Production and Operation

Management (MAN406)
Lesson 3: Product and process design

By: Dr. Falak Shad Memon

 Economic Analysis of Project
Development Costs

• Using measurable factors to help determine:

• Operational design and development decisions
• Go/no-go milestones

• Building a Base-Case Financial Model

• A financial model consisting of major cash flows
• Sensitivity Analysis for “what if” questions
 Designing for the Customer

House of Quality

Quality Function Ideal Customer Value Analysis/

Deployment Product Value Engineering
 Designing for the Customer:
Quality Function Deployment

• Inter-functional teams from marketing, design

engineering, and manufacturing

• Voice of the customer

• House of Quality
Typical Phases of Product Development
• Planning
• Concept Development
• System-Level design
• Design Detail
• Testing and Refinement
• Production Ramp-up
 6
Designing for the Customer:
The House of Quality

Customer
requirements
information forms
the basis for this
matrix, used to
translate them into
operating or
engineering goals.
 Designing for the Customer:
Value Analysis/Value Engineering

• Achieve equivalent or better performance 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?
 Design for Manufacturability

• Traditional Approach
• “We design it, you build it” or “Over the wall”

• Concurrent Engineering
• “Let’s work together simultaneously”
Design for Manufacturing and Assembly

• Greatest improvements related to DFMA arise

from simplification of the product by reducing the
number of separate parts:
1. During the operation of the product, does the part
move relative to all other parts already assembled?
2. Must the part be of a different material or be
isolated from other parts already assembled?
3. Must the part be separate from all other parts to
allow the disassembly of the product for
adjustment or maintenance?
 Measuring Product Development Performance
Performance Measures
Dimension •Freq. Of new products introduced
•Time to market introduction
•Number stated and number completed
Time-to-market •Actual versus plan
•Percentage of sales from new products

•Engineering hours per project

•Cost of materials and tooling per project
Productivity •Actual versus plan

•Conformance-reliability in use
Quality •Design-performance and customer satisfaction
•Yield-factory
 Process Analysis Terms

• Process: Is any part of an organization that takes

inputs and transforms them into outputs
• Cycle Time: Is the average successive time between
completions of successive units
• Utilization: Is the ratio of the time that a resource is
actually activated relative to the time that it is
available for use
Process Flowcharting

• Process flowcharting is the use of a diagram to

present the major elements of a process
• The basic elements can include tasks or operations,
flows of materials or customers, decision points, and
storage areas or queues
• It is an ideal methodology by which to begin
analyzing a process
Flowchart Symbols
Purpose and Examples
Tasks or operations Examples: Giving an
admission ticket to a
customer, installing a engine
in a car, etc.

Examples: How much change

should be given to a customer,
Decision Points which wrench should be used,
etc.
Flowchart Symbols
Purpose and Examples
Storage areas or Examples: Sheds, lines of
queues people waiting for a service,
etc.

Flows of materials or Examples: Customers moving

customers to a seat, mechanic getting a
tool, etc.
Example: Flowchart of Student Going to School

Go to Yes
Drive to Walk to
school
school class
today?

No

Goof
off
 Types of Processes

Single-stage Process

Stage 1

Multi-stage Process

Stage 1 Stage 2 Stage 3

 Types of Processes (Continued)

A buffer refers to a storage area between stages where the

output of a stage is placed prior to being used in a
downstream stage

Multi-stage Process with Buffer

Buffer

Stage 1 Stage 2
 Other Process Terminology

• Blocking
• Occurs when the activities in a stage must stop because
there is no place to deposit the item just completed
• If there is no room for an employee to place a unit of work
down, the employee will hold on to it not able to continue
working on the next unit

• Starving
• Occurs when the activities in a stage must stop because
there is no work
• If an employee is waiting at a work station and no work is
coming to the employee to process, the employee will
remain idle until the next unit of work comes
 Other Process Terminology (Continued)

• Bottleneck
• Occurs when the limited capacity of a process causes work
to pile up or become unevenly distributed in the flow of a
process
• If an employee works too slow in a multi-stage process,
work will begin to pile up in front of that employee. In this
is case the employee represents the limited capacity
causing the bottleneck.
• Pacing
• Refers to the fixed timing of the movement of items
through the process
 Other Types of Processes

• 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
 Process Performance Metrics

• Operation time = Setup time + Run time

• Throughput time = Average time for a unit to

move through the system

• Velocity = Throughput time

Value-added time
Process Performance Metrics (Continued)

• Cycle time = Average time between

completion of units

• Throughput rate = 1 .
Cycle time

• Efficiency = Actual output

Standard Output
Process Performance Metrics (Continued)

• Productivity = Output
Input

• Utilization = Time Activated

Time Available
 Cycle Time Example

Suppose you had to produce 600 units in 80 hours to meet the

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 80 hours) in 80 hours. So the
average time between completions would have
to be: Cycle time = 4,800/600 units = 8 minutes.
Process Throughput Time Reduction

• Perform activities in parallel

• Change the sequence of activities

• Reduce interruptions
 Types of Processes

• Conversion (ex. Iron to steel)

• Fabrication (ex. Cloth to clothes)
• Assembly (ex. Parts to components)
• Testing (ex. For quality of products)
 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 ad piece for a business)

• Assembly Line (ex. Automobile manufacturer)

• Continuous Flow (ex. Petroleum manufacturer)
 Few High
Low Multiple Major Volume,
Volume, Products, Products, High
One of a Low Higher Standard-
Kind Volume Volume ization
I. Commercial Flexibility (High)
Job Printer Unit Cost (High)
Shop French Restaurant These are
the major
II. Heavy stages of
Batch Equipment product and
III. process life
Automobile cycles
Assembly Assembly
Line Burger King
IV.
Sugar
Continuous Refinery Flexibility (Low)
Flow Unit Cost (Low)
 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 equal
 Break-Even Analysis (Continued)
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

TR=TC
P*Q=TFC+TVC
This formula can be used to find any of its PQ=TFC+VQ
components algebraically if the other PQ-VQ=TFC
parameters are known Q=TFC/(P-V)

Profit=TR-TC
 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 customers who 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 customer – Variable costs
=5,000/(25-5)
=250 customers
Manufacturing Process Flow Design

• A process flow design can be defined as a

mapping of the specific processes that raw
materials, parts, and subassemblies follow as
they move through a plant

• The most common tools to conduct a process

flow design include assembly drawings,
assembly charts, and operation and route
sheets
 Example: Assembly Chart (Gozinto)

Lockring
4
Spacer, detent spring
5
SA-2 A-2
Rivets (2)
6
Spring-detent
7
A-5
Component/Assy Operation

Inspection
 Example: Process Flow Chart

No,
Material Inspect Continue…
Received
Material for
from
Supplier Defects Defects
found?

Yes

Return to
Supplier for
Credit