Chapter 2

Processes Planning and Design

Copyright 2013 John Wiley & Sons, Inc.

Overview

2-2
 Louis Vuitton
• Needs to produce exclusive products in
volume
– While maintaining high quality
• Historically used a job shop
• Currently uses many robots
• Also uses cellular manufacturing

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 IBM’s Charlotte, NC Plant
• Assembly line produces 27 significantly
different products
• Uses only 40 workers
• Products include hand-held bar-code scanners,
portable medical computers, fiber-optic
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
• Pioneer in using the virtual organization
• Only two of editorial production company’s
employees work at headquarters in New Jersey
• Art director works in Arizona
• Editors are located in Florida, Georgia,
Michigan, and the District of Columbia
• Freelancers even more scattered
• Internet and AOL used to coordinate work

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 Martin Marietta
• Has a manufacturing facility in Denver
• 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
– A 50 percent reduction in WIP
– A 21 percent reduction in lead times
– A 90 percent reduction in overtime

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 Variety of Transformation
Systems

• Louis Vuitton factory has primarily a

cellular production process
• 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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 Forms of Transformation
Systems
• 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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 Five Basic Forms of
Transformation Systems
1. Continuous process
2. Flow shop
3. Job shop
4. Cellular
5. Project

Slide on each of these 2-11

 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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 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

Figure 2.1 2-16

 Advantages of the Flow Shop
• Low unit cost
– Specialized high volume equipment
– Bulk purchasing
– Lower labor rates
– Low in-process inventories
• Less skilled operators used
• Fewer supervisors are needed
• 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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 Layout of the Flow Shop
• 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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Balancing the Production Line
• Needs tasks, times, and precedence
information
• Used to construct a precedence diagram
• Intent is to find a cycle time in which each
workstation can complete it tasks
– Also known as takt time
• Tasks are grouped for each workstation
• Efficiency is computed
• Will see using an example

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 Line Balancing Formulas
available work time
Cycle time 
demand

Number of theoretic al workstati ons, N T

N T   task times /cycle time

output total task time

Efficiency = 
input ( N A stations)  cycle time

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 Tasks in Credit Application
Processing

Table 2.1 2-23

 Precedence Diagram for Credit
Applications

Figure 2.2 2-24

 Line Balancing Data
• Company operates one shift per day
• Company works eight hours per shift
• Company wishes to process 1,200
applications per day

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 Cycle Time and NT Calculations

8 hr  60 min/hr
Cycle time   (0.4 min/applic ation)
1,200 applicatio ns

1.9
NT   4.75  5
0.4

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 Station Task Assignment

Table 2.2 2-27

 Station Assignments

output 1.9
Efficiency    95 percent
input 5  0.4
Figure 2.3 2-28
 Job Shop
• Each output, or small batch of outputs is
processed differently
• High variety - low volume
• Considerable amount of transport of
staff, material, or recipients
• Large variations in system flow times
• Equipment and staff grouped based on
function

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 A Generalized Job Shop
Operation

Figure 2.4 2-30

 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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 Layout of the Job Shop
• Layout is one of the most crucial
elements affecting efficiency for a job
shop
• The layout problem is complex
– Mainly due to variety of outputs
• Layout based on how important (or
unimportant) it is to have two
workstations near each other

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 Directly Specified Closeness
Preferences

Table 2.3 2-35

 Closeness Preferences Layout
(a) Initial and (b) Final

Figure 2.5 2-36

Cost-Volume-Distance Model
• Desirability of closeness based on
movement cost
• Objective is to minimize the cost of
moves
• Total cost is calculated by the equation
below
• Useful for a first draft of the layout
N N
TC =  C V D
i=1 j=1
ij ij ij
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 Cellular Production
• 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

2-38
 Conversion of a Job Shop Layout
to a Cellular Layout

Figure 2.7 2-39

 Organization of Miscellaneous
Parts into Families

Figure 2.8 2-40

 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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 Methods of Cell Formation
• With production flow analysis (PFA) families
are determined by evaluating resource
requirements
• Outputs needing same resources are grouped
into a family
• Then cluster resources to make that family
• Essence of PFA is to determine the resource-
output matrix and use to identify outputs with
common resource requirements

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 Original Machine-Part Matrix

Table 2.5 2-46

 Reordered Matrix

Table 2.6 2-47

 General Guidelines for
Reordering The Matrix by PFA
• Incompatible resources should be in
separate cells
• Each output should be produced in only
one cell
• Any investment in duplicate resources
should be minimized
• The cells should be limited to a
reasonable size

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 Project Operations
• Large scale
• Finite duration
• Non-repetitive
• Multiple interdependent activities
• Offers extremely short reaction times

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 Selection of a Transformation
System
• The five systems are simplified extremes of
what is observed in practice
– Few firms use one of the five forms in a pure sense
– Most use a hybrid
• Services are typically job shops
– Recent focus on mass production of service
• Problem is to decide what processing form is
best for the organization long term

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 Considerations of Volume and
Variety
• 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

Figure 2.9 2-52

 Product and 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
organization’s focus

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 Selection of Transformation
System by Stage of Life Cycle

Figure 2.10 2-54

 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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 The Service Matrix

Figure 2.12 2-56

 Service Gaps
• It is useful to inspect the service design
for gaps between customer needs and
what provider is offering
• This allows provider to control quality,
productivity, cost, and performance
• Can help identify a competitive
advantage

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 Service Guarantees
1. Must be meaningful to the customer
2. Must be unconditional
3. Must be easy to communicate and easy
to understand
4. Must be easy to use

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