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					Chapter 3


     Process Planning and Design




            Chapter 3: Process Planning and Design   1
Process Planning and Design
Chapter 2 identified the critical factors in
  providing value to the customer. This
  chapter discusses the selection and
  design of the transformation process that
  can deliver those factors—low cost, high
  quality, enhanced functionality, speed,
  and so on—in an efficient and effective
  manner.
              Chapter 3: Process Planning and Design   2
Introduction
   Fender's Custom Shop
   Assembly line at IBM's plant in Charlotte,
    North Carolina
   Rickard Associates, an editorial production
    company
   Martin Marietta's aerospace electronics
    manufacturing facility in Denver, Colorado
   Nynex

                  Chapter 3: Process Planning and Design   3
    Examples
   Examples illustrate several transformation systems.
    The Fender Custom Shop is a job shop that has
    specialized departments for routing, lathe operations,
    inlaying, paint and finishing, and final assembly.
    Because work is organized by the task performed,
    Rickard Associates is also a job shop - even
    though the work is not performed in one location.
    Companies like Rickard that rely on information
    technology to bring separated workers together are
    referred to as virtual organizations. Martin Marietta
    converted into focused factories. And assembly
    lines like the one IBM uses are referred to as flow
    shops.
                     Chapter 3: Process Planning and Design   4
    Fender’s Custom Shop
   Customers include Eric Clapton, John Deacon
    (Queen), David Gilmour, Yngwie Malmsteen
    and Stevie Ray Vaughn
   Production Steps:
     computer controlled routers and lathes
      shape guitar bodies and necks
     also have Neck Duplicator

     necks and bodies hand and machine
      sanded
                  Chapter 3: Process Planning and Design   5
Fender’s Custom Shop
continued

     detailed inlay work done with Hegner
      precision scroll saw
     paint and finishing operations in special
      room where air is re-circulated 10
      times/minute
     buffed
     hung up and seasoned for two weeks
     final assembly by actual musicians

                 Chapter 3: Process Planning and Design   6
IBM’s Charlotte, NC Plant

   Assembly line produces 27 significantly
    different products
   Products include hand-held bar-code
    scanners, portable medical computers, fiber-
    optic connectors, and satellite communications
    devices
   “Kits” of parts delivered to workers
   Computer screen displays assembly
    instructions
                 Chapter 3: Process Planning and Design   7
Rickard Associates

   Produces magazines and marketing materials
   Only two of editorial production company’s
    employees work at headquarters in NJ
   Art director works in AZ
   Editors are located in FL, GA, MI, and D.C.
   Freelancers even more scattered
   Internet and AOL used to coordinate work


                 Chapter 3: Process Planning and Design   8
Martin Marietta Aerospace
Plant
   Originally set up as job shop with
    numerous functional departments
       high WIP levels
       long lead times
       long travel distances
       departmental barriers inhibited
        communication
   Plant subsequently arranged into three
    focused factories
                   Chapter 3: Process Planning and Design   9
Martin Marietta continued

   Each focused factory completed entire
    electronic assembly for particular
    application
   Each focused factory treated as
    separate business enterprise
   Factory manager assigned to each
    focused factory
   “NFL draft” used to select worker teams
               Chapter 3: Process Planning and Design   10
Martin Marietta continued
   Within focused factories part families identified
    based on technology and processes
   Standard routings identified for each part
    family
   Improvements
       seven months of consecutive production with no
        scrap
       50% reduction in WIP
       21% reduction in lead times
       90% reduction in overtime

                    Chapter 3: Process Planning and Design   11
Nynex
   Analyzed company in terms of four core
    processes
       customer operations
       customer support
       customer contact
       customer provisioning



                  Chapter 3: Process Planning and Design   12
Nynex continued
   Obtained services of Boston Consulting
    Group
   Visited 152 companies to document best
    practices
   Estimated savings are $1.5 to $1.7
    billion


               Chapter 3: Process Planning and Design   13
Variety of Transformation Systems

   Fender Custom Shop is job shop
   Rickard Associates is job shop and is
    also a virtual organization
   Martin Marietta converted from a job
    shop to focused factories
   IBM uses a flow shop


                Chapter 3: Process Planning and Design   14
Transformation System Design and
Layout Analysis
   Transformation system design considers
    alternative transformation forms and
    selects best one given characteristics of
    desired outputs.
   Layout analysis seeks to maximize the
    efficiency or effectiveness of operations.



                Chapter 3: Process Planning and Design   15
Forms of Transformation
Systems

     Continuous Process




          Chapter 3: Process Planning and Design   16
Continuous Process

   Highly standardized products in large
    volumes
   Often these products have become
    commodities
   Typically these processes operate 24
    hours/day seven days/week
   Objective is to spread fixed cost over as
    large a volume as possible
                Chapter 3: Process Planning and Design   17
Continuous Process continued

   Starting and stopping a continuous
    process can be prohibitively expensive
   Highly automated and specialized
    equipment used
   Layout follows the processing stages
   Output rate controlled through
    equipment capacity and flow mixture
    rates
                Chapter 3: Process Planning and Design   18
Continuous Process continued
   Low labor
    requirements
   Often one primary
    input
   Initial setup of
    equipment and
    procedures very
    complex
               Chapter 3: Process Planning and Design   19
Forms of Transformation
Systems

     Flow Shop




          Chapter 3: Process Planning and Design   20
Flow Shop

   Similar to continuous process except
    discrete product is produced
   Heavily automated special purpose
    equipment
   High volume - low variety
   Both services and products can use flow
    shop form of processing

               Chapter 3: Process Planning and Design   21
A Generalized Flow Shop Operation




            Chapter 3: Process Planning and Design   22
Advantages of the Flow Shop

   Low unit cost
       specialized high volume equipment
       bulk purchasing
       lower labor rates
       low in-process inventories
       simplified managerial control



                  Chapter 3: Process Planning and Design   23
Disadvantages of Flow Shop

   Variety of output difficult to obtain
   Difficult to change rate of output
   Minor design changes may require
    substantial changes to the equipment
   Worker boredom and absenteeism
   Work not very challenging
   Vulnerable to equipment breakdowns
                Chapter 3: Process Planning and Design   24
Disadvantages of Flow Shop continued


   Line balanced to slowest element
   Large support staff required
   Planning, design, and installation very
    complex task
   Difficult to dispose of or modify special
    purpose equipment


                 Chapter 3: Process Planning and Design   25
Flow Shop Layout

   Objective is to assign tasks to groups
   The work assigned to each group should
    take about the same amount of time to
    complete
   Final assembly operations with more
    labor input often subdivided easier
   Paced versus unpaced lines

               Chapter 3: Process Planning and Design   26
Line Balancing


                       available work time
          Cycle time 
                             demand

 number of theoretical workstations, N T   task times / cycle time


                    output         total task time
       efficiency =        
                     input ( N A stations)  cycle time

                       Chapter 3: Process Planning and Design          27
Line Balancing Example

     Task Time Required Precedes
      A      2.2 min.   B, C, D
      B         3.4        E
      C         1.7        E
      D         4.1        F
      E         2.7        F
      F         3.3        G
      G         2.6        --

            Chapter 3: Process Planning and Design   28
Line Balancing Example
continued

   Company operates one shift per day
   Available time per shift is 450 minutes
   Demand is 100 units/day




                Chapter 3: Process Planning and Design   29
Precedence Diagram

                B

                                                  E

 A              C




                  D                               F   G

         Chapter 3: Process Planning and Design           30
Calculations

cycle time = 450/75 = 6 minutes/part

NT = 20/6 = 3.33 = 4 stations




             Chapter 3: Process Planning and Design   31
Task Assignment

          Time         Elig.             Will Task    Idle
  Station Avail.       Tasks             Fit? Assign. Time
     1     6.0          A                 A
           3.8        B,C,D B,C                           B
           0.4          C,D                 --            --   0.4
    2      6.0          C,D              C,D              D
           1.9             C                C             C
           0.2             E                --            --   0.2
                 Chapter 3: Process Planning and Design              32
Task Assignment continued

          Time Elig.                    Will               Task   Idle
  Station Avail. Tasks                  Fit?              Assign. Time
    3      6.0            E                E                E

           3.3            F                F                F     0.0

    4      6.0            G                G                G     3.4


                 Chapter 3: Process Planning and Design                  33
Line Balancing Solution

                                                           Station 3
      Station 1          B

                                                            E

  A                      C

                  Station 2
                                                                       Station 4

                           D                                F              G

                  Chapter 3: Process Planning and Design                       34
Efficiency

     efficiency = 20/(4*6) = 83.3%




             Chapter 3: Process Planning and Design   35
Precedence Graph for Credit
Applications




              Chapter 3: Process Planning and Design   36
Stations Assignments for Credit
Application




               Chapter 3: Process Planning and Design   37
Forms of Transformation
Systems

     Job Shop




          Chapter 3: Process Planning and Design   38
Job Shop

   High variety - low volume
   Equipment and staff grouped based on
    function
   Each output processed differently




               Chapter 3: Process Planning and Design   39
A Generalized Job Shop Operation




            Chapter 3: Process Planning and Design   40
Advantages of the Job Shop

   Flexibility to respond to individual
    demands
   Less expensive general purpose
    equipment used
   Maintenance and installation of general
    purpose equipment easier
   General purpose equipment easier to
    modify and therefore less susceptible to
    becoming obsolete
                Chapter 3: Process Planning and Design   41
Advantages of the Job Shop
continued

   Dangerous activities can be segregated
    from other operations
   Higher skilled work leading to pride of
    workmanship
   Experience and expertise concentrated
   Pace of work not dictated by moving line
   Less vulnerable to equipment
    breakdowns
                Chapter 3: Process Planning and Design   42
Disadvantages of the Job
Shop
   General purpose equipment is slower
   Higher direct labor cost
   High WIP inventories
   High material handling costs
   Management control very difficult



               Chapter 3: Process Planning and Design   43
Directly Specified Closeness
Preferences

   A = absolutely necessary
   E = especially important
   I = important
   O = ordinary closeness OK
   U = unimportant
   X = undesirable


               Chapter 3: Process Planning and Design   44
Cost-Volume-Distance Model



          N            N
   TC =    C
          i =1        j=1
                                     ij   Vij D ij




              Chapter 3: Process Planning and Design   45
Office Layout




                Chapter 3: Process Planning and Design   46
Forms of Transformation
Systems

     Cellular Production




          Chapter 3: Process Planning and Design   47
The Cell Form

   Combines flexibility of job shop with low
    costs and short response times of flow
    shop
   Based on group technology
   First identify part families
   Then form machine cells to produce part
    families

                Chapter 3: Process Planning and Design   48
Conversion of a Job Shop Layout to a
Cellular Layout




              Chapter 3: Process Planning and Design   49
Organization of Miscellaneous Parts
into Families




             Chapter 3: Process Planning and Design   50
Advantages of Cellular Production

   Reduced machine setup times
       increased capacity
       economical to produce in smaller batch
        sizes
       smaller batch sizes result in less WIP
       less WIP leads to shorter lead times
       shorter lead times increase forecast
        accuracy and provide a competitive
        advantage
                  Chapter 3: Process Planning and Design   51
Advantages of Cellular Production
continued

   Parts produced in one cell
   Capitalize on benefits of using worker
    teams
   Minimal cost to move from job shop to
    cellular production (e.g. EHC)
   Can move from cellular production to
    “mini-plants”

                Chapter 3: Process Planning and Design   52
Disadvantages of Cellular Production

   Volumes too low to justify highly efficient
    high volume equipment
   Vulnerable to equipment breakdowns
   Balancing work across cells
   Does not offer the same high degree of
    customization as the job shop


                 Chapter 3: Process Planning and Design   53
Cellular Layout
   Teams of workers and equipment to
    produce families of outputs
   Workers cross-trained
   Nominal cells versus physical cells.
   Remainder cell
   Cell formation methods
       production flow analysis

                   Chapter 3: Process Planning and Design   54
Original Machine-Component Matrix

            A B C D E
        1 1                    1                   1
        2           1                    1
        3 1                    1                   1
        4           1                    1
        5 1                                        1

              Chapter 3: Process Planning and Design   55
Reordered Machine-Component
Matrix

            A C E B D
        1 1         1 1
        3 1         1 1
        5 1                   1
        2                               1          1
        4                               1          1

              Chapter 3: Process Planning and Design   56
Forms of Transformation
Systems

     Project Operations




          Chapter 3: Process Planning and Design   57
Project Operations
    Large scale
    Finite duration
    Nonrepetitive
    Multiple
     interdependent
     activities
    Offers extremely
     short reaction times

                Chapter 3: Process Planning and Design   58
Selection of the Process




          Chapter 3: Process Planning and Design   59
Volume/Variety Considerations

   High volume indicate automated mass
    production
   High variety implies use of skilled labor
    and general purpose equipment
   Make-to-stock versus make-to-order




                Chapter 3: Process Planning and Design   60
Effect of Output Characteristics on
Transformation Systems




               Chapter 3: Process Planning and Design   61
Product/Process Life Cycles
   In R&D stage, product made in small
    volumes
   At peak of life cycle, demand may justify
    high volume special purpose equipment
   System should evolve as market evolves
   Whether an organization moves with a
    product through its life cycle depends on
    the organization’s focus
                Chapter 3: Process Planning and Design   62
Selection of Transformation System by
Stage of Life Cycle




              Chapter 3: Process Planning and Design   63
Service Processes
   Often implemented with little
    development or pretesting
   Need to consider amount of customer
    contact
   Customers may not arrive at smooth and
    even increments
   Including customer in service process
    provides opportunities to improve
    service
               Chapter 3: Process Planning and Design   64
New Transformational
Technologies and Reengineering




           Chapter 3: Process Planning and Design   65
Information Technology
   World Wide Web
       Federal Express
           Web server set up in late 1994
           By 1996 12,000 customers using service each
            day to access package-tracking database
           provides higher customer service
           saves FedEx $2 million per year
   Intranets

                     Chapter 3: Process Planning and Design   66
Information Technology
continued
   Decision support systems
   Artificial intelligence
   Expert systems




               Chapter 3: Process Planning and Design   67
The Office of the Future
   Focus of 1980s was on improving
    individual productivity
   Focus 1990s is enhancing way teams
    work together
   Groupware
       communications (e-mail)
       collaboration (access to shared data)
       coordination (jointly accomplishing
        activities)
                   Chapter 3: Process Planning and Design   68
Manufacturing Technologies
   Numerical Control (NC)
       computer numerical control
       direct numerical control
   Robotics
   Flexible Manufacturing Systems (FMS)



                  Chapter 3: Process Planning and Design   69
Business Process Design
(Reengineering)




         Chapter 3: Process Planning and Design   70
Division of Labor Concept
   Work broken down into its simplest most
    basic tasks
       Performing same task facilitates attaining
        greater skill
       No time lost switching to another task
       Workers well positioned to improve tools
        and techniques


                   Chapter 3: Process Planning and Design   71
Division of Labor Concept
continued

   Division of labor concept not challenged
    until recently despite dramatic changes
    in technology
   Quality, innovation, service, and value
    more important than cost, growth, and
    control



                Chapter 3: Process Planning and Design   72
Process
   Set of activities that taken together
    produce a result of value to the customer
   Organizing on basis of processes
       Eliminate delays and errors when work is
        handed off
       Capture information once and at source
       When people closest to process perform
        work, there is little need for management
        overhead
                   Chapter 3: Process Planning and Design   73
Business Process Design
(BPD)
The fundamental rethinking and radical
  redesign of business processes to
  bring about dramatic improvements in
  performance



Hammer, M. and Stanton, S. The Reengineering Revolution, Harper
   Business, 1995.

                     Chapter 3: Process Planning and Design   74
Radical
   Profoundly change the way work
    performed
   Not concerned with making superficial
    changes
   Get to root
   Get rid of old
   Reinventing, not improving

               Chapter 3: Process Planning and Design   75
Redesign
   BPD is about designing how work is
    done
   Smart, capable, well trained, highly
    motivated employees mean little if the
    way work is performed is poorly
    designed



                Chapter 3: Process Planning and Design   76
Process
   All organizations perform processes
   Customers not interested in individual
    activities but rather overall results
   Few of them are organized on the basis
    of processes
   Thus, processes tend to go unmanaged
   Team approach one way this addressed

               Chapter 3: Process Planning and Design   77
Dramatic
   Quantum leaps in performance, not
    marginal or incremental improvements
   Breakthroughs in performance




               Chapter 3: Process Planning and Design   78
IBM Credit Example




          Chapter 3: Process Planning and Design   79
IBM Credit Example continued
   Order logged by 1 of 14 people in
    conference room
   Carted upstairs to credit department
   Information entered into computer to
    check borrower’s creditworthiness
   Results written on piece of paper


                Chapter 3: Process Planning and Design   80
IBM Credit Example continued
   Business practices department modified
    standard loan covenant in response to
    customer requests
   Used its own computer system
   Pricer keyed data into PC to determine
    appropriate interest rate
   Administrator converted to quote letter
    and Fedexed to field sales rep.
               Chapter 3: Process Planning and Design   81
IBM Credit Example continued
   Average time to process a request was 6
    days
   Could take as long as 2 weeks
   Actual processing time 90 minutes
   Deal Structurer
       Turnaround time 4 hours
       Number of deals processed increased 100
        times with small reduction in head count
                  Chapter 3: Process Planning and Design   82
Chapter 3: Process Planning and   83
             Design

				
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