MGMT 4000 Exam 1 Production Processes

Production Processes

used to make any manufactured items

Steps of production processes

Step 1: Source the Parts

Step 2: Make the Product

Step 3: Deliver the Product

Lead Time

duration of time between receiving the order and fulfilling it (measured in days)

Customer order decoupling point

where inventory is positioned to allow entities in the supply chain to operate independently

Lean manufacturing

a means of achieving high levels of customer service with minimal inventory investment

4 types of production processes

Make-to- Stock, Assemble-to-order, make-to- order, engineer-to- order

Make-To-Stock

Serve Customers from finished goods inventory

-decoupling point: finished goods

-essential issue:balancing level of inventory against the level of customer services; easy with unlimited inventory

-trade off: costs of inventory and level of customer service

-Use lean manufacturing to achieve higher service levels for a given inventory investment

-Examples: TV, clothing, food product

Assemble-to-Order

Combine a number of preassembled modules to meet a customer's specifications

-DP: moved to components

-primary task is to define a customer's order in terms of alternative components becuase they are carried in inventory

-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

-Example: dell making computers

Make-to-order

Make the customer's product from raw materials, parts, and components

- DP: raw materials at manufacturing site or supplier inventory

-might not be possible to preorder

-Boeing making aircraft

Engineer-to-order

-Work with the customer to design and make product

- DP: raw materials at manufacturing site or supplier inventory

-might not be possible to preorder

-Boeing making aircraft

Production Process Organization parts

Project, workcenter (job shop or process layout), manufacturing cell, assembly line (product layout), continuous process

Project

the product remains in a fixed location and Manufacturing equipment is moved to the product

Work Center

- job shop or process layout

-similar equipment or functions are grouped together

Manufacturing cell:

a dedicated area where products that are similar in processing

requirements are produced

Assembly line

- Product layout

-work processes are arranged according to the

progressive steps by which the product is made

Continuous Process

assembly line only the flow is continuous such as with liquids

Processes in order low to high for investment to inventory

- engineer to order

- make to order

- assemble to order

- make to stock

Low inventory investment is

Long customer lead time

High standardized commity to low one of a kind high to low

continous process, assembly line, manufacturing cell, work center, project

Product volume low to high

project, work center, manufacturing cell, assembly line, continuous process

Process flow design

-a mapping of the specific processes that raw materials, parts, and sub assemblies followas they move through a plant

-most cmmon tools: assembly drawings, charts, and operation and route sheets

-focus is on identifcation of activities that can be minimized or eliminated like movement and storage

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- var cost)

Break-even analysis alternative processes

- 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