DME 814

Computer Integrated
Manufacturing
Lecture # 4
 Justifying Investments
 Human Resource Requirements
 Quality Issues
 Implementation Difficulties / Analysis of Manufacturing
Operations
FINANCIAL JUSTIFICATION
 The cost of CIM technology must be justified for an
investment. Be it a robot or CNC equipment, technology
for technology's sake makes little business sense; the
company adopting it must benefit financially.
 FINANCIAL JUSTIFICATION
 The decision to fund any CIM technology reflects the
benefits expected from the investment. Methods
commonly used in determining financial feasibility are
 (a) payback period
 (b) rate of return
 (c) present worth
 (d) uniform annual cost.
Payback Period
PP=C/(S-A)
PP= Payback period
C= Required Investment
S= Annual Savings
A= Annual Cost of utilizing investment
Example: A welding stations costs $ 295,000;
Robot shall replace five manual welders; welder
cost is $15/hour and works one shift for 8 hours;
Year=250 working days; Robot supervision is half
the time of semi skilled operator at a cost of $10
per hour and annual cost of robot spares is $ 500.
Project is acceptable of pay back is less than three
years. Pay back=?
Payback Period
C=$295,000
S= 5 x 2000 hours x $15 per hour
S= $ 150,000/
A= 0.5(($10 / hour x 2000 hours) + $ 500
A= $ 10,500

PP= 2.12 Years

Rate of Return
Example: MARR= 15%; Useful life of robot is 10
years and no salvage value ;Straight Line depreciation
is applied.

Yearly depreciation = 295,900/10=$29,590

Total Annual Cost=$29,590+10,500=$40,090
Net Annual Savings=Labor Cost-Annual Cost
 = $150,000-$40,090=$109,910
Return on Investment = 109,910 / 295,900
 = 37.1%
 Human Resource Requirements
 Well educated and trained people for CIM company
 Employee should react to the change
 Respect of employees
 Quality Issues
 Quality assurance programmes like ISO 9000 etc must
be applied
An Overview of Manufacturing
(Implementation Difficulties)
People are so busy enjoying the numerous manufactured
products, such as cars, televisions telephones, and coffee
makers, that they hardly realize the existence of the world of
manufacturing. We manufacture so many different
products—from bread to bombers, rugs to robots, salt to
satellites—that often we fail to perceive their vast numbers
and varieties.
An Overview of Manufacturing
To facilitate comprehension, the enormous array of
manufactured products and the associated industries are
classified according to Standard Industrial Classification
(SIC) numbers.
An Overview of Manufacturing
 In the United States, industrial activities are grouped
according to SIC numbers, which appear in a directory
compiled and published by the U.S. Office of
Management and Budget.
 http://www.pbs.gov.pk/content/classifications
An Overview of Manufacturing
 SIC Code Industry
 01-09 Agriculture, Forestry, and Fishing
 10-14 Mining
 15-17 Construction
 20-39 Manufacturing
 40-49 Transportation, Communications, Electric, Gas, and
Sanitary Services
 50-59 Wholesale and Retail Trade
 60-67 Finance, Insurance, and Real Estate
 70-89 Services
 91—97 Public Administration
An Overview of Manufacturing

Major Group Manufactured Products

 20 Food and Kindred Products

 21 Tobacco Manufactures
 22 Textile Mill Products
 23 Apparel and Other Finished Products made frc
Fabrics and Similar Materials
 24 Lumber and Wood Products, except Furniture
 25 Furniture and Fixtures
 26 Paper and Allied Products
 27 Printing, Publishing, and Allied Industries
 28 Chemicals and Allied Products
 29 Petroleum and Related Industries
 30 Rubber and Miscellaneous Plastics Products
An Overview of Manufacturing

Major Group Manufactured Products

 31 Leather and Leather Products

 32 Stone, Clay, Glass and Concrete Products
 33 Primary Metal Industries
 34 Fabricated Metal Products, except Machinery
Transportation Equipment
 35 Machinery, except Electrical
 36 Electrical and Electronic Machinery, Equipment and
Supplies
 37 Transportation Equipment
 38 Measuring, Analyzing, and Controlling Instruments
Photographic, Medical, and Optical Goods; Watches
and Clocks
 39 Miscellaneous manufacturing industries
An Overview of Manufacturing
A third digit further breaks down the major groups.
For example, the fabricated metal products under SIC
34 include the following categories, among others:
341 Metal cans and shipping containers
342 Cutlery, hand tools, hardware
346 Forgings and stampings
349 Miscellaneous fabricated metal products
Types of Manufacturing
Manufacturing can be classified according to the following
six criteria:
a. Continuous or Discrete
b. Variety and volume
c. Raw material to final product
d. To order or to stock
e. Size
f. Machinery used
a-Continuous or Discrete Manufacturing
Manufacturing operations fall into two very broad
groups:
(a)Continuous-flow or process type: Continuous-flow
operations typically the chemical and mining industries
and oil refineries, which produce large amounts of bulk
material.

(b)Discrete-parts manufacturing (also known as discrete

manufacturing).
Continuous or Discrete Manufacturing
The term discrete parts manufacturing denotes operations
involving products that can be counted. The output of
process type industries is also counted eventually; for
example, sugar in terms of number of sacks or tons. What
distinguishes discrete manufacturing from process industries
is the potential flexibility of its output.
 Continuous or Discrete Manufacturing

A special feature of discrete manufacturing is that the end

product, generally made of several components, can be
disassembled and reassembled; an example is a bicycle.
 b-Variety and Volume
 Another way to look at manufacturing facilities is
according to Variety and Volume.
 Based on volume and variety, discrete manufacturing is of
three types:
 Mass production
 Batch production
 Job shop
Variety & Volume
 Mass Production. In mass production of discrete parts or
assemblies — for example, bolts or ballpoint pens — the
production volume is high.
 Batch Production. In batch production of parts or
assemblies, the volume is lower, and the variety higher,
than in mass production.
Variety and Volume
 Job Shop Production. The job shop represents the most
versatile production facility. Within the limitations of the
machines and the operators, it can manufacture almost any
product. With a low production volume, sometimes as low
as I to 10 units, the cost of product design and set up is
relatively high.
Variety and Volume
 Production facilities for example aircraft, ships, or special
machine tools are examples of job shops. NC and CNC
technologies can significantly improve the productivity of
job shops.
c-Raw Material to Final Product
 On the basis of the relationship between raw material and
the end product, manufacturing follows one of four
different patterns:
 Disjunctive, Sequential, Locational or Combinative.
Raw Material to Final Product
Disjunctive. In the disjunctive pattern, a single raw
material is progressively processed into its various
components as end products.
Examples of disjunctive facilities are slaughterhouses,
lumber mills and oil refineries.
Raw Material to Final Product
Sequential. In sequential facilities, too, there is only
one raw material as input. But, unlike disjunctive
operations, which separate the raw material into
components, it is progressively modified to become the
end product.
An example is a supplier’s production facility that
machines castings for the automobile manufacturer.
Raw Material to Final Product
Locational. Locational patterns involve buying, storing
and eventually distributing manufactured goods without any
substantial physical modification in the product.
An example is the company that buys a product in large
quantities and distributes it in small packets under its own
brand name. This pattern suits bulk materials, such as sugar
or rice.
Raw Material to Final Product
Combinative. The combinative type is basically discrete
manufacturing in which components — some produced in-
house and some bought from suppliers — are assembled,
inspected, packaged and shipped as end products.
A good example is an automobile factory. From a
production viewpoint, the combinative pattern is the most
complex.
 d-To Order or to Stock
 Based on the immediate destination of the end
products, manufacturing may be of two types.
 In the first type, products are shipped directly to
consumers, wholesalers, or retailers. Such companies
are said to produce "to order.” Since they do not store
the end products, for finished-goods inventory is
unnecessary. Capital is therefore released and profit
realized immediately following production.
 Job shops usually operate in this mode.
To Order or to Stock
 In the second type, products are stocked in finished-goods
inventory; marketing distributes them to retailers or
consumers as needed. This type of operation is said to
produce “to stock.”
e-Size
 It is sometimes convenient to classify manufacturing
companies on the basis of size, with criteria such as
number of employees, annual sales turnover, net
worth, and so forth.
 Whether a company is small or large is often
determined by the number of employees. While there
is no standard cut-off number, the following
categorization is usually practiced: small - below 100;
medium - 100 to 499; large - 500 or more.
 f-Machinery Used
 A variety of machine tools, equipment, and processes are
used in an average plant. They fall into the following
functional groupings:
 Metal forming
 Metal cutting
 Assembly
 Material handling
 Inspection, testing, gauging.
MANUFACTURING AS A SYSTEM
A system is defined as an integrated assembly of interacting
elements designed to carry out cooperatively a
predetermined, function. According to this definition, a
system displays four characteristics. It must:
(a)be an assemblage of components
(b)have interactive elements
(c)be goal-oriented
(d)be flexible.
MANUFACTURING AS A SYSTEM
 Assemblage. A system is an assemblage of several
distinguishable units called subsystems, elements,
components, or factors. The assemblage does not need to
be physical; it may just be conceptual.
MANUFACTURING AS A SYSTEM
 In a manufacturing system, the machining center, for
example, represents one element, its operator another. The
capital required to start and run the business is a third
element. Depending on the level of refinement, a
manufacturing system may comprise dozens of elements.
MANUFACTURING AS A SYSTEM
Interaction
The elements of a system must interact. A mere assemblage
without interaction is not a system, but a group or a set.
MANUFACTURING AS A SYSTEM
Goal Orientation
A system attempts to achieve a certain set of goals. In a
manufacturing system, the goal is to maximize profit if
operating in a free market economy. For markets controlled
by governments, the goal is to manufacture the best product
(or provide the best service) for a specified cost.
MANUFACTURING AS A SYSTEM
 Flexibility. A system must be flexible enough to adapt to
the environment in which it operates. In manufacturing,
the environment includes competition, consumers,
governments, the economy, and so forth.
CIM: AN IMPLEMENTATION OF THE SYSTEM CONCEPT

 CIM can be thought of as a computerized

implementation of the system concept. Similar to a
system, CIM also requires inclusion of as many
relevant manufacturing functions as are feasible. The
only difference is that, while the system approach
attempts to handle the problem through mathematical
or quantitative models, CIM does it through
computerization, with timely information controlling
the operations.
CIM: AN IMPLEMENTATION OF THE SYSTEM CONCEPT

 CIM relies on computer-based simulation and practice of

the manufacturing system or its subsystems. Both CIM
and the system approach begin with a "bird's-eye view" of
manufacturing.
Lecture # 5-6
 Research Papers
 Accelerating Productivity through Computer Integrated
Manufacturing
 Presentation: Group Presentation. In the paper to reap the
benefits from CIM some business and manufacturing
objectives are considered in the design of the CIM system.
Keeping above in view some other barriers may be
discussed by you other than mentioned in the paper. You
may also identify some new tasks or components of sub-
topics to implement CIM in the industry.
Lecture # 5-6
 A study on Computer Integrated Manufacturing Methods
in Bangladeshi Textile Industry.
 Presentation: Group Presentation. The main benefit arising
from the implementation of the proposed CIM system is the
abrupt reduction of lead-time because of introduction of
effective scheduling technique, which will finally, brought up
customer satisfaction. After discussing the current scenario
discuss how CIM wheel components will be useful in customer
satisfaction.