Production and Operations Management

Norman Gaither Greg Frazier

Slides Prepared by John Loucks

 1999 South-Western College Publishing 1

 Chapter
Chapter 55

Production Technology:
Selection and Management

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 Overview
Overview
 Introduction
 Proliferation of Automation
 Types of Automation
 Automated Production Systems
 Factories of the Future
 Automation in Services
 Automation Issues
 Deciding Among Automation Alternatives
 Wrap-Up: What World-Class Producers Do
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 Introduction
Introduction
 In the past, automation meant the replacement of
human effort with machine effort.
 Today, automation means integrating a full range of
advanced information and engineering discoveries
into production processes for strategic purposes.

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 Advanced
Advanced Production
Production Technology
Technology
 Types of Automation
 Automated Production Systems
 Factories of the Future
 Automation in Services
 Automation Issues
 Decision Approaches

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 Types
Types of
of Automation
Automation
 Machine Attachments - one operation
 Numerically Controlled (N/C) - reads computer or
tape inputs
 Robots - simulates human movements
 Automated Quality Control - verifies conformance to
specifications
 Auto ID Systems - automatic acquisition of data
 Automated Process Control - adjusts processes per set
parameters

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 Automated
Automated Production
Production Systems
Systems
 Automated Flow Lines (Fixed Automation)

Automated processes linked by automated material
transfer
 Automated Assembly Systems

Automated assembly processes linked by
automated material transfer
 Flexible Manufacturing Systems (FMS)

Groups of processes, arranged in sequence,
connected by automated material transfer, and
integrated by a computer system
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 Design
Design Products
Products for
for Automation
Automation
 Reduce amount of assembly required..fewer parts
 Reduce number of fasteners needed
 Design parts to be automatically delivered/positioned
 Design for layered assembly... base to top
 Design parts to self-align
 Design parts into major modules
 Increase quality of components to avoid jams

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 Material-Handling
Material-Handling Automation
Automation
 Automated Storage & Retrieval System (ASRS)

Receive orders, pick parts, maintain inventory
records

Benefits: increase storage density and throughput,
reduce labor costs, improve product quality

Drawbacks: added maintenance costs
 Automated Guided Vehicle (AGVS)

Follows wire or track in floor. Newer versions use
sensors placed around the factory to figure out
where they are.
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 Material
Material Handling
Handling (continued)
(continued)
 Don’t build monuments to manage inventory!

Most factories moving towards point-of-use stocks


Receiving docks built all around the exterior of
buildings

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 Computer-Based
Computer-Based Systems
Systems
 Computer-Aided Design (CAD) - Use of computer in
interactive engineering drawing and storage of
designs
 Computer-Aided Manufacturing (CAM) - Use of
computers to program, direct and control processes
 CAD/CAM - merger and interaction between the two
systems

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 Computer
Computer Integrated
Integrated Manufacturing
Manufacturing (CIM)
(CIM)
 Incorporates all manufacturing processes

ASRS
AGV

Automated
NC
Assembly
Machining

Order Entry
CAD/CAM
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 Characteristics
Characteristics of
of Factories
Factories of
of the
the Future
Future
 High product quality
 High flexibility
 Fast delivery of customer orders
 Changed production economics
 Computer-driven and computer-integrated systems
 Organization structure changes

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 Automation
Automation in
in Services
Services
 Trend developing toward more-standardized services
and less customer contact.
 Service standardization brings trade-offs:

Service not custom-designed for each customer

Price of service reduced, or at least contained
 Banking industry is becoming increasingly automated
 Service firm can have a manual/automated mix:

Manual - “front room” operations

Automated - “back room” operations

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 Automation
Automation Issues
Issues
 Not all automation projects are successful.
 Automation cannot make up for poor management.
 Economic analysis cannot justify automation of some
operations.
 It is not technically feasible to automate some
operations.
 Automation projects may have to wait in small and
start-up businesses.

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 Automation
Automation Questions
Questions
 What level of automation is appropriate?
 How would automation affect the flexibility of an
operation system?
 How can automation projects be justified?
 How should technological change be managed?
 What are some of the consequences of implementing
an automation project?

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 Watch
Watch Out
Out For
For !!!
!!!
 Success .... many projects are not... high tech skills
required to manage advanced technologies
 Technical feasibility.... There always are bugs with
new technology
 Economic analysis ... include both qualitative and
quantitative

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 Managing
Managing Technological
Technological Change
Change
 Have a master plan for automation.
 Recognize the risks in automating.
 Establish a new production technology department
 Allow ample time for completion of automation.
 Do not try to automate everything at once.
 People are the key to making automation successful.
 Don’t move too slowly in adopting new production
technology; you might loose your competitive edge.

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 Deciding
Deciding Among
Among Automation
Automation Alternatives
Alternatives

Three approaches commonly used in industry:

 Economic Analysis

 Rating Scale Approach

 Relative-Aggregate-Scores Approach

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 Economic
Economic Analysis
Analysis
 Provides an idea of the direct impact of automation
alternatives on profitability.
 Break-even analysis and financial analysis are
frequently used.
 Focus might be on:

cash flows

variable cost per unit

annual fixed costs

average production cost per unit

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 Rating
Rating Scale
Scale Approach
Approach

Automation alternatives are rated using, say, a five-

point scale on a variety of factors such as:
 Economic measures

 Effect on market share

 Effect on quality

 Effect on manufacturing flexibility

 Effect on labor relations

 Amount of time required for implementation

 Effect on ongoing production

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1
 Relative-Aggregate-Scores
Relative-Aggregate-Scores Approach
Approach
 Similar to Rating Scale Approach, but weights are
formally assigned to each factor which permits the
direct calculation of an overall rating for each
alternative.

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 Wrap-Up:
Wrap-Up: World-Class
World-Class Practice
Practice
 World-Class producers utilize the latest
technologies/practices. For example:

Design products to be automation-friendly

Use CAD/CAM for designing products

Convert fixed automation to flexible automation

Move towards smaller batch sizes

Plan for automation

Build teams to develop automated systems

Justify automation based on multiple factors

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End
End of
of Chapter
Chapter 55

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