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PRODUCTIONOPERATION MANAGEMENT

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DEFINITION (POM)

Operations management (OM) is defined as the design,operation, and improvement of the systems that create and

deliver the firmsprimary products and services

POM concerns itself with the conversion of inputs into

outputs, using physical resources, so as to provide utilities,

place, possession or state or a combination of these tocustomer while meeting the other organizational objectives

of effectiveness, efficiency and adaptability.

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Value-Added Service Categories

Operations

ManagementInformation

Problem Solving

Sales Support

customization


3

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Production Vs Operation Management

Production Management Operation Management

focused uponadministration, planning

and execution of production

process

concerned with input/outputand churning out products

in the shape of desired

finished product.

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Historical Development of OM

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TANGIBILITY SPECTRUM

4/1/2014 6

Tangible

Dominant

Intangible

Dominant

Salt

Soft DrinksDetergents

AutomobilesCosmetics

AdvertisingAgencies

AirlinesInvestment

ManagementConsulting

Teaching

Fast-foodOutlets

Fast-food

Outlets

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GOODS & SERVICES MIX

4/1/2014 7

0

10

20

30

40

50

60

70

80

90

100

Tangible goods goods+ services equal share of goods &

services

services + minor goods Pure services

0

30

50

70

100100

70

50

30

0

ser vices goods

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Differences Between

Goods and Services

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Intangibility

Perishability

Simultaneous

Productionand

Consumption

Heterogeneity

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IMPLICATIONS OF INTANGIBILITY

Services cannot be inventoried

Services cannot be patented

Services cannot be readily displayed or

communicated

Pricing is difficult

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IMPLICATIONS OF HETEROGENEITY

Service delivery and customer satisfaction depend on

employee actions

Service quality depends on many uncontrollable

factors

There is no sure knowledge that the service deliveredmatches what was planned and promoted

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Implications of Simultaneous Productionand Consumption

Customers participate in and affect the transaction

Customers affect each other

Employees affect the service outcome

Decentralization may be essential

Mass production is difficult

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IMPLICATIONS OF PERISHABILITY

It is difficult to synchronize supply and demand

with services

Services cannot be returned or resold

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SERVICES ARE DIFFERENTGoods Services Resulting Implications

Tangible Intangible Services cannot be inventoried.Services cannot be patented.Services cannot be readily displayed or communicated.Pricing is difficult.

Standardized Heterogeneous Service delivery and customer satisfaction depend onemployee actions.Service quality depends on many uncontrollable factors.There is no sure knowledge that the service deliveredmatches what was planned and promoted.

Productionseparate from

consumption

Simultaneousproduction and

consumption

Customers participate in and affect the transaction.Customers affect each other.

Employees affect the service outcome.Decentralization may be essential.Mass production is difficult.

Nonperishable Perishable It is difficult to synchronize supply and demand withservices.Services cannot be returned or resold.

Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Problems and Strategies in Services Marketing,

Journal of Marketing49 (Spring 1985): 33-46.

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Operations Strategy @ Global Level


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CorporateMission

BusinessStrategy

Product/servicePlans

CompetitivePriorities- Cost,

time, Quality &flexibility

OperationStrategy

SWOTOperationStrategy

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THREE INPUTS TO A BUSINESS

STRATEGY


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BUSINESS/FUNCTIONAL STRATEGY


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OPERATIONS STRATEGY DESIGNING

THE OPERATIONS FUNCTION


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IMPORTANCE OF OPERATIONS

STRATEGY

Companies often do not understand thedifferences between operational efficiencyand strategy

Operational efficiency is performing tasks well,even better than competitors

Strategy is a plan for competing in the marketplace

Operations strategy is to ensure all tasksperformed are the right tasks


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COMPETITIVE PRIORITIES- THE EDGE

Four Important Operations Questions: Will you

compete on

Cost?

Quality?

Time?

Flexibility? All of the above? Some? Tradeoffs?


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COMPETING ON COST?

Offering product at a low price relative to competition

Typically high volume products

Often limit product range & offer little customization

May invest in automation to reduce unit costs

Can use lower skill labor

Probably use product focused layouts

Low cost does not mean low quality


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COMPETING ON QUALITY?


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Quality is often subjective

Quality is defined differently depending on who is defining it

Two major quality dimensions include

High performance design:

Superior features, high durability, & excellent customer service

Product & service consistency:

Meets design specifications

Close tolerances

Error free delivery

Quality needs to address

Product design qualityproduct/service meets requirements

Process qualityerror free products

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COMPETING ON TIME?


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Time/speed one of most important competition priorities

First that can deliver often wins the race

Time related issues involve

Rapid delivery:

Focused on shorter time between order placement and delivery

On-time delivery:

Deliver product exactly when needed every time

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COMPETING ON FLEXIBILITY?


23

Company environment changes rapidly

Company must accommodate change by being flexible

Product flexibility:

Easily switch production from one item to another

Easily customize product/service to meet specific requirements of a customer

Volume flexibility:

Ability to ramp production up and down to match market demands

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CURRENT ISSUES IN OM Coordinate the relationships between mutually supportive but separate

organizations.

Optimizing global supplier, production, and distribution networks.

Increased co-production of goods and services

Managing the customers experience during the service encounter

Raising the awareness of operations as a significant competitive

weapon

Managing the customers experience during the service encounter

Raising the awareness of operations as a significant competitive

weapon4/1/2014 PRODUCTION & OPERATION MANAGEMENT 24

C P ti

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Career Perspective

&

Job Role & Responsibilities

Career in every Industry- retail, banking, Real estate,

manufacturing (cement, FMCG, apparel etc)

prepares program budgets,

facilitates several programs around the company,

controls inventory,

handles logistics, and

interviews and supervises employees.4/1/2014 PRODUCTION & OPERATION

MANAGEMENT25

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Productivity

American Productivity: A double edged sword(2008-09)

Law Firm-24 recruitments (Required 48)

Rescind joining by year @ low salary Americans are most productive.

1920 working hours (240 working days/year)

122 working hours (Britain), 378 workinghours(Germans)

Results: Living standard, employment rate,

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Productivity

Textile Industry: In 1950s one worker taking

care of 5 machines at a time.

In 2010s one worker can take care of 100

machines @ a time. Productivity:120 fold

increase in productivity.

Egg laying Operation: In 2010s 2 worker can

manage 1 mn chickens laying 240 mn eggs/yr.

Result: Higher standard of living.

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MEASURING PRODUCTIVITY


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Productivity is a measure of how efficiently inputs are converted to outputs

Productivity = output/input

Total Productivity Measure

Total Productivity = $sales/inputs $

Partial Productivity Measure

Partial Productivity = cars/employee

Multifactor Productivity Measure

Multi-factor Productivity = sales/total $costs

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NUMERICAL Productivity Example - An automobile manufacturer has presented the following data for

the past three years in its annual report. As a potential investor, you are interested in

calculating yearly productivity and year to year productivity gains as one of several factors in

your investment analysis.


29

2003 2002 2001

Partial Prod. Measure

Unit Car Sales/Employee 24.1 21.2 18.3

Year-to-year Improvement 13.7% 15.8%

Total Cost Productivity 1.26 1.24 1.19

Year-to-year Improvement 1.6% 4.2%

Which is the best measurement?

2003 2002 2001

Unit car

sales

2,700,000 2,400,000 2,100,000

Employees 112,000 113,000 115,000

$ Sales

(billions$)

$49,000 $41,000 $38,000

Cost ofSales

(billions)

$39,000 $33,000 $32,000

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PRODUCTIVITY EXAMPLE


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It took 500 hrs of labor to produce 200 units of a product. The product

sells for $160 each. Total labor cost is $14/hr on the average. Material

cost is $30/unit. Compute final productivity and productivity/hr.

Solution: Here are two from manyways to compute productivity:

Total output = 200 units x $160/unit = $32,000

Total input = 500 hrs x $14/hr + 200 units x $30/unit =$13,000

Productivity = Output/Input = $32,000/$13,000 = 2.46

Output ($/hr) = 200 units x $160/unit / 500 hrs = $64/hrInput ($/hr) = $14/hr

Productivity = Output/Input = ($64/hr) / ($14/hr) = 4.57


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MANAGEMENT FUNCTIONS


32

Staffing

OrganizingControlling

Planning

Fi f i

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Five stages of strategic

management process

Develop strategy ,vision and mission.

Analyze the internal and external environment

Refine options and choices

Plan

Implement

Evaluate


33

KEY SUCCESS FACTORS

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KEY SUCCESS FACTORS

PRICE/COST

QUALITY

Performance

Conformance

Features

Durability

Reliability

Serviceability

Aesthetics

Perceived Quality


34

strategic elements that affect their ability to prosper in the marketplace

(i.e., attributes, resources, competencies, or capabilities).

SERVICE

FLEXIBILITY

TRADEOFFS

ORDER QUALIFERS- Performance dimensions onwhich customers expect a minimum level of performance. Superior performance on

an order qualifier will not, by itself, give a company a competitive advantage.

ORDER WINNERS- A useful way to examine a firm'sability to be successful in the market is to identify the order winners. An order

winner is a criterion that customers use to differentiate the services or products of

one firm from those of another.

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PRODUCT DEVELOPMENT PROCESS There are six phases of the generic development process

are:

PLANNING:

Marketing- articulate market opportunity, STP etc

Design- Consider product platform & architecture, assess newtechnology

Manufacturing- identify production constraints, set supply chainstrategy

Other functions- Research, available technologies, financialbudgeting, allocate project resources


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PRODUCT DEVELOPMENTPROCESS contd

Concept Development-

Marketing: collect customers need, competitive products,

Design:feasibility test, develop industrial design concepts, Build

and test experimental prototypes.

Manufacturing: estimate manuf. Cost, assess productionfeasibility.

OF: Facilitate economic analysis, investigate patent issues.


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System Level Design

Marketing: Develop Product plan options & extended pro.Family. Set target sales price points

Design: Generate alternative product arch, define major sub

systems and interfaces, define ind. designs.

Manuf.: Identify suppliers, perform make-buy analysis, defineassembly scheme, set target costs.

OF: facilitate make-buy analysis, identify service issues.


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Detail Design:

Marketing: develop marketing plan, sales plan

Design: define part geometry, choose materials, assign tolerance,

complete industrial design control docx.

Manuf.: define piece-part production processes, design tooling,

define QA, procurement of long-lead tooling.


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Testing & Refinement:

Marketing: Develop promotion and launch materials, facilitate

field testing.

Design: Reliability, life & performance testing, regulatory

approval, implement design changes.

Manuf.: Facilitate supplier ramp-up, refine fabrication and

assembly process, train work force, refine QA.


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Production Ramp-up

Marketing: Place early production with key customers.

Design: Evaluate early production o/p.

Manuf.: Begin operation of entire production system.


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Variants of Generic Products on thebasis of Product Design

Generic( Market-pull Products)-basic goods.

Technology-push products- Innovative Products- I Pod, walkman(sony) etc

Platform Products- TV, Washing Machine, Automobiles etc Process-Incentive Products- Foods, Electricity, few of platform

products.

Customized products- Switches, Batteries etc.

High-Risk Products- Softwares, Ics, technology based products.

Quick-build Products- Trendy or fashion products; cellularphones, apparels

Complex Systems- Airplanes, Jet Engines etc.4/1/2014 PRODUCTION & OPERATIONMANAGEMENT 43

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Threats and ControlsThreatlack of management control during the process could cause under or over production

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Controlproper approval of production orders by involving management earlier on in theprocess

Controlperiodic status reports to management

Threat inaccurate inventory control, threat is this system only shows when raw material is

being used, but it does not show when/how many completed units the company has on

hand

Controlinventory control department should update the general ledger by sending a journal

voucher after production has been completed

Controluse RFID technology to keep track of inventory

Controldo a periodic physical inventory counts

Controlmove tickets should be used to document subsequent movement of inventory.

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Designing for the Customer


Quality Function

Deployment

Value Analysis/

Value EngineeringIdeal Customer

Product

House of Quality

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DESIGNING FOR THE CUSTOMER:QUALITY FUNCTION DEPLOYMENT

Interfunctional teams from marketing, design engineering,and manufacturing

Voice of the customer

House of QualityA matrix that helps a product design team

translate customers requirements into operating & engg. Goals.


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Designing for the Customer:Value Analysis/Value Engineering

VA: It deals with the products already in production and is used toanalyze product specializations & requirements as shown in

production docx & purchase requests.

VE: Its cost-avoidance method, To achieve equivalent or betterperformance at a lower cost while maintaining all functional

requirements defined by the customer

Does the item have any design features that are not necessary?

Can two or more parts be combined into one?

How can we cut down the weight?

Are there nonstandard parts that can be eliminated?


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Measuring Product Development Performance


MeasuresFreq. Of new products introduced

Time to market introduction

Number stated and number completed

Actual versus plan

Percentage of sales from new products

Time-to-market

Productivity

Quality

Engineering hours per project

Cost of materials and tooling per project

Actual versus plan

Conformance-reliability in use

Design-performance and customer satisfaction

Yield-factory and field

Performance

Dimension

Process Flowchart

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Process Flowchart


Types of Processes

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Types of Processes Process: It is an activity of an organization that takes i/p and transforms

into o/p, thatsgreater value to the organization is called process.

There are two type of process: Single stage process

Multiple stage process


Stage 1 Stage 2 Stage 3

Start Stop

Process Design

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Process DesignKey Terms


There are various key terms used in process design. These are as follows:

Cycle time: Average time between completions of successive units in

process.

Utilization: Ratio of time that a resource is actually activated relativeto the time that it is available for use.

Buffering: A storage area between stages where the output of a stage isplaced prior to being used in a downstream stage. Buffering allows the

stages to operate independently.

K T

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Key Terms Blocking: Activities in the stage must stop because there is no place to deposit the

item just completed. Starving:Activities in a stage must stop because there is no work.

Bottleneck:Resource that limits the capacity or maximum output of theprocesses.

Make to Order: Only activated in response to an actual order Both work-in-process and finished goods inventory kept to a minimum

Make to Stock: Process activated to meet expected or forecast demand Customer orders are served from target stocking level

Hybrid:Combination of Make to Order & Make to Stock process.


P d d S i S O i

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Product and Service Strategy Options


Facility Layout and Process Choice

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Facility Layout and Process Choice

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Process Improvement

Reduce WIP (work in progress)

Add additional resources to increase capacity.

Minimize non-value added activities.

Reduce lead time

Redesign product layout, process etc.

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Numerical


Suppose you had to produce 100 units in 80 hours to meetthe demand requirements of a product. What is the

cycle time to meet this demand requirement?

Answer: There are 4,800 minutes (60 minutes/hour x 80hours) in 80 hours. So the average time betweencompletions would have to be: Cycle time = 4,800/100

units = 48 minutes.

Answer: 48 minutes

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Types of Processes Conversion (ex. Iron to steel)

Fabrication (ex. Cloth to clothes)

Assembly (ex. Parts to components)

Testing (ex. For quality of products)


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Process Flow Structures Job shop (ex. Copy center making a single copy of a student

term paper)

Batch shop (ex. Copy center making 10,000 copies of an adpiece for a business)

Assembly Line (ex. Automobile manufacturer)

Continuous Flow (ex. Petroleum manufacturer)


Product Process Matrix

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IV.

Continuous

Flow

III.Assembly

Line

II.

Batch

I.

Job

Shop

Low

Volume,One of a

Kind

Multiple

Products,Low

Volume

Few

Major

Products,Higher

Volume

High

Volume,

HighStandard-

ization

Commercial

Printer

French Restaurant

Heavy

Equipment

Automobile

Assembly

Burger King

Sugar

Refinery

Flexibility (High)

Unit Cost (High)

Flexibility (Low)

Unit Cost (Low)

These are

the major

stages of

product and

process life

cycles

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MANAGEMENT 59

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Break-Even Analysis A standard approach to choosing among alternative

processes or equipment

Model seeks to determine the point in units produced (and

sold) where we will start making profit on the process or

equipment

Model seeks to determine the point in units produced (and

sold) where total revenue and total cost are equal4/1/2014

PRODUCTION & OPERATION

MANAGEMENT 60

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Break-Even Analysis (Continued)

This formula can be used to find any of its components

algebraically if the other parameters are known


MANAGEMENT 61

Break-even

Demand=

Purchase cost of process or equipment

Price per unit - Cost per unit

or

Total fixed costs of process or equipment

Unit price to customer - Variable costs per unit

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Break-Even Analysis (Continued) Example: Suppose you want to purchase a new computer that will

cost $5,000. It will be used to process written orders from customerswho will pay $25 each for the service. The cost of labor, electricity

and the form used to place the order is $5 per customer. How many

customers will we need to serve to permit the total revenue to break-

even with our costs?

Break-even Demand:

= Total fixed costs of process or equip.

Unit price to customerVariable costs

=5,000/(25-5)=250 customers


MANAGEMENT 62

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Issues in Facility Location Proximity to Customers

Business Climate

Total Costs

Infrastructure

Quality of Labor Suppliers

Other Facilities4/1/2014


MANAGEMENT 63

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Issues in Facility Location Free Trade Zones Political Risk

Government Barriers

Trading Blocs

Environmental Regulation

Host Community

Competitive Advantage


MANAGEMENT 64

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PLANT LOCATION MODELS

Factor Rating method

Centroid Method

Linear programming or Transportation method


MANAGEMENT 65

Plant Location Methodology: Factor Rating Method

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Example


MANAGEMENT 66

Fuels in region 0 to 330

Power availability and reliability 0 to 200

Labor climate 0 to 100

Living conditions 0 to 100

Transportation 0 to 50

Water supply 0 to 10Climate 0 to 50

Supplies 0 to 60

Tax policies and laws 0 to 20

Two refineries sites (A and B) are assigned the following range of

point values and respective points, where the more points thebetter for the site location.

123150

54

24

45

48

5

5

Major factors for site location Pt. Range

156100

63

96

50

54

50

20

Sites

A B

Total pts. 418 544

Best Site

is B

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Plant Location Methodology: Centroid Method The centroid method is used for locating single facilities

that considers existing facilities, the distances between

them, and the volumes of goods to be shipped between them

This methodology involves formulas used to compute the

coordinates of the two-dimensional point that meets the

distance and volume criteria stated above


MANAGEMENT 67

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Plant Location Methodology: CentroidMethod Formulas


MANAGEMENT 68

C =d V

Vx

ix i

i

Where:

Cx= X coordinate of centroid

Cy= X coordinate of centroid

dix= X coordinate of the ith locationdiy= Y coordinate of the ith location

Vi= volume of goods moved to or from ith

location

C =d V

Vy

iy i

i

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Plant Location Methodology: Example of CentroidMethod

Centroid method example Several mobile showrooms are located according to the

following grid which represents coordinate locations for

each showroom


MANAGEMENT 69

Question: What is the best location for a new Z-Mobile

warehouse/temporary storage facility considering only distances

and quantities sold per month?

S howroom No of Z-Mobile s

s old pe r month

A 1250

D 1900

Q 2300X

Y

A(100,200)

D(250,580)

Q(790,900)

(0,0)

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Plant Location Methodology: Example of Centroid Method(Continued): Determining Existing Facility Coordinates


MANAGEMENT 70

X

Y

A(100,200)

D(250,580)

Q(790,900)

(0,0)

S howroom No of Z-Mobile s

s old p e r month

A 1250

D 1900

Q 2300

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Plant Location Methodology: Example of Centroid Method(Continued): Determining the Coordinates of the New Facility


MANAGEMENT 71

C =100(1250) + 250(1900) + 790(2300)

1250 + 1900 + 2300 =

2,417,000

5,450 =x 443.49

C =200(1250) + 580(1900) + 900(2300)

1250 + 1900 + 2300 =

3,422,000

5,450 =y 627.89

S ho wroo m No of Z-Mo bile s

s old pe r month

A 1250

D 1900

Q 2300X

Y

A(100,200)

D(250,580)

Q(790,900)

(0,0)

Z

New location

of facility Z

about(443,627)

You then take the coordinates and place them on the map:

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Plant Location Methodology: TransportationMethod of Linear Programming

Transportation method of linear programming seeks

to minimize costs of shipping n units to m

destinations or its seeks to maximize profit ofshipping nunits to mdestinations


MANAGEMENT 72

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PLANT LAYOUT

What is factory Layout?

What is its importance?

Activities: HR wing, R&D deptt, Marketing & Sales deptt,

Maintenance deptt, Administrative deptt, Finance deptt, Production & Operation

deptt.


MANAGEMENT 73

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Facility Layout efinedFacility layoutcan be defined as the process by which the placement of

departments, workgroups within departments, workstations, machines,

and stock-holding points within a facility are determined

This process requires the following inputs:

Specification of objectives of the system in terms of output and flexibility

Estimation of product or service demand on the system

Processing requirements in terms of number of operations and amount of flowbetween departments and work centers

Space requirements for the elements in the layout

Space availability within the facility itself


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40

6

20

50

15

18

E30

25

40H

I

DB

FC

A

G

S1

S2

S3S5S4

LayoutLayout: the configuration of departments, work centers, and

equipment, with particular emphasis on movement of work(customers or materials) through the system

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Objectives of Facility Layout Minimize material handling costs

Utilize space efficiently

Utilize labor efficiently

Eliminate bottlenecks

Facilitate communication and interaction between

workers, between workers and their supervisors, or

between workers and customers


MANAGEMENT 76

Reduce manufacturing cycle time or customer service time

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Eliminate waste or redundant movement

Facilitate the entry, exit, and placement of material, products, or

people

Incorporate safety and security measures

Promote product and service quality

Encourage proper maintenance activities

Provide a visual control of operations or activities

Provide flexibility to adapt to changing conditions

4/1/2014


MANAGEMENT 77

OBJECTIVES OF PRODUCTION

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PLANT LAYOUT

Achieve optimal layouts with minimum capital Investment

Ease of maintenance

Effective utilization of factory space and vertical space

Minimize material and handling costs

Adhere to the site conditions and building norms

Construct cafes, wash room and rest room for employees

Elimination of bottlenecks and jams.

Better working conditions. Provide space for production machines equipments, testing &

warehousing etc

4/1/2014


MANAGEMENT 78

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Basic Production Layout Formats Process Layout (also calledjob-shoporfunctional layout)

Product Layout (also calledflow-shop layout)

Group Technology (Cellular) Layout

Fixed-Position Layout

Retail Service Layout

Office Layout

4/1/2014


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Process Layout: Interdepartmental Flow Given

The flow (number of moves) to and from all departments

The cost of moving from one department to another

The existing or planned physical layout of the plant

Determine

The best locations for each department, where best means

maximizing flow, which minimizing costs

CRAFT technique used to analyze proper layout design

4/1/2014


MANAGEMENT 80

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Process Layout

4/1/2014


MANAGEMENT 81

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Product LayoutIN

OUT

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1 2 3 4

5

6

78910

IN

OUT

Workers

A U-Shaped Production Line

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Hybrid Layouts Cellular layouts

group machines into machining cells

Flexible manufacturing systems

automated machining & material handling systems

Mixed-model assembly lines

produce variety of models on one line

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Cellular Layout Cellular Manufacturing

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

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Group Technology

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Machine

1

Machine

2Machine

3

Machine

4

Machine

5

Materials in

Finished

goods out

One Worker, Multiple Machines

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Group Technology: Benefits1. Better human relations

2. Improved operator expertise

3. Less in-process inventory and material handling

4. Faster production setup

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Group TechnologyDrilling

D D

D D

Grinding

G G

G G

G G

Milling

M M

M M

M M

Assembly

A A

A A

Lathing

Receiving and

shipping

L

L L

L L

L L

L

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Group Technology

(a) Jumbled flows in a job shop without GT cells

Drilling

D D

D D

Grinding

G G

G G

G G

Milling

M M

M M

M M

Assembly

A A

A A

Lathing

Receiving and

shipping

L

L L

L L

L L

L

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Group Technology


Drilling

D D

D D

Grinding

G G

G G

G G

Milling

M M

M M

M M

Assembly

A A

A A

Lathing

Receiving and

shipping

L

L L

L L

L L

L

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Group Technology


Drilling

D D

D D

Grinding

G G

G G

G G

Milling

M M

M M

M M

Assembly

A A

A A

Lathing

Receiving and

shipping

L

L L

L L

L L

L

Group Technology

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Group Technology

(b) Line flows in a job shop with three GT cells

Cell 3

L M G G

Cell 1 Cell 2

Assembly

area

A A

L M DL

L M

ShippingD

Receiving

G

Group Technology

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Group Technology


Cell 3

L M G G

Cell 1 Cell 2

Assembly

area

A A

L M DL

L M

Shipping

D

Receiving

G

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Group Technology


Cell 3

L M G G

Cell 1 Cell 2

Assembly

area

A A

L M DL

L M

Shipping

D

Receiving

G

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Group Technology


Cell 3

L M G G

Cell 1 Cell 2

Assembly

area

A A

L M DL

L M

Shipping

D

Receiving

G

Hybrid Layouts

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Hybrid Layouts

Combine elements of both product &process layouts

Maintain some of the efficiencies of productlayouts

Maintain some of the flexibility of process layouts

Examples: Group technology & manufacturing cells

Grocery stores

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Fixed Position Layout

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Used when product is large

Product is difficult or impossible to move, i.e.

very large or fixed

All resources must be brought to the site

Scheduling of crews and resources is a

challenge

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Fixed Position Layout

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Retail Service Layout Goal--maximize net profit per square foot of floor space Servicescapes

Ambient Conditions

Spatial Layout and Functionality

Signs, Symbols, and Artifactscustomer comfort and convience

Appealing layout

Good communication in work area

Appealing display

Privacy in work spaece

Provide sufficicent for service and waiting line

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Designing Product Layouts continued

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Designing Product Layouts - continued

Step 1: Identify tasks & immediate predecessors

Step 2: Determine the desired output rate

Step 3: Calculate the cycle time Step 4: Compute the theoretical minimum number of

workstations

Step 5: Assign tasks to workstations (balance the line)

Step 6: Compute efficiency, idle time & balance

delay

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Numerical

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Numerical

The Model Tata Jaguar, is to be assembled onconveyor belt. Five Hundred cars are

required per day. Production Time per day is

420 mins, and the assembly steps and timesfor car are given below. Find the balance that

minimizes the number of workstations,

subject to the cycle time and precedenceconstraints.

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Assembly Steps

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Task Task Time Description Task that must

precede

A 45 Position rear axle support -----

B 11 Insert rear axle A

C 9 Tighten rear axle support B

D 50 Position front axle assembly ---

E 15 Tighten front axle D

F 12 Position rear wheel & fasten hubcap C

G 12 Position rear wheel & fasten hubcap C

H 12 Position front wheel & fasten hubcap E

I 12 Position front wheel & fasten hubcap E

J 8 Position car handle shaft on front F,G,H,I

K 9 Tighten Bolt and nuts J

Step 1:Identify Tasks & Immediate Predecessors

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Example 10.4 Vicki's Pizzeria and the Precedence Diagram

Immediate Task Time

Work Element Task Description Predecessor (secondsA Roll dough None 50

B Place on cardboard backing A 5

C Sprinkle cheese B 25

D Spread Sauce C 15

E Add pepperoni D 12

F Add sausage D 10

G Add mushrooms D 15H Shrinkwrap pizza E,F,G 18

I Pack in box H 15

Total task time 165


MANAGEMENT104

L t C l l ti

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Layout Calculations Step 2:Determine output rate

Vicki needs to produce 60 pizzas per hour

Step 3:Determine cycle time

The amount of time each workstation is allowed to

complete its tasks

Limited by the bottleneck task (the longest task in aprocess):

sec./uni60units/hr60

sec/min60xmin/hr60

units/hroutputdesired

sec./daytimeavailable)(sec./unittimeCycle

hourperpizzasorunits/hr,72sec./unit50

sec./hr.3600

timetaskbottleneck

timeavailableoutputMaximum


MANAGEMENT

105

Layout Calculations

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y C(continued)

Step 4: Compute the theoretical minimumnumber of stations

TM = number of stations needed to achieve 100%efficiency (every second is used)

Always round up (no partial workstations)

Serves as a lower bound for our analysis

stations3or2.75,

nsec/statio60

seconds165

timecycle

timestaskTM


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106

Layout Calculations

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y(continued)

Step 5:Assign tasks to workstations

Start at the first station & choose the longest eligible task

following precedence relationships

Continue adding the longest eligible task that fits without going

over the desired cycle time

When no additional tasks can be added within the desired cycle

time, begin assigning tasks to the next workstation until finishedWorkstation Eligible task Task Selected Task time Idle time

A A 50 10

B B 5 5

C C 25 35

D D 15 20

E, F, G G 15 5

E, F E 12 48

F F 10 38

H H 18 20

I I 15 5

1

2

3


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Last Layout Calculation

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Last Layout Calculation

Step 6:Compute efficiency and balance delay

Efficiency (%) is the ratio of total productive

time divided by total time

91.7%100sec.60xstations3

sec.165

NC

t(%)Efficiency

POM Unit 1

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