CHAPTER THREE

DESIGN OF THE OPERATION

SYSTEM

1
 2.1 The Concept of Design of the Operation System

Production system:
 the way a firm acquires inputs then converts
and disposes outputs

Design:
 refers to the process of originating and
developing a plan for a product, service or
process
 Product Design
• is deciding on the unique characteristics and features of the
company’s product
• Product design and process selection affect;
 product quality,
product cost, and
 customer satisfaction.
•Therefore, to achieve customer satisfaction, product must have the
combined characteristics of good design, competitive pricing, and
the ability to fill a market need
 Factors Affecting Product
Design
🞇 Product designer can require the input of different functional managers
 production manager’s viewpoint
 a marketing viewpoint
 a financial manager’s view
 a top management view point
 Quality Control View Point

🞇 Because the decision pertaining to the final product design will influence or
determine; the firm’s image, profitability, opportunities and the problems it
may face in the future.
 Other Design Considerations
1. Consumer Quality level

2. Standardization:
 is a means of achieve lower production and assembly costs through reducing variety

3. Value analysis and value engineering

Value analysis:

🞇 is a systematic organizational effort to reduce the costs of materials and purchased parts for producing a product,
without sacrificing aesthetic or functional requirements, which is the (responsibility purchasing).

Value engineering (VE)

 is a systematic method to improve the "value" of goods or products and services by using an examination of
function.
 Value, as defined, is the ratio of function to cost.
 Value can therefore be increased by either improving the function or reducing the cost.

4. Product Diversification and Simplification

🞇 Product diversification -an increase in the types, qualities, sizes, and colors of a particular product.

🞇 Product Simplification- is the elimination of the complex features of a product with reduced costs, higher quality
and more custom satisfaction.
 Service Design
 A useful tool in service design is service blueprint

Service Blueprint:
 is a method for describing and analyzing a service or proposed
service.
 It is tool that provides guidance on how a service will be
provided, specifying the physical evidence, staff actions, and
support systems / infrastructure needed to deliver the
service across its different channels.
 A key element of a service blue print is flow chart of the
service
Example
.
 2.2 The Product Design
Process
🞇 Certainsteps are common in the development of most product
designs.

 Idea generation

 Product screening

 Preliminary design & testing and

 Final design.
🞇 Product designs are never finished, but are always updated
with
new ideas.
Product Design
Process…
I. Idea Development
🞇 All product designs begin with an idea.
The idea might come from
A. Internal sources
– a product manager who spends time with customers and has a sense of what customers want,
– from an engineer with a flare for inventions, or
– from anyone else in the company.
B. Sources of Ideas
 customers
 Suppliers
 Competitors : by looking at product design, pricing strategy etc.,
 For example reverse Engineering. using competitors’ ideas, buying a competitor’s new product
and study its design features
Product Design Process…
II. Product Screening
 evaluating likelihood of success of product idea
 the product design idea will be evaluated according
to the needs of the major business functions
 Evaluation executives from each function area.
 Product Design Process…

Major Function Area

Operations:-
 production needs of the proposed new product and how to match with existing
resources, facilities and equipment needed
Marketing:-
 potential size of the market for the proposed new product
🞇 The long-term product potential
Finance:-
 new product’s financial potential, cost and return on
investment
 Product Design
Process…
III. Preliminary Design and Testing
 design engineers translate general performance specifications

into technical specifications

 Prototypes are built and tested
 For service companies involves testing the offering on a small scale
and working with customers to refine the service offering
Product Design Process…

IV. Final Design

 final product specifications are drawn up
 The final specifications are then translated into specific
processing instructions to manufacture the product;
 selecting equipment,
 outlining jobs that need to be performed and
 identifying specific materials needed and suppliers
 2.3 Process Planning And Process Design
Process:
 Is any part of an organization which takes a set of
input resources then used to transform something into
outputs of products or services

🞇 Process planning and design is the complete description of the

specific steps in production.
-It involves choice of technology & related issues and
- it has major implications for capacity planning, layout of
facilities, equipment, and design of work systems
 Types of
🞇 Processes
There are three main categories :
1. Conversion Processes

🞇 Is the reaction under specific controlled conditions yields products that may
hardly look like their parents.

For example, changing iron ore into steel sheets .

2. Fabricating Processes

🞇 This process involves changing raw materials into some specific form.

🞇 For example making chair out of wood

3. Assembly processes

🞇 it brings together necessary raw materials or components that

makeup a product.

For examples, assembly automobiles, building construction, house appliances

etc.
 Types of process flow structure
🞇 There are basically, four (4) types of processing systems:

1. Continuous,

2. Assembly line,

3. Intermittent and

4. Project processing
1. Continues process (product-focused)
🞇 In which production departments are organized according to the type
of product being produced.
🞇 All of the operation required to produce a product are ordinarily
grouped in to one production department.
🞇 It is also called line flow production or continuous production
because; the product follows a pre-determined sequence of steps.
🞇 It produce high volume of standardized output.
🞇 The ultimate continues processing systems produce a single product. such as
🞇 powder ,
🞇 sugar,
🞇 chemicals,

🞇 liquid, etc.
2.Assembly line process (Repetitive process)
 It refers to production of separate (discrete) parts moving from
workstation to workstation at a controlled rate, following the sequence
steps needed to build the product.
 It produces output that allows for some variety;

Here products are highly similar but not identical.

Examples
 include assembly of televisions,
computers ,calculators, cameras etc.

 Typically, these products are produced in discrete

units.
 3. Intermittent Processing (Process-
is used )
focused when systems handle a variety of processing requirements on
a start-and stop basis.
 Here is a low volume of output than continuous process.

It takes two forms:

 Batch Processing-
 Produces the same item again and again, usually in a specified lot
sizes.

🞇 i.e. each of which is produced in periodic batches, either to customers

order or for inventory.
 Job shop process-
 Used to handle/produce small batches/lots of a large number of
different products
Examples: that printing
Commercial require afirms,
different set or sequence
publication etc. of processing
steps
 4. Projects
processing
🞇 Projects are set up to handle complex jobs consisting of unique sets

of activities that must be completed in a limited time span.

🞇 Examples:

🞇 of application include large or unusual construction projects, new

product development or promotion and so on.

🞇 This process in characterized by:

🞇 high variable cost

🞇 Involves the manufacture of a single, one-of-a kind product

🞇 High skilled manpower

 Objectives of Design
The objectives of design may vary from situation to situation.
Generally, the objectives/reasons are:
 To introduce new or revised products to the market as quickly as
possible;
 To design product that have customer appeal;
 To increase the level of customer satisfaction;
 To reduce costs and;
 To increase quality
 To become competitive by offering new products or
services
 To make the business grow and make profit
 To develop new products or services as an alternative to
downsizing etc.
 2.4 STRATEGIC CAPACITY
PLANNING
🞇 Capacity can be defined as ability to produce certain out put with in a
specified time period or the rate of out put that can be achieved from
a process.

🞇 Capacity is also a product design specification

Important Concepts of Capacity Decisions
Design Capacity
 It represents the maximum output that can be achieved in a specific time period under
ideal condition

Effective Capacity
🞇 It represents the maximum output per unit time given a particular product mix, labour
skills, product quality level, material quality, available maintenance, and time between
setups

Actual or Operating Capacity

 It is the average output per unit of time over a preceding time period

adjusted to reflect actual reject levels and scheduling and maintenance

losses.
 Capacity Measures

the two measures frequently cited to justify investments in equipment and

processes are:

1. Efficiency and

2. Utilization
Cont…

🞇 Efficiency is a measure of the use of effective capacity in producing a

particular result.

🞇 Efficiency = actual output per time period____

Effective capacity per time period

🞇 Utilization is a measure relating design capacity to output

🞇 Utilization = actual output per time period
Design capacity per time period
2.5 Facility Location & Layout
Facility Location
🞇 Facility location is the process of determining a geographic
site for a firm’s operations.

🞇 The selection of location is a key-decision because improper

location of plant may lead to waste of all the investments
made in building and machinery, equipment

🞇 The purpose of the location study is to find an optimum

location result in the greatest advantage to the organization.
Facility location…

🞇 Globalization allows companies greater flexibility in their

location choices

🞇 However, in practice, the question of location is very much

linked to two competitive imperatives
 The need to produce close to the customer due to time based
competition, trade agreements, and shipment costs
 The need to locate near the appropriate resource pool to
take
advantage of low costs
 Factors Affecting Location
Decisions
(A) Regional factors
 Business Climate.
 Total Costs.
 Infrastructure
 Quality of Labor
 Suppliers
 Location of raw
materials
Factors Affecting Location Decisions
…..
B. Community Considerations

🞇 a number of factors determine the desirability of a community as a peace for its

workers and managers to live. They include:
 Facilities for education, shipping, recreation transportation , religious
workshop, entertainment, the quality of policy and medical services
 attitude towards the company
 The size of the community
 Cost and availability of utilities
 Environmental regulations
 Taxes and
 Existence of development support or incentive
Facility Layout

 facility layout is to locate people, machines, and processes in an

optimal time-saving and money saving relationship that meets the
anticipated production level
 It refers to the arrangement of departments, work centers and
equipment
with a particular emphasis on movement of work through the system.
Objectives of Facility
layout
🞇 layout is to provide a smooth work flow and control;

🞇 reducing cost of material through the factory or

uncomplicated pattern for both consumers and workers in a
service organization.
Specific objectives of layout decision for manufacturing
firm
 Provide enough production capacity
 Minimize material handling cost and effort
 Minimize labour requirements
 Provide a smooth flow of materials and
product
 Provide for volume and product flexibility
 Maximize the uses of machine tools
 Maximize output
 Minimize health hazards etc
Specific objectives of layout decision for service operations

 provide for customer comfort and

convenience
 allow attractive display
 reduce travel of personnel and customers
 provide for private in work areas
 promote communication
🞇 Reading Assignment
🞇 Try to identify the Major
Advantages
and Disadvantages of four
facility layouts i.e
1. (Process layout /for job-shops/
2. Product or Line Layout
3. Cellular Manufacturing (CM) Layouts’
4. Fixed position Layout
2.7 Job Design and Work
Measurement
🞇 Job design: is planned structuring of work effort performed by an
individual or a team of persons
🞇 Good job designs must answer
 what work is to be performed
 who is to perform the work
 where the work is to be done
 when the work is to be done
 why the job is necessary and
 how should the work be accomplished.

🞇 Job designers usually attempt to minimize the amount of physical

human
effort.
Cont…
🞇 job design has two basic elements, a human element and a work element.

🞇 The objective of job design is :

 to develop work assignments that meet the requirements of the organization and
the technology
 To satisfy the personal and individual requirements of the job holder.
 Work
Measurement
🞇 It is determining the amount of time required to perform a unit of work

🞇 It may be used to determine the standard number of minutes that a

qualified properly trained, and experienced person should take to perform
a specific task or operation when working at a normal pace

🞇 makes available the necessary data for effective planning and scheduling

🞇 provides a basis for wage and salary administration for devising sound
incentive schemes.
Work Measurement
Procedure
basic steps
🞇 Select the work to be studied.

🞇 Record all the relevant data

🞇 Measure each element in terms of time over a sufficient number of cycles of

activity to ensure that a representative picture has been obtained.

🞇 Examine the recorded data and time elements critically to ensure that unproductive
or random elements are separated from productive elements; also examine the
recorded times of each element and determine a representative time for each.

🞇 Compile (bring together )a time for the operation will provide a realistic standard
of performance

🞇 Define precisely the series of activities and method of operation for which the time
has been allowed and issue the standard time for the activities and methods
specified
 Reading
Assignement
🞇 Techniques of Work Measurement
 Time study
 Work sampling: Estimates percent of time a worker spends on various tasks
 Pre-determined motion-time system (PMTS):-Divide manual
work into small basic elements that have established times
 Analytical estimating
 Synthesis from standard data
 MOST(Maynard Operation Sequence Technique) :- is to
calculate the cycle time for an operation based on
Pre- determined time study data
End of Third Chapter