Process & Capacity 2

60 %
40 %
Information about Process & Capacity 2

Published on June 17, 2008

Author: knksmart

Source: slideshare.net

Outline Four Process Strategies Process Focus Repetitive Focus Product Focus Mass Customization Focus Capacity Forecasting Capacity Requirements Selection of Equipment and Technology Managing Demand Uncertainty Break-Even Analysis Single-Product Case Multi-product Case

Four Process Strategies

Process Focus

Repetitive Focus

Product Focus

Mass Customization Focus

Capacity

Forecasting Capacity Requirements

Selection of Equipment and Technology

Managing Demand Uncertainty

Break-Even Analysis

Single-Product Case

Multi-product Case

Dell Computer Company “ How can we make the process of buying a computer better?” Sells custom-build PCs directly to consumer Integrated the Web into every aspect of its business Operates with six days inventory Builds computers rapidly, at low cost, and only when ordered Research focus on software designed to make installation and configuration of its PCs fast and simple

“ How can we make the process of buying a computer better?”

Sells custom-build PCs directly to consumer

Integrated the Web into every aspect of its business

Operates with six days inventory

Builds computers rapidly, at low cost, and only when ordered

Research focus on software designed to make installation and configuration of its PCs fast and simple

Process Fit: Volume vs. Variety Process focus: job shops,(machine, print, carpentry) Repetitive (autos, motorcycles) Harley Davidson Product focus (paper, steel, glass) High Variety One or few units per run (customization) Medium Variety (Change product with standardized modules) Low Variety (Similar products with minor changes) Mass Customization (difficult to achieve, but huge rewards) Dell Computer Co. Poor strategy (High variable cost) Low-Volume (Intermittent) Medium-Volume (Modular) High-Volume (Continuous)

Types of Process Strategies Classify the process strategies by the level continuum : Repetitive-Focused Product-Focused Process-Focused Continuum

Process-Focused Strategy Facilities are organized by process Similar processes are together Example: All drills or lathes are together Low volume, high variety products ‘ Jumbled’ flow Other names Intermittent process Job shop Operation Product A Product B 1 2 3

Facilities are organized by process

Similar processes are together

Example: All drills or lathes are together

Low volume, high variety products

‘ Jumbled’ flow

Other names

Intermittent process

Job shop

Process-Focused Strategy Examples Bank © 1995 Corel Corp. Machine Shop © 1995 Corel Corp. Hospital © 1995 Corel Corp.

Process-Focused Production Variances of Process Focused Production University education Swimming pool remodeling

Variances of Process Focused Production

University education

Swimming pool remodeling

Process Focused Strategy - Pros & Cons (p262) Advantages Greater product flexibility Use more general purpose equipment Suitable for customization Disadvantages More highly trained personnel More difficult production planning & control (including inventory, machine and personnel scheduling, maintenance, quality control…) Low equipment utilization (25% to 45%)

Advantages

Greater product flexibility

Use more general purpose equipment

Suitable for customization

Disadvantages

More highly trained personnel

More difficult production planning & control (including inventory, machine and personnel scheduling, maintenance, quality control…)

Low equipment utilization (25% to 45%)

Process Automation and Flexible Manufacturing System Production Technology Automated Guided Vehicles (AGV) Automated Storage and Retrieval Systems (ASRSs) Flexible Manufacturing Systems (FMS) Programmable process Control Vision Systems and Robots

Production Technology

Automated Guided Vehicles (AGV)

Automated Storage and Retrieval Systems (ASRSs)

Flexible Manufacturing Systems (FMS)

Programmable process Control

Vision Systems and Robots

Product-Focused Strategy Facilities are organized to produce a small number of products High volume, low variety products Other names Continuous process manufacturing Line flow production Continuous production Operation Products A & B 1 2 3

Facilities are organized to produce a small number of products

High volume, low variety products

Other names

Continuous process manufacturing

Line flow production

Continuous production

Product-Focused Examples © 1995 Corel Corp. Light Bulbs (Discrete) Paper (Continuous) © 1984-1994 T/Maker Co. © 1995 Corel Corp. Soft Drinks (Continuous, then Discrete)

Product Focused Process

Product-Focused Strategy Pros & Cons (p242) Advantages Lower variable cost per unit Use more specialized equipments Easier production planning and control Higher equipment utilization (70% to 90%) Disadvantages Lower product flexibility High shut-down cost Usually higher capital investment

Advantages

Lower variable cost per unit

Use more specialized equipments

Easier production planning and control

Higher equipment utilization (70% to 90%)

Disadvantages

Lower product flexibility

High shut-down cost

Usually higher capital investment

Repetitive Focused Strategy Facilities often organized by assembly lines Characterized by modules Parts & assemblies made previously Modules combined for many output options Other names Assembly line Production line

Facilities often organized by assembly lines

Characterized by modules

Parts & assemblies made previously

Modules combined for many output options

Other names

Assembly line

Production line

Repetitive-Focused Strategy - Examples Truck © 1995 Corel Corp. Clothes Dryer © 1995 Corel Corp. Fast Food McDonald’s over 95 billion served © 1984-1994 T/Maker Co.

Repetitive Focused Strategy - Considerations More structured than process-focused, less structured than product focused Enables quasi-customization Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model

More structured than process-focused, less structured than product focused

Enables quasi-customization

Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model

Harley-Davidson

Process Fit: Volume vs. Variety Process focus: job shops,(machine, print, carpentry) Repetitive (autos, motorcycles) Harley Davidson Product focus (paper, steel, glass) High Variety One or few units per run (customization) Medium Variety (Change product with standardized modules) Low Variety (Similar products with minor changes) Mass Customization (difficult to achieve, but huge rewards) Dell Computer Co. Poor strategy (High variable cost) Low-Volume (Intermittent) Medium-Volume (Modular) High-Volume (Continuous)

Mass Customization Using technology and imagination to rapidly mass-produce products that cater to sundry unique customer desires. Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant.

Using technology and imagination to rapidly mass-produce products that cater to sundry unique customer desires.

Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant.

Repetitive Focus Assembly line Modular Design Flexible equipment Mass Customization Process focus Intermittent process High variety, low volume Product focus Continuous Process Low variety, high volume Modular techniques Scheduling techniques Rapid throughput

Automated Storage and Retrieval System (ASRS) Provide for automatic placement and withdrawal of parts and products into and from designated places in a warehouse. Improve efficiency of material handling and inventory management in both production, distribution, and retail site

Provide for automatic placement and withdrawal of parts and products into and from designated places in a warehouse.

Improve efficiency of material handling and inventory management in both production, distribution, and retail site

Material handling machines Used to move parts & equipment in manufacturing May be used to deliver mail & meals in service facilities Automatic Guided Vehicles (AGV) © 1984-1994 T/Maker Co.

Material handling machines

Used to move parts & equipment in manufacturing

May be used to deliver mail & meals in service facilities

Using automated machines (DNC) & materials handling equipment together Often connected to centralized computer Also called automated work cell Production Technology FMS Computer Machine 1 Machine 2 Robot or AGV Auto Tool Chg. Auto Tool Chg.

Using automated machines (DNC) & materials handling equipment together

Often connected to centralized computer

Also called automated work cell

Computer Integrated Manufacturing (CIM)

Process Reengineering The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance Relies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptions Tools for process redesign across boundaries Flow Diagrams Process Charts Time-Function/Process Mapping Service Blueprint

The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance

Relies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptions

Tools for process redesign across boundaries

Flow Diagrams

Process Charts

Time-Function/Process Mapping

Service Blueprint

Process Strategies (Ikea and McDonalds Examples) Involve determining how to produce a product or provide a service Objective Is the process designed to achieve competitive advantage? Does the process eliminate steps that do not add value? Does the process maximize customer value as perceived by the customer? Will the process win orders?

Involve determining how to produce a product or provide a service

Objective

Is the process designed to achieve competitive advantage?

Does the process eliminate steps that do not add value?

Does the process maximize customer value as perceived by the customer?

Will the process win orders?

Time Function Map Customer Sales Production control Plant A Warehouse Plant B Transport Order Product Process Order Print Extrude Receive product Wait Move Wait Wait Wait Move Order Order WIP WIP WIP WIP Product Product Product 12 days 1 day 1 day 1 day 1 day 13 days 4 days 10 days 9 days

Process Chart Example SUBJECT: Request tool purchase Dist (ft) Time (min) Symbol Description  D  Write order    On desk 75    D  To buyer  D  Examine  = Operation;  = Transport;  = Inspect; D = Delay;  = Storage

Showing Sensitivity to the Environment Make products recyclable Use recycled materials Use less harmful ingredients Use light components Use less energy Use less materials

Make products recyclable

Use recycled materials

Use less harmful ingredients

Use light components

Use less energy

Use less materials

Crossover Chart Fixed cost - Process A Fixed cost - Process B Fixed cost - Process C Total cost - Process C Total cost - Process B Total cost - Process A Process A: low volume, high variety Process B: Repetitive Process C: High volume, low variety Process C Process B Process A Lowest cost process

How much long-range capacity is needed When more capacity is needed Where facilities should be located (location) How facilities should be arranged (layout) Facility and Capacity Planning Facility planning answers:

How much long-range capacity is needed

When more capacity is needed

Where facilities should be located (location)

How facilities should be arranged (layout)

Definition and Measures of Capacity Capacity: Designed Capacity: Effective capacity: The maximum output of a system in a given period The maximum capacity that can be achieved under ideal conditions The percent of design capacity actually expected

Measure of planned or actual capacity usage of a facility, work center, or machine Utilization Utilization Expected capacity Capacity Planned hours to be used Total hours available = =

Measure of planned or actual capacity usage of a facility, work center, or machine

Measure of how well a facility or machine is performing when used Efficiency Efficiency Actual output Effective capacity Actual output in units Standard output in units Average actual time Standard time = = =

Measure of how well a facility or machine is performing when used

Capacity Planning Process (Apply to Examples) Forecast Demand Compute Needed Capacity Compute Effective Capacity Evaluate Capacity Plans Implement Best Plan Qualitative Factors (e.g., Skills) Select Best Capacity Plan Develop Alternative Plans Quantitative Factors (e.g., Cost)

Approaches to Capacity Expansion Expected Demand Time in Years Demand New Capacity Capacity leads demand with an incremental expansion

Approaches to Capacity Expansion Expected Demand Time in Years Demand New Capacity Capacity lags demand with an incremental expansion

Approaches to Capacity Expansion Expected Demand Time in Years Demand New Capacity Attempts to have an average capacity, with an incremental expansion

Breakeven Analysis Technique for evaluating process & equipment alternatives Objective: Find the point ($ or units) at which total cost equals total revenue Fixed costs: costs that continue even if no units are produced: depreciation, taxes, debt, mortgage payments Variable costs: costs that vary with the volume of units produced: labor, materials, portion of utilities

Breakeven Chart Fixed cost Variable cost Total cost line Total revenue line Profit Breakeven point Total cost = Total revenue Volume (units/period) Cost in Dollars (Thousands) Loss

Crossover Chart Fixed cost - Process A Fixed cost - Process B Fixed cost - Process C Total cost - Process C Total cost - Process B Total cost - Process A Process A: low volume, high variety Process B: Repetitive Process C: High volume, low variety Process C Process B Process A Lowest cost process

Vary staffing Change equipment & processes Change methods Redesign the product for faster processing Managing Existing Capacity Capacity Management Vary prices Vary promotion Change lead times (e.g., backorders) Offer complementary products Demand Management

Vary staffing

Change equipment & processes

Change methods

Redesign the product for faster processing

Vary prices

Vary promotion

Change lead times (e.g., backorders)

Offer complementary products

Complementary Products Time (Months) Sales (Units) Jet Skis Snow-mobiles Total 0 1,000 2,000 3,000 4,000 5,000 J M M J S N J M M J S N J

Attaining Lean Production The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance Focus on inventory reduction Modulization, postponed differentiation Develop close relationships with suppliers Eliminate all but value-added activities Reevaluating the process of planning, scheduling, and transportations across boundaries

The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance

Focus on inventory reduction

Modulization, postponed differentiation

Develop close relationships with suppliers

Eliminate all but value-added activities

Reevaluating the process of planning, scheduling, and transportations across boundaries

Techniques for Improving Process Efficiency of Service Separation Self-service Postponement Focus Structure service so customers must go where service is offered Self-service so customers examine, compare and evaluate at their own pace Customizing at delivery Restricting the offerings Strategy Technique

Separation

Self-service

Postponement

Focus

Structure service so customers must go where service is offered

Self-service so customers examine, compare and evaluate at their own pace

Customizing at delivery

Restricting the offerings

Techniques for Improving Process Efficiency of Service Modulizarion Automation Scheduling Training Modular selection of service. Modular production Separating services that lend themselves to automation Precise personnel scheduling Clarifying the service options Explaining problems Improving employee flexibility

Modulizarion

Automation

Scheduling

Training

Modular selection of service. Modular production

Separating services that lend themselves to automation

Precise personnel scheduling

Clarifying the service options

Explaining problems

Improving employee flexibility

Add a comment

Related presentations

Related pages

CAPACITY MANAGEMENT: 6.2 The Capacity Management process

The remainder of this Section describes the sub-processes of Capacity Management in more detail, and Section 6.3 explains the activities that constitute ...
Read more

⚡Presentation "Process Capacity. 2 Ardavan Asef-Vaziri ...

Process Capacity. 2 Ardavan Asef-Vaziri June-2013Capacity- Basics A Process; Three Sequential Activities You Oven Friend 15 minutes 205 3 sequential ...
Read more

Capacity planning - Wikipedia, the free encyclopedia

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context ...
Read more

Internal Revenue Manual - 2.144.2 Business Capacity Management

Effect on Other Documents IRM 2.144.2 dated October 10, 2014 is superseded Audience The Business capacity Management Process is applicable to ...
Read more

Internal Revenue Manual - 2.144.4 Component Capacity ...

Effect on Other Documents IRM 2.144.4 dated October 14, 2014 is superseded Audience The Component Capacity Management Process is applicable ...
Read more

Process capacity=Min{Capacity of Res 1, ...., Capacity of ...

Process capacity=Min{Capacity of Res 1, ...., Capacity of Res 2} Incorporating available input rate from MARKETING 2 at Kellogg School of Management
Read more

Evaluating Process Capacity 2013e.ppt [相容模式]

1 1 Chapter 3 Evaluating Process Capacity Process Flow Diagram Bottleneck and Capacity Utilization Multiple Types of Flow Units 2 A process is a set of ...
Read more

Chapter 3 Process Capacity 09-16-13 - Augusta State University

QUAN 6610 Process Capacity 2 3 How to Create a Process Flow Diagram? A process flow diagramis a graphical way to describe the process and it will help us ...
Read more

Process Capacity Sheet - mai

2. Process Capacity Sheet why required ・The maximum capacity for part processing at any one process. ・Recorded the amount of time spent in manual work and
Read more