SCMG 330 CH 6

Production processes

Are used to make any manufactured item

1. Source the parts needed

2. Make the product

3. Deliver the product

Lead time

The time needed to respond to a customer order

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

Make-to-Stock Production Process

Serve customers from finished goods inventory (e.g. commodity): standardized; Essential issue in satisfying customers is to balance the level of inventory against the level of customer service

Assemble-to-Order Production Processes

Combine a number of preassembled modules to meet a customer’s specifications (e.g., pizza crust); Define a customer’s order in terms of alternative components since these are carried in eventory

Make-to-Order

Make the customer’s product from raw materials, parts, and components (e.g., Dell computer): Customized (differentiation strategy)

Engineer-to-Order

Work with the customer to design and then make the product (e.g., Boeing)

Production Process Mapping

Develop a high-level map of a supply chain process; Useful to understand how material flows and where inventory is held

Little’s Law

Describes the flow of items through a production process

Inventory equation

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

Inventory

Materials held by the firm for future use

Total average value of inventory

The sum of the value (at cost) of the raw material, WIP, and FG inventory

Inventory turns

The cost of goods sold divided by the average inventory value; not particularly useful for evaluating the performance of a process

Days of supply

The inverse of inventory turns scaled to days

Project

The product remains in a fixed location, equipment is moved to the product

Workcenter (job shop)

Similiar equipment or functions are grouped together

Manufacturing cell

A dedicated area where products that are similar in processing requirements are produced

Assembly line

Work processes are arranged to the progressive steps by which the product is made

Product characteristics

• One of a kind

• Low volume-low standardization

• Multiple products, low volume

• Few major products, higher volume

• High volume-high standardization, commodity product

Process characteristics

• No flow

• Jumbled flow (job shop)

• Disconnected line flow (batch)

• Connected line flow (assembly line)

• Continuous flow

Project layout

• Product remains in a fixed location

• A high degree of task ordering is common

• A project layout may be developed by arranging materials according to their assembly priority

Workcenter

• The most common approach to developing this type of layout is to arrange these in a way that optimized the movement of material

• Drilling, grinding, and painting

• Optimal placement often means placing these with large interdepartmental traffic adjacent to each other

• Minimize moving and waiting time

• Sometimes is referred to as a department and is focused on a particular type of operation

Manufacturing cell

Formed by allocating dissimilar machines to cells that are designed to work on similar products (shape, processing, etc)

Assembly line and continuous layout

Designed for the special purpose of building a product by going through a series of progressive steps

Production system designs

• Project layout

• Workcenter

• Manufacturing cell

• Assembly line and continuous layout

Manufacturing cell development

1. Group parts into families that follow a common sequence of steps

2. Identify dominant flow patterns for each part family

3. Machines and the associated processes are physically regrouped into cells

Workstation cycle time

A uniform time interval in which a moving conveyor passes a series of workstations; also the time between successive units coming off the line

Assembly-line balancing

Assigning tasks so a series of workstations to that the required cycle time is met and idle time is minimized

Precedence relationship

The order in which tasks must be performed in an assembly process

Assembly line balancing procedure

1. Specify the sequential relationships among tasks

2. Determine the required workstation cycle time

3. Determine the theoretical minimum number of workstations

4. Assign tasks, one a time, until the sum of the tasks is equal to the workstation cycle time (the actual # of workstations)

5. Evaluate the efficiency of the balance

6. Rebalance if needed

Mixed-Model line balancing

Means of scheduling the varied production; most factories produce a number of different products

Break even analysis

• A means of choosing between two options

• A way to understand how profits and losses change for each option as the total number of units varies

• Particularly suitable when processes have a significant initial investment (fixed cost) and when production costs vary in proportion to the number of units produced (variable costs)

• Total revenue recieved = all costs associated