Block-2
Block-2
Operations
BLOCK 2
DESIGNING OPERATIONS
51
Operations
Management –
An Overview
52
Process and Capacity
UNIT 4 PROCESS AND CAPACITY Analysis
ANALYSIS
Objectives
After studying this unit, you will be able to:
• Generate and maintain a capacity plan which is accurate
• Provide guidance and advice on all issues related to capacity and
performance.
• Make sure that the service performance achievements meet their agreed-
upon targets
• Measure and monitor capacity to support service level management.
• Provide assistance with the diagnosis and resolution of incidents and
problems.
• Analyze the impact which the changes have had on the capacity plan and
take proactive measures to improve the performance wherever it is cost-
effective.
Structure
4.1 Process and capacity analysis -- Introduction
4.1.1 Process selection
4.1.2 Process types
4.2 Capacity planning – Introduction
4.2.1 Managing a process to meet demand
4.3 Capacity decisions are strategic
4.3.1 Defining and Measuring Capacity
4.4 Developing capacity strategies
4.5 Process of capacity planning
4.6 How to perform a manufacturing capacity analysis
4.7 How To Perform A Manufacturing Capacity Analysis In Your Business
4.8 Summary
4.9 Check your progress: possible answers
4.10 Keywords
4.11 Further Readings
Figure 4.1: Process selection and capacity planning influence system design
54
Figure 4.1 above provides an overview of where process selection and Process and Capacity
Analysis
capacity planning fit into system design. Forecasts, product and service
design, and technological considerations all influence capacity planning and
process selection. Moreover, capacity and process selection are interrelated,
and are often done in concert. They, in turn, affect facility and equipment
choices, layout, and work design. How an organization approaches process
selection is determined by the organization’s process strategy. Key aspects
include:
• Capital intensity: The mix of equipment and labor that will be used by
the organization.
• Process flexibility: The degree to which the system can be adjusted to
changes in processing requirements due to such factors as changes in
product or service design, changes in volume processed, and changes in
technology.
Job Shop
A job shop usually operates on a relatively small scale. It is used when a low
volume of high-variety goods or services will be needed. Processing is
intermittent; work includes small jobs, each with somewhat different
processing requirements. High flexibility using general-purpose equipment
and skilled workers are important characteristics of a job shop. A
manufacturing example of a job shop is a tool and die shop that is able to
produce one-of-a-kind tools. A service example is a veterinarian’s office,
which is able to process a variety of animals and a variety of injuries and
diseases.
Batch
Batch processing is used when a moderate volume of goods or services is
desired, and it can handle a moderate variety in products or services. The
equipment need not be as flexible as in a job shop, but processing is still
intermittent. The skill level of workers doesn’t need to be as high as in a job
shop because there is less variety in the jobs being processed. Examples of
batch systems include bakeries, which make bread, cakes, or cookies in
batches; movie theaters, which show movies to groups (batches) of people;
and airlines, which carry planeloads (batches) of people from airport to
airport. Other examples of products that lend themselves to batch production
are paint, ice cream, soft drinks, beer, magazines, and books.
Repetitive
When higher volumes of more standardized goods or services are needed,
repetitive processing is used. The standardized output means only slight
flexibility of equipment is needed. Skill of workers is generally low.
Examples of this type of system include production lines and assembly lines.
55
Designing Operations In fact, this type of process is sometimes referred to as assembly. Familiar
products made by these systems include automobiles, television sets, pencils,
and computers. An example of a service system is an automatic carwash.
Continuous
When a very high volume of non-discrete, highly standardized output is
desired, a continuous system is used. These systems have almost no variety in
output and, hence, no need for equipment flexibility. Workers’ skill
requirements can range from low to high, depending on the complexity of the
system and the expertise workers need. Generally, if equipment is highly
specialized, worker skills can be lower. Examples of non-discrete products
made in continuous systems include petroleum products, steel, sugar, flour,
and salt. Continuous services include air monitoring, supplying electricity to
homes and businesses, and the Internet.
Process Variation
Variation occurs in all business processes. It can be due to variety or
variability. For example, random variability is inherent in every process; it is
always present. In addition, variation can occur as the result of deliberate
management choices to offer customers variety. Variations can be disruptive
to operations and supply chain processes, interfering with optimal
functioning. Variations result in additional cost, delays and shortages, poor
quality, and inefficient work systems. Poor quality and product shortages or
service delays can lead to dissatisfied customers and can damage an
organization’s reputation and image. It is not surprising, then, that the ability
to deal with variability is absolutely necessary for managers.
Example
Compared to the effective capacity of 40 units per day, 36 units per day looks
pretty good. However, compared to the design capacity of 50 units per day,
36 units per day is much less impressive although probably more meaningful.
58
Check Your Progress 2 Process and Capacity
Analysis
Notes: a) Space is given below for your answer.
b) Check your answer with the one given at the end of this unit.
Explain the determinants of effective capacity. (Answer in about 200
words).
............................................................................................................................
............................................................................................................................
............................................................................................................................
............................................................................................................................
............................................................................................................................
The systems viewpoint includes good ideas, which can increase supply chain
capacity with minimum expenditures. The formula for actual measured
capacity of a manufacturing or service department is
C = T × E × U,
Where
C = actual measured capacity (in units converted to standard hours)
T = real time available
E = efficiency
U = utilization
In supply chain terms, benchmarking systematically compares fundamental
measures with those of contestants performing similar supply chain
functions. In the following sections, we will discuss capacity planning for an
operational department what is popularly known as aggregate production
planning.
60
............................................................................................................................ Process and Capacity
Analysis
............................................................................................................................
............................................................................................................................
............................................................................................................................
............................................................................................................................
61
Designing Operations Step 3: Rollout Process Changes
Managers are now equipped with accurate and verifiable data that drives real
change at this point in the capacity analysis. These changes can be used to
tackle the most significant capacity constraints, unlock the hidden capacity to
eliminate overtime, reduce the need for capital expenditure, and hone a
maintenance program that works in sync with changeovers and other
operating conditions instead of contention with them.
Capacity Limitations
It is important to understand your capacity limitations so that you can identify
areas of improvement and develop a capacity plan that is just right for your
organization.
62 ............................................................................................................................
Process and Capacity
4.8 SUMMARY Analysis
Process Types
There are five basic process types: job shop, batch, repetitive, continuous,
and project.
Job Shop.
A job shop usually operates on a relatively small scale. It is used when a low
volume of high-variety goods or services will be needed.
Batch.
Batch processing is used when a moderate volume of goods or services is
desired, and it can handle a moderate variety in products or services.
Repetitive.
When higher volumes of more standardized goods or services are needed,
repetitive processing is used.
Continuous.
When a very high volume of non-discrete, highly standardized output is
desired, a continuous system is used. These systems have almost no variety in
output and, hence, no need for equipment flexibility.
Check Your Progress 2
Determinants Of Effective Capacity
Facilities.
The design of facilities, including size and provision for expansion, is key.
Locational factors, such as transportation costs, distance to market, labor
63
Designing Operations supply, energy sources, and room for expansion, are also important.
Product and Service Factors.
Product or service design can have a tremendous influence on capacity. For
example, when items are similar, the ability of the system to produce those
items is generally much greater than when successive items differ.
Process Factors.
The quantity capability of a process is an obvious determinant of capacity. A
more subtle determinant is the influence of output quality. For instance, if
output quality does not meet standards, the output rate will be slowed by the
need for inspection and rework activities. Productivity also affects capacity.
Human Factors.
The tasks that make up a job, the variety of activities involved, and the
training, skill, and experience required to perform a job all have an impact on
the potential and actual output.
Policy Factors.
Management policy can affect capacity by allowing or not allowing capacity
options such as overtime or second or third shifts.
Operational Factors.
Scheduling problems may occur when an organization has differences in
equipment capabilities among alternative pieces of equipment or differences
in job requirements.
Supply Chain Factors.
Supply chain factors must be taken into account in capacity planning if
substantial capacity changes are involved.
External Factors.
Product standards, especially minimum quality and performance standards
can restrict management’s options for increasing and using capacity.
Check Your Progress 3
Process of Capacity Planning
Capacity planning is concerned with defining the long-term and the short-
term capacity needs of an organization and determining how those needs will
be satisfied. Capacity planning decisions are taken based upon the consumer
demand and this is merged with the human, material and financial resources
of the organization. Capacity requirements can be evaluated from two
perspectives—long-term capacity strategies and short-term capacity
strategies.
While this desire makes sense, in practice this modular expansion often
amplifies inefficiencies and costs more over the long run to implement.
4.10 KEYWORDS
Process planning: Systematic determination of the methods by which a
product is to be manufactured economically and competitively
66
Design of
UNIT 5 DESIGN OF MANUFACTURING Manufacturing
Goods and Services
GOODS AND SERVICES
OBJECTIVES
After studying this unit, you will be able to:
• Improve the manufacturing feasibility of a product.
• Reduce the overall costs of the product.
• Improve the overall quality of the product.
• To design a product that is easily and economically manufactured.
• Minimize manufacturability issues so that the product can be
manufactured quicker and in a more economical way
• Create an efficient design that leaves room for potential design changes
in the later stages without a huge cost.
Structure
5.1 Manufacturing Product Design and Process Basics
5.1.1 The Phases of Product Design
5.1.2 Product Analysis and Testing
5.2 Strategies for New Product Development and Introduction
5.2.1 Process Flow Design and Process Selection
5.3 Product Life-Cycle Stages
5.3.1 Demand Prediction in Life-Cycle Stages
5.4 Design for Manufacturing - Guidelines
5.5 Competitive Advantage
5.5.1 Product Development Tradeoffs
5.6 Types of designs
5.6.1 Step in Design Process
5.7 Definition of DFM
5.7.1 Design for manufacturing and assembly
5.7.2 Factors that Affect DFM
5.8 Summary
5.9 Check your progress: possible answers
5.10 Keywords
5.11 Further Readings
b) Value: Customers expect value in return for the money spent. Higher the
money spent for a product, the higher is the expectation of the customer.
For example, a Taka 3 Econo ball pen is expected to perform much
below a Tk 300 Parker ball pen. If the Parker pen lasts long, the
customer will feel that the purchase was worth the price. However, if it
lasts for a few weeks, the customer would feel that the value was not
there.
d) After sales service: Many products are used repeatedly over a period of
time. In this process it may need maintenance. Does the seller have the
ability to service the machine? For example, computers need newer
software’s; printers need replacement ribbons etc. Are these supports
available? If not, the product cannot function to its fullest ability, and as
such, is of little use to the customers.
Production design
Production design is the structuring of component parts or activities so that as
a unit they can provide a specified value. It usually begins with the
development of a set of detailed specifications. New product and service
ideas come from various sources, including customers, top management, and
staff from marketing, research and development, production and engineering.
Product selection, definition and design take on a continuing basis because so
many new product opportunities exist. Mainly five factors influencing market
opportunities. These are,
• Economic change:
• Sociological and demographic change:
• Technological change:
68
• Political change: Design of
Manufacturing
• Other changes Goods and Services
c. Advanced design:
c. Repetitive focus: The repetitive process line is the classic assembly line.
Repetitive processes use modules. Modules are parts or components
previously prepared often in a continuous process. The repetitive process
is widely used, including the assembly of virtually all automobile and
household appliances. Comparison among Process, Repetitive is Product
focus is given in Table 5.1.
72 .........................................................................................................................
Design of
5.3 PRODUCT LIFE-CYCLE STAGES Manufacturing
Goods and Services
Operations managers need to be aware of the timing and stages that drive the
development schedules of new products (goods and services) and the
production and delivery schedules of the company’s mature products. The
product life cycles are composed of four stages, all products and services go
through the following stages:
• Introduction to the market
• Growth of volume and share
• Maturation, where maturity is the phase of relative equilibrium
• Decline occurs, because of deteriorating sales;
73
Designing Operations
75
Designing Operations Check Your Progress 3
Notes: a) Space is given below for your answer.
b) Check your answer with the one given at the end of this unit.
Firms innovate and develop new products for unique opportunities for
competitive advantages. Comment (Answer in about 200 words).
............................................................................................................................
............................................................................................................................
............................................................................................................................
............................................................................................................................
............................................................................................................................
............................................................................................................................
• DFMA not only reduces the manufacturing cost of the product but it
helps to reduce the time to market and quality of the product.
• DFMA provides a systematic procedure for analyzing a proposed design
from the point of view of assembly and manufacture.
• Any reduction in the number of parts reduces the cost as well as the
inventory.
• DFMA tools encouraged the dialogue between the designer and
manufacturing engineer during the early stages of design.
1. Process
2. Design
3. Material
4. Environment
5. Compliance/Testing
Ideally, DFM must occur early in the design process, well before tooling
begins. In addition, properly-executed DFM needs to include all the
stakeholders — engineers, designers, contract manufacturers, mould builders
and material suppliers. This “cross-functional” DFM intends to challenge the
design — to look at the design at all levels: component, sub-system, system,
and holistic levels — to ensure the design is optimized and does not have
unnecessary costs embedded in it. 77
Designing Operations The following chart offers an excellent visual representation of the effect of
an early DFM. As the design progresses through the product life cycle,
changes become more expensive and more difficult to implement. Early
DFM allows design changes to be executed quickly, at the least expensive
location.
5.8 SUMMARY
Designing for Manufacturing and Assembly (DFM or DFMA) is a critical
part of the product development cycle. It involves optimizing the design of
your product for its manufacturing and assembly process and merging the
design requirements of the product with its production method. Employing
DFM tactics reduces the cost and difficulty of producing a product while
maintaining its quality. Design for Manufacturing is Important for:
• Market driven: According to this view You should make what you can
sell. In this case, the market determines new products with little regard to
existing technology and operations processes.
• Technology driven: This approach would suggest You should sell what
you can make. Accordingly new products should be driven from
production technology, with little regard for the market.
• Inter-functional view: In this view, new product introduction is inter
functional in nature and requires co-operation among marketing,
operations, engineering, and other functions. The new product
development process is neither market driven nor technology driven but
determined by a coordinated effort between functions.
5.10 KEYWORDS
Design for Manufacturing: It involves optimizing the design of your product
for its manufacturing.
Design Simplicity: Simplifying your design cuts down on the time and
inventory needed to make your product, which correlates to its cost
Prototypes: 3D printing allows for rapid iteration so you can test out many
different designs early and often
82
Computerized Layout
UNIT 6 COMPUTERIZED LAYOUT Design Algorithms
DESIGN ALGORITHMS
OBJECTIVES
After studying this unit, you will be able to:
• To provide optimum space to organize equipment, facilitate the
movement of goods, and create a safe and comfortable work
environment.
• To promote order in production towards a single objective.
• To reduce the movement of workers, raw materials, and equipment
• To promote the safety of the plant as well as its workers.
• To facilitate extension or change in the layout to accommodate new
product lines or technology upgradation.
• To increase the production capacity of the organization
STRUCTURE
6.1 Automation - Introduction
6.1.1 Computerized Layout Planning
6.1.2 Need for using computer programs
6.2 Classification of computer programs of plant layout
6.3 Computerized relative allocation of facilities technique
6.3.1 Input requirements of CRAFT
6.3.2 Steps Involved in CRAFT:
6.4 Automated layout design program (ALDEP)
6.4.1 Input requirements of ALDEP:
6.4.2 Step-by-step procedure of ALDEP
6.5 Computerized relationship layout planning (CORELAP)
6.5.1 Input requirements of CORELAP
6.5.2 Step-by-step procedure of CORELAP:
6.6 Summary
6.7 Check your progress: possible answers
6.8 Keywords
6.9 Further Readings
Step-4: Given data on flow, distance, and cost, compute the total handling
cost of the present layout.
Step-7: Is the cost in the previous is less than the total cost of the present
layout? If yes, go to step 8. If not go to step-11.
Step-8: Interchange the selected pair of departments. Call this the NEW-
LAYOUT. Compute centroids, distance matrix and total cost.
Step-9: Is the cost of the new layout less than the cost of the present layout?
Step-10: The new layout is hereafter considered as the present layout. The
data on centroids, layout matrix and the total cost is retained. Go to step-5.
Step-11: Print the present layout as the FINAL LAYOUT.
Step-2: Consider an appropriate scale for one unit square and calculate no of
squares for all the departments. Consider an appropriate scaled layout such
that the total no of squares is within the layout area.
Step-4: After placing the randomly selected department in the layout, scan
the relationship chart and divide the non-selected departments into category-
A and category-B. scan the relationship chart following the condition.
Step-6: check whether the computed score of the layout is higher than the
current best layout If yes, call the new layout as the current best layout and
save the corresponding score.
Step-7: check for the current iteration number i.e. I=N. If yes, print the
current best layout as the final layout and its corresponding score as a final
score.
Step-2: consider scale as 1 square = 600 sq.m Compute no. of square units
for all the departments. no of squares = dept. area /Area per square in layout
Step-3: By using the REL chart, compute the total closeness rating for all the
departments.
91
Designing Operations
Step-4: Select the department with the highest TCR value. The selected
department occupy 1 square and it is placed in the centre of the layout matrix.
Step-5: Check the close relationship of the first selected dept with other
departments. And note the corresponding closeness value. now select the
maximum REL value dept
Select that department which has maximum REL Value as 3rdseleced dept.
Step-6: Repeat the above procedure with unassigned departments.
92
Computerized Layout
6.6 SUMMARY Design Algorithms
CORELAP
It begins by calculating which of the activities in the layout is the busiest or
most related. The sums of each activity’s closeness relationships with all
other activities are compared and the activity with the highest total closeness
relationship (TCR) count is selected and located first in the layout matrix.
This activity is named Winner. Next, an activity which must be close to the
winner is selected and placed as adjacent as possible to winner: This activity
is denoted as A (closeness absolutely necessary) and is named Victor. A
search of winner’s remaining relationships for more A-related victors is then
made. These are placed, again, as close to each other as possible. If no more
A’s can be found, the victors become potential winners and their
relationships are searched for A’s. If an A is found, the victor becomes the
new winner, and the procedure is repeated. When no A’s are found, the same
procedure is repeated for E’s (closeness Especially important), I’s (closeness
important), and 0’s (Ordinary closeness o.k.) until all activities have been
placed in the layout. CORELAP also puts a value on the U (closeness
Unimportant) and X (closeness not desirable) relationship.
ALDEP
It uses a preference table of relationship values in matrix form to calculate the
scores of a series of randomly generated layouts. If for example, activities 11
and 19 are adjacent, the value of the relationship between the two would be
added to that layout’s score. A modified random selection technique is used
to generate alternate layouts. The first activity is selected and located at
random. Next, the relationship data are searched to find an activity with a
high relationship to the first activity. This activity is placed adjacent to the
first. If none is found, a second activity is selected at random and placed next
to the first. This procedure is continued until all activities are placed. The
entire procedure is repeated to generate another layout. The analyst specifies
the number of layouts wanted which must satisfy a minimum score.
CRAFT
It is the only one which uses flow of materials data as the sole basis for
development of closeness relationships. Material flow, in terms of some unit
of measurement (pounds per day, in terms of skid-loads per week), between
each pair of activity areas, forms the matrix to the programme.
A second set of input data allows the user to enter cost of moving in terms of
cost per unit moved per unit distance. In many cases this cost input is
unavailable or inadequate, in which case it can be neutralized by entering 1.0
for all costs in the matrix.
Space requirements are the third set of input data for CRAFT. These take the
form of an initial or an existing layout. For new area layouts, hest guess or
even completely random layouts can be used. In any case, activity
identification numbers, in a quantity approximate to their space requirements,
are entered in an overall area of continuation. The location of any activity can 93
Designing Operations be fixed in the overall area through control cards CRAFT limits the number
of activities involved in the layout to 40.
94
Computerized Layout
Check Your Progress 4 Design Algorithms
The Input requirements of CORELAP algorithm is as follows
• The number of departments in the layout.
• Area of each department.
• Length and width of layout.
• The closeness Relationship value based on the Relationship chart (REL
chart)
• Scale of output
• Building length to width ratio
• Department pre-assignment.
6.8 KEYWORDS
Layout: A layout defines the structure for a user
Facility layout: an arrangement of different aspects of manufacturing in an
appropriate manner as to achieve desired production results
Heuristic algorithms: used to solve NP problems and decrease the time
Product line: A product line is a group of related products all marketed
complexity of problems by giving quick solutions under a single brand name
that is sold by the same company
Material flow: Material flow, a model used in supply chain management,
represents the transportation of raw materials, parts, work-in-progress
inventory
Iterations: the act of repeating; a repetition. a different form or version of
something:
Systematic: methodical in procedure or plan
96