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Chapter 1 (overview of MIS)

1.What is Manufacturing?

Manufacturing = making things, by latin words means made by hand

Important :
 Technologically : Manufacturing is the essential factor that makes technology
possible (related to tech, tech makes change from raw material to product)
 Economically : contribute to national income (related to economy, manufacturing
increase value)

Classification of industry :
 Primary industry : exploit natural resource
 Secondary industry : use output from primary
 Tertiary industry : service sector

Manufactured Products :
 Consumer goods : can directly used by consumer
 Capital goods : purchased by company first to create usage for consumer

Production Quantity (Q)

 Low = 1 – 100 units
 Medium = 100 – 10,000 units
 High = 10,000 – millions of units

High level of production = many variety produced

Manufacturing Capability related to :

 Technological processing capability : number machine
 Physical products limitation : handling and keeping cost
 Production capacity : plant capacity (hours of worker)

2.Materials in Manufacturing

3 basic Categories :
 Metals
 Ceramics
 Polymers
 Additional : composites

3.Manufacturing Processes

2 Basic Processes :
 Processing operation
 Assembly operation
4.Production Systems

2 Categories of Production Systems :

(system and procedure to accomplish efficient production)
 Production facilities
 Manufacturing support system

5.Manufacturing Economics

Production Quantity (Q)

 Low = product complex, custom made (job shop)
 Medium = batch production, cellular manufacturing
 High = quantity production, flow line production in mass production

6.Recent Developments in Manufacturing

 Microelectronics
 Computerization in manufacturing
 Flexible manufacturing
 Microfabrication and Nanotechnology
 Lean production and Six Sigma
 Globalization and outsourcing
 Environmentally conscious manufacturing
Chapter 2 (operation management and supply chain management)

•The Operations Function

Operation = transformation process

Input -> transformation process -> output

Transformation process : a series of activities

along the supply chain that add value

•The Evolution of Operations and Supply Chain Management

Historical events in operation management

1.Industrial revolution 5. Quality revolution
2. Scientific management 6. Internet revolution
3. Human relation 7. Globalization
4. Operation research 8. Sustainability


Why “go global”?

–favorable cost
–access to international markets
–response to changes in demand
–reliable sources of supply
latest trends and technologies

•Productivity and Competitiveness

•Competitiveness : degree to which a nation can produce goods and services that meet the
test of international markets
•Productivity : ratio of output to input

•Strategy and Operations

 Cost : eliminate waste, examine cost structure, lean production

 Speed : fast move, fast adapt
 Quality : minimize defect
 Flexibility : adjust changes in production, volume or design

Use balance scorecard to analyse

Chapter 3 (product design)

•Design Process

Effective design can provide competitive edge

Idea Generation (down), feasibility analysis (side) Market Analysis

Perceptual Maps (customer perception) Economic Analysis
Benchmarking (from best in industry) Technical / Strategy Analysis
Reverse Engineering (dismantling competitor product) Performance Specification

•Rapid Prototyping and Concurrent Design

- Testing model  build prototype  test prototype  revise design  retest

System reliability

0.98 0.92+(1-0.92)(0.90)=0.99 0.98
0.98 x 0.99 x 0.98 = 0.951
0.98 0.9 0.98

System Availability
𝑀𝑒𝑎𝑛 𝑡𝑖𝑚𝑒 𝑏𝑒𝑡𝑤𝑒𝑒𝑛 𝑓𝑎𝑖𝑙𝑢𝑟𝑒𝑠 (𝑀𝑇𝐵𝐹)
𝑆𝐴 =
𝑀𝑇𝐵𝐹 + 𝑀𝑒𝑎𝑛 𝑇𝑖𝑚𝑒 𝑡𝑜 𝑅𝑒𝑝𝑎𝑖𝑟 (𝑀𝑇𝑇𝑅)

•Technology in Design •Design Quality Reviews

- Computer Aided Design (CAD) - Failure Mode and Effect Analysis
- Collaborative Product Design (CPD) (FMEA)
- Fault tree analysis (FTA)
- Value Analysis (VA)

•Design for Environment

•Quality Function Deployment (QFD)

Definition : Translates voice of customer into

technical design requirements

•Promotes better understanding of customer demands

•Promotes better understanding of design interactions
•Involves manufacturing in design process
•Provides documentation of design process

•Design for Robustness

•Robust product : designed to withstand variations in environmental and operating

•Robust design : yields a product or service designed to withstand variations

•Characteristics of Services •Service Design Process

 Tools for Service Design • Waiting Line Analysis for Service Improvement

•λ = mean arrival rate
•μ = mean service rate
•n = number of customers in line
CHAPTER 5-6 (Processes and Technology)

•Process Planning

Definition : converts design into workable instructions for manufacture or delivery

Process Strategy Outsourcing Project Selection (Type of Process)

Vertical Integration Cost Projects
Capital Intensity Capacity Batch Production
Process Flexibility Quality Mass Production
Customer involvement Speed, Reliability, Expertise Continuous Production

Process Selection with Break Even Analysis

•Process Analysis
Definition : systematic study of all aspects of a process to make it faster, efficient, less costly
Tools : Process Flowchart, Diagrams, Maps

•Process Innovation
Definition : total redesign of a process for breakthrough improvements (there is principles
for redesigning
for Redesigning Processes Principles for Redesigning Processes

• Remove waste, simplify, and consolidate similar • Provide visibility through fresher and richer
activities information about process status
• Link processes to create value • Fit process with sensors and feedback loops that
• Let the swiftest and most capable enterprise can prompt action
execute the process • Add analytic capabilities to the process
• Flex process for any time, any place, any way • Connect, collect, and create knowledge around
process through all who touch it
• Capture information digitally at the source and
propagate it through process • Personalize process with preferences and habits
of participants

•Technology Decisions
© 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 6-42
© 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 6-43

Example of Manufacturing Technology : computer numerically control, flexible

manufacturing system, robots, conveyors, automatic guided vehicle, automated storage and
retrieval system, process controls, computer-integrated manufacturing, additive

Information Technology : Business to business, Business to Consumer, Internet, Intranet,

Extranet, Bar Codes, RFID, Electronic Data Interchange, XML, ERP, SCM, CRM, DSS(decision
support system), Expert System, Artificial Intelligence
Chapter 7 – 8 (Capacities and Facilities Design)

•Capacity Planning

Definition : establishes overall level of

productive resources for a firm

Related to Capacity Expansion Strategy

based on growth in demand

•Basic Layouts

Terms :
- Economies of scale : unit cost decreases as output volume increase (FC can be spread
over large number of units, quantity discount if purchase large amount of materials,
operating efficiency as worker gain experience, operating cost remain linear with
output level)
- Best operating level : % of capacity utilization that minimize unit cost
- Capacity Cushion : % of capacity held in reserve for unexpected occurrence (idle stock)

•Designing Process Layouts

Definition : group similar activities together
according to process or function they perform

•Designing Service Layouts

Definition : Arrange activities in line according
to sequence of operations for a particular services

•Designing Product Layouts

Definition : Arrange activities in line according
to sequence of operations for a particular products
according to process or function they perform

Print slide 35 – 39, 41, 43, 45

•Hybrid Layouts
Cellular layouts : group dissimilar machines into work centers (called cells) that process
families of parts with similar shapes or processing requirements
Chapter 13-14 (Supply Chain Management Strategy and Design)

•Supply Chains

Definition : •The facilities, functions, and activities involved in producing and delivering a
product or service from suppliers to customers

•The Management of Supply Chains

Definition SCM : Managing flow of information through supply chain in order to attain the
level of synchronization that will make it more responsive to customer needs while lowering
•Keys to effective SCM : information, communication, cooperation, trust

•Green Supply Chains

Related to supply chain sustainability : goinggreen, make sure future generation able to
meet their need, sustaining human and social resource, reduce waste, impore fuel
efficiency, eco- friendly packing material.

•Information Technology: A Supply Chain Enabler 

•Supply Chain Management (SCM) Software

ERP : software that integrate components of the
company by sharing and organizing information and data

•Supply Chain Integration

- Share information among supply chain members
- Collaborative planning, forecasting
- Coordinated production, operation
- Adopt new business model and technologies

•Measuring Supply Chain Performance

Measuring Supply Chain Performance
• Key performance indicators
– Metrics used to measure supply chain performance
•Inventory turnover
Inventory turns
Cost of goods sold
Average aggregate value of inventory
•Total value (at cost) of inventory

Average aggregate value of inventory

= å (average inventory for item i ) ´ (unit value item i )
Measuring Supply Chain Performance
© 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 10-32

•Days of supply

Days of supply
Average aggregate value of inventory
(Cost of goods sold)/(365 days)

•Fill rate: fraction of orders filled by a distribution center

within a specific time period

© 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 10-33