296 HANDOUT: CONTINUOUS FLOW (PRODUCT ORIENTED LAYOUT) AND BOTTLENECK ANALYSIS Reference: Operations Management by Mark A.

Vonderembse and Gregory P. W ite. ! e Prod"ct #ayo"t and $ystem %apacity ! e capacity of a prod"ct&oriented system can be 'is"a(i)ed as a series of pipes of 'arying capacity* +it t e sma((est diameter or capacity o(ding back t e entire system. ,- ibit 9.. i(("strates fi'e pipes /departments or mac ines0 +it different diameters /capacities0. ! e o"tp"t from one pipe becomes t e inp"t to t e ne-t "nti( t e finis ed prod"ct e-its pipe n"mber fi'e. 1n ,- ibit 9..* pipe n"mber t+o cannot and(e a(( t e f(o+ t at pipe n"mber one can de(i'er* and t erefore it restricts t e f(o+. 2eca"se of pipe n"mber t+o3s (imited capacity* it restricts t e f(o+ from "pstream pipes and star'es t e do+nstream pipes. Pipes t ree* fo"r* and fi'e can +ork on on(y + at pipe t+o can de(i'er. ! is restriction is ca((ed a bott(eneck* and it determines t e system3s capacity. Ana(ysis of $ystem %apacity 1n a prod"ct&oriented (ayo"t* identifying t e bott(eneck is critica(. ! e importance of t is ana(ysis cannot be o'erstated beca"se t e res"(ts are "sed not on(y in determining capacity* b"t a(so in p(anning and sc ed"(ing prod"ction* + ic +i(( be disc"ssed in Part 111 on p(anning and managing operations. ! e approac to determining t e bott(eneck is i(("strated in ,- ibit 9.4. $tart at t e beginning of t e system* and determine t e capacity of t e first operation or department. ! is is t e system capacity so far. 5se t is capacity as t e inp"t to t e ne-t department in t e se6"ence. %an t at department take t e tota( inp"t from t e pre'io"s department and process it comp(ete(y7 1f it can* t en t e system capacity as not c anged. 1f it cannot* t en t e system capacity is red"ced to t e capacity of t at department. ! e proced"re contin"es "nti( t e end of t e process is reac ed and t e system capacity is kno+n. %onsider t e e-amp(e s o+n in ,- ibit 9.8. ! e basic o-ygen f"rnace as a ma-im"m rate of 4*299 tons per day /tpd0* + i(e t e contin"o"s casters rate is 6*999 tpd. %(ear(y* t e capacity of t at part of t e system is (imited by t e 4*299 tpd of t e s(o+er operation. ,- ibit 9... A 2ott(eneck in t e Prod"ct :(o+

29; ,- ibit 9.4. A $e6"entia( Approac to 2ott(eneck Ana(ysis

<etermining t e 2ott(eneck =o+ consider t e entire system for making stee( s o+n in ,- ibit 9.6. ! e capacities are (isted be(o+ eac department. At t+o points in t e stee(&making process* o"tp"ts from t+o departments are inp"ts to a sing(e department. ! e ratio of eac inp"t is (isted on t e arro+ t at i(("strates t e f(o+. :or e-amp(e* in t e b(ast f"rnace* . po"nds of iron ore are mi-ed +it > po"nd of coke. 1n t ese cases* t e inp"ts to a department s o"(d be combined in t e correct proportion "nti( at (east one of t e inp"ts is e- a"sted. W at is t e system capacity7 :o((o+ a(ong in ,- ibit 9.6. 1ron ore processing and coke o'ens can de(i'er .*999 and >*999 tpd* respecti'e(y. /On(y .*999 tons can

,- ibit 9.8. $imp(e $tee( Prod"ction :(o+

29? ,- ibit 9.6. $tee( Prod"ction :(o+: A Prod"ct #ayo"t

,- ibit 9.;.<etermining $ystem %apacity.

be "sed from iron ore processing beca"se of t e ratio re6"irements.0 ! e combined 4*999 tpd is more t an s"fficient for t e b(ast f"rnace* + ic re6"ires on(y .*999 tpd tota(. $o far* t e b(ast f"rnace is o(ding back prod"ction. ! e b(ast f"rnace and scrap and(ing* in t"rn* s"pp(y .*999 and >*899 tpd* + ic is more t an ade6"ate for t e basic o-ygen f"rnace capacity of 4*299 tpd. 2eca"se t e basic o-ygen f"rnace cannot process a(( a'ai(ab(e inp"ts* t e b(ast f"rnace cannot be t e bott(eneck. ! e basic o-ygen f"rnace cannot de(i'er s"fficient o"tp"t to t e remaining departments. ! erefore* t e basic o-ygen f"rnace is t e bott(eneck for t e system* and t e capacity of t e system is 4*299 tpd. !o ca(c"(ate t e prod"ction rates t at a((o+ t e system to prod"ce 4*299 tpd* begin at t e bott(eneck department in ,- ibit 9.;. !race t e prod"ct f(o+ from t e bott(eneck to t e beginning and t e end of t e process. 1n order to ac ie'e 4*299 tpd of basic o-ygen f"rnace inp"t* /2@.0 /4*2990 A 2*?99 tpd comes from t e b(ast f"rnace and />@.0/4*2990 A >*499 tpd comes from scrap. ! e re6"irements are (isted abo'e eac department. ! e b(ast f"rnace re6"ires /.@40/2*?990 A 2*>99 tpd of iron ore and />@40/2*?990 A ;99 tpd of coke. Mo'ing from t e basic o-ygen f"rnace to t e end of t e process is simp(er beca"se t ere are no pairs of departments. ! e re6"irement for t ose departments is 4*299 tpd. 1n act"a( prod"ction* eac operation in t is process +o"(d s"ffer yie(d (oss* + ic +e do not describe ere in order to simp(ify disc"ssion.

299 Ro"nding O"t $ystem %apacity 1t is a(so important to kno+ + ic department* mac ine* or step in t e process restricts t e system3s capacity. An operations manager may be c arged +it increasing t e system3s capacity. 1f e or s e tries to do so by increasing b(ast f"rnace capacity* t ere +i(( be no increase in t e system3s capacity. ! is organi)ation co"(d spend mi((ions on a ne+ b(ast f"rnace and not get one additiona( ton of stee( o"t of t e system beca"se t e bott(eneck constricts t e f(o+. ! e system capacity can be increased by app(ying reso"rces to t e bott(eneck department. ! is approac is ca((ed ro"nding o"t capacity beca"se reso"rces are app(ied to t e bott(eneck to bring it into ba(ance +it ot er parts /departments0 in t e system. Ro"nding o"t capacity as a (imit* o+e'er. $imp(y stated* if t e operations manager do"b(es basic o-ygen f"rnace capacity beca"se it is t e bott(eneck* t e system3s capacity +i(( not do"b(e. ! ere is not eno"g capacity in ot er departments to absorb t at (arge an increase. As a res"(t of do"b(ing basic o-ygen f"rnace capacity* t e bott(eneck simp(y B"mps to anot er department. Managers s o"(d "nderstand t is and caref"((y ana(y)e t e effect on t e system of any increase in departmenta( capacity. An important and "sef"( piece of information to determine is o+ far t e system3s capacity can be increased before t e ne-t bott(eneck appears. !o ans+er* e-amine t e re6"irements (isted abo'e eac department in ,- ibit 9.;. A 6"ick re'ie+ s o+s t at scrap and(ing and t e b(ast f"rnace +i(( be bott(enecks as basic o-ygen f"rnace capacity is increased. Wit a c"s ion of >99 tons per day in scrap and(ing* t e capacity of t e system co"(d increase by on(y .99 tpd. /Remember t at one part scrap and t+o parts ot meta( from t e b(ast f"rnace are re6"ired.0 ! e scrap and(ing and b(ast f"rnace departments a'e ins"fficient capacity to and(e an increase of more t an .99 tpd in basic o-ygen f"rnace capacity. 1f t is 6"ick ana(ysis is too conf"sing* simp(y set t e capacity of t e present bott(eneck to infinity and re+ork t e prob(em. ! e res"(ts are s o+n in ,- ibit 9.?. ! e system3s capacity is 4*899 tpd* and t ere are t+o bott(enecks: b(ast f"rnace and scrap and(ing. Remember* t e basic o-ygen f"rnace capacity +as set to infinity. 1n rea(ity* it m"st be 4*899 tpd or more if t e system capacity is 4*899 tpd. ,- ibit 9.?. Ro"nding O"t $ystem %apacity

.99 ! e ana(ysis of system capacity and associated bott(enecks is e-treme(y important for determining capacity. Rationa( decisions abo"t capacity can be made on(y if t ese concepts are f"((y "nderstood.

.>; $5MMARC a. Mac ine and departmenta( capacities are needed to determine t e capacity of a system. A system can go on(y as fast as its s(o+est part* + ic is t e bott(eneck. b. 1ncreases in system capacity can be ac ie'ed by increasing capacity in t e bott(eneck department. ! is is ca((ed ro"nding o"t capacity. $O#V,< PRO2#,M >. Wade % emica( %ompany as a prob(em +it its f(o+ process. Ana(y)e t e fo((o+ing diagram and tab(e:

C
<epartment A 2 % < %apacity /Ga((ons Per Do"r0 >99 ;9 89 >29

! e ratio for mi-ing t e o"tp"ts from departments 2 and % is t+o to one. ! is means t at getting t ree ga((ons of inp"t to department < re6"ires mi-ing t+o ga((ons of 23s o"tp"t and one ga((on of %3s o"tp"t. a. W at is t e system3s capacity* and + ic department is t e bott(eneck7 $O#5!1O= <epartment A can de(i'er >99 ga((ons per o"r /gp 0 to department 2* + ic can on(y "se ;9 gp * so department A cannot be t e bott(eneck. <epartments 2 and % combine t eir inp"ts to < in a ratio of t+o to one. 1f 2 as on(y ;9 gp to offer* t en on(y .8 gp of % can be "sed. $o far* department 2 restricts t e capacity. !o department < +i(( f(o+ >98 gp /;9 from 2 p("s .8 from %0. <epartment < as s"fficient capacity to process >29 gp . As a res"(t* t e system capacity is >98 gp * and department 2 is t e bott(eneck. b. Do+ m"c s(ack /"n"sed capacity0 is a'ai(ab(e in t e ot er departments7 $O#5!1O= <epartment A 2 % < %apacity /GPD0 >99 ;9 89 >29 Prod"ction Vo("me !o Make >98 GPD ;9 ;9 .8 >98 5n"sed %apacity /GPD0 .9 9 >8 >8

.>? ! e prod"ction 'o("mes are ca(c"(ated in part a of t is prob(em. $tart at t e bott(eneck* and +ork back+ard to t e beginning of t e process. Do+ many gp are needed from A to a((o+ 2 to make ;9 gp 7 2eca"se no ot er department inp"ts to 2* a(( ;9 gp m"st come from A. =o+ +ork from t e bott(eneck to t e end of t e process. <epartment % m"st prod"ce .8 gp to get t e tota( gp needed by <. <epartment < m"st process >98 gp . c. Do+ m"c system capacity can be gained by adding capacity to t e bott(eneck7 $O#5!1O= A((o+ t e capacity of department 2 to be "n(imited* and re+ork parts a and b of t is prob(em. =o+ department A can pass on >99 gp . <epartment 2 can process a(( >99 ga((ons and combine t em +it <epartment %3s o"tp"t of 89 gp to de(i'er a tota( of >89 gp to department <. <epartment < can on(y process >29 gp * so t e system capacity is no+ >29 gp and < is t e bott(eneck. <epartment A 2 % < %apacity >99 1nfinite 89 >29 Prod"ction Vo("me !o Make >29 GPD ?9 ?9 49 >29 5n"sed %apacity 29 & >9 9

! e capacity of department 2 ad to be increased from ;9 to ?9 gp to ac ie'e t e >8 gp increase in system capacity.