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A Production Process: Many models out of one Platform
3

OPERATIONS MANAGEMENT  Volkswagen’s Premium Platform Electric (P P E) is shared between Audi

and Porsche uses 800V battery, single and dual motor configurations,
LECTURE -3 differential torque vectoring drive, air suspension and all wheel
steering. Computerized car management such as: throttle and break
controls, navigation, media, automatic/assisted steering.
MANUFACTURING
 Building the P P E may be thought of as a crucial production process
PROCESSES step that helps produce Porsche and Audi, allowing each to introduce
different lineups of sedans and SUV quickly at low cost . Outwardly
the vehicles are very different, but most everything inside are the
same.
Chapter 6 1- 1

Volkswagen’s Premium Platform Electric (PPE) and Vehicles Goods and Services
4

 Product and service choices, capacity planning, process selection, and

layout of facilities are among the most basic decisions managers make
because they have long-term consequences for business organizations,
and they impact a wide range of activities and capabilities.

 Processes convert inputs into outputs; they are at the core of operations
management. But the impact of process selection goes beyond operations
management: It affects the entire organization and its ability to achieve
its mission, and it affects the organization’s supply chain.
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 Production Processes Production Process Terms

 Production processes are used Positioning inventory in the supply chain  Lead time – the time needed to respond to a customer order
to make any manufactured  Customer order decoupling point – where inventory is
item positioned to allow entities in the supply chain to operate
 Step 1 – Source the parts independently
needed
 Lean manufacturing – a means of achieving high levels of
 Step 2 – Make the product

 Step 3 – Deliver the product

customer service with minimal inventory investment

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Types of Firms Make-to-Stock

8

 Make-to-Stock  Examples of products

 A production environment where the customer is served “on-demand” from  Televisions
finished goods inventory.  Clothing
 Packaged food products
 Assemble-to-Order
 Essential issue in satisfying customers is to balance the level of inventory
 Preassembled components, subassemblies, and modules are put together in against the level of customer service
response to a specific customer order.  Easy with unlimited inventory, but inventory costs money
 Make-to-Order  Trade-off between the costs of inventory and level of customer service must be
made
 The product is built directly from raw materials and components in response to
a specific customer order.  Use lean manufacturing to achieve higher service levels for a given
inventory investment
 Engineer-to-Order
 Firm works with the customer to design and then make the product. Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution
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 Assemble-to-Order Configuring a DELL Computer
 A primary task is to define a customer’s order in terms of alternative
components, since these are carried in inventory
 An example is the way Dell Computer makes their desktop computers
 One capability required is a design that enables as much flexibility as
possible in combining components
 There are significant advantages from moving the customer order
decoupling point from finished goods to components
 Wide variety of finished goods combinations can be built from a set
of components
𝟏 𝟐 𝒏 𝟏 𝒏
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Make-to-Order/Engineer-to-Order Production Process Mapping

 Boeing’s process for making commercial aircraft is an example  Develop a high-level map of a supply chain process
 Customer order decoupling point could be in either raw  Useful to understand how material flows and where inventory is held
materials at the manufacturing site or the supplier inventory  First step in analyzing the flow of material through a production
process
 Depending on how similar the products are it might not even be

possible to pre-order parts

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 Inventory Measures Little’s Law
 Total average value of inventory – The total investment in inventory at the  The flow of items through a production process can be
firm
 Raw materials
described using Little’s Law
 Work-in-process  Inventory = Throughput rate × Flow time
 Finished goods
 Inventory – materials held by the firm for future use
Commonly tracked in accounting systems and reported in financial statements
 Throughput – long-term average rate that items are flowing
 Inventory turn – An efficiency measure where the cost of goods sold is through the process
divided by the total average value of inventory
 Days-of-supply – A measure of the number of days of supply of an item (the  Flow time – time for a single unit to to completely flow
inverse of inventory turn scaled to days) through the entire process
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Little’s Law 2 Little’s Law 3

17

Example : Car Batteries An automobile company assembles cars in a plant and purchases Solution:
batteries from a vendor in China. The average cost of each battery is $45. The automobile
company takes ownership of the batteries when they arrive at the plant. It takes exactly 12 We can split this into two inventories: work-in-process and raw material.
hours to make a car in the plant, and the plant assembles 200 cars per 8-hour shift For the work-in-process, Little’s law can be directly applied to find the amount of
(currently, the plant operates one shift per day). Each car uses one battery. The company work-in-process inventory: Inventory = Throughput × Flow time.
holds, on average, 8,000 batteries in raw material inventory at the plant as a buffer.
Throughput is 200 cars/shift(8 hrs.) or 25 cars per hour and one battery per car
Assignment:
it is 25/hr.
a. Find the total number of batteries in the plant on average (in work-in-process at the
plant and in raw material inventory). Flow time is 12 hours.
b. How much are these batteries worth? Inventory = Throughput rate × Flow time
c. How many days of supply are held in raw material inventory on average? Work-in-process inventory = 25 × 12 = 300 batteries.
 Little’s Law 4 Process Selection

Raw material inventory: 8000 batteries Process selection refers to the strategic decision of selecting which kind of
production processes to use to produce a product or provide a service.
Total Inventory = 8000+300 = 8300 batteries.
At a cost of $45 / battery,
Process selection and facility layout are closely tied, Process selection
Values of total inventory = 8300*45 = $373500.
refers to deciding on the way production of goods or services will be
Days of supply of Raw material inventory = 8000/200 = 40 days supply. organized. It has major implications for capacity planning, layout of
facilities, equipment, and design of work systems. Process selection
Assuming first in first out for batteries, it will take 40 days for a typical occurs as a matter of course when new products or services are being
battery to flow through the raw material inventory to become work in planned.
process.) Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or
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Organization of Production Processes Product-Process Matrix

20

• Project – the product remains in a fixed location; equipment is

moved to the product.
• Workcenter (job shop) - similar equipment or functions are
grouped together.
• Manufacturing cell - a dedicated area where products that are
similar in processing requirements are produced.
• Assembly line - work processes are arranged according to the
progressive steps by which the product is made.
• Continuous process – (assembly line only) the flow is continuous,
such as with liquids. Copyright ©2020 McGraw-Hill Education. All rights reserved. No reproduction or
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 Production System Design An Example of a Project Layout
Project Layout
• The product remains in a fixed location
• Labor, material, and equipment are moved to the product
• A project layout may be developed by arranging materials according to their
assembly priority.
Workcenter Layout
• Most common approach to developing this type of layout is to arrange
workcenters in a way that optimizes the movement of material
• Optimal placement often means placing workcenters with high levels of
interdepartmental traffic adjacent to each other
• Sometimes is referred to as a job shop and is focused on a particular type of
operation
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A Workcenter Production System Design

Manufacturing Cell Layout
• A dedicated area where products that are similar in process requirements are
produced
• Cells are designed to perform a specific set of processes
• Dedicated to a limited range of products

Assembly Line and Continuous Process

• Area where an item is produced through a fixed sequence of workstations, designed

to achieve a specific production rate
• A process that converts raw materials into finished product in one contiguous process
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 A Manufacturing Cell An Example of Continuous Process

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An Assembly Line Manufacturing Cell Development Workcenter layout –

similar machines
grouped together

1. Group parts into

families that follow a
common sequence of
steps.
2. Identify dominant flow
patterns for each part
family
3. Machines and the
associated processes
are physically
regrouped into cells
Exhibit 6.4
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 Reallocating Machines Assembly Line Design

 Workstation cycle time - a uniform time interval in which a

moving conveyor passes a series of workstations
 Also the time between successive units coming off the line
Manufacturing cells are  Assembly-line balancing - assigning all tasks to a series of
formed according to part
family processing workstations so that the required cycle time is met, and idle time
requirements
is minimized
 Precedence relationship - the order in which tasks must be

performed in an assembly process

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Assembly-Line Balancing Assembly-Line Balancing

1. Specify the sequential relationships among tasks using a 5. Assign tasks (one at a time) to the first workstation until no more
precedence diagram. tasks can be added (due to cycle time or sequencing constraints).
2. Determine the required workstation cycle time (C). Repeat for all subsequent workstations until all tasks are assigned.

3. Determine the theoretical minimum number of workstations (Nt). 6. Evaluate the efficiency of the balance
sum of task times
Efficiency of the balance 
 #of work stns  Cycle time 
4. Select a primary rule to assign tasks to workstations and a
secondary rule to break ties. 7. If efficiency is unsatisfactory, rebalance using a different rule.
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 Cycle Time Example Assembly Steps and Times – Example

Suppose you had to produce 600 units in 80 hours to meet the demand Assembly-Line Balancing The Model J Wagon is to be
requirements of a product. What is the cycle time to meet this demand assembled on a conveyor belt. Five hundred wagons are
requirement? required per day. Production time per day is 420
minutes, and the assembly steps and times for the wagon
Answer: There are 4,800 minutes (60 minutes/hour x 80 hours) in 80 are given in next slide:
hours. So, the average time between completions would have to be:
Cycle time = 4,800/600 units = 8 minutes.

6 - 34

Assembly Steps and Times – Example Example: Assembly Line Balancing (Cont.)
Task Time (in Tasks That must
Task seconds) Description Precede
a) Draw the precedence/schematic diagram.
A 45 Position rear axle support and hand fasten four screws to nuts. - b) What is the required cycle time to meet 500 wagons per day based on
B 11 Insert rear axle. A 420-minute work days?
C 9 Tighten rear axle support screws to nuts. B c) What is the theoretical minimum number of workstations required to meet
D 50 Position front axle assembly and hand fasten with four screws to -
nuts. 500 wagons per day based on 420-minute work days?
E 15 Tighten front axle assembly screws. D
F 12 Position rear wheel #1 and fasten hubcap. C
d) Use the largest number of following tasks as the primary rule, and as a tie
G 12 Position rear wheel #2 and fasten hubcap. C breaker use the longest-task-time rule to balance the line in the minimum
H 12 Position front wheel #1 and fasten hubcap. E number of workstations to produce 500 wagons per day.
I 12 Position front wheel #2 and fasten hubcap. E
Position wagon handle shaft on front axle assembly and hand
e) What is the efficiency of the line balance derived in question (d)?
J 8 F, G, H, I
fasten bolt and nut.
Copyright
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195
 Example: Assembly Line Balancing (Cont.) Example: Assembly Line Balancing (Cont.)

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Precedence Graph – Example 6.2 How to calculate Task to Follow:

ALWAYS
For Task A:
Round Up
Even if you get Count the one which are shaded
3.0001 then still it
will be rounded up So A is having 6 Tasks to follow
to 4.

𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐓𝐢𝐦𝐞 𝐩𝐞𝐫 𝐃𝐚𝐲 60 sec min × 420 min. 25,200 sec
𝑪= = = = 50.4 sec wagon
𝐎𝐮𝐭𝐩𝐮𝐭 𝐩𝐞𝐫 𝐃𝐚𝐲 500 wagons 500 wagons
𝑻
𝑵𝒕 = 𝑪 = .
= 3.87 = 4 (rounded up)

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 How to calculate Task to Follow: How to calculate Task to Follow:

For Task B: For Task H:

Count the one which are shaded Count the one which are shaded

So A is having 5 Tasks to follow So A is having 2 Tasks to follow

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Task to Follows: Steps in Balancing:

Task/s to
Rules: Task Follow
A 6
B 5
Primary: Largest Number of C 4 Task
Task/s to
Follow
following Tasks D 5 A
B
6
5
E 4 C 4
D 5
F 2
Secondary: Longest Task Time G 2
E
F
4
2
G 2
H 2 H 2
I 2 I 2
J 1
J 1 K 0
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 Steps in Balancing: Steps in Balancing:

Task/s to Task/s to
Task Follow Task Follow
A 6 A 6
B 5 B 5
C 4 C 4
D 5 D 5
E 4 E 4
F 2 F 2
G 2 G 2
H 2 H 2
I 2 I 2
J 1 J 1
K 0 K 0
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Steps in Balancing: Steps in Balancing:

Task/s to Task/s to
Task Follow Task Follow
A 6 A 6
B 5 B 5
C 4 C 4
D 5 D 5
E 4 E 4
F 2 F 2
G 2 G 2
H 2 H 2
I 2 I 2
J 1 J 1
K 0 K 0
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 Prioritize Tasks – Example Efficiency – Example

Prioritize tasks based on the Prioritize tasks in order of

largest number of following longest task time.
tasks.

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SAME Problem but with Changed Rule SAME Problem but with Changed Rule

Task/s to
Rules: Task Follow
A 6
B 5
C 4 Task/s to
Primary: Longest Task Time D 5
Task
A
Follow
6
E 4 B 5
C 4
F 2
Secondary: Largest Number of G 2
D
E
5
4
following Tasks H 2 G
F 2
2
I 2 H 2
I 2
J 1 J 1
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 SAME Problem but with Changed Rule Reducing Task Time Possibilities

 Split the task – Can we split the task so that complete units are
processed in two workstations?
 Share the task – Can the task be shared so an adjacent workstation

Task
Task/s to
Follow
does part of the work?
A 6
 Use parallel workstations
B 5
C 4
 Use a more skilled worker
D 5
E 4
 Work overtime
F 2
G 2
 Redesign – It may be possible to redesign the product to reduce the
H 2
I
J
2
1
task time
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Flexible Line Layouts Flexible Line Layouts

Problem: Operators caged. No chance Solution: Operators can trade elements of Problem: Operators birdcaged. No
to trade elements of work between work. Can add and subtract operators. chance to increase output with a third
them. operator.

Solution: Operators can help each

other. Might increase output with a
third operator.
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 Flexible Line Layouts Example: Assembly Line Balancing
The following tasks must be performed on an assembly line in the sequence and times specified:

Task Task Time (seconds) Tasks that must

precede
A 50 ---

Problem: Straight line is difficult to

B 40 ---
balance. C 20 A
Solution – U-line gives better operator
access and may reduce number of D 45 C
operators. Here, five operators are E 20 C
reduced to four.
F 25 D
G 20 E

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H 35 B, F,G
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Example : Assembly Line Balancing (Cont.)

a) Draw the schematic diagram.
b) What is the required cycle time to meet 400 units per day based on 8-
hour workdays?
c) What is the theoretical minimum number of workstations required to
meet a forecast demand of 400 units per eight –hour days?
d) Use the longest-task-time rule and balance the line in the minimum of
workstations to produce 400 units per day.
e) What is the efficiency of the line balance derived in question (d)?

6 - 60