IE 271

Operations Analysis and

Design
Lecture 1
Introduction

What is Production?

Production is transformation of inputs into outputs

Inputs

- Raw Materials
- Labor
- Energy
- Machines
- Money
- Information

Production

Outputs

- Goods Produced (Manufacturing)

- Services Provided (Service)

Production

Production is transformation of inputs into outputs

Some examples of the transformation processes in manufacturing systems.

Cutting
Drilling
Casting
Molding
Assembling
Painting
...

Car

Manufacturers: The whole production system

consists of manufacture and assembly of cars
together with services like sales, distribution,
marketing etc.

Production vs
Manufacturing?

Production

and Manufacturing are not equivalent terms

Production
Manufacturing

Production is a broader term that corresponds to

all activities required in a transformation process
until a valuable good or service is obtained

Manufacturing and Production

Systems

Manufacturing is the ability to make goods and services to

satisfy societal needs

Manufacturing processes are strung together to create a

manufacturing system (MS)

Production system is the total company and includes

manufacturing systems

The manufacturing
system converts
inputs to outputs using
processes to add
value to the goods for
the external customer.

Manufacturing Technologically

The functions and systems of

the production system, which
includes (and services) the
manufacturing system.

Manufacturing Systems
Suppliers

Raw Material
Inventory

...

Finished Goods
Inventory

Work - In - Process

Raw

material can be stored in the warehouse

(Raw Materials Inventory)
Subparts

can be stored during the process,

between the departments (Work-In-Process Inventory)
Finished

Goods can be stored at the warehouse

(Finished Goods Inventory)

Customers

Types of Manufacturing

Manufacturing can be discrete or continuous.

Continuous process industries involve the

continuous production of product, often using
chemical rather than physical or mechanical
means, e.g. sugar, paper, glass

Discrete parts production involves the

production of individual items, e.g. cars,
appliances, etc.

Discrete Manufacturing
Layout

Product Layout (Flow Shop): arrange activities in a

line according to the sequence of operations that
need to be performed to assemble a particular
product

Process Layout (Job Shop): group similar activities,

together in departments or work centers according
to the process or function they perform

Project Shop: Immobile item being manufactured

(e.g planes, ships, etc)

P - Q Relationship in Plant
Layout

Process Layout
Layout in which equipment is arranged
according to function
Suited to low and medium production
quantities and medium to high product variety
Different parts or products are processed
through different operations in batches

Each batch follows its own routing

No common work flow followed by all work units

Material handling activity is significant

Process Layout

Process Layout (Job Shop)

Product Layout
Layout in which workstations and equipment are
located along the line of flow of the work units
Suited to high production quantities and low product
variety
Work units typically moved by powered conveyor
At each workstation, a small amount of the total
work content is accomplished on each work unit

Each station specializes in its task, thus achieving high

efficiency

Product Layout for

Assembled Product

Product Layout (Flow Shop)

Flow Shop

Figure 1-8 The moving assembly line for cars is an example of the flow shop.

Assembly workers on an
engine assembly line
(photo courtesy of Ford
Motor Company).

Product Layout

Process Layout

Description

Sequential arrangement of activities

Functional grouping of activities

Type of Process

Continuous, mass production, assembly

Intermittent, job shop, batch

production

Product

Standardized, made to stock

Varied, made to order

Demand

Stable

Fluctuating

Volume

High

Low

Equipment

Special Purpose

General Purpose

Workers

Limited Skills

Varied Skills

Inventory

Low WIP, High FG

High WIP, Low FG

Storage Space

Small

Large

Material Handling

Fixed Path (conveyor)

Variable Path (Forklifts)

Aisles

Narrow

Wide

Scheduling

Part of Balancing

Dynamic

Layout Decisions

Line Balancing

Machine Location

Goal

Equalize work at each station

Min. Mat. Handling Costs

Advantage

Efficiency

Flexibility

Fixed-Position Layout

Layout in which product remains in one location

during fabrication, and workers and equipment are
brought to the product
Suited to low production quantities and high product
variety
Reason for keeping product in one location:

Product is big and heavy

Typical plants: assembly and fabrication

Much manual labor

Equipment is portable or mobile

Fixed-Position Layout

Assembly operations
on the Boeing 777
(photo courtesy of
Boeing Commercial
Airplane Co.).

Hybrid Layouts

Cellular - attempts to combine the best

features of process and product layouts
Combinations of fixed position and either

Process layout or
Product layout

Cellular Layout

Layout in which work units flow between stations, as

in a production line, but each station can cope with a
variety of part styles without the need for timeconsuming changeovers
Combination of product and process layouts

Tries to combine efficiency of product layout with versatility

of process layout

Neither objective is achieved perfectly, but it is more efficient

than a process layout and more versatile than a product
layout

Based on principles of group technology

Cellular Layout

A machining cell consisting of two

horizontal machining centers supplied
by an in-line pallet shuttle (photo
courtesy of Cincinnati Milacron).

Cellular Layout

A robotic arm performs

unloading and loading
operation in a turning
center using a dual gripper
(photo courtesy of
Cincinnati Milacron).

Other Combination Layouts

Fixed-position and process layout

Shipyard - ships made in modules

Parts fabricated in process layout

Modules built in fixed-position layout

Fixed-position and product layout

Commercial airplanes (e.g., Boeing 747)

Fabrication begins with fuselage and proceeds through 7

or so stations where specialized workers assemble parts
and modules to airplane

Layout Types for P-Q

Combinations

Project Layout

Usually refers to construction project

Work teams and equipment are brought to the work
site
Layout is temporary because project has scheduled
completion date
Project layout vs. fixed-position layout:

Product is large and heavy

In fixed-position layout, when product is completed, it is
transported away
In project layout, product remains, workers and equipment
are transported away

Mass Production to Lean

Production

The traditional subassembly lines can be redesigned into U-shaped cells as part of the
conversion of mass production to lean production.

New Manufacturing Systems

Toyota Production System

Lean manufacturing system

100% good units flow without interruption
Integrated quality control
Responsibility for quality is given to manufacturing
Constant quality improvement

Order Driven vs. Stock Driven

Manufacturing Systems

Make to stock (MTS)

Assemble to order (ATO)
Make to order (MTO)
Engineer to order (ETO)

Order and Stock Driven

Systems

Make to Stock (MTS)

Customer demand is forecasted for future periods.
Finished goods are produced in large quantities and stored in a
warehouse.
When customer order is received, the item is sold from the stocks
(warehouse).
When the quantity remaining in the stocks falls down under
critical levels, the item is produced again.
Suitable when the demand is large and more or less predictable.
Delivery of the product to the customer is determined by the
availability in the warehouse and the stock replenishment
mechanism.

Order and Stock Driven Manuf.

Systems

Make to Order (MTO)

Products are selected by the customers based on

a catalog of available designs
Manufacturing of the finished good starts only
after the customer order is received
Generally, there are time lags between the
delivery time of the product to the customer and
the time order is placed
Kitchen Furniture

Order and Stock Driven Systems

Assemble to Order (ATO)

Similar to MTO
Products are configured or assembled to
customer order from a set of core subassemblies
or components
Customer makes a contact with the manufacturer
through their sales organization
Laptop computer

Order and Stock Driven Systems

Engineer to Order (ETO)

Customer order requires that a new engineering

design be developed
The product is designed specifically for the needs
of the customer
ETO products are one of a kind products

New Manufacturing
Environment

Increased product diversity

Greatly reduced product life cycles

Environmental impact of manufacturing systems

Changing cost patterns

Changing social expectations

Industrial Revolution

Mechanization is the replacement of human labor by

machine

Automation is replacement of human control of machines by

automatic control

CNC (Computer Numerical Control) Machines

Computer Aided Drawing (CAD)

ERP Systems:

Performs computerized manufacturing operations

Very large scaled information system software which automates

various operational activities in the production system

Robots

Reprogrammable multi-functional manipulator, designed to move

material, parts, tools or specialized devices through variable
programmed motions for the performance of a variety of tasks.

Industrial Engineering Definitons

The engineering approach applied to all factors,

including the human factor, involved in the
production and distribution of products or services

Industrial Engineering is concerned with the design,

improvement and installation of integrated systems
of people, material, equipment and energy. It draws
upon specialized knowledge and skills in the
mathematical, physical and social sciences together
with the principles and methods of enginering
analysis and design to specify, predict and evaluate
the results to be obtained from such systems

Industrial Engineering

Finding ways of utilizing input resources in a

more cost-effective manner

Has been originated out of the need of

businesses and military organizations.

History of Industrial
Engineering

Matthew Bolton and James Watt (around

1795)

Modern, closely integrated factory to produce

steam engines
Standards for detecting waste and inefficiency
Used methods for forecasting, plant location and
layout, wage incentives
100-150 years ahead of their time

History of Industrial
Engineering

Applied economists and industrialists in

England around 1800

Adam Smith specialization of labor

Development of new skills when a single task is

performed
Saving of time lost in changing from one task to another
Invention of new, special-purpose tools and equipment

Charles Babbage

Not necessary to pay for skill levels used only during a

fraction of the total job

History of Industrial
Engineering

Developments in America

Frederick W. Taylor (early 1900s)

The Principles of Scientific Management

Frank and Lillian Gilbreth

Henry Gantt

Gantt chart still used by today as a preliminary

scheduling aid.

History of Operations
Research
World War II
Groups of mathematicians, economists and other
scientists formed in England and in the US
Navy employing more than 70 scientists
Variety of problems such as
radar installations,
search for enemy submarines,
deploy aerial mines in the seas around Japan,
determining optimal size of merchant convoy fleets,
development of maneuver strategies for ships under attack
...

History of Operations
Research

After World War II

Industrial firms in England and the US

attempting to apply it to their operational and
managerial problems
Issues attacked by people such as Taylor and
Gantt being addressed using more
quantitative and systems-oriented procedures

George Dantzig

Development of linear programming

IE OR

Traditional IE and OR can be considered as a

continuum where IE is at one end and OR is
at the other
Traditional IE tends to be more applicable to
problems in a manufacturing environment
OR has a broader scope
OR has more mathematical approaches than
traditional IE

IE vs OR

Somewhat separate histories

Common mission

N. Barish says

Providing effective, efficient answers to questions relating

to design, analysis and evaluation.
OR is the applied science for managerial systems,
whereas IE is the engineering of managerial systems.

Each student will develop their own philosophy of

the relationship between the two areas in time.

Examples of IE/OR
Activities
Description

Determining the most appropriate manufacturing operations and

tooling to use to produce a particular product

Activity

Manufacturing
Processes

Courses
IE262

Setting time standards for various manufacturing jobs, such as

welding two plates together

Work
Measurement

IE271

Designing efficient and effective methods for work tasks

Work Methods

IE271

Engineering
Economy

IE342

Designing the best layout of a facility so that travel distances are

minimized

Facility Layout

IE271 + El

Determining the location of fewest number of fire stations

required to provide a response time of no greater than 5 minutes

Facility Location

Elective

Production
Planning

IE375

Evaluating the economic costs and benefits of one or more

investment alternatives

Determine how much to produce and when to produce

Examples of IE/OR
Activities

Determining the best system for moving goods within a set of

facilities

Material
Handling

IE271

Mathematical
Programming

IE202
IE303

Estimation of average waiting times in front of a bank teller

Queueing

IE325

Determining optimal reorder and order quantities of inventories

Inventory

IE325 + El

Forecasting future demand figures

Forecasting

IE375

Determining the sequence of jobs in order to meet due dates

Scheduling

IE375 + El

Quality Control

IE380

Determining the method of cutting the maximum number of shirt

patterns from a large piece of cloth to minimize scrap

Cutting Stock

IE202 +
Elective

Determining the most efficient procedures of assembling a bicycle

Methods
Improvement

IE271

Mathematical modeling of decision problems involving allocation of

scarce resources, finding optimal solutions

Designing acceptance tests to ascertain a quality level

Industrial Engineering

IE uses engineering concepts, mathematics,

economics, and principles of human behavior
to design and implement more efficient, more
productive systems.

What is more efficient?

What is more productive?
How can you quantify them?

Work

Is our primary means of livelihood

Serves an important economic function in
the global world of commerce
Creates opportunities for social
interactions and friendships
Provides the products and services that
sustain and improve our standard of living

The Nature of Work

Work is an activity in which one exerts

physical and mental effort to accomplish a
given task or perform a duty
Task or duty has some useful objective
Worker applies skills and knowledge for
successful completion
The activity has commercial value
The worker is compensated

The Pyramidal Structure

of Work

Work consists of tasks

Tasks consist of work elements

Work elements consist of basic motion elements

Task

An amount of work that is assigned to a

worker or for which a worker is responsible
Repetitive task as in mass production

Time required = 30 seconds to several minutes

Non-repetitive task performed periodically,

infrequently, or only once

Time required usually much longer than for

repetitive task

Work Element

A series of work activities that are logically

grouped together because they have a
unified function in the task
Example: assembling a component to a base
part using several nuts and bolts
Required time = six seconds or longer

A Work System as a
Physical Entity

Productivity

The level of output of a given process relative to the

level of input
Process can refer to

Individual production or service operations

A national economy

Productivity is an important metric in work systems

because

Improving productivity is the means by which worker

compensation can be increased without increasing the
costs of products and services they produce

Labor Productivity

The most common productivity measure is

labor productivity, defined by the following
ratio:
WU
LPR = LH
where LPR = labor productivity ratio, WU =
work units of output, LH = labor hours of input

Labor Factor in
Productivity

Labor itself does not contribute much to

improving productivity
More important factors:

Capital - substitution of machines for human

labor
Technology - fundamental change in the way
some activity or function is accomplished

Measuring Productivity

Not as easy as it seems because of the

following problems:

Non-homogeneous output units

Multiple input factors

Labor, capital, technology, materials, energy

Price and cost changes due to economic forces

Product mix changes

Relative proportions of products that a company sells

change over time

Labor Productivity Index

Measure that compares input/output ratio
from one year to the next
LPI =

LPRt
LPR b

where LPI = labor productivity index,

LPRt = labor productivity ratio for period t, and
LPRb = labor productivity ratio for base period

Example: Productivity
Measurement

During the base year in a small steel mill,

326,000 tons of steel were produced using
203,000 labor hours. In the next year, the
output was 341,000 tons using 246,000 labor
hours.
Determine: (a) the labor productivity ratio for
the base year, (b) the labor productivity ratio
for the second year, and (c) the productivity
index for the second year.

Example: Solution
(a) In the base year, LPR = 326,000 / 203,000
= 1.606 tons per labor hour
(b) In the second year, LPR = 341,000 /
246,000
= 1.386 tons per labor hour
(c) Productivity index for the second year
LPI = 1.386 / 1.606 = 0.863
Comment: No matter how its measured,
productivity went down in the second year.

Productive Work Content

A given task performed by a worker can be

considered to consist of
Basic productive work content

Theoretical minimum amount of work required to

accomplish the task

Excess nonproductive activities

Extra physical and mental actions of worker

Do not add value to the task
Do not facilitate the productive work content
Take time

Excess Nonproductive
Activities

Can be classified into three categories:

Excess activities due to poor design of product

or service
Excess activities caused by inefficient methods,
poor workplace layout, and interruptions
Excessive activities cause by the human factor

Productivity

Productivity measures the capability of

processing inputs to convert to outputs.
It simply measures how much output is
produced relative to the inputs of labor,
capital (plant and equipment), and technology
A process may be productive but may not be
efficient

Efficiency

Efficiency denotes the maximum utilization on ones

given resources
Efficiency is generally a relative term, used for
comparison. Its focus is on the best utilization of
resources.
Elimination of some adjacent bank branches as a
result of merge of two banks would attain greater
efficiency, while a termination of employment due to
teller machines would cause greater productivity.

Standard Time-Based Performance

Index

100 employees produce 5000 units of a given

product in one day. The productivity is 50
units/employee per day.

Standard time to assemble:

a grinder=2min/unit;
an operator assembles 275 grinders/day,
work duration is 8 hrs/day (480 min/day).
Performance Index = (2*275)/480 = 114.6 %

Factors that facilitate

productivity improvement:

Technological Innovation:

faster machines, eliminate heavy physical work

and repetitive operations
increased capital investment, complex machinery,
skilled operators

Effective Management

Employee motivation, better marketing, etc.

Questions we will deal with in

this course:

How is work done?

What is a better way of doing it? (Setup times,
loading/unloading, inspection, actual operations)
How long does the work take to complete?
What is the frequency of work?
We will use

Work Study: Time Study (Taylor) and Motion Study

(Gilbreths)
Plant Layout

Work Study for Increased

Productivity

Motion Study
Eliminate unnecessary work
Design efficient and effective methods and
procedures most suitable to the employees

Time Study

Measurement of work to determine standard

times.