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Chapter 3

Process Planning and Design

Chapter 3: Process Planning and Design

Process Planning and Design


Chapter 2 identified the critical factors in providing value to the customer. This chapter discusses the selection and design of the transformation process that can deliver those factorslow cost, high quality, enhanced functionality, speed, and so onin an efficient and effective manner.
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Introduction

Fender's Custom Shop Assembly line at IBM's plant in Charlotte, North Carolina Rickard Associates, an editorial production company Martin Marietta's aerospace electronics manufacturing facility in Denver, Colorado Nynex
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Examples

Examples illustrate several transformation systems. The Fender Custom Shop is a job shop that has specialized departments for routing, lathe operations, inlaying, paint and finishing, and final assembly. Because work is organized by the task performed, Rickard Associates is also a job shop - even though the work is not performed in one location. Companies like Rickard that rely on information technology to bring separated workers together are referred to as virtual organizations. Martin Marietta converted into focused factories. And assembly lines like the one IBM uses are referred to as flow shops.
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Fenders Custom Shop

Customers include Eric Clapton, John Deacon (Queen), David Gilmour, Yngwie Malmsteen and Stevie Ray Vaughn Production Steps: computer controlled routers and lathes shape guitar bodies and necks also have Neck Duplicator necks and bodies hand and machine sanded
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Fenders Custom Shop


continued

detailed inlay work done with Hegner precision scroll saw paint and finishing operations in special room where air is re-circulated 10 times/minute buffed hung up and seasoned for two weeks final assembly by actual musicians
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IBMs Charlotte, NC Plant

Assembly line produces 27 significantly different products Products include hand-held bar-code scanners, portable medical computers, fiberoptic connectors, and satellite communications devices Kits of parts delivered to workers Computer screen displays assembly instructions
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Rickard Associates

Produces magazines and marketing materials Only two of editorial production companys employees work at headquarters in NJ Art director works in AZ Editors are located in FL, GA, MI, and D.C. Freelancers even more scattered Internet and AOL used to coordinate work

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Martin Marietta Aerospace Plant

Originally set up as job shop with numerous functional departments


high WIP levels long lead times long travel distances departmental barriers inhibited communication

Plant subsequently arranged into three focused factories


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Martin Marietta continued

Each focused factory completed entire electronic assembly for particular application Each focused factory treated as separate business enterprise Factory manager assigned to each focused factory NFL draft used to select worker teams
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Martin Marietta continued


Within focused factories part families identified based on technology and processes Standard routings identified for each part family Improvements

seven months of consecutive production with no scrap 50% reduction in WIP 21% reduction in lead times 90% reduction in overtime
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Nynex

Analyzed company in terms of four core processes


customer operations customer support customer contact customer provisioning

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Nynex continued

Obtained services of Boston Consulting Group Visited 152 companies to document best practices Estimated savings are $1.5 to $1.7 billion

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Variety of Transformation Systems

Fender Custom Shop is job shop Rickard Associates is job shop and is also a virtual organization Martin Marietta converted from a job shop to focused factories IBM uses a flow shop

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Transformation System Design and Layout Analysis

Transformation system design considers alternative transformation forms and selects best one given characteristics of desired outputs. Layout analysis seeks to maximize the efficiency or effectiveness of operations.

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Forms of Transformation Systems


Continuous Process

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Continuous Process

Highly standardized products in large volumes Often these products have become commodities Typically these processes operate 24 hours/day seven days/week Objective is to spread fixed cost over as large a volume as possible
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Continuous Process continued

Starting and stopping a continuous process can be prohibitively expensive Highly automated and specialized equipment used Layout follows the processing stages Output rate controlled through equipment capacity and flow mixture rates
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Continuous Process continued

Low labor requirements Often one primary input Initial setup of equipment and procedures very complex
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Forms of Transformation Systems


Flow Shop

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Flow Shop

Similar to continuous process except discrete product is produced Heavily automated special purpose equipment High volume - low variety Both services and products can use flow shop form of processing
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A Generalized Flow Shop Operation

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Advantages of the Flow Shop

Low unit cost

specialized high volume equipment bulk purchasing lower labor rates low in-process inventories simplified managerial control

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Disadvantages of Flow Shop

Variety of output difficult to obtain Difficult to change rate of output Minor design changes may require substantial changes to the equipment Worker boredom and absenteeism Work not very challenging Vulnerable to equipment breakdowns
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Disadvantages of Flow Shop continued

Line balanced to slowest element Large support staff required Planning, design, and installation very complex task Difficult to dispose of or modify special purpose equipment

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Flow Shop Layout

Objective is to assign tasks to groups The work assigned to each group should take about the same amount of time to complete Final assembly operations with more labor input often subdivided easier Paced versus unpaced lines
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Line Balancing

available work time Cycle time demand


number of theoretical workstations, N T task times / cycle time

output total task time efficiency = input ( N A stations) cycle time


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Line Balancing Example


Task Time Required Precedes A 2.2 min. B, C, D B 3.4 E C 1.7 E D 4.1 F E 2.7 F F 3.3 G G 2.6 -Chapter 3: Process Planning and Design 28

Line Balancing Example


continued

Company operates one shift per day Available time per shift is 450 minutes Demand is 100 units/day

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Precedence Diagram
B E A C

D
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G
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Calculations
cycle time = 450/75 = 6 minutes/part NT = 20/6 = 3.33 = 4 stations

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Task Assignment
Time Station Avail. 1 6.0 3.8 0.4 2 6.0 1.9 0.2 Elig. Tasks A C,D C,D C E Will Task Idle Fit? Assign. Time A B -D C -0.2
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B,C,D B,C -C,D C --

0.4

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Task Assignment continued


Time Elig. Station Avail. Tasks 3 6.0 3.3 4 6.0 E F G Will Fit? E F G Task Idle Assign. Time E F G 0.0 3.4

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Line Balancing Solution


Station 3
Station 1 B E A C Station 2 D
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Station 4 F G
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Efficiency
efficiency = 20/(4*6) = 83.3%

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Precedence Graph for Credit Applications

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Stations Assignments for Credit Application

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Forms of Transformation Systems


Job Shop

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Job Shop

High variety - low volume Equipment and staff grouped based on function Each output processed differently

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A Generalized Job Shop Operation

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Advantages of the Job Shop


Flexibility to respond to individual demands Less expensive general purpose equipment used Maintenance and installation of general purpose equipment easier General purpose equipment easier to modify and therefore less susceptible to becoming obsolete
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Advantages of the Job Shop


continued

Dangerous activities can be segregated from other operations Higher skilled work leading to pride of workmanship Experience and expertise concentrated Pace of work not dictated by moving line Less vulnerable to equipment breakdowns
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Disadvantages of the Job Shop

General purpose equipment is slower Higher direct labor cost High WIP inventories High material handling costs Management control very difficult

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Directly Specified Closeness Preferences

A = absolutely necessary E = especially important I = important O = ordinary closeness OK U = unimportant X = undesirable

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Cost-Volume-Distance Model

TC =

C
i =1 j=1

ij

V Dij ij

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Office Layout

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Forms of Transformation Systems


Cellular Production

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The Cell Form

Combines flexibility of job shop with low costs and short response times of flow shop Based on group technology First identify part families Then form machine cells to produce part families
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Conversion of a Job Shop Layout to a Cellular Layout

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Organization of Miscellaneous Parts into Families

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Advantages of Cellular Production

Reduced machine setup times

increased capacity economical to produce in smaller batch sizes smaller batch sizes result in less WIP less WIP leads to shorter lead times shorter lead times increase forecast accuracy and provide a competitive advantage
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Advantages of Cellular Production continued

Parts produced in one cell Capitalize on benefits of using worker teams Minimal cost to move from job shop to cellular production (e.g. EHC) Can move from cellular production to mini-plants
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Disadvantages of Cellular Production

Volumes too low to justify highly efficient high volume equipment Vulnerable to equipment breakdowns Balancing work across cells Does not offer the same high degree of customization as the job shop

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Cellular Layout

Teams of workers and equipment to produce families of outputs Workers cross-trained Nominal cells versus physical cells. Remainder cell Cell formation methods

production flow analysis


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Original Machine-Component Matrix


A B C D E 1 1 2 3 1 4 5 1 1 1 1 1 1
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1 1

1 1

Reordered Machine-Component Matrix


A C E B D 1 1 3 1 5 1 2 4 1 1 1 1 1 1 1 1 1
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Forms of Transformation Systems


Project Operations

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Project Operations

Large scale Finite duration Nonrepetitive Multiple interdependent activities Offers extremely short reaction times
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Selection of the Process

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Volume/Variety Considerations

High volume indicate automated mass production High variety implies use of skilled labor and general purpose equipment Make-to-stock versus make-to-order

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Effect of Output Characteristics on Transformation Systems

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Product/Process Life Cycles

In R&D stage, product made in small volumes At peak of life cycle, demand may justify high volume special purpose equipment System should evolve as market evolves Whether an organization moves with a product through its life cycle depends on the organizations focus
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Selection of Transformation System by Stage of Life Cycle

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Service Processes

Often implemented with little development or pretesting Need to consider amount of customer contact Customers may not arrive at smooth and even increments Including customer in service process provides opportunities to improve service
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New Transformational Technologies and Reengineering

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Information Technology

World Wide Web

Federal Express

Web server set up in late 1994 By 1996 12,000 customers using service each day to access package-tracking database provides higher customer service saves FedEx $2 million per year

Intranets
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Information Technology continued


Decision support systems Artificial intelligence Expert systems

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The Office of the Future


Focus of 1980s was on improving individual productivity Focus 1990s is enhancing way teams work together Groupware

communications (e-mail) collaboration (access to shared data) coordination (jointly accomplishing activities)
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Manufacturing Technologies

Numerical Control (NC)


computer numerical control direct numerical control

Robotics Flexible Manufacturing Systems (FMS)

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Business Process Design (Reengineering)

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Division of Labor Concept

Work broken down into its simplest most basic tasks

Performing same task facilitates attaining greater skill No time lost switching to another task Workers well positioned to improve tools and techniques

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Division of Labor Concept


continued

Division of labor concept not challenged until recently despite dramatic changes in technology Quality, innovation, service, and value more important than cost, growth, and control

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Process

Set of activities that taken together produce a result of value to the customer Organizing on basis of processes

Eliminate delays and errors when work is handed off Capture information once and at source When people closest to process perform work, there is little need for management overhead
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Business Process Design (BPD)


The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance

Hammer, M. and Stanton, S. The Reengineering Revolution, Harper Business, 1995.


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Radical

Profoundly change the way work performed Not concerned with making superficial changes Get to root Get rid of old Reinventing, not improving
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Redesign

BPD is about designing how work is done Smart, capable, well trained, highly motivated employees mean little if the way work is performed is poorly designed

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Process

All organizations perform processes Customers not interested in individual activities but rather overall results Few of them are organized on the basis of processes Thus, processes tend to go unmanaged Team approach one way this addressed
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Dramatic

Quantum leaps in performance, not marginal or incremental improvements Breakthroughs in performance

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IBM Credit Example

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IBM Credit Example continued

Order logged by 1 of 14 people in conference room Carted upstairs to credit department Information entered into computer to check borrowers creditworthiness Results written on piece of paper

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IBM Credit Example continued

Business practices department modified standard loan covenant in response to customer requests Used its own computer system Pricer keyed data into PC to determine appropriate interest rate Administrator converted to quote letter and Fedexed to field sales rep.
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IBM Credit Example continued

Average time to process a request was 6 days Could take as long as 2 weeks Actual processing time 90 minutes Deal Structurer

Turnaround time 4 hours Number of deals processed increased 100 times with small reduction in head count
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