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1 1 2002 South-Western/Thomson Learning 2002 South-Western/Thomson Learning TMTM
Slides preparedSlides preparedby John Loucksby John Loucks
3
OverviewOverview
Introduction Types of Manufacturing Automation Automated Production Systems Software Systems for Automation Automation in Services Automation Issues Deciding Among Automation Alternatives Wrap-Up: What World-Class Companies Do
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IntroductionIntroduction
In the past, automation meant the replacement of human effort with machine effort, to save labor costs.
Today, automation means integrating a full range of advanced information and engineering discoveries into operations processes for strategic purposes.
Today, automation is applied not only for labor cost savings, but also for:
Improved quality Faster production and delivery of products/services Increased flexibility
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Types of Manufacturing AutomationTypes of Manufacturing Automation
Machine Attachments Inexpensive add-ons to machines Represent oldest technology in automation Typically perform one or a few simple operations Examples:
Strip feeders Quick centering and grasping devices
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Types of Manufacturing AutomationTypes of Manufacturing Automation
Numerically Controlled (N/C) Machines Have a control system that receives/reads
instructions and translates them into machine operations
N/C machines have evolved: CN/C – computer numerically controlled DN/C – direct numerically controlled (several
machines controlled by a single computer) Examples:
Weaving machines Lathes
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Types of Manufacturing AutomationTypes of Manufacturing Automation
Robots Human-like machines performing production tasks Brain of these machines is a microcomputer Have grippers (vacuum, magnetized, adhesive) Have sensors (tactile, proximity, vision/optical) Can operate in environments hostile to humans
(heat, noise, dust, darkness, skin irritants, …) Perform precisely and repeatedly without fatigue Weld, assemble,paint, inspect, transport, …..
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Types of Manufacturing AutomationTypes of Manufacturing Automation
Automated Quality Control Inspection Take physical dimensions of parts Compare measurements to standards Determine if parts conform to specifications Also check performance (ex. - electronic circuits) Making 100% inspection economically feasible
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Types of Manufacturing AutomationTypes of Manufacturing Automation
Automatic Identification Systems (AIS) Sense and input data into computers Use bar codes, radio frequencies, magnetic stripes,
optical character recognition, machine vision Data read from products, documents, parts, and
containers Used in warehouses, factory floors, retailing,
wholesaling Example – scanner at grocery store checkout
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Types of Manufacturing AutomationTypes of Manufacturing Automation
Automated Process Controls Use sensors to obtain measures of performance Compare measures to standards Might use “expert system” to determine if/what
process adjustment is necessary If necessary, change settings of process Long used in chemical processing, petroleum
refining, paper production
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Automated Production SystemsAutomated Production Systems
Automation technology becoming more sophisticated Focus has shifted away from individual machines More common are whole systems of automated
machines linked together for broader purposes
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Automated Production SystemsAutomated Production Systems
Automated Flow Lines In-line, automated processing machines linked by
automated material transfer Perform without need for human attendance Used to produce an entire component Also called fixed automation or hard automation Used when product demand is high and stable
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Automated Production SystemsAutomated Production Systems
Automated Assembly Systems Automated assembly machines linked by
automated material transfer Operations are component insertion and joining Produce major assemblies or complete products Often use standard (lower cost) robots Product design appropriate for assembly by
humans is not fitting for automated assembly
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Redesigning Products for Automated AssemblyRedesigning Products for Automated Assembly
Reduce the amount of assembly required Reduce the number of fasteners required Design components to be automatically delivered and
positioned Design products for layered assembly and vertical
insertion of parts Design parts so that they are self-aligning Design products into major modules for production Increase component quality to avoid machine jams
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Automated Production SystemsAutomated Production Systems
Flexible Manufacturing Systems (FMS) Kits of materials/parts for a product are loaded on
the materials-handling system Code is entered into computer identifying product
and its location in the sequence Each production machine (without a worker):
Receives settings/instructions from computer Automatically loads/unloads required tools Carries out its processing instructions
Product automatically transferred to next machine
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Flexible Manufacturing System (FMS)Flexible Manufacturing System (FMS)
Machine 1
Tools
X X
Machine 2
Tools
X X
Machine 3
Tools
X X
Computer
Worker
X
X
X
X
X
X
X
UnloadLoad
PalletTransferSystem
Parts
Pallet withworkpieceattached
Workpiecein queue
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Automated Production Systems Automated Production Systems
Automated Storage & Retrieval Systems (ASRS) Receive orders for materials from anywhere in
operations Collect the materials from locations in warehouse Deliver the materials to workstations in operations Three major elements of ASRS are:
Computers and communication systems Automated materials handling/delivery systems Storage and retrieval systems in warehouse
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Automated Production SystemsAutomated Production Systems
Automated Storage & Retrieval Systems (ASRS) Main benefits of ASRS are:
Increased storage capacity Increased system throughput Reduced labor costs Improved product quality
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Software Systems for AutomationSoftware Systems for Automation
Three “complex” computer-based systems Computer-Aided Design and Computer-Aided
Manufacturing (CAD/CAM) Computer-Integrated Manufacturing (CIM) Enterprise Resource Planning (ERP)
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Software Systems for AutomationSoftware Systems for Automation
Computer-Aided Design and Computer-Aided Manufacturing (CAD/CAM)
CAD/CAM is a merger of two systems, CAD and CAM (described next)
It is the automation of the transition from product design to manufacturing
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Software Systems for AutomationSoftware Systems for Automation
Computer-Aided Design (CAD) Concerned with the automation of certain phases
of product design Use of computer in interactive engineering
drawing and storage of designs CAD systems are installed to:
Increase designers’ productivity Improve the quality of designs Improve product standardization Improve design documentation Create a manufacturing database
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Software Systems for AutomationSoftware Systems for Automation
Computer-Aided Manufacturing (CAM) CAM capability progressing slower than CAD Concerned with automating the planning and
control of production: Plan production Prepare product routings Generate N/C programs Fix the settings of machinery Prepare production schedules Control the operation
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Software Systems for AutomationSoftware Systems for Automation
Computer-Integrated Manufacturing (CIM) “All of the firm’s operations related to production
are incorporated in an integrated computer system to assist, augment, or automate the operations.”
Covers the chain of events from sales order to product shipment
Output of one activity becomes the input to the next activity
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Computer Integrated Manufacturing (CIM)Computer Integrated Manufacturing (CIM)
Incorporates all manufacturing-related functions
ProcessControls
MRP II
ASRS
CAD/CAM
AutomatedAssembly GT
Systems
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Software Systems for AutomationSoftware Systems for Automation
Enterprise Resource Planning (ERP) A complex set of software programs Integrates most of the business functions in an
organization Accounting Human resources Purchasing Production Logistics E-Business … and more
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Software Systems for AutomationSoftware Systems for Automation
Enterprise Resource Planning (ERP) Five leading ERP software companies are:
SAP ( their “R/3” software is top seller) Oracle J.D. Edwards PeopleSoft Baan
Can take several years and $millions to implement (Chevron spent $160 million over five years)
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Automation in ServicesAutomation in Services
Example Airlines – air traffic control, passenger reservation Banks – ATMs, computerized bank statements Gas Stations – automated payment (pay-at-the-pump) Health Care – MRI system, AGVS for waste disposal Grocery Store – self-service checkout stations Real Estate – web based house-for-sale tour video
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Automation in ServicesAutomation in Services
Trend developing toward more-standardized services and less customer contact.
Service standardization brings trade-offs: - Service not custom-designed for each customer + Price of service reduced, or at least contained
Banking industry is becoming increasingly automated Service firm can have a manual/automated mix:
Manual - “front room” operations Automated - “back room” operations
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Degree of Customer Contact in Servicesand the Use of Automated Equipment
Degree of Customer Contact in Servicesand the Use of Automated Equipment
Degree of Customer Contact
CapitalIntensity
High
High
Low
Low
Manual Operations
Mechanized Operations
AutomatedOperations
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Automation IssuesAutomation Issues
Not all automation projects are successful. Automation cannot make up for poor management. Economic analysis cannot justify automation of some
operations. Not technically feasible to automate some operations. Automation projects may have to wait in small and
start-up businesses.
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Automation QuestionsAutomation Questions
What level of automation is appropriate? How would automation affect the flexibility of an
operation system? How can automation projects be justified? How should technological change be managed? What are some of the consequences of implementing
an automation project?
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Building Manufacturing FlexibilityBuilding Manufacturing Flexibility
Manufacturing flexibility has become the cornerstone of operations strategy in the 2000s.
The ability to improve/maintain market share because Customer orders can be delivered soon after
receipt of the order Production can quickly be shifted from product to
product Production capacity can be increased rapidly New products can be developed and introduced
into production quickly and inexpensively
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Justifying Automation ProjectsJustifying Automation Projects
Payback period, NPV, IRR, and other conventional approaches alone are inadequate tools on which to base product/process design/redesign decisions
Product/process technology must be seen as a long-term strategic choice
Returns on investment include: Improved product/service quality Faster order delivery Increased flexibility Reduced production cost Increased market share
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Managing Technological ChangeManaging Technological Change
Have a master plan for automation. Recognize the risks in automating. Establish a new production technology department Allow ample time for completion of automation. Do not try to automate everything at once. People are the key to making automation successful. Don’t move too slowly in adopting new technology.
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Worker Displacement and Training/ RetrainingWorker Displacement and Training/ Retraining
One result of automation is the elimination of jobs Some say that new jobs are created in engineering,
manufacturing, programming, selling, and servicing the new-technology products
Many firms realize they cannot afford NOT to train and retrain their current workers
Firms are providing more training than ever before Still, US firms spend little on training compared to,
say, German firms (4% of payroll cost on training)
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Deciding Among Automation AlternativesDeciding Among Automation Alternatives
Economic factors Effect on market share Effect on product/service quality Effect on manufacturing flexibility Effect on labor relations Amount of time required for implementation Effect of implementation on ongoing production Amount of capital required
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Deciding Among Automation AlternativesDeciding Among Automation Alternatives
Economic Analysis Economic analysis will always be an important, if
not a predominant, factor in deciding among alternatives
Frequently used approaches are: Break-even analysis Financial analysis
By using only economic analysis, other important factors are ignored
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Example: Valley HospitalExample: Valley Hospital
Economic Analysis
Valley Hospital is planning to install a new linen retrieval system. Two alternatives being considered are: a continuous vacuum (CV) system and a batch robotic/chute (BR/C) system. The following estimates were prepared:
CV BR/C
Annual Fixed Costs ($000) $2,690 $975
Average Variable Cost per Ton $1,660 $2,590
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Example: Valley HospitalExample: Valley Hospital
Economic Analysis
At a forecast annual operating level of 2,000 tons of linen, which alternative should be chosen based only on total annual cost?
TCCV = 2,690,000 + 1,660(2,000) = $6,010,000
TCBR/C = 975,000 + 2,590(2,000) = $6,155,000
The continuous vacuum (CV) alternative has a lower total annual cost.
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Example: Valley HospitalExample: Valley Hospital
Economic Analysis
The annual volume of linen has to increase or decrease to what level in order for the BR/C alternative to be favored?
TCCV = TCBR/C
2,690,000 + 1,660(Q) = 975,000 + 2,590(Q) 830Q = 1,715,000 Q = 1,844.1 tons
Annual volume must decrease to 1,844 tons or less.
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Example: Security BankExample: Security Bank
Economic Analysis
Security is considering the installation of an ATM and has estimated the cost of the machine, effects on revenue, savings in taxes from depreciation, and labor savings.
The machine is estimated to have an initial cost of $250,000 and an expected life of five years. The after-tax cash inflows for years 1-5 are estimated to be: $87,500; $79,600; $75,300; $71,600; and $69,400. Compute the after-tax payback period.
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Example: Security BankExample: Security Bank
Economic Analysis Cumulative
After-Tax After-Tax Year Cash Inflow Cash Inflow
1 $87,500 $ 87,5002 79,600 167,1003 75,300 242,4004 71,600 314,0005 69,400 383,400
Payback period = 3 + (250,000 – 242,400)/71,600= 3.106 years
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Deciding Among Automation AlternativesDeciding Among Automation Alternatives
Rating Scale Approach
Automation alternatives are rated using, say, a 5-point scale on a variety of factors such as:
Economic measures Effect on market share Effect on product quality Effect on manufacturing flexibility Effect on labor relations Amount of time required for implementation Effect on ongoing production
44
Deciding Among Automation AlternativesDeciding Among Automation Alternatives
Relative-Aggregate-Scores Approach
Similar to Rating Scale Approach, but weights are formally assigned to each factor which permits the direct calculation of an overall rating for each alternative.
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Example: Brownell CleanersExample: Brownell Cleaners
Relative-Aggregate-Scores Approach
An analyst at Brownell Cleaners is considering two alternatives for a new garment conveyor system, GCS1 and GCS2.
He has interviewed several managers in the firm and conducted extensive analysis of the problem. He has collected the information shown on the next slide.
Which alternative do you recommend, based on the relative-aggregate-scores approach?
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Example: Brownell CleanersExample: Brownell Cleaners
Relative-Aggregate-Scores Approach Factor
Automation Factors Weight GCS1 GCS2Economic factors Annual savings .30 $21,600 $26,700Other factors Score Score
Market share .30 .700 .800Service quality .15 .600 .700Labor relations .15 .500 .800Implementation time .10 .700 .600
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Example: Brownell CleanersExample: Brownell Cleaners
Relative-Aggregate-Scores Approach
GCS1 GCS2 Factor Wgt.
Wgt.Automation Factors Weight Score Score Score ScoreEconomic factors Annual savings .30
1.000 .300 .809 .243Other factors
Market share .30 .700 .210 .800 .240Service quality .15 .600 .090.700 .105Labor relations .15 .500 .075.800 .120Implementation time .10 .700 .070.600 .060
Total Aggregate Score .745 .768
21,600/26,700
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Wrap-Up: World-Class PracticeWrap-Up: World-Class Practice
World-Class companies utilize the latest technologies/practices. For example:
Design products to be automation-friendly Use CAD/CAM for designing products Convert fixed automation to flexible automation Move towards smaller batch sizes Plan for automation Build teams to develop automated systems Justify automation based on multiple factors