The Production/Manufacturing Process

Process selection
Refers to deciding on the way production of goods or
services will be organized
It has major implications for
Capacity planning
Layout of facilities
Equipment
Design of work systems
Process Selection and System Design

Inputs Outputs

Facilities and
Forecasting Capacity Equipment
Planning

Product and Layout

Service Design

Process
Technological Selection Work
Change Design
 Process Selection

Process choice is demand driven.

Two key questions in process selection:
1. How much variety in products or services will
the process need to be able to handle?
2. How much volume will the process need to be
able to handle?
Job
Shop

Batch

Repetiti Continu
ve ous
 Types of Processing
Repetitive/
Job Shop Batch Assembly Continuous
Description Customized Semi- Standardized Highly standardized
goods or standardized goods or Goods or services
services goods or services
services

Advantages Able to handle a Flexibility; easy Low unit Very efficient, very
wide variety to add or change cost, high volume, high volume
of work products or services efficient

Disadvantages Slow, high cost Moderate cost Low flexibility, Very rigid, lack of
per unit, per unit, high cost of variety, costly to
complex moderate downtime change, very high
planning and scheduling cost of downtime
scheduling complexity
 FoldRite Furniture Co:
Planning to Meet a Surge in
Demand
FoldRite Furniture Co: Planning to Meet a Surge in Demand

• Background of FoldRite
• FoldRite’s Markets
• Strategic Changes to Company Products
• Operations and Manufacturing Process at Foldrite
• Gathering Information from Colleagues
• Production Planning
 Layout
• A layout is the physical configuration of
departments, work stations, and equipment
in the conversion process. It is the spatial
arrangement of physical resources used to
create the product.

Types of basic layouts

• Product-oriented
• Process-oriented
• Fixed position
• Combination layout
 Types of Layouts
• Product layout or line layout: A
product-oriented layout is appropriate
for producing one standardized product,
usually in large volume.
• Work centers and equipment are ideally
arranged in a line to afford a specialized
sequence of tasks.
 Product layout for car wash

Waiting
area

Hand
Top Side wipe
Hot Final Hot
Clean wash wash and
water rinse blowe
out and and clean
spray spray r
brush brush up

Exit
 Product layout in manufacturing product

Drill
Lathe Press
#2
Start
Productio
n Packaging Finish
m/c Producti
Drill on
Painting
Press
M/c
#1
 Contd.
• Process layout or functional layout: A process-oriented
layout is appropriate for intermittent operations when
work flow is not consistent for all output. Variable work
flow occurs when a variety of products or variations on a
single product are produced.
• Work centers or departments are grouped together
according to their functional type.

• Fixed position or project layout: A fixed position layout

is appropriate when, because of size, shape or any other
characteristics, it is not feasible to move the product.
• In fixed position layout, the product stays in one location;
tools, equipment and workers are brought to it, as needed
 Characteristics of Layout
Aspect of the Product-oriented Process-oriented Fixed position
conversion
process

Product Standardized product, large volume, stable Diversified products using common Made-to-order, low volume
rate of output operations, varying volume, varying
rate of output

Work flow Straight line of product; same sequence of Variable flow, each order (product) Little or no flow; equipment and
operations for each unit may require unique sequence of human resources brought to site
operations as needed

Human Skills Able to perform routine, repetitive tasks at Primarily skilled craftsmen; able to Great flexibility required; work
fixed pace; highly specialized perform without close supervision assignments and locations vary
and be moderately adaptable

Support staff Large, schedule material and people, monitor Perform tasks of scheduling, Schedule and coordinate
and maintain work production and inventory control skillfully

Material handling Predictable, systematized Flow variable; handling often Flow variable, often low;
duplicated
 Characteristics of Layout
Aspect of the Product-oriented Process-oriented Fixed position
conversion process

Inventory High turnover of raw materials and Low turnover of raw material Variable inventories
work-in-progress inventories and work-in-progress
inventories

Space utilization Efficient utilization, large output per Small output per unit space; Small output per unit space if conversion is
unit space large work-in-progress on site
requirements

Capital requirement Large investment in specialized General purpose, flexible General purpose, mobile equipment and
equipment and processes equipment and processes processes

Product cost Relatively high fixed costs; low unit Relatively low fixed costs; Relatively low fixed costs; high unit labor
cost for direct labor and materials high unit cost for direct labor , and materials costs
materials and material
handlings
Retail Service Layout
• Goal--maximize net profit per square foot of
floor space
• Servicescapes: is a model developed by
Booms and Bitner to emphasize the impact
of the physical environment in which
a service process takes place.
– Conditions (temperature, humidity)
– Spatial Layout and Functionality
– Signs, Symbols,
 Load-Distance Model
• Load distance analysis evaluates alternative layouts on the basis of the sum of
actual distance times, the load (units) for each alternative. This is done to
compute the material handling cost directly by multiplying the number of
loads by the materials handling cost per load. The layout with the lowest load
times distance total or load times cost total is the best choice.
• A facility using a process-oriented layout produced diversified products in
variable work flows, and handles a relatively large amount of material.
• A special order product might need to be moved through as many as 20
different work centers.
- incurred cost
- people and equipment must be on hand
- space must be available for storing the product in between work centers.
In this model, we minimize the cost C expressed as:
 Example
• A factory manager is considering an interchange of departments
3 and 6 in the present layout. The present layout and the
interdepartmental materials handling frequencies are furnished in
figure. All the departments are of the same size and
configuration. 1
1 03 5
1
0 2 4 6
Present layout

Weekly frequencies of interdepartmental materials handling

From To 1 2 3 4 5 6
1 0 90 160 50 0
2 70 0 100 130
3 20 0 0
4 180 10
5 40
6

The per unit length interdepartmental cost of materials

handling are equal. What is the effect of the interchange of the
departments 3 and 6 in the layout?
• Office Layout: Grouping of workers, their equipment, and
spaces to provide comfort, safety, and movement of
information.
• Movement of information is main distinction
• Objective: Locate workers requiring frequent contact close to
one another
• Company have removed fixed wall
• Relationship chart used
• Assembly Line

– Equipment or work processes are arranged according

to the progressive steps by which the product is made
• Manufacturing Cell

– Groups dissimilar machines to work on products that

have similar shapes and processing requirements
• Systematic Layout Planning
i. Used when numerical flow of items between workstations is
either impractical to obtain or does not reveal qualitative factors
that might be crucial.
ii. This layout planning involves developing a relationship chart
showing degree of importance of having workstations adjacent to
each other while considering the space available.
 Closeness Rating or Muther Grid or Relationship
(REL) Chart or Nearness Diagram
• Developed by Richard Muther
• Muther suggests the following list:
a. They use same equipment or facilities
b. They share the same personnel or records
c. Required sequence of work flow
d. Needed for ease of communication
e. Would create unsafe or unpleasant conditions
f. Similar work is performed
Example: Given the following nearness diagram, expressing the proximity requirements, arrange the
work center into a suitable 2 column ˣ 3 row grid

Work Center 1
I
Work Center 2
U
U A
Work Center 3 E E
X E X
Work Center 4 I I
O E
Work Center 5
U
U
Work Center 6

Muther’s Grid
Example: Assign the six departments in 2*3 set of locations. Assign the critical departments first,
because they are the most important.

Work Center 1
A
Work Center 2
A
E X
Work Center 3 U U
X I O
Work Center 4 A A
O X
Work Center 5
A
A
Work Center 6

Muther’s Grid
 Line Balancing
– The process of assigning tasks to workstations in such a way
that the workstations have approximately equal time
requirements
– Goal:
• Obtain task grouping that represent approximately equal
time requirements since this minimizes idle time along the
line and results in a high utilization of equipment and labor
– Why is line balancing important?
1. It allows us to use labor and equipment more efficiently.
2. To avoid fairness issues that arise when one workstation must
work harder than another.
 Cycle Time

• Cycle time
– The maximum time allowed at each
workstation to complete its set of
tasks on a unit
Operating time per day
– Cycle time= also
Cycle time establishes
Desired output ratethe
output rate of a line
Operating time per day
Output rate =
Cycle time
 How Many Workstations are Needed?

• The required number of

workstations is a function of
– Desired output rate
– Our ability to combine tasks into a
t
workstation
N =min
Cycle time
• Theoretical
where minimum number of
N = theoretical minimum number of stations
stations min

 t = Sum of task times

 Measuring Effectiveness

Idle time per cycle

Balance Delay = 100
• Balance delay (percentage of idle time) N actual  Cycle time
– Percentage of idle timewhere
of a line
N actual = Actual number of stations

Efficiency = 100% - Balance Delay

• Efficiency
– Percentage of busy time of a line
 Designing Product Layouts: Line Balancing
Line Balancing: The process of assigning tasks to workstations in such a way that the
workstations have approximately equal time requirements.

0.1 min 0.7 min 1.0 min 0.5 min 0.2 min

Cycle Time: The maximum time allowed at each workstation to complete its set of tasks
on a unit

Output rate: Operating time per day/ Cycle time

Assume that line will operate for eight hours per day. With a cycle time of 1.0 minute,
output would be 480/1.0 = 480 units per day

With cycle time of 2.5 minutes, the output would be 480/2.5 = 192 units per day

Cycle time = Operating time per day / Desired output rate

 Assembly Line Balancing
• ALB often has implication for layout.
• The most common assembly line is a moving conveyor that passes a series of workstations in a
uniform time interval called: Workstation cycle time
Steps in balancing an assembly line are straightforward
1. Specify the sequence relationship among task using a precedence diagram. Circles represent
individual tasks and Arrows indicate the order of the task performance.
2. Calculate the required workstation cycle time (C), using the formula
Formula: C = Production time per day (Time available for work)/ Required output per day or
number of unit to be produced (in units)
3. Determine the theoretical minimum number of workstations (N) required to satisfy the
workstation cycle time constraint using the formula
Formula: N = Sum of task time (T) or Time required to perform all task on a unit / Cycle Time
4. Select a primary rule by which tasks are to be assigned to workstations and a secondary rule to
break ties.
 Conti.
6. Assign tasks, one at a time, to the first workstation
until the sum of the task time is equal to the
workstation cycle time, or no other tasks are feasible
because of time or sequence restrictions. Repeat the
process for workstation 2, workstation 3, workstation 4
and so on, until all tasks are assigned.
7. Evaluate the efficiency of the balance derived using
the formula:
Efficiency = Sum of task time (T)/ Actual number of
workstation * Workstation cycle time (Cycle time of
all work station)
8. If efficiency is unsatisfactory, rebalance using a
different decision rule.
9. Balance delay = 100- line efficiency
Method of creating workstation:
1. Visual check method
2. Minimum predecessor method
3. Maximum number of successor
Example: The work elements, precedence requirements and time
requirements to assemble an item as tabulated as below:
Element Precedence Time (Minutes)

a ------------------ 0.30
b a 0.40
c ----------------- 0.60
d b 1.20
e c 0.20
f d 1.20
g e 0.10
h g,f 0.50
i h 0.30
 Conti.
Management has designed an output rate of 275 units
per day. Assume 440 minutes available per day.
1. Construct a precedence diagram
2. Set up a assembly line for this output rate
3. Calculate the line efficiency and balance delay
4. Calculate the maximum number of items that can
be manufactured per day
5. Reassemble the line for maximum production
 Service Layout
• Service layouts can be categorized as: product, process,
or fixed position
• Service layout requirements are somewhat different due
to such factors as:
– Degree of customer contact
– Degree of customization
• Common service layouts:
– Warehouse and storage layouts
– Retail layouts
– Office layouts
 Group Technology
• Group technology
– The grouping into part families of items with
similar design or manufacturing characteristics
• Design Characteristics:
– Size
– Shape
– Function
• Manufacturing or processing characteristics
– Type of operations required
– Sequence of operations required
– Requires a systematic analysis of parts to identify
the part families
Example 8.2: Assembly Steps and Times
 Example: C and Nt

Production time per day 60 sec. x 420 min

C= =
Output per day 500 wagons
25,200
= = 50.4
500
T 195 seconds
Nt = = = 3.87  4
C 50.4 seconds
 F

A B
A C
A
A G

J K

D E

I
Example: Precedence Graph
Example: Assignment
 Example: Efficiency

T 195
Efficiency= = = 0.77 = 77%
N a C 5(50.4)
 Managing longer cycle time
• Splitting Tasks
• Share the task
• Use Parallel Work Stations
• Use more skilled worker
• Work overtime
• Re-design
A factory needs 600 toy trucks per day to meet forecasted demand. Production time
per day is 8 hours.
The assembly steps and times for the trucks are given in table below. Find the balance
that minimizes the number of workstations, subject to cycle time and precedence
constraints. Draw the precedence diagram and solve through both approaches and
compare

Tasks Task time (in Task Precedence

seconds)
A 28 -
B 13 -
C 35 B
D 11 A
E 20 C
F 6 D,E
G 23 F
H 25 F
I 37 G
J 11 G,H
K 27 I,J
What Does Product & Service Design Do?
1. Translate customer wants and needs into product
and service requirements
2. Refine existing products and services
3. Develop new products and services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications
8. Translate product and service specifications into
process specifications
 Reasons to Design or Re-Design
• The driving forces for product and service
design or redesign are market opportunities or
threats:
– Economic
– Social and Demographic
– Political, Liability, or Legal
– Competitive
– Cost
– Technological
 Idea Generation
1. Supply-chain based: Ideas can come from anywhere in the supply chain:
– Customers
– Suppliers
– Distributors
– Employees
– Maintenance and repair personnel

2. Competitor based
• By studying how a competitor operates and its products and services, many
useful ideas can be generated
• Reverse engineering
– Dismantling and inspecting a competitor’s product to discover product
improvements
 Idea Generation
3. Research based
• Research and Development (R&D)
– Organized efforts to increase scientific knowledge or product
innovation
– Basic research
• Has the objective of advancing the state of knowledge about a
subject without any near-term expectation of commercial
applications
– Applied research
• Has the objective of achieving commercial applications
– Development
• Converts the results of applied research into useful commercial
applications.
 Legal Considerations
• Legal Considerations
– Product liability
• The responsibility a manufacturer has for any injuries or damages
caused by as faulty product
• Some of the associated costs
– Litigation (Hearing cost/Process cost)
– Legal and insurance costs
– Settlement costs
– Costly product recalls
– Reputation effects
– Uniform Commercial Code
• Under the UCC, products carry an implication of merchantability
and fitness
 Ethical Considerations
• Designers are often under pressure to
– Speed up the design process
– Cut costs
• These pressures force trade-off decisions
– What if a product has bugs?
• Release the product and risk damage to your reputation
• Work out the bugs and forego revenue
 Sustainability
• Sustainability
– Using resources in ways that do not harm ecological systems that
support human existence
• Key aspects of designing for sustainability
– Cradle-to-grave assessment (Life-Cycle assessment)
– End-of-life programs
– The 3-Rs
• Reduction of costs and materials used
• Re-using parts of returned products
• Recycling (Recovering materials for future use)
 Product Design Process
• Outsourcing
• Contract Manufacturer: It is an organization capable of manufacturing
and/or purchasing all the components needed to produce a finished product
or device.
• Example: Clothing, Drug, Plastics, electronic products and customer
manufacturing
• Eg. Automobile industry: CM produce many parts and assemblies, such as
seats and other interior parts, the headlight and taillight assemblies, and
electronic equipment such as radio/CD and GPS navigation systems.
• Close coordination is required to manage the network of assembly plants
and contract manufacturing partners for success.
• Volvo: Core Competency is safety
• Core competency has three characteristics:
I. Provides potential access to a wide variety of markets
II. Increase perceived customer benefits
III. It is hard for competitors to imitate.
• Dell has developed a set of highly specialized systems
that support its make-to-order operating strategy. Dell
has created a set of proprietary logistical processes that
range from the design of its web page through its
information systems infrastructure (a process that has
proved difficult for others to imitate). Dell owns the data
about what people are buying and in which
combinations. It also has been vertically integrated into
final assembly facilities that are designed to efficiently
produce in lot sizes of one. Finally, while it outsources
components, Dell uses longer-term relationships with its
suppliers and links them into its information system to
support quick response.
 Six Phases of the Generic
Development Process (Formal Process)
• Phase 0: Planning
• Phase 1: Concept development
• Phase 2: System-level design
• Phase 3: Design detail
• Phase 4: Testing and refinement
• Phase 5: Production ramp-up
 The Generic Product Development Process
Phase 0: Phase 1: Phase 2: Phase 3: Phase 4: Phase 5:
Planning Concept System-Level Detail Design Testing and Production
Development Design Refinement Ramp-Up

Marketing

•Articulate •Collect customer •Develop plan for •Develop •Develop •Place early
the market needs product options marketing plan promotion and production
opportunity •Identify lead users and extended launch materials with key
•Define •Identify product family •Facilitate field customers
market competitive •Set target sales testing
segment products price

Design

•Consider •Investigate •Generate •Choose material •Reliability testing •Evaluate

product feasibility of alternative •Assign •Life testing early
platform and product concepts products tolerances •Performance production
architecture •Develop industrial architectures •Complete testing output
•Assess new design concepts •Define major industrial design •Obtain regulatory
technologies •Build and test subsystems and control approvals
experimental interfaces documentation •Implement
prototypes •Refine industrial design changes
design
Phase 0: Phase 1: Phase 2: Phase 3: Phase 4: Phase 5:
Planning Concept System-Level Detail Design Testing and Production
Developme Design Refinement Ramp-Up
nt
Manufacturing

•Identify production •Estimate •Identify suppliers •Define piece- •Facilitate •Begin

constraints manufacturi for key part production supplier ramp-up operation of
•Set supply chain ng cost components processes •Refine entire
strategy •Assess •Perform make- •Design tooling fabrication and production
production buy analysis •Define quality assembly system
feasibility •Define final assurance processes
assembly scheme processes •Train work force
•Set target sales •Begin •Refine quality
costs procurement of assurance
long-lead processes
tooling
Other Functions

•Research: •Finance: •Finance: •Sales: Develop

Demonstrate Facilitate Facilitate make- sales plan
available economic buy analysis
technologies analysis •Service: Identify
•Finance: provide •Legal: service issues
planning goals investigate
•General patent issues
management:
allocate project
resources
 Product Design Criteria
• Designing for the customer
– Quality Function Deployment(QFD): A process that
helps a company determine the product characteristics
important to the consumer and to evaluate its own
product in relation to others
– House of Quality: A matrix that helps a product design
team translate customer requirements into operating
and engineering goals.
– Value Analysis/Value Engineering: Analysis with the
purpose of simplifying products and processes by
achieving equivalent or better performance at a lower
cost
 Quality Function Deployment(QFD)
• Customer requirements
• Customer rating of these requirements
• Technical requirements or capabilities of the
firm
• Relationship matrix( between these two sets)
• Quantification of these
• Competitive assessment with other
manufacturers
• Specifications or target values and
Competitive assessment
 Designing for the Customer
• It use inter-functional team from marketing, design
engineering and manufacturing has been created by TMC for
reducing the costs on its car by more than 60 percent by
significantly shortening design times.

• QFD starts with studying and listening to the customer to

determine the characteristics of a superior product
– Uses market research
– Customer preferences are defined and broken down into
customer requirements
• House of Quality
 Correlation
Matrix

Design Requirements
De

Cust Com
omer petit
Requ ive
Relationship Matrix Asse
irem
ents ssm
ent.

Specifications
The House of Quality Sequence
Car Door Design (opening parameters)
• Design Parameters
– Weight(material)
– Thickness
– Hinges
– Slope towards body
– Maximum angle of opening
• Customer requirements ( rate 1 to 5)
• Minimum 5 requirements

• Numerical values for relationship

• 5 ( strong dependency)
• 3 (Moderate)
• 1(marginal or minimal)
 Designing for the Customer:
Value Analysis/Value Engineering

• Examination of the function of parts and materials in an

effort to reduce the cost and/or improve the performance of
a product
• Common questions used in value analysis
• Is the item necessary; does it have value; could it be
eliminated?
• Are there alternative sources for the item?
• Could another material, part, or service be used instead?
• Can two or more parts be combined?
• Can specifications be less stringent to save time or
money?
• Do suppliers/providers have suggestions for
improvements?
• Can packaging be improved or made less costly?
 Designing Products for Manufacture and Assembly

• Traditional Approach
– “We design it, you build it” or “Over the
wall”

• Concurrent Engineering
– “Let’s work together simultaneously”
Design for Manufacturing and Assembly (DFMA)

• Greatest improvements related to DFMA arise from

simplification of the product by reducing the number of
separate parts:
1. During the operation of the product, does the part move
relative to all other parts already assembled?
2. Must the part be of a different material or be isolated from
other parts already assembled?
3. Must the part be separate from all other parts to allow the
disassembly of the product for adjustment or maintenance?
 Ecodesign
• Ecodesign: the incorporation of environmental
considerations in the design and development
of products or services
– The whole life cycle is considered
– The product is considered as a system
– A multi-criteria approach is used
• Application of ecodesign can benefit business
BioBag
BioBag biodegradable and
compostable plastic bags are
used for carrying produce
and are supplied on a roll.
Text on the bag says “This
bag is certified compostable.
Use, reuse, then compost.”
 Service Design

• Begins with a choice of service strategy, which

determines the nature and focus of the service,
and the target market
• Key issues in service design
• Degree of variation in service requirements
• Degree of customer contact and
involvement
 The Well-Designed Service System
• Characteristics
– Being consistent with the organization mission
– Being user-friendly
– Being robust if variability is a factor
– Being easy to sustain
– Being cost-effective
– Having value that is obvious to the customer
– Having effective linkages between back- and front-of-the-
house operations
– Having a single, unifying theme
– Having design features and checks that will ensure service
that is reliable and of high quality
 Successful Service Design
1. Define the service package in detail
2. Focus on the operation from the customer’s perspective
3. Consider the image that the service package will present both to
customers and to prospective customers
4. Recognize that designers’ familiarity with the system may give
them a quite different perspective than that of the customer, and
take steps to overcome this
5. Make sure that managers are involved and will support the design
once it is implemented
6. Define quality for both tangibles and intangibles
7. Make sure that recruitment, training, and reward policies are
consistent with service expectations
8. Establish procedures to handle both predictable and unpredictable
events
9. Establish system to monitor, maintain, and improve service
 Process Analysis Terms

• Process: Is any part of an organization that

takes inputs and transforms them into outputs

• Cycle Time:

• Utilization: Is the ratio of the time that a

resource is actually activated relative to the
time that it is available for use
 Process Flowcharting: Defined
• The process represents the basic sequence of steps or activities
that a firm employs to conceive, design and bring a product to
market.
• Consider simultaneous performance of a number of activities,
all operating at the same time
Process flowcharting:
• is the use of a diagram to present the major elements of a
process
• The basic elements can include tasks or operations, flows of
materials or customers, decision points, and storage areas or
queues
• It is an ideal methodology by which to begin analyzing a
process
 Flow Chart Symbols
• Task or operations:

• Storage area or queues

• Flow of material or customer:

• Decision Point:
 Example: Flowchart of Student Going to School

Go to Yes
Drive to Walk to
school school class
today?

No

Goof
off
 Types of Process
• Single-stage

Stage 1

• Multi stage

Stage 1 Stage 2 Stage 3

 Conti.
• Buffers: is a storage area between stages
where the output of a stage is placed prior to
being used in a downstream stage.
• Buffering allows the stages to operate
independently.
• Multi-stage Process with Buffer

Buffer
Stage 1 Stage 2
• If one stage feeds a 2nd stage with no intermediate buffer then two
stages are directly linked.
• When process is design in this way then most common problem
occur
- Blocking
- Starving

Blocking:
• Occurs when the activities in a stage must stop because there is no
place to deposit the item just completed
• If there is no room for an employee to place a unit of work down,
the employee will hold on to it not able to continue working on the
next unit
Starving:
• Occurs when the activities in a stage must stop because there is no
work
• If an employee is waiting at a work station and no work is coming to
the employee to process, the employee will remain idle until the
next unit of work comes
 Contd.
• Bottleneck
– Occurs when the limited capacity of a process causes work
to quantity or become irregularly distributed in the flow of
a process
– If an employee works too slow in a multi-stage process,
work will begin to pile up (mass) in front of that employee.
In this is case the employee represents the limited capacity
causing the bottleneck.

• Pacing
– Refers to the fixed timing of the movement of items
through the process
 Other Types of Processes
• Make-to-order
– Only activated in response to an actual order
– Both work-in-process and finished goods inventory kept to
a minimum
• Make-to-stock
– Process activated to meet expected or forecast demand
– Customer orders are served from target stocking level
– This process ends with the finished goods inventory then
customer order served from this inventory.
– This process also used when demand is seasonal (constant
rate throughout the year)
▪ Hybrid Process
 Process performance metrics
• Metrics: Utilization
• It is the ratio of the time that resource is actually being used relative to the
time that it is available for use. Eg. Utilization of direct labor or utilization
of machine
• Operation Time = Setup time + Run time
• Setup time: Time required to prepare a machine to make a particular item
• Run time: Produce Batch of parts with and time required to produce each
unit
• Throughput time: Average time for unit to move through the system
(actual time spends + waiting time) or Work-in-progress/ Throughput rate
• Process Velocity or Throughput ratio : Throughput time/ Value-added
time (it is the time in which useful work is actually being done on the unit)
• Cycle Time: Average time between completion of units
• Throughput rate: 1 / Cycle time
• Efficiency = Actual output/ Standard Output
• Utilization: Time activated/ Time available
• Productivity:
 Setup Queue
Batch Time/u
time Time
Size nit

Operations
Run
Time Throughp
Time
ut time

Standards Cycle
Time Velocity

Efficiency Throughput Productivity Inputs

rate

Time Time
Utilization
Available Activated
 Reducing Throughput time
• Perform activities in parallel
• Change the sequence of activities
• Reduce interruptions: Large time interval
between the activities.
 Example
• Daffy Dave’s Sub Shop makes custom submarine sandwiches to order. They
are analyzing the processes at their shop. The general flow of the process is
given below. There is a separated person working at each of the steps in the
process.
Slice the Add and
Bun and Toppings & Bag the
Take the
add the Condiment Order
Order
meat/chees s
e 2Min/order
1 Min/order 3 Min/order 4 Min/order
Daffy Dave wants to figure out the following for a typical 8-hours work day.
a. What is the current maximum output of the process?
b. If we add another person, where would we add him or her and what is the
benefit?
c. Is there a benefit if we can shift 1 minutes from Bun and Meat to order
Taking? Assume we do not make the change in part b above.
d. Is there a benefit if we shift 1 minutes of work from Condiments to Bagging?
Assume we do not make the changes in part b and c above.
Solution: a

Operation Output

Take orders (60 min. per hour/1 min. per order)*8 hours= 480 subs per day

Bun and Meat (60 min. per hour/3 min. per order)*8 hours= 160 subs per day

Toppings/Condime (60 min. per hour/4 min. per order)*8 hours= 120 subs per day
nts
Bag the order (60 min. per hour/2 min. per order)*8 hours= 240 subs per day

Conclusion: Maximum output is 120 subs per day. Output per day is determined by
the slowest station So we can only produce 120 per day because that is the limit of
Toppings/Condiments
Solution: b
Dave should add the person to the slowest station because it is the bottleneck.
Operation Output

Take orders (60 min. per hour/1 min. per order)*8 hours= 480 subs per day

Bun and Meat (60 min. per hour/3 min. per order)*8 hours= 160 subs per day

Toppings/Condime (60 min. per hour/4 min. per order)*8 hours= 120*2 = 240 subs
nts per day

Bag the order (60 min. per hour/2 min. per order)*8 hours= 240 subs per day

Conclusion: Impact is not a very big one. Topping/Condiments station now can do 240
subs per day and the Bun and Meat station can do only 160 subs per day so Bun and
Meat is the Maximum output .
Solution: C
Order taking station will go from 1 minute to 2 minutes and Bun and Meat goes
from 3 minutes to 2 minutes
Operation Output

Take orders (60 min. per hour/2 min. per order)*8 hours= 240 subs per day

Bun and Meat (60 min. per hour/2 min. per order)*8 hours= 240 subs per day

Toppings/Condime (60 min. per hour/4 min. per order)*8 hours= 120 subs per day
nts
Bag the order (60 min. per hour/2 min. per order)*8 hours= 240 subs per day

Conclusion: There is no benefit to this change. Dave can still only make 120 sub per
day since we can produce 120 per day because i.e. the limit of Topping/Condiments
station
Solution: D
Topping/Condiments station will go from 4 minute to 3 minutes and Bagging goes
from 3 minutes to 2 minutes
Operation Output

Take orders (60 min. per hour/1 min. per order)*8 hours= 480 subs per day

Bun and Meat (60 min. per hour/3 min. per order)*8 hours= 160 subs per day

Toppings/Condime (60 min. per hour/3 min. per order)*8 hours= 160 subs per day
nts
Bag the order (60 min. per hour/3 min. per order)*8 hours= 160 subs per day

Conclusion: There is benefit to this change. Dave can now make 160 subs per day.
This will provide the same benefit as hiring another worker. However, Dave wants to
increase output further, he will have to hire some additional staff.