firms distinctive competence in executing similar strategies better than competitors. The phenomenon of disruptive technologies explains how companies with less-sophisticated technologies producing lowermargin products can enter a market unchallenged, and then evolve to transform an industry. STRATEGY AND THE INTERNET Internet technology has become the great equalizer, allowing innovations to be enjoyed and copied with little investment in time or money. Companies that are not managed well offline are a disaster online. STRATEGIC DECISIONS IN OPERATIONS Strategic decisions involve products and services, processes and technology, capacity and facilities, human resources, quality, sourcing, and operating systems. Product and Services The kinds of products and services offered by a company drive operations strategy. Products and services can be classified as make-to-order, make-to-stock, or assemble-to-order. Make-to-order products and services are made to customer specifications after an order has been received. Make-to-stock products and services are made in anticipation of demand. Assemble-to-order or build-to-order products and services add options according to customer specifications. Processes and Technology Production processes can be classified into projects, batch production, mass production, and continuous production. A project is a one-at-a-time production of a product to customer order. Batch production process many different jobs through the production system at the same time in groups or batches. Mass production produces large volumes of a standard product for a mass market. Product demand is stable, and product volume is high. Continuous production is used for very high-volume commodity products that are very standardized. It is typically operating continuously 24 hours a day. The process chosen to create the product or service must be consistent with product and service characteristics. The most important product characteristics are degree of standardization and demand volume. A more natural classification system for services and emphasizes degree of customization and degree of labor intensity. A professional service is highly customized and very labor intensive such as doctor. A service shop is less customized and labor intensive but still attentive to individual customers such as school. A mass service offers the same basic services to all customers and allows less interaction with the service provider such as retailing. Service factory processes services with the least degree of customization and labor intensity such as manufactured products. Capacity and Facilities Inadequate capacity can lose customers and limit growth. Excess capacity can drain a companys resources and prevent investments in more lucrative ventures. Facility location can also be a strategic decision, especially when it concerns global expansion.

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Human Resources Strategic issues in human resources involve determining the skill levels and degree of autonomy required to operate the production system, outlining training requirements and selection criteria, and setting up policies on performance evaluations, compensation, and incentives. Quality Decisions regarding quality of products or services involving both product and service providers and customers Sourcing Outsourcing raw materials that cannot be produced by the firm Vertical integration is the degree to which a firm produces the parts that go into its products. Operating Systems Operating systems execute strategic decisions on a day-to-day basis, so it is important that they be deigned to support how the firm competes in the market place. STARTEGY DEVELOMENT The Strategic Planning Hierarchy Senior management develops a corporate strategic plan in line with the firms mission and vision, customer requirements (voice of customers) and business conditions (voice of business). Corporate strategy provides direction for formulating strategies in the functional areas of the firm: marketing, operations and financial strategy. Companies struggling to align day-to-day decisions with corporate strategy have found success with two types of planning systems: policy deployment and balanced scorecard. 1. Policy Deployment or Hoshin Planning Policy deployment tries to focus everyone in an organization on common goals and priorities by translating corporate strategy into measurable objectives throughout the various functions and levels of the organization. The process for forming objectives would continue in a similar manner down the organization with the means of achieving objectives for one level of management becoming the target, or objectives, for the next level. The outcome of the process is a cascade of action plans (hoshins) aligned to complete each functional objective, which will, in turn, combine to achieve the strategic plan. 2. Balanced Scorecard It examines a firms performance in four critical areas: finance, customer, processes, and learning and growing. ISSUES AND TRENDS IN OPERATIONS Managers must also gain insight into future trends. The following trends are especially important: 1. Global markets, global sourcing, and global operations.worldwide competition Operations managers are faced with the task of breaking down the barriers between domestic and international operations, and providing global service for local needs. 2. Virtual Companies.alliances Group of individuals will form to meet a need, dissolve when the need is met, and reform to meet another need. 3. Greater choice, more individualism.mass customization and customers will be viewed as partners

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4. Emphasis on service.concentrating more on serving the customer rather than producing the product 5. Speed and flexibility. internet provides speed of information, speed of actions, speed of communications, speed of delivery, and speed of innovation 6. Supply chains. Companies will focus on what they do best and outsource the rest 7. C-commerce or collaborative commerce. It occurs when business partners share data collaborate on design decisions, synchronize activities, optimize events, solve problems together, and manage business processes across enterprise. 8. Technological advances. information technology, e-commerce, and telecommunications 9. Knowledge. The ability to create, and utilize knowledge is the paramount skill of the new economy. Those in operations will need to foster learning communities that can share knowledge across physical and cultural boundaries. 10. Environmental and social responsibilities. Consideration of environmental impact and social responsilities. Chapter Three: Products and Services The purpose of nay organization is to provide product and services to its customers. Design defines a firms customers as well as its competitors. It capitalizes on a firms core competencies and determines what new competencies need to be developed. It is also the most obvious driver of change. Product and service design provide a natural venue for learning, breaking down barriers, working in teams, and integrating across functions. THE DESIGN PROCESS Product design specifies which materials are to be used, determines dimensions and tolerances, defines the appearance of the product, and sets standards for performance. Service design specifies what physical items, sensual benefits, and psychological benefits the customer is to receive from the service. Design may be an art, but the design process must be managed effectively. An effective design process: Matches product or service characteristics with customer requirements Ensures that customer requirements are met in the simplest and least costly manner Reduces the time required to design a new product or service Minimizes the revisions necessary to make a design workable

1. Idea Generation ---marketing Te design process begins with understanding the customer and actively identifying customer needs. Sources of ideas: customers feedback, complaints, or suggestion, marketing research, suppliers, workers, new technological development and competitors. Perpetual maps, benchmarking, and reverse engineering can help companies learn from their competitors. Perpetual maps: a visual method of comparing customer perceptions of different products or services. Benchmarking: comparing a product or process against the best-in-class product and making recommendations for improvement based on the results. Reverse Engineering: carefully dismantling competitors product to look for design features to improve your own product.

2. Feasibility Study Product or service concepts undergo feasibility study. A feasibility study consists of a market analysis, an economic analysis and a technical or strategic analysis.

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Market Analysis: assesses whether theres enough demand for the proposed product to invest in developing it further.

If the demand potential exists, then theres an economic analysis Economic Analysis: looks at estimates of production and development costs and compares them to estimated sales volume. Quantitative techniques such as cost-benefit analysis decision theory, net present value, or internal rate of return are commonly used to evaluate the profit potential of the project. Technical or strategic analysis: answer the questions: Does the new product require new technology? Is the risk or capital investment excessive? Is sufficient capacity available for production?

Performance specifications are written for product concepts that pass the feasibility study and are approved for the development. PRELIMINARY DESIGN It involves testing and revising a prototype until viable design is determined. 3. Form Design It refers to how the product will lookphysical appearance of the product. 4. Functional Design It refers to how the product will performtwo performance characteristics: reliability and maintainability. Reliability is the probability that a given part or product will perform its intended function for a specified length of time under normal conditions of use.---product warranty o As the number of serial components increases, system reliability will continue to deteriorate. o To increase the reliability of individual parts, redundant parts can be built to back up a failure. o Calculations: R= [(1-R1)(1-R2)] *R1 and R2 -failure rate o Reliability can also be expressed as the length of time a product or service is n operation before it fails, called mean time between failures (MTBF). o MTBF = 1/failure rate Maintainability or serviceability is the ease with which a product is maintained or repaired. o One quantitative measure of it is mean time to repair (MTTR). o System Availability = MTBF/ (MTBF+MTTR)

4. Production design It refers on how the product will be made. Recommended approaches to production design include simplification, standardization, and modularity. Simplification reduces the number of parts, assemblies or options in a product. Standardizationwhere interchangeable parts are used. Modular design combines standardized building blocks, or modules, to create unique finished products.

5. Pilot run and Final Tests: Final Design and Process Plans Prototypes are built and tested. Adjustments are made as needed before the final design is agreed on. The final design consists of detailed drawings and specifications for the new product or service. The accompanying process plans are workable instructions for manufacture. 6. New product or service launch TECHNIQUES FOR IMPROVING THE DESIGN PROCESS 1. Establishing multifunctional design teams. Involvement and interaction of the create, make, and market functions from the beginning of the design project.

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2. Making design decisions concurrently rather than sequentially. Concurrent design: a new approach to design that involves the simultaneous design of products and processes by design teams. Concurrent design also means involving the customer in the design process before production begins. Sequential design: cost-plus approach Concurrent design: price-minus approach 3. Designing for manufacture and assembly. DMFA means designing a product from material that can be recycled or easily repaired rather than discarded. DMF guidelines promote good design practice, such as: 1. Minimize the number of parts and subassemblies. 2. Use standard parts when possible and repeatable, well-understood processes. 3. Design parts for many uses. Incorporate modularity in design. 4. Design for ease of assembly, minimal handling, and proper presentation. 5. Allow for efficient and adequate testing and replacement of parts. Design for Assembly is a set of producers for reducing the number of parts in an assembly, evaluating methods of assembly, and determining an assembly sequence. Manual assembly is concerned with maintaining a balance between operations on the assembly line, whereas automated assembly is concerned with minimizing the reorientation of parts for assembly. 4. Reviewing designs to prevent failures and ensure value. Design review--- analyzing possible failures. Three such techniques: failure mode and effects analysis (FMEA), fault tree analysis (FTA), and value analysis (VA). FMEA is a systematic approach to analyzing the causes and effects of production failures. It begins with listing the function of the product and each of its parts. All failures modes are ranked in order of their seriousness and likelihood of failure. Failures are addressed one by one. The objective of FMEA is to anticipate failures and prevent them from occurring. FTA is a visual method for analyzing the interrelationships among failures. FTA lists failures and their causes in a tree format using two hatlike symbols, one with a straight lie on the bottom representing and, and one with a curved line on the bottom for or. Features VA or Value engineering helps eliminate unnecessary features and functions in product design. The team assigns a value to each function and determines the cost of providing the function. Ratio of value to cost is calculated. Benefit>Cost

5. Designing for the environment. Design for Environment (DFE) means designing a product by using materials or components that can be recycled or easily repaired rather than discarded. Extended Producer Responsibility (EPR) is a concept that holds companies responsible for their product even after its useful life. --International Standards for Environmental Stewardship, called ISO 1400. 6. Measuring design quality. The quality of a design depends in large part on how easy or difficult it is to produce. A more comprehensive and useful evaluation of design quality includes the following metrics: 1. Percent of revenue from new products or services

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2. Percent of products capturing 50 percent or more of the market 3. Percent of process initiatives yielding 50% or more improvement in effectiveness 4. Percent of suppliers engaged in collaborative design 5. Percent of parts that can be recycled: a measure of greenness of product design 6. Percent of parts used in multiple products: a measure of standardization and modularity 7. Average number of components per product: a measure of design simplicity 8. Percent of parts with no engineering change orders: a measure of how realistic the initial design is--producible 9. Things gone wrong: a measure of design quality that originates from the customer 7. Using quality function deployment. QFD translates the voice of the customer to technical requirements at every stage of design and manufacture. QDF uses a series of matrix diagram that resembles connected house the house of quality House of quality has six sections: customer requirement section, competitive assessment sections, design characteristics section, relationship matrix, trade-off matrix, and target values section. 8. Designing for robustness. A product can fail because it was manufactured wrong in the factoryquality conformanceor because it was designed incorrectly quality of design. A product designed to withstand variations in environmental and operating conditions is said to be robust or to possess robust quality. The conditions that cause a product to operate poorly can be separated into controllable factors and uncontrollable factors. Controllable are design parameters such as material used, dimensions, and form of processing. Uncontrollable are under the users control such as maintenance, length of use and settings.

9. Engaging in collaborative design. TECHNOLOGY IN DESIGN Computer Aided Design (Cad) is a software system that uses computer graphics to assists in the creation, modification and analysis of a design. It produces better designs faster. It can be used for geometric modeling, automated drafting and documentation, engineering analysis, and design analysis. Geometric Modelinguses basic lines, curves, and shapes to generate the geometry and topology part. Automated drafting produces engineering drawings Engineering analysis, when performed at a computer terminal with a CAD system is called computer aided engineering (CAE). CAE tests and analyzes designs on the computer screen.

Collaborative Product Commerce is a software system for collaborative design and development among trading partners; it follows the life cycle of the product. Collaborative design accelerates product development, helps to resolve product launch issues, and improves the quality of the design. SPECIAL CONSIDERATIONS IN SERVICE DESIGN Characteristics of Service: 1. Services are intangible Services are experienced, and that experience may be different for each individual customer

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2. Service output is variable--- customers demand varies but service experience remains constant 3. Services have higher customer contact It involves giving the service provider the skills and authority necessary to complete a customer transaction successfully. Customer is the service in many cases--- facilitates feedback from customers for improvement to existing services. 4. Services are perishable Service cant be inventoried, the timing and locations of delivery is important.

5. Customers do not separate the service from the delivery of service Service design and process design must occur concurrently

6. Services tend to be decentralized and geographically dispersed Multiple service outlets can be a plus on rapid prototyping

7. Services are consumed more often than products 8. Services can be easily emulated Competitors can copy new or improved services quickly

The Service Design Process Service Design is more comprehensive and occurs more often than product design 1. Service Concept : defines the target customer and the desired customer experience. It also defies how our service is different from others and how it will compete in the marketplace. 2. Service Package : is created to meet customer needs. It consists of a mixture of physical items (touchable commodities), sensual benefits (taste and aroma of the food and the sights and sounds of the people), and psychological benefits (rest and relaxation, comfort, status, and sense of well-being). From the service package, service specification are developed for performance design and delivery. 3. Performance Specifications outline expectations and requirements for general and specific customer. Performance specifications are converted into design specifications and, finally, delivery specifications. 4. Design Specifications describe the service in sufficient detail for the desired service experience to be replicated for different individuals at numerous locations. 5. Delivery Specifications outline the steps required in the work process, including the work schedule, deliverables, and the location at which the work is to be performed. Service blueprint: a type of process flowchart that emphasizes customer interaction and service-related terms such as failure points and lines of visibility. The term blueprint is used to reinforce the idea that service delivery needs to be as carefully designed as a physical product and documented with a blueprint of its own. Chapter Four: Processes and Technologies A process is a group of related tasks with specific inputs and outputs. Process exists to create value for the customer, the shareholder, or society. Process Design defines what tasks need to be done and how they are to be coordinated among functions, people and organization.

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Process Strategy is an organizations overall approach for physically producing goods and providing services. A firms process strategy defines its: Capital Intensity: the mix of capital and labor resources used in the production process. Process flexibility: the ease with which resources can be adjusted Vertical integration: the extent to which the firm will produce the inputs and control the outputs of each stage of the production process Customer involvement: role of the customer in the production process

Four types of Production Process: 1. Project: one-of-a-kind production for an individual customer 2. Batch Production: systems process many different jobs through the system in groups (or batches)--- job shops 3. Mass Production: produces large volumes of a standard product for a mass market--- repetitive production It is associated with flow lines or assembly lines. Flow describes how a product moves through the system from one workstation to the next in order of the processing requirements for that particular product. Assembly line describes the way mass production is typically arranged. 4. Continuous Production: are used for very-high-volume commodity products that are very standardizedProcess industries Process Selection with Break-Even Analysis (Quantitative Technique) Break-even analysis examines the cost trade-offs associated with demand volume. The components of break-even analysis are volume, cots, revenue, and profit. Volume: is the level of production, usually expressed as the number of units produced and sold Cost: fixed (remain constant regardless of the number of units produced) and variable (vary with the volume of units produced) costs Profit: difference between the total revenue and total cost. Profit is zero= break-even point

Break even point: fixed cost/ [price per unit -variable cost per unit] Process Planning determines how a product will be produced or a service provided. It converts designs into workable instructions for manufacture. Make or Buy Decisions : decisions regarding which items will be purchased form an outside supplier and which items will be produced in own factories. The make-or-buy decision rests on an evaluation of the following factors: o Cost : would it be cheaper to make the item or buy it? o Capacity : companies that are operating at less than full capacity usually make components rather than buy them. It is better to produce in-house those parts or products with steady demand that consume a set capacity than those whose demand patterns are uncertain. o Quality: quality control o Speed: components are purchased if supplier can provide goods sooner than manufacturer o Reliability: suppliers need to be reliable in both the quality and the timing of what they supplyno delays o Expertise: companies that are especially good at making or designing certain items may want to keep control over their production Specific Equipment Selection: using, replacing, or upgrading equipments, adding additional capacity, or purchasing new equipment. It involves outlay of funds capital investment o Capital Investment involve the commitment of funds in the present with an expectation of returns over some future period Financial analysis of equipment purchase: o Purchase Cost: initial investment in equipment

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o o o o o o Process Plans

Operating Cost: annual cost of operating machine Annual Savings: savings from purchasing new equipmentless materials to be used Revenue Enhancement: increase in revenue due to equipment upgrades or new equipment Replacement Analysis: a hidden cost in replacement analysis is the opportunity cost of not investing in new equipment when upcoming technology will make the equipment obsolete Risk and Uncertainty: investment in new equipment and untested technology can be risky Piecemeal Analysis: proposal and evaluation of equipment purchases

The set of documents that details manufacturing and delivery specification is called a process plan. Process plan may include: o o o o o Blue Prints: detailed drawing of product design A bill of materials: list f materials and parts that go into a product Assembly Chart: show a product is to be assembled Operations Process Charts: show how a product is to be fabricated Routing Sheet: ordered list of machines or workstations that shows where a part is to be sent for its next operation

Computer-Aided Process planning (CAPP) can alleviate some of the difficulties associated with the manual preparation of process plans. It is a specialized software system for process planning. o o Variant system: retrieves a standard process plan from a CAPP database and allows the planner or engineer to modify it for the new part. Generative System: uses a knowledge base of rules gathered from expert machines to create an individual process plan from scratch

Process Analysis is the systematic examination of all aspects of a process to improve its operations. The basic tools of process analysis are process flowcharts, process diagram, and process maps. o o o Process Flowcharts; highlight nonproductive activities Process Diagram: detail each step of a process in simple graphic form Process Maps: more complex process diagrams

Process Reengineering When continual improvement efforts have been exhausted and performance expectations still cannot be reached with an existing process, it is time to completely redesign or reengineer the process. Reengineering is the total redesign of a process. The Reengineering Process 1. Goals and Specifications--- data from existing process are used as a baseline to which benchmarking data on the best industry practices, customer requirements data, and strategic directives are compared. 2. High Level Process Maps-- contains only the essential building blocks of a process-- design principles and innovative ideas 3. Detailed Process Mapprepared for each subprocess or block in the high-level map. model validation and key performance measure When the team is satisfied that the performance objective can be reached with the new design, a pilot study can be conducted. 4. Pilot Studyallows the team to try something, see if it works, modify it, and try again. 5. Implementationfull scale implementation Technology Decisions Information Technology is used to communicate with customers, suppliers, and employees internally in remote locations.

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Management Information Systems (MIS) channels large quantities and numerous types of information through an organization. Decision Support Systems assists decision makers in making decisions. Experts Systems recommends a decision based on expert knowledge. Artificial Intelligence attempts to replicate human thought processes with a computer system. o Artificial neural networks emulate the processing capabilities of the human brain with its thousands of interconnected neurons. o Genetic algorithms are patterned after the adaptation capabilities of biological systemsnarrowing down possible solutions up to acceptable solutions o Fuzzy Logic makes decisions based on incomplete information by stimulating the ability of the human mind to deal with ambiguity Enterprise Software is the backbone of corporate IT Advanced Communication o Electronic data interchange (EDI) to exchange information over private networks called value added networks (VANs) o Internet is a world wide web of computer networks sharing a common software standard called TCP/IP. Its backbones are high speed fiber trunk lines owned mostly by telephone companies. Intranet : internal company networks Extranets : intranets that allow access to selected areas by selected business partners Wireless Communicationcellular phones Teleconferencing and telecommuting allowing work to be performed almost everywhere Bar Coding identifies parts and products, communicating information quickly to processing machines, material handling devices, and costing agents Virtual Reality is a visual form of communication in which the user experiences animation as an active participant

Manufacturing Technology The machines on which basic machining operations are performed called machine tools. Numerically Controlled (NC) machines controlled machine tools with instructions contained on a punched tape. Computer Numerical Controlled (CNC) machines are controlled by software instructions in the memory of a computer. These machines were equipped with a screen and keyboard for writing and editing NC programs at the machines. Automated Material Handling --- conveyors Automated guided vehicle (AVG) is a driverless truck that follows paths of tape, rails or wires embedded in the floor, or wireless radio commands from a centralized computer system Automated storage and retrieval systems (ASRS) are basically automated warehouse although their size has been considerably reduced in recent years. Flexible manufacturing systems (FMS) consist of numerous programmable machine tools connected by an automated material handling system and controlled by a common computer network. Robotics are manipulators that can be programmed to move workpieces or tools along a specified path.

E-Manufacturing includes electronic management of products, processes and manufacture. IT provides the needed linkages between customers, workers, machines, databases, and decisions. Group technology (GT) is the grouping of parts into families based on similar shapes or processing requirements Standard for the exchange of product model data (STEP) sets standards for communication between pieces of automated equipment produced by different vendors Computer aided manufacturing (CAM) is the use of programmable automation in the manufacturer of a product

Chapter Five: Facilities Facilities are where work is performed

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Facility Layout refers to the arrangement of areas within a facility. The basic objective of the layout decision is to ensure a smooth flow of work, material, people, and information through the system. Effective layout also: Minimize material handling costs Utilize space efficiently Utilize labor efficiently Eliminate bottlenecks Facilitate communication and interaction Reduce manufacturing cycle time and customer service time Eliminate waste 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

Basic Layoutsthere are three basic layouts: process, product, and fixed positioning; and three hybrid layouts: cellular layouts, flexible manufacturing systems, and mixed model assembly lines. 1. Process Layouts, also known as functional layouts, group similar activities together in departments or works centers according to the process or function they perform. The major layout concern for a process layout is where to locate the departments or machines centers in relation to each other. Process layouts in manufacturing firms require flexible material and handling equipment (such as forklifts) that can follow multiple paths, move in any direction, and carry large loads of in-process goods. A forklift moves pallet of material form department to department. 2. Product Layouts, better known as assembly lines, arrange in a line according to the sequence o operations that need to be performed to assemble a particular product. Each product has its own line specifically designed to meet its requirements. The flow of work is orderly and efficient, moving from one workstation to another down the assembly line until a finished product comes off the end the line. Product layouts are suitable for mass production or repetitive operations in which demand is stable and volume is high. Process layouts are flexible; products layouts are efficient. The major concern in a product layout is balancing the assembly line so that no one work station becomes a bottleneck and holds up the flow of work through the line. A product layout needs material moved in one direction along the assembly line and always in the same pattern. Conveyors are the most common material handling equipment for product layouts. Conveyors can be automatically set to control the speed of work or stopped and started by the workers according to their use. Assembly work can be performed online (conveyor) or offline (at a workstation serviced by the conveyor). 3. Fixed-position Layouts are typical of projects in which the product produced is too fragile, bulky, or heavy to moveships, house, and aircrafts. The product remains stationary for the entire manufacturing cycle. Equipment, workers, materials, and other resources are brought to the production site. Designing Process Layouts Process layout objective: minimize material handling costs. Departments that incur the most interdependent movement should be located closest to each other, and those that do not interact should be located further away. Two techniques used to design process layouts: block diagramming and relationship diagramming. Block Diagramming tries to minimize nonadjacent loads. 1. Data on historical or predicted movements of materials between departments in the existing or proposed facility.provided by the load summary chart: gives the average number of unit loads transported between the departments over a given period of time. A nut load is the quantity in which materials is normally moved.

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2. Calculate the composite movements between departments and rank them from most movement to least movement.back and forth movement between each pair of department. 3. Trial layouts are placed on a grid that graphically represents the relative distances between departments in the form of uniform blocks. The objective is to assign each department to a block on the grid so that nonadjacent loads are minimized. A block diagram is a type of schematic layout diagram that includes space requirements. It can be created by blocking in the work areas around the departments on the grid. The final block diagram adjusts the block diagram for the desired or proposed shape of the building. Standardized building shapes include rectangles, L shapes, T shapes, U shapes Relationship diagramming: is a schematic diagram that uses weighted lines to denote locations. Muthers grid (Richard Muther) is a format for displaying manager preferences for department locations. The preference information is coded into six categories associated with the five vowels, A, E, I, O, and U, plus the letter X. A-absolutely necessary E-especially important I-important O-okay U-unimportant X-undesirable

Computerized Layouts Solutions Computerized Relative Allocation of Facilities Technique (CRAFT) takes a load summary chart and block diagram as input and then makes pairwise exchanges of departments until the improvements in cost or nonadjency score can be found. It is often used to improve on existing layouts or to enhance the best manual attempts at designing a layout. Computerized Relationship Layout Planning (CORELAP) uses nonquantitative input relationship diagramming to produce feasible layout for upto 45 departments and different building shapes. It attempts to create an acceptable layout from the beginning by locating department pairs with A ratings from then those with E ratings, and so on.

Service Layouts may have different objectives than manufacturing layouts but layout in much the same way as manufacturing layout. Designing Product Layouts A product layout arranges machine or workers in a line according to the operations that need to be performed to assemble a particular product. Layout could be determined simply by following the order of assembly. Product layouts objective is to balance the assembly line. Product layouts or assembly lines are used for high volume production. To attain the required output rate as efficiently as possible, jobs are broken down into their smallest indivisible portions, called work elements. Work elements are grouped together into workstation so products flow through the assembly line smoothly. Workstation is any area along the assembly line that requires at least one worker or machine. The process of equalizing the amount of work at each workstation is called line balancing. Line Balancing: trial and error process Assembly line balancing operates under two constraints, precedence requirements and cycle time restrictions. Precedence requirements are physical restrictions on the order in which operations are performed on the assembly line. Cycle time is the maximum amount of time a product is allowed to spend at each workstation. o Desired cycle time (Cd) = production time available/ desired units of output o Actual cycle time is the maximum workstation time on the line

1. Draw and label a precedence diagram 2. Calculate the desired cycle time required for the line 3. Calculate the theoretical minimum number of workstation 4. Group elements into workstations, recognizing cycle time and precedence constraints 5. Calculate the efficiency of the line

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The efficiency of the line can provide one type of guidelines; the theoretical minimum number of workstation provides another. The total idle of time is called balance delay. : (1effiecency) expressed as percentage

6. Determine if the theoretical minimum number of workstations or an acceptable efficiency level has been reached. If not go back to step 4. Computerized Line Balancing use of heuristics or rules to balance the line at an acceptable level of efficiency Line balancing heuristics specify the order in which work element are allocated to workstation. Hybrid Layouts: modify or combine some aspects of product and process layouts 1. Cellular Layouts attempt to combine the flexibility of a process layout with the efficiency of a product layout. It groups dissimilar machines into work centers (called cells) that process families of parts with similar shapes or processing requirements. Production Flow Analysis is a group of technology technique that reorders part routing matrices to identify families of parts with similar processing requirements. The reordering process can be as simple as listing which parts have four in common, then which have three in common, two in common, and the like. The advantage of cellular layouts are as follows: o Reduced material handling and transmit timematerial movement is more direct o Reduced setup timesimilar parts are grouped and processed together o Reduced work-in-process inventory the flow of work is balanced o Better use of human resourcesworkers in each cell are multifunctional o Easier to control items in the same part family are processed in a similar manner through the work cell o Easier to automate cellular layouts can be automated one cell at a time The disadvantages of cellular layouts: o Inadequate part families there must be enough similarity in the type of items processed to form distinct part families o Poorly balanced cells items may follow different sequences through the cell that requires diff. machines o Expanded training and scheduling of workers time consuming and requires workers cooperation o Increased capital investments -- expensive

Flexible Manufacturing Systems (FMS) can produce an enormous variety of items The trend in flexible manufacturing is toward smaller versions of the traditional FMS, called flexible manufacturing cells. FMS layouts differ based on the variety of parts that the system can process, the size of the parts processed, and the average processing time required for part completion. Progressive Layout all parts follow the same progression through the machining stations Closed-loop Layout arranged in the general order of processing for a much larger variety of parts Ladder Layout allowing two machines to work on one time at a time Open-field Layout allows material to move among the machine centers in any order and typically includes several support stations

Mixed-Model Assembly Lines processes more than one product model Single-model and mixed-model assembly lines differ in layout and operation The following factors are important in the design and operation of mixed-model assembly lines: Line balancing the time to complete a task can vary from model to model U-shaped lines it is necessary to have flexible workforce and to arrange the lines so that workers can assist one another as needed Flexible workforce variations on work performance Model Sequencing different models are produced

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Chapter Six: Project Management Project Management is the management of the work to develop and implement an innovation or change in an existing operation. It encompasses planning the project and controlling the project activities, subject to resource and budget constraints, to keep the project on schedule. The Elements of Project Management 1. Project Team is a group of individuals selected from other areas in the organization because of their special skills, expertise, and experience related to the project activities. Matrix Organization is a team structure with members from different functional areas or departments, depending on the skills required. The matrix is derived from the two-dimensional characteristics of this type of organizational structurevertical (normal organizational structure) and horizontal dimension (special functional structure). The most important member of the project team is the project manager. The project team members are often from diverse areas of the organization and possess different skills, which must be coordinated into a single, focused effort to complete the project successfully.

2. Project Planning requires that the objectives of the project be clearly defined so the manager and the team know what is expected. The elements of project planning: 1. Define project objectives Statement of work: a written description of what is to be accomplished, the work to be done, and the project time frame. 2. Identify activities Activity is the performance of an individual job or work effort that requires labor, resources, and time. 3. Establish precedence relationships Precedence relationship is the sequential relationship of activities in a project. 4. Make time estimates 5. Determine project completion schedule objectives 6. Compare project schedule objectives 7. Determine resource requirements to meet objectives 3. Work Breakdown Structure organizes the work to be done on a project. It breaks down a project into components, subcomponents, activities and tasks. It identifies relationship between modules and activities. It also indentifies unnecessary duplication of activities. 4. Project Control Project management consists of two distinct phases: planning and control. Once the project planning process is completed, the project can be physically initiatedthe activities can begin. Control includes making sure all activities are identified and included and making sure the activities are completed in the proper sequence. The primary focus of control is on maintaining the project schedule and budget, and making sure the project is completed on time.

The GANTT Chart (Henry Gantt) bar chart It is a traditional management technique for scheduling and planning small projects with relatively few activities and precedence relationships. It is a graph with a bar representing time for each activity in the project being analyzed. This set of activities demonstrates how a precedence relationship works. It provides visual display of the project schedule, indicating when activities are scheduled to start, when finished, and where extra time is available and activities can be delayed. The extra time for an activity is called slack. Slack is the amount by which an activity can be delayed without delaying any of the activities that follow it or the project as a whole. CPM and PERT are both derivatives from GANTT chart and uses a network to depict precedence relationships among activites Critical Path Method: activities are shown as a network of precedence relationships using activity-on-node network construction

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Project Evaluation and Review Technique: activities are shown as a network of precedence relationships using activity-onarrow network construction

The Project Network: consists of branches and nodes Activiy-on-node (AON) -- nodes represent activities and arrows show precedence relationships. Branches represent activities and the nodes between them reflect events An event is the completion or beginning of an activity in a project Activity-on-arrow (AOA) -- arrows represent activities and nodes are events for points in time. Two or more activities cannot share the same start and end nodes; dummy required. Dummy activity is inserted into the network to show a precedence relationship, but it does not represent any actual passage of time.

A network path is a sequence of connected activities that runs from the start node to the end node in the network. The project cannot be completed sooner than the time required by the longest path in the network, in terms of time. The Critical Path is the longest path through a network; it is the minimum project completion time. Activity Scheduling To determine the earliest start time (ES) for every activity is the earliest time an activity can start), we make a forward pass through the network. A forward pass starts at the beginning of a CPM/PERT network to determine the earliest activity times. The earliest start time for an activity is the maximum time in which all preceding activities have been completesthe time when activity start node is realized. The earliest finish time (EF) is simply the earliest start time plus the activity time estimate. Companions to the earliest start and finish are the latest start and latest finish times, LS and Lf. The latest start time is the latest time an activity can start without delaying the completion of the project critical path time. The latest finish time is the latest time an activity can be completed and still maintain the project critical path time. A backward pass determines latest activity times by starting at the end of CPM/PERT network and working forward. Activity Slack For activities not on the critical path for which the earliest and latest start times or earliest and latest finish times are not equal, slack time exists. Slack is the amount of time an activity can be delayed without affecting the overall project duration. Probabilistic Activity Times Probabilistic Time Estimates Probabilistic time estimates reflect uncertainty of activity times. A beta distribution is a probability distribution traditionally used in CPM/PERT. The three estimates for each activity are the most likely time (m), the optimistic time (a), and the pessimistic time (b). The most likely time is a subjective estimate of the activity time that would most frequently occur if the activity were repeated many times. The optimistic time is the shortest possible time to complete the activity if everything went right. The pessimistic time is the longest time to complete the activity assuming everything went wrong. Project Crashing is a method for shortening the project duration by reducing the time of one of the critical project activities to less than its normal activity time. Crashing is reducing project time by expanding additional resources. Crash time is the amount of time an activity is crashed; crash cost is the cost of reducing activity time. The objective of project crashing is to reduce project duration while minimizing cost of crashing. Since the project completion time can be shortened only by crashing activities on the critical path, it may turn out that not all actives have to be crashed.

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