An Integrative Approach: Managing Supply Chain and Operations

Managing Supply Chain and Operations:
An Integrative Approach
Second Edition
Chapter 3
Product and Process Design
and Mapping
Copyright © 2019, 2016 Pearson Education, Inc. All Rights Reserved.

Integrated Model – Process Design

Learning Objectives
3.1 Understand and Explain the Steps of Process
Design
Mapping and Layout Planning
3.3 Illustrate the Different Elements of Product
Design
3.4 Understand and Employ Quality Function
Deployment
3.5 Apply Green Design Elements to Your Process
and Product Design
Learning Objective 3.1
• Understand and Explain the Steps of Process
Design
– Explain the differences between process and extended
process.
– Describe the different choices that managers face when
planning a process.
– List the different components of the process continuum
and apply the continuum when choosing a process.
– Apply break-even analysis when choosing processes.

Process Design
• Product design
– Act of creating new products
• Process design
– Methods for producing products/services
– Managers create ongoing process of renewal

Processes and Extended Processes
• Traditional: Input-Transformation Process-Output
– Decoupled from customers and suppliers
• What has changed?
– Traditional: company vs company
– Modern: SC vs SC
– One change impacts entire system

Figure 3.1 Traditional Operations
Management Model

Figure 3.2 The Extended Process

Process Layout
• Process Layout
– Physical arrangement of equipment, work-centers
– Like functions gathered together
– Highly flexible (lots of variety)
– Less efficient and more costly
• Example: University Campus

Figure 3.3 Process Layout

Product Layout
• Usually linear or U-shaped
• High production volumes
• Low unit costs
• Laid out according to product requirements

Figure 3.4 An Automobile Windshield
Product Layout

Figure 3.5 The Process Continuum

Process Continuum
• Project – one-time outcome
• Job shop – low-volume, high variety
• Batch – produces products in bunches
• Assembly line – high volume, little variety
• Continuous flow – high volume, little interaction

Figure 3.6 A Product/Process Matrix

Break-Even Analysis
• Determining viability of an investment
• Do revenues equal costs?
– Considers
 Fixed costs
 Variable costs
 Expected revenues

Break-Even Analysis Formula
• R×Q = Fc + (Vc×Q)
– R = Revenue Per Unit Sold
– Q = Quantity
– Fc = Fixed Costs
– Vc = Variable Cost Per Unit
• R×Q = total revenues
• Fc + (Vc×Q) = total costs

Sample Break-Even Problem
• Should management buy production equipment?
– Fixed cost for equipment $3M
– One unit sells for $20
– Variable cost per unit $5
 Includes labor, materials, energy
– Expected demand 300,000 units
Solved Problem 3.1 in MyLab Operations Management

Sample Break-Even Solution
• Q reveals where revenue = costs
– R×Q = Fc + (Vc×Q)
– $20Q = $3,000,000 + ($5Q)
– $20Q - $5Q = $3,000,000
– $15Q = $3,000,000
– Q = 200,000 = BREAK EVEN POINT
• 300,000 (expected demand) > 200,000
• Investment would be profitable

• Understand and Explain the Steps of Process
– Define and describe an extended process map for
supply chains.
– List and describe hybrid layouts and in what situations
managers should apply each type of layout.
– Use line balancing when assigning tasks in the process
chain.
– Use matrices to design functional layouts.

Process Maps
• Schematic picture of a process
– Uses symbols to see processes
• How is it used?
– Develop general process map
– Evaluate each step of process
• Determine which steps add value
– Eliminate non-value added steps

Figure 3.8 Process Mapping Symbols

Figure 3.9 A Process Map of the Home Occupation
Process as It Currently Exists Before Any Changes

Figure 3.10 A Process Map of the Home
Occupation Process with Simplification

Hybrid Layouts - FMS
• Flexible Manufacturing Systems (FMS)
– Moderate volumes with moderate flexibility
– Capital intensive
– Mass assembly/job shop hybrids
– Require almost immediate changeovers
• Ladder FMS
– Parts and assemblies multidirectional

Figure 3.12 Flexible Manufacturing Systems:
Moderate Volumes with Moderate Flexibility

Figure 3.13 A Ladder FMS System

Hybrid Layouts – Cellular and Fixed
• Cellular Layouts
– Flexible equipment placed in cells
 Several steps performed in same cell
– U-shaped production line
– More efficient than job shop
• Fixed-Position Layouts
– Product stays stationary
– Equipment, labor moved to product
– E.g. Hangar-built airplanes

Line Balancing Formulas
amount of time available
Task time =
needed production volume
sum of task times
Minimum number of workstations =
task time
sum of task times
Efficiency =
(no. of workstations  task time)
sum of slack times
Balance delay =
(no. of workstations  task time)

Line Balancing Steps (1 of 2)
• Allocates tasks to process workstations
• 9 Steps to Line Balancing:
1. Identify tasks to produce product
2. Determine the task sequence
3. Determine the task duration
4. Calculate the task time

Line Balancing Steps (2 of 2)
5. Calculate theoretical minimum workstations
6. Choose a heuristic
 i.e. - longest operating time, most followers
7. Apply the heuristic to workstations
8. Compare workstations to minimum workstations
9. Look to improve the layout
See Solved Problem 3.2 in MyLab Operations

Management

Load Distance Equation
 n n 
C    Lij Dij  K
 i 1 j 1 
– minimizes product flow between work centers
– C = cost
– n = number of work centers
– Lij = loads between i and j
– Dij = distance between i and j
– K = cost to move a load

Designing Functional Layouts
• Load-Distance Models
– Technique used for functional layouts
– Focused on cost and distance
– Ignore behavioral reasons for layout
• Muther’s Grid is behaviorally focused
– Some machines cannot be proximate
– Recognizes safety and practicality
See Solved Problem 3.3 in MyLab Operations Management

Muther’s Grid
• Outlines preferences for layouts
• Behavioral reasons considered
– What should be close to each other
– Creates grid = all possible layouts
 A = absolutely necessary
 E = very important
 I = important
 O = somewhat important
 U = unimportant
 X = Undesirable

Figure 3.14 Muther’s Grid

How to Determine Muther’s Grid Priorities
1. Usage of common equipment
2. Usage of same labor or information
3. Same work sequence
4. Need to communicate
5. Makes work unsafe
6. Diminishes quality of work life
7. Similar work

• Illustrate the Different Elements of Product Design
– Describe the product life cycle and the role that
complementary products play.
– Explain the role of research and development in a firm.
– Walk through the product design process and explain
the function and importance of each step.

Product Design
• Continuous design
– Enhance existing products
• Discontinuous design
– Complete changes from existing products
• Product design key questions
– What functions do customers want?
– What are current product attributes?
– What are material limitations?

Figure 3.15 Phases of the Product Life Cycle

Complementary Products
• Goods made with similar technologies
– Can co-exist in product family
– E.g. Snowmobiles and ATVs
 Counter seasonal, same factory products

Research & Development (R&D) Motives
• Motives for R&D
– Strengthening bottom line
– Absorbing productive capacity
– Emerging customer needs
– Increasing market share
– Regulatory mandates
– Technological advances
– Changes in materials

R&D Research
• Basic Research
– Theoretical: not motivated by profit
• Applied: practical, motivated by profit
– E.g. - nuclear fission versus nuclear power

R&D Pull versus Push
• Market Pull (continuous development)
– Improves on current products
– e.g. iPhone X
• Technological Push (discontinuous development)
– Creating products for new market
– e.g. The first personal computers

Figure 3.16 The Product Development
Process

Product Design Process Steps (1 of 3)
1. Product Idea Generation
– Internal (Marketing, R&D, etc.) Inputs
– External (Customers, Industry experts, etc.) Inputs
2. Customer Future Needs Projection
– Use analytics to predict needs
– Anticipate customer preference changes
3. Technology Selection
– Technology feasibility statement considers
performance parameters, limitations, etc.

4. Technology Development
– Selection of material transformation processes
5. Final Production Definition
– Final drawings and specifications
6. Marketing and Distribution
– Define customers and distribution networks

7. Product Design and Evaluation
– Product Design Specification (PDS) developed
 Identifies final product attributes
8. Manufacturing System Design

– Selection of process technologies
 Ensures low cost, high quality
9. Manufacture, Delivery, and Use

– Consumer enjoys result of design process

• Understand and Employ Quality Function
Deployment
– Understand the importance of concurrent design times,
the design for manufacture method, design for
maintainability, and design for reliability.

Figure 3.17 The QFD House of Quality

Concurrent Design Teams
• Concurrent Engineering
– Team-based design
– Differing design tasks performed simultaneously
– Advantages:
 Communication among group members
 Speed
 Customer Interaction

Design for Manufacture
• Design for Manufacture (DFM)
– Makes product easy to build
– Needed due to “over-the-wall” syndrome
– Product Data Management (PDM)

Design for Maintainability
• Design for Maintainability
– Product replacement often cheaper than repair
– Makes components easy to replace
– Creates components that are easily removed
– Partitions adequate space to perform maintenance
– Ensures nondestructive disassembly and safe
maintenance
– Provides adequate owner’s manuals and
documentation

Design for Reliability (1 of 2)
• Two Dimensions of Reliability
– Failure rate and time
• Component Reliability
– The propensity for a part not to fail over a given time
• System reliability
– Probability, a system of components will perform
 As designed throughout time

Design for Reliability (2 of 2)
• Bathtub-shaped hazard function
– Model showing when product fail
 Either early or late
– Buying a service contract
– Should buy with initial warranty?

Figure 3.18 A Bathtub-Shaped Reliability
Curve

Series Reliability
• System components are a series if
– System performance depends all components
– Single component failure dooms system
• Series reliability
– Reliability of the entire system
– Probability each component functioning properly
Rs  P( x1 x2 xn )
 P( x1 ) P( x2 | x1 ) P( x3 | x1 x2 ) P( xn | x1 x2 xn 1 )

Series Reliability: Example 1
• What is the system reliability in a system with four
components?
– Component A Reliability= 98%
– Component B Reliability= 99%
– Component C Reliability= 90%
– Component D Reliability= 97%
• R = .98 × .99 × .90 × .97 = 84.7% reliability
See Solved Problem 3.5

• You have a TV
– It has 700 components
– Each component has 99% reliability
– Over the next 5 years
• R = .99700 =.00088
• 0.088% chance
– TV will last 5 years

• Want TV with 90% reliability (R)
– What is needed component reliability?
• 90% = R700
• R = (.90)1/700 = .99985
• Required component reliability is 99.985%
– To reach 90% series reliability

Reliability
• One way to evaluate reliability is through failure
rate:
Number of failures
Failure rate =
Units tested  Number of hours tested
• Another way to evaluate reliability is through

system availability:
Mean time between failures
System Availability =
Mean time between failures + Mean time to repair

FMEA & Traceability
• Failure Models and Effects Analysis
– Identifies where components can fail
– Identifies consequences of failure
• Product Traceability
– Tracks products
– From final use to origin
– Determine who is liable
 When they are liable

• Apply Green Design Elements to Your Process
and Product Design
– Explain why manufacturers design for reuse and why
doing so is significant beyond the manufacturing stage.
– Describe why and how manufacturers are incorporating
green practices in their process and product designs.

Green Design (1 of 2)
• Design for reuse
– Products that can be used again
 In later generations of products
– E.g. Ink toner cartridges
 Refilled and reused
• Design for disassembly

– Product easy to take apart
– Example: Kodak FunSaver camera

Green Design (2 of 2)
• Other Green Principles:
– Using nontoxic materials
– Using longer lasting parts
– Using energy efficient processes
– Conduct life-cycle assessments
– Using renewable materials
– Make decomposable products
– Use process that conserve water

Completed Learning Objectives
Design
3.3 Illustrate the Different Elements of Product
Design
3.4 Understand and Employ Quality Function
Deployment
3.5 Apply Green Design Elements to Your Process
and Product Design
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Copyright © 2019, 2016 Pearson Education, Inc. All Rights Reserved.

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Solved Problem 3.1 in MyLab Operations Management

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See Solved Problem 3.2 in MyLab Operations

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See Solved Problem 3.3 in MyLab Operations Management

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8. Manufacturing System Design

9. Manufacture, Delivery, and Use

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See Solved Problem 3.5

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