Production and Operations Management: Manufacturing and Services

1
Chapter 6
Manufacturing - ProcessSelection and
Design Impact on C, Q, S, F, S, G
.
2
Types of Manufacturing Processes (subset of OM
Transformations).

• Conversion - iron ore to iron, mixtures to steel,
  crude oil to gas, etc.
• Fabrication - blue beads to pen tops.
• Assembly - parts to assemblies.
• Testing - in-house or on-site testing.

3
Process Flow StructuresFlow of Product or Service

• Job shop/ Unit Production
• Batch/ Process Departments
• Assembly Line/ Product Departments
• Continuous Flow/ Process Industries

4
PROCESS FLOW CONTD

• UNIT/JOB SHOP One of a Kind, Custom Tools,
  Buildings, Software, Research Projects, Exclusive
  Restaurants
• BATCH Furniture, Clothes, Most Plastic Parts,
  Many Photo Shops
• MASS Autos, BIC pens, Consumer Electronics,
  One-Hour Photos, Fast Food Restaurants
• CONTINUOUS PROCESS Chemicals, Primary
  Materials, Petroleum, Lumber

5
INTERMITTENT CONTINUOUS

• INTERMITTENT PROCESSES
• UNIT
• BATCH
• CONTINUOUSE PROCESSES
• MASS ASSEMBLY LINE
• CONTINUOUS PROCESS

6
PROCESSES PRODUCT POSITIONING

• Engineer To Order
• Make To Order
• Assemble To Order
• Make to Stock
• ETO - MTO- ATO- MTS
• Function of Competitive/Corp. Strategy,
  Homogeneity of Product, Price, Quality, Speed,
  Flexibility, and Service.

7
Product-Process Matrix MAKE TO ORDER MAKE TO
STOCK

• INTERMITTENT
• CONTINUOUS

8
GOING FROM INTERMITTENT TO CONTINUOUS WHAT
HAPPENS TO

• INVESTMENT UP OR DOWN
• BREAK EVEN QUANTITY
• UNIFORMITY OF QUALITY
• COST/UNIT
• DIRECT LABOR/UNIT
• AUTOMATION
• SPECIAL PURPOSE EQUIP.
• STD. SPEC. SIMPL.

9
GOING FROM INTERMITTENT TO CONTINUOUS

• COMPLEXITY OF DAY-TO-DAY OPERATIONS
• CUSTOMIZATION
• OPERATOR SKILL
• QUALITY OF PRODUCTS
• RISK
• IN-PROCESS INVENTORIES
• FLEXIBILITY
• TIME SPENT ON SYSTEM DESIGN

10
Exhibit 5.9
Source Modified from Robert Hayes and Steven
Wheelwright, Restoring Our Competitive Edge
Competing through Manufacturing (New York John
Wiley Sons, 1984). p. 209.
13
11
ABOVE THE DIAGONAL

• Flexibility/Variety is Higher
• Costs are Higher
• OK with low volume markets
• OK when high customization is necessary
• Threats
• A competitor can undercut you
• Risky when high volume can be stimulated through
  price competition

12
BELOW THE DIAGONAL

• Costs are lower
• Automation is higher
• Greater investment
• Threats
• Greater market risk what do you do with an
  automated highly specialized plant when demand
  decreases?
• Competition may match costs with greater product
  variety.

13
Virtual Factory

• Shift from centralized production to .......
  an integrated network of capabilities
• For example some of Sonys Products are
  fabricated and assembled by suppliers - not in
  Sony facilities. How about Sears?

14
14
Virtual Factory Defined
A virtual factory can be defined as a
manufacturing operation where activities are
carried out not in one central plant, but in
multiple locations by suppliers and partner firms
as part of a strategic alliance.