Process and Technology

MGT3303Michel Leseure

Process Management

MGT3303


Toyota Production System

Manufacturer TGW (Things gone wrong)

in First Eight Months per 100 cars

Chrysler 285

GM 256

Ford 214

Japanese (avg)

132

Toyota 55

Notion of Process Capital


Process Design

• Process design is about preparing production– A process is a sequence of steps

performed for a given purpose. – More simply stated, process is what you

do. The process integrates people, tools and procedures together

– More or less integrated with the product design stage: this integration is a key challenge!


Process Example


Overview of Process Management

ProcessC apita l

P rocess S tra tegy

Process D esign/Selection

Technology M anagem ent

P rocess Analysis/R e-engineering

Process V is ib ility

P rocessesProcedures

R outines

PR O C ESS M A N A G EM EN T


Process Strategy• Process volume & Standardisation• Capital Intensity

– The extent to which the selected process is mainly dependent on capital investment (machinery, fixed assets, automation) or not

• Process flexibility– The ease with which employees and equipment can handle a

wide variety of products, output levels, duties, and functions

• Vertical integration– The degree to which a firm will handle the whole supply chain

process or only a certain stage of the supply chain (e.g. assembly)

• Customer involvement


Process Volume & Standardisation

Source: Adapted from Robert Hay and Steven Wheelwright, Restoring Competitive Edge: Competing through Manufacturing (New York: John Wiley & Sons, 1984).


Capital Intensity

• Process Selection with Break-Even Analysis– For a single process,

• find the breakeven point

– Among several processes,• find the point of indifference


Break-Even Analysis

cf = fixed costv = volumecv = variable cost per unitp =price per unit

Total cost = total fixed cost + total variable costTC = cf + vcv

Total revenue = volume x price TR = vp

Total profit = total revenue - total cost Z = TR - TC = vp - (cf + vcv)

where,


Solving For Break-Even Point

TR = TC

vp = (cf + vcv)

vp - vcv = cf

v(p - cv) = cf

v =

cf

p - cv


Break-Even Example

Fixed cost cf = $2,000Variable cost cv = $5 per raftPrice p = $10 per raft

v = =

= 400 rafts

cf

p - cv 200010 - 5


© 1998 by Prentice-Hall IncRussell/Taylor Oper Mgt 2/e

Break-Even Graph

$0

$1,000

$2,000

$3,000

$4,000

$5,000

400Units

Do

llar

s TC

TR

Break even point


Choosing Between Two Processes

• Find volume where – Cost of process A = Cost of process

B

• Above point of indifference, choose process with lowest variable cost

• Below point of indifference, choose process with lowest fixed cost


Point Of Indifference

$3v = $8,000

v = 2,667 rafts

$2,000 + $5v = $10,000 + $2v

Process A Process B

Below 2,667 rafts, choose AAbove 2,667 rafts, choose B


Graphical Solution to Process Selection

$0

$5,000

$10,000

$15,000

$20,000

$25,000

0 1000 2000 3000 4000

Units

Dolla

rs

A

B


Process Flexibility

• Product flexibility: – the ability to introduce a new product whilst incurring only

a minor reconfiguration of plant and equipment.

• Mix flexibility: – the ability to simultaneously produce two different

versions of a product, or two different products.

• Volume flexibility: – the ability to process simultaneously on the same

production line large and low volume series without any major cost differences.

• Delivery flexibility: – the ability to change scheduled delivery times when

needed without generating too many delays and too many costs.


Process Flexibility

• Investment in process flexibility challenge the volume/standardisation trade-off

• Allows firms to operate away from the diagonal of the product process matrix


Make-Or-Buy Decisions

1. Cost

2. Capacity

3. Quality

4. Speed

5. Reliability

6. Expertise


Process Design/Selection

• Process selection

• Specific equipment selection

• Process plans

• Process analysis


Documents for Process Plans

• Blueprints - Drawings of product design• Bill of Materials - List of materials and parts• Assembly Diagram - Drawing of how parts are

combined to form final product• Assembly Chart (Product Structure Diagram)

Top down view of product components• Operations Process Chart - detailed list of

operations to make product• Routing Sheet - ordered list of m/c’s


Product Structure Diagram(Assembly Chart)

Packaged Hand-Vac

Hand-VacUpholstery

toolCrevice

toolPackage

Dusting tool

Forward housing

assembly

Rear housing

assembly

Screw and lock washer

assembly


Product Diagram

Make base

Make feet (4)

Make stem

Cut cable

Purchasebulb holder

Assemble base and feet(sub-assembly 1)

Inspect for mis-wiring

Assemble cable,stem and bulbholder(sub-assembly 2)

Purchaseshade

Make retainingring

Assemble sub-assemblies1&2 (sub-assembly 3)

Assemble lamp(final assembly)

Finalinspection

Cable

Stem

Bulbholder

Retainingring

Shade

Base

Feet


Operations Process Chart

Part name Table leg

Part no. 2410

Usage Table

Assembly No. 437

Oper No. Description Dept. Machine Time Tools

10 Saw to rough length 041

20 Plane to size 043

30 Saw to finished length 041

40 Measure dimensions 051

50 Sand 052


Process Flowchart Symbols

Operations

Inspection

Transportation

Delay

Storage


Process Flowcharts

Ste

p

Ope

ratio

nT

rans

port

Insp

ect

Del

ay

Sto

rage

Dis

tanc

e(f

eet)

Tim

e(m

in)Description

ofprocess

1

2

3

4

5

6

7

8

9

10

11

Unload apples from truck

Move to inspection station

Weigh, inspect, sort

Move to storage

Wait until needed

Move to peeler

Apples peeled and cored

Soak in water until needed

Place in conveyor

Move to mixing area

Weigh, inspect, sort

TotalPage 1 0f 3 480

30

5

20

15

360

30

20

190 ft

20 ft

20 ft

50 ft

100 ft

Date: 9-30-00

Analyst: TLR

Location: Graves Mountain

Process: Apple Sauce


Process Analysis

• Continuous improvement– Basic tool - process flowchart,

process analysis– Incremental, continuous pressure

to improve• Reengineering

– Basic tool - process map– Radical redesign approach


The Reengineering Process

Customer requirements data

Strategicdirectives

Goals & specifications

for process performance

Detailed process map

Pilot study of new design

Full-scale implementation

Benchmark data

DesignPrinciples

Key PerformanceMeasures

Baseline Data

Innovative Ideas

Model Validation

High levelprocess map


High-level Process Map

Input OutputPerformance

Goal

Subprocess Subprocess

Subprocess Subprocess


Design Principles For Reengineering

1. Organize around outcomes, not tasks

2. Capture information once, at the source

3. Centralize resources with info. tech.

4. Link parallel subprocesses

5. Design to do work right the first time

6. Remove complexity

7. Identify information & technology levers


Techniques For Generating Innovative Ideas

• Vary entry point to a problem

• Draw analogies

• Change your perspective

• Try inverse brainstorming

• Chain forward as far as possible

• Use attribute brainstorming


Technology Management


Automated Material Handling

• Conveyors

• Robots

• Automated guided vehicle systems

(AGVS)

• Automated storage & retrieval systems (ASRS)


Flexible Manufacturing Systems (FMS)

• Programmable machine tools

• Controlled by common computer network

• Combines flexibility with efficiency

• Reduces setup & queue times

Flexible Manufacturing System

PartsFinished

goods

Load Unload

Computercontrolroom

Terminal

Tools

Conveyor

Pallet

CNCMachine


Robots

• Programmable manipulators that follow specified paths

• Better than humans for – hostile environments– long hours– consistency


Components Of CIM

CIM

Productdesign

Manuf

Processplanning

Systemsmgmt

RoboticsFMSNC/CNC/

DNCCells

& centersAutomatedinspection

AGV,ASRS

JIT/kanban

DSS/ES/AI

LAN, TOP,satellites

TQM

Bar codes,EDI

MRP

GTCAECADIGES,PDES

DFM

Cellularmanuf

MAP,STEP

CAD/CAM

CAPP


Adoption Of Technology

• Technology Readiness• Need well-designed products & efficient processes

• Technology Design• Know what to automate

• Technology Selection• Choose the right level

• Technology Integration• Have a strategy for incremental automation


Suggested Homework

• Problem 4.1, 4-2, 4-3, 4-4, 4-5, 4-6 p. 153• Yellow Plates Process Mapping exercise