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Technical and economic feasibility studies Prototype design Performance testing of prototype Market sensing/evaluation and economic evaluation of the prototype 5. Design of production model 6. Market/performance/process testing and economic evaluation of production model 7. Continuous modification of production model
project for developing the product If initial feasibility studies are favorable, engineers prepare an initial prototype design
and function of the final product It will not necessarily be identical to the production model
prototype continues until this design-testredesign process produces a satisfactorily performing prototype
potential customers, market test, or market surveys If the response to the prototype is favorable, economic evaluation of the prototype is performed to estimate production volume, costs, and profits If the economic evaluation is favorable, the project enters the production design phase.
modified to:
Adapt to changing market conditions
Adapt to changing production technology Allow for manufacturing improvements
Focus is improving performance, quality, and cost Objective is maintaining or improving market share of maturing products/services Little changes can be significant Small, steady (continuous) improvements can add up to huge long-term improvements Value analysis is practiced, meaning design features are examined in terms of their cost/benefit (value).
characteristics of the product Tolerances - Minimum & maximum limits on a dimension that allows the item to function as designed Standardization - Reduce variety among a group of products or parts Simplification - Reduce or eliminate the complexity of a part or product
Three general dimensions of service design are: Degree of Standardization of the Service
Custom-fashioned for particular customers or
(fast-food restaurant)?
goods, their development usually does not require engineering, testing, and prototype building. Because many service businesses involve intangible services, market sensing tends to be more by surveys rather than by market tests and demonstrations.
What is a Process?
A process is any part of an organization that takes inputs and transforms them into outputs that ,it is hoped, are of greater value to the organization than the original inputs.
Process Selection
It refers to the strategic decisions of selecting which kind of production process to have in the manufacturing plant.
Product/Service Quality
Old viewpoint high-quality products must be made in small quantities by expert craftsmen New viewpoint high-quality products can be mass-produced using automated machinery Automated machinery can produce products of incredible uniformity The choice of design of production processes is affected by the need for superior quality.
Product-Focused
Processes (conversions) are arranged based on the sequence of operations required to produce a product or provide a service Also called Production Line or Assembly Line Two general forms
paper
Product-Focused
Raw Material
2
Components
4
Assemblies
1 3 5 7
Fin. Goods
Raw Material
Components
Subassem. Purchased
6
1 Product/Material Flow
Production Operation
Components, Subassemblies
Product-Focused
Advantages
Lower labor-skill requirements Reduced worker training Reduced supervision Ease of planning and controlling production
Disadvantages
Higher initial investment level Relatively low product flexibility
Process-Focused
Processes (conversions) are arranged based on the type of process, i.e., similar processes are grouped together Products/services (jobs) move from department (process group) to department based on that particular jobs processing requirements Also called Job Shop or Intermittent Production Examples
Process-Focused
Custom Woodworking Shop
Cutting Planing Shaping Assembly Sanding Finishing
1 2 2 3 3 4 5 6 7
Job A Job B 1
Drilling Turning
Process-Focused
Advantages
High product flexibility Lower initial investment level
Disadvantages
Higher labor-skill requirements More worker training More supervision More complex production planning and controlling
Group Technology
Each part produced receives a multi-digit
code that describes the physical characteristics of the part. Parts with similar characteristics are grouped into part families Parts in a part family are typically made on the same machines with similar tooling
Some of the factors important in process design for products are also important in services:
Nature (level and pattern) of customer
demand Degree of vertical integration Production flexibility Degree of automation Service quality
Customer-as-Product
Quasi-Manufacturing
Physical goods are dominant over intangible
service Production of goods takes place along a production line Operations can be highly automated Almost no customer interaction Little regard for customer relations Example banks checking encoding operation
Customer-as-Participant
Physical goods may be a significant part of
the service Services may be either standardized or custom High degree of customer involvement in the process Examples: ATM, self-service gas station
Customer-as-Product
Service is provided through personal
attention to the customer Customized service on the customer High degree of customer contact There is a perception of high quality Customer becomes the central focus of the process design Examples: medical clinic, hair salon
Large
Small
Many
The first consideration is variety, or how much the product changes from customer to customer.
The second consideration is volume of demand. the flexibility of the equipment used to create the product, is determined by the product being created and is often determined by the first two.
Types of Process
1. 2. 3. 4.
It refer to how a factory organizes material flow one or more of the process technologies.
Flow Structures
1. 2. 3. 4.
Batch shop
It is generally employed when a business has a
Continuous flow
Conversion or further processing of undifferentiated
The relationship between process structures and volume requirements is often depicted on a product process matrix.
As volume increases and the product line narrows, specialized equipment's and standardized materials flows become economically feasible
Output rate
Setup requirements
Maintenance
Obsolescence
Direct to indirect ratio Skills and training General vs special purpose equipment Special tooling Complexity Change over speed Complexity Frequency Availability of parts State of the art Modification for use in other situation
It is a method to evaluate the specific process that raw materials, parts, and subassemblies follow as they move through the plant
Assembly drawing
It is simply an explode view of the product
a particular part. It conveys such information as the type of equipment, tooling, and operation required to complete the part
SERVICE
A type of economic activity that is intangible, is not stored and does not result in ownership. A service is consumed at the point of sale. Services are one of the two key components of economics, the other being goods
CHARACTERISTICS OF SERVICES
The services have unique characteristics which make them different from that of goods. The most common characteristics of services are:
CHARACTERISTICS OF SERVICES
Intangibility Services are activities performed by the provider, unlike physical products they cannot be seen, tasted, felt, heard or smelt before they are consumed
Inseparability Services are typically produced and consumed simultaneously. Incase of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later
CHARACTERISTICS OF SERVICES
Variability Services are highly variable, as they depend on the service provider, and where
The line linking customer to people shows that the people are extremely important in producing and delivering service to the customer.
The customer to system link shows that the service operations should also be designed with the customer in mind.
Strategy to system means that the systems and procedures should follow from the service strategy. Strategy to people means that all the service providers should be well aware of the organization's strategy The system to people means that the service operations system and procedures should be people-friendly
Facility Location
The problem of facility location is faced by both new and existing businesses, its solution is critical to a companys success. An important element in designing a companys supply chain is the location of it facilities.
Facility location
Facility location is the process of determining geographic sites for a firms operations. Location decisions affect processes throughout the organization.
Marketing must assess how the location will appeal to
training needs.
Accounting and Finance must evaluate costing.
Managers must weigh many factors when assessing the desirability of particular locations. The factor must be sensitive to location. The factor must have a high impact on the companys ability to meet its goals.
Geographical information system (GIS) is a system of computer software, hardware, and data that the firms personnel can use to manipulate, analyze, and present information relevant to a location decision. It can be used to:
Store databases Display maps Create models that can take information from existing
datasets, apply analytic functions, and write results into new derived datasets.
Together, these three functionalities of data storage, map displays, and modeling are critical parts of an intelligent GIS, used to a varying extent in all GIS applications.
Proximity to raw materials sources Cost and availability of energy/utilities Cost, availability, skill and productivity of labor Government regulations at the federal, state, country and local levels Taxes at the federal, state, county and local levels Insurance Construction costs, land price
Business Climate: Includes the presence of similar-sized business, presence of companies in the same industry etc..
Total costs: The objective is to select the site with the lowest cost. These include certain regional costs as well as some hidden costs. Infrastructure: Adequate road, rail, air and sea transportation are vital. Energy and telecommunication needs should also be met.
Quality of Labor: The Educational and skill level of the labor pool must watch the companys needs. Must stress on the ability and willingness to learn. Suppliers: A high-quality and competitive supplier base makes a given location suitable. The proximity of important suppliers plants also supports lean production methods.
Other Facilities: The location of other plants or distribution centers of the same company may influence a new facilitys location in the network. Free Trade Zones: A foreign trade zone or a free trade zone is a closed facility into which foreign goods can be brought without being subject to normal customs department.
Political Risk: Political risk in both the country of location and the host country influence location decisions.
Government Barriers: Barriers to enter and locate in many countries are being removed today trough legislations. Many non legislative and cultural barriers should be considered in location planning.
The Process required to narrow down to a particular area can vary significantly depending on the type of business we are in and competitive pressures that must be considered.
There are three different types of techniques that have proven to be very useful:
Factor Rating systems Transportation Method Centroid Method
It allows us to consider many different types of criteria using simple point-rating scales. It is the most widely used of the
Each alternative location will then be rated based on these factor weights. The most weighted alternative is selected as the best alternative.
Example
A refinery assigned the following range of point values to major factors affecting a set of possible sites:
RANGE Fuels in region Power availability and reliability Labor climate Living conditions 0 to 330 0 t0 220 0 to 100 0 to 100
Transportation
Water supply Climate
0 to 50
0 to 50 0 to 50
Each site was then rate against each factor, and the point value was selected from its assigned range. The sums of assigned points for each site were then compared. The site with points most points was selected.
Transportation Method
The transportation method is a special linear programming method. It gets its name from application of problems involving transporting products from several sources of several destinations. Two common objectives of such problems are either
Minimize the cost of shipping Maximize the profit of shipping
(n units to m destinations).
SHIPPING ROUTE AF
Centroid Method
In simplest form this method assumes than inbound and outbound transportation costs are equal, and it does not include shipping costs for less than full loads.
The centroid method is found by calculating the X and Y coordinates that result in the minimal transportation cost. We use the formulas
LAYOUT PLANNING
Planning that involves decisions about the physical arrangement of economic activity centers needed by a facilitys various processes.
What centers should the Layout include? How much space and capacity does each center need?
Flexible-Flow Layouts
This is typical type of production where the equipment performing similar operations is grouped together.
Such a layout is particularly useful where the volume of manufacture is low and the variety of jobs is great.
The sequence of operation for one job is different from that of another job,hence the layout should be flexible.
Line-Flow Layouts
The equipment is laid out according to the sequence in which it is used for making the product.
Hybrid Layouts
Some
portions
of
the
facility
are
The material remains in a fixed position,but the machinery,tools,workmen, etc. are brought to the material.
This is preferred when the equipment and the machinery is small in number and size and the workmen are highly skilled to perform the various small jobs on the product.
Eg:Ship building.
LINE BALANCING
The total work to be performed at a workstation is equal to the sum of the tasks assigned to that workstation
The line balancing problem is one of assigning all the tasks to series of workstation so that each workstation has no more than can be done in the workstation cycle time and so that the unassigned time across all workstation is minimized
Steps..
1.
2.
Determine the required workstation cycle time(C) C=production time per day required output per day
3.Determine the theoretical minimum number of workstations(N1), required to satisfy wsct constraint
5.Assign tasks, one at a time to the first workstation until the sum of the task time is equal to the workstation cycle time.
Efficiency=
actual no of workstations(Na)*(*C)
Load distance method is a mathematical model used to evaluate locations based on proximity factors .
The distance between two points is expressed by assigning the points to grid coordinates on a map.
A load may be shipments from suppliers, shipments between plants or to customers, or it may be customers or employees traveling to or from the facility. The firm seeks to minimize its loaddistance (ld) score, generally by choosing a location, so that large loads go short distances.
Distance Measures
Mainly two type of distance measures are used:
D ab = distance between point a and b. Xa Ya Xb Yb = x- coordinate of point a. = y- coordinate of point a. = x- coordinate of point b. = y- coordinate of point b.
Rectilinear distance measures distance between two points with a series of 90 turns as city blocks.
This distance is the sum of the two dashed lines representing the base and side of the triangle.
The distance traveled in the x-direction is the absolute value of the difference in xcoordinates.
Adding this result to the absolute value of the difference in the y-coordinates gives
DAB = |XA-XB| + |YA-YB|
Aalogistics Co. has just signed a contract to deliver products to three locations, and they are trying to decide where to put their new warehouse. The three delivery locations are Chicago, Kansas City, and Memphis. The two potential sites for the warehouse are Peoria and St. Louis. The x, y coordinates for the delivery locations and warehouses are as follows: Location x coordinate y coordinate Chicago 92 42 Kansas City 85 39 Memphis 90 35 Warehouses Peoria 90 41 St. Louis 90 39 The total quantity to be delivered to each destination is: 400 to Chicago, 150 to Kansas City, and 100 to Memphis.
Calculate the total load-distance value from each potential warehouse location.
Locate in: A. Peoria B. St. Louis