Objectives, Measures and Controls

1
Chapter 6
A Science of Manufacturing
2
Factory Physics

• Simply provides the relationship between
• Cycle Time
• Throughput Rate
• Inventory
• Customer Service
• Capacity
• Variability
• Etc

3
Factory Physics

• How?
• Through
• Data
• Fact Based Analysis
• System and Process Analysis
• Modeling
• Descriptive models describes the current
  system
• Prescriptive models optimizes design or
  control of production

4
Systems Analysis A Generic Methodology

• Definition Systems analysis is a structured
  approach to problem-solving that involves
• 1. Identification of objectives (what you want to
  accomplish), measures (for comparing
  alternatives), and controls (what you can
  change).
• 2. Generation of specific alternatives.
• 3. Modeling (some form of abstraction from
  reality to facilitate comparison of
  alternatives).
• 4. Optimization (at least to the extent of
  ranking alternatives and choosing best one).
• 5. Iteration (going back through the process as
  new facets arise).

5
Automobile Design

• Requirements
• Mass of car of 1000 kg
• Acceleration of 2.7 meters per second squared
  (zero to 60 in 10 seconds)
• Engine with no more than 200 Newtons of force
• Can we do it?
• Answer

No way!
F ma 200 Nt ? (1000 kg) (2.7 m/s2) 2,700 Nt.
6
Factory Design

• Requirements
• 3000 units per day,
• with a lead time of not greater than 10 days,
• and with a service level (percent of jobs that
  finish on time) of at least 90.
• Can we do it?
• Answer

?
Who knows?
7
Factory Tradeoff Curves
8
System Analysis Paradigm
REAL WORLD
ANALOG WORLD
OPERATIONS ANALYSIS
Conjecture Objectives Verify constraints Identify
Alternatives
Choose Measures of Effectiveness Specify
Parameters and Controls Model Interactions Verify
Validate Model
SYSTEMS DESIGN
Compare Alternatives Choose Policies Ask What
If Questions
Compare Controls Optimize Control
Levels Sensitivity Analysis
Implement Policies Train Users Fine Tune System
IMPLEMENTATION
EVALUATION
Evaluate System Performance Look For
Oversights Identify Future Opportunities
Validate Model Predictions Question
Assumptions Identify Other Controls
9
General Measures and Objectives

• Fundamental Objective
• elementary starting point
• source of agreement
• example - make money over the long-term
• Hierarchy of Objectives
• more basic objectives that support fundamental
  objective
• closer to improvement policies
• Tradeoffsobjectives conflict
• we need models

10
Hierarchical Objectives
High Profitability
Low Costs
High Sales
Low Unit Costs
Quality Product
High Customer Service
High Throughput
High Utilization
Low Inventory
Many products
Fast Response
Less Variability
More Variability
High Inventory
Low Utilization
Short Cycle Times
11
Corporate Measures and Objectives

• Fundamental Objective Maximize the wealth and
  well-being of the stakeholders over the long
  term.
• Financial Performance Measures
• 1. Net-profit.
• 2. Return on investment.
• Components
• 1. Revenue.
• 2. Expenses.
• 3. Assets.

12
Plant Measures and Objectives

• Measures
• Throughput product that is high quality and is
  sold.
• Costs Operating budget of plant.
• Assets Capital equipment and WIP.
• Objectives
• Maximize profit.
• Minimize unit costs.
• Tradeoffs we would like (but cant always have)
• Throughput
• Cost
• Assets

13
Systems Analysis Tools

• Process Mapping
• identify main sequence of activities
• highlight bottlenecks
• clarify critical connections across business
  systems
• Workshops
• structured interaction between various parties
• many methods Nominal Group Technique, Delphi,
  etc.
• roles of moderator and provocateur are critical

14
Systems Analysis Tools (cont.)

• Conjecture and Refutation
• promotes group ownership of ideas
• places critical thinking in a constructive mode
• everyday use of the scientific method
• Modeling
• always done with specific purpose
• value of model is its usefulness
• modeling is an iterative process

15
Process Mapping Activities

• Purpose understand current system by
• identifying main sequence of activities
• highlighting bottlenecks
• clarifying critical connections across business
  system
• Types of Maps
• Assembly Flowchart diagram of activities to
  assembly product.
• Process Flowchart diagram of how pieces of
  system interrelate in an organization.
• Relationship Map diagram of specific steps to
  accomplish a task, without indication of
  functions or subsystems.
• Cross-Functional Process Map diagram of specific
  steps to accomplish a task organized by function
  or subsystem responsible for the step.

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Sample Assembly Flowchart
CELL 1
START
PANASERT 1050
ROBOT 1100
CIM FLEX 1250
ROBOT 1150
ROBOT 1200
ROBOT 1300
ROBOT 1350
ROBOT 1375
ROBOT 1380
SOLDER STATION 1000
DECODER SINGULATION ROBOT 1500
RECEIVER SINGULATION ROBOT 1750
LASER TRIM 1775
CELL 2
EOL TEST 1550
UNIX CELL CONTROLLER
TEST BAY
LEGEND
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Process Flowchart for Order Entry
Generate Standard Layout Plan
Receive Customer Order Form
Customer Approval?
No
Yes
Review Plan/Lists
Generate Parts Lists
Approval?
No
Yes
Enter Parts Lists into System
End of Bucket?
No
Yes
Generate Cutting Orders
18
Sample Relationship Map
Operating departments make independent decision
Production Control - controls work flow
Warehouse
Customers
Production control
Salesmen
Order Processing
Production Scheduling
Design
Fabricating
Finishing
Shipping
Salesman controls the order processing and design
flow
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Sample Cross-Functional Process Map
Customer needs observed
Field support needs reviewed
Field support planned
Field Offices
Market opportunity defined
New product evaluated
Price and distribution options reviewed
Price point set
Roll-out planned
Marketing
New product concept floated
New product prototype developed
Final product engineered
Engineering
Process feasibility review and cost estimating
Tooling and capacity planned
Production readiness planned
Manufacturing
Production
TIME
20
Conclusions

• Science of Manufacturing
• important for practice
• provides a structure for OM education
• Systems Approach
• one of the most powerful engineering tools
• a key management skill as well (e.g.,
  re-engineering)
• Modeling
• part, but not all, of systems analysis
• key to a science of manufacturing