Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L.

Smunt - Bus Mgt 711

PRODUCTION PROCESSES

 Production
processes are used
to make any
manufactured item
 Step 1 – Source the
BUS MGT 711 parts needed
GLOBAL SUPPLY CHAIN
STRATEGY AND COMPETITIVE  Step 2 – Make the
OPERATIONS Chapter 6 – Manufacturing
Processes
product
 Step 3 – Deliver the
product
© 2021 - Dr. Timothy L. Smunt

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Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

PRODUCTION PROCESS TERMS TYPES OF FIRMS

 Lead time – the time needed to respond to a customer order Make-to-Stock

 Customer order decoupling point – where inventory is positioned • Serve customers “on demand” from finished goods inventory

to allow entities in the supply chain to operate independently Assemble-to-Order

• Combine a number of preassembled modules to meet a customer’s
 Lean manufacturing – a means of achieving high levels of specifications
customer service with minimal inventory investment Make-to-Order
• Make the customer’s product from raw materials, parts, and
components
Engineer-to-Order
• Work with the customer to design and then make the product

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Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

MAKE-TO-STOCK MAKE-TO-ORDER/ENGINEER-TO-ORDER
Examples of products

 Televisions
 Boeing’s process for making commercial aircraft is an example
 Clothing  Another example is a custom-built house
 Packaged food products
 Essential issue in satisfying customers is to balance the level of inventory against
the level of customer service
 Easy with unlimited inventory but inventory costs money
 Trade-off between the costs of inventory and level of customer service must be made
 Use lean manufacturing to achieve higher service levels for a given inventory
investment

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 Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

ASSEMBLE-TO-ORDER PRODUCT-PROCESS MATRIX

 A primary task is to define a customer’s order in terms of
Job Shop – one at a time
alternative components since these are carried in inventory Batches
 An example is the way Dell Computer makes their desktop computers
 One capability required is a design that enables as much
flexibility as possible in combining components
 There are significant advantages from moving the customer
order decoupling point from finished goods to components
 Wide variety of finished goods combinations can be built from
a set of components
𝑇𝑜𝑡𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐶𝑜𝑚𝑏𝑖𝑛𝑎𝑡𝑖𝑜𝑛𝑠 𝑁 𝑁 ⋯ 𝑁 𝑁

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Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

JOB/FLOW SHOP COMPARISON PRODUCTION PROCESS MAPPING

Workcenter Flow Shop
(Assembly, Continuous)
 Develop a high-level map of a supply chain
Batch Processing process
Equipment General Purpose Specialized  Useful to understand how material flows and
where inventory is held
Labor Skilled Lower
 First step in analyzing the flow of material
Capacity Excess Equipment Max Utilization through a production process
Labor Limited Machine Limited

Engineering Focus Product Variety and Process

Improvements Improvements
Layout
Process, Functional Product, Line Flow
Manufacturing Cell (Area within a plant focused on
a single item or group of similar items)
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Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

LITTLE’S LAW INVENTORY MEASURES

 The flow of items through a production process can be described
using Little’s Law
 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇ℎ𝑟𝑜𝑢𝑔ℎ𝑝𝑢𝑡 𝑟𝑎𝑡𝑒 𝑥 𝐹𝑙𝑜𝑤 𝑡𝑖𝑚𝑒
 Throughput – long term average rate of flow through the process
 Flow time – time for a single unit to traverse the entire process
 Total average value of inventory - the sum of the value (at cost) of the raw
material, work-in process, and finished goods inventory
 Commonly tracked in accounting systems and reported in financial statements
 Inventory turn - the cost of goods sold divided by the average inventory value
 Days of supply - the inverse of inventory turns scaled to days

 Inventory – materials held by the firm for future use

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 Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

ASSEMBLY LINE DESIGN ASSEMBLY-LINE BALANCING

Specify the sequential relationships among tasks using a precedence diagram.
 Workstation cycle time - a uniform time interval in which a moving conveyor passes 1.
2. Determine the required workstation cycle time (C).
a series of workstations 𝐶
𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟 𝑑𝑎𝑦
𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑜𝑢𝑡𝑝𝑢𝑡 𝑝𝑒𝑟 𝑑𝑎𝑦 𝑖𝑛 𝑢𝑛𝑖𝑡𝑠
 Also the time between successive units coming off the line 3. Determine the theoretical minimum number of workstations (𝑁 ).
𝑆𝑢𝑚 𝑜𝑓 𝑡𝑎𝑠𝑘 𝑡𝑖𝑚𝑒𝑠 𝑇
 Assembly-line balancing - assigning tasks to a series of workstations so that the 𝑁
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 𝐶
required cycle time is met and idle time is minimized 4. Select a primary rule to assign tasks to workstations and a secondary rule to break ties.
5. Assign tasks (on at a time) to the first workstation until no more tasks can be added (due to cycle time or
 Precedence relationship - the order in which tasks must be performed in an sequencing constraints). Repeat for all subsequent workstations until all tasks are assigned.
assembly process 6. Evaluate the efficiency of the balance
𝑆𝑢𝑚 𝑜𝑓 𝑡𝑎𝑠𝑘 𝑡𝑖𝑚𝑒𝑠 𝑇
𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦
𝐴𝑐𝑡𝑢𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑠 𝑁 𝑊𝑜𝑟𝑘𝑠𝑡𝑎𝑡𝑖𝑜𝑛 𝑐𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 𝐶
7. If efficiency is unsatisfactory, rebalance using a different rule.

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EXAMPLE 6.2 – ASSEMBLY-LINE BALANCING EXAMPLE 6.2 – PRECEDENCE DIAGRAM

Production Time per Day 60 sec min 420 min. 25,200 sec
𝐶 50.4 sec wagon
Output per Day 500 wagons 500 wagons

𝑇 195 seconds
𝑁 3.87 ⟹ 4
𝐶 50.4 seconds

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Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

EXAMPLE 6.2 - ASSIGNMENT EXAMPLE 6.2 - EFFICIENCY

Prioritize based on the
number of following tasks.

𝑇 195 seconds
Efficiency 0.77 77%
𝑁 𝐶 5 50.4 seconds

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 Dr. Timothy L. Smunt - Bus Mgt 711 Dr. Timothy L. Smunt - Bus Mgt 711

REDUCING TASK TIME REQUIREMENTS Flexible Line Layouts

 Split the task
 Share the task
 Use parallel workstations
 Use a more skilled worker
 Work overtime
 Redesign

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Dr. Timothy L. Smunt - Bus Mgt 711

CHAPTER 6 TAKEAWAYS
1.Recognize the match between
product/service characteristics and
the organization of the process (i.e.
workstations, cells, assembly
line/flow).
2.Our focus was on Assembly Line
analysis vs. other types of process
analysis.
Suggestion: Review of solved problems 2 and 3 at the
end of the chapter will reinforce the assembly
balancing concept.
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