???????????????? (Production Management)

1
????????????????(Production Management)

• ??.??.?????? ????
• ????????????????????????
• ????????????????? ????????????????

2
???????????????????????

• ??????? ??????? ????????????????????????????????
• ????????????????????????????
  ??????????

3
Definition of Production Management

• Production management deals with the decision
  making related to production process of that the
  resulting goods and service is produced according
  to specifications in the amounts and at the
  scheduled demanded and at minimum cost

4
??????????????????????? cont.

• ??????????????? ??????? ??????????????????????????
  ??????????????????????????????????????? ?
  ?????????????????????????????????? ????
  ?????????????
• ??????????????????????????????? Value Chain
• ???????????????? ?????????????????????????????????
  ?????????????????????????????????
  ????????????????????????????? ????????????????????
  ?????????? ?????????????????????????

5
Functions of Production Management

• 1. Production planning
• 2. Production control2
• 3. Factory building
• 4. Provision of plant services
• 5. Plant layout

6
Functions of Production Management

• 6. Physical Environment
• 7. Method study
• 8. Inventory control
• 9. Quality control
• 10. Product department

7
??????????????????????? cont.

• ?????????????????????????? ????????????????
• ????????? ?????????????????? ??????????????????
  ????????? Layout ????????????
• ????????????????????????? ????????????????
  ????????????????????????? ??????????????????
  ???????????????????? ???????
• ??????????? ????????????????????
  ??????????????????????????

8
Productivity

• ???????????????/ ???????/ ????????????? ???????
  P
• P Output/Input
• Single Factor Productivity ??????? Output
  ?????????????? Input 1 ???
• Multi-Factor Productivity ??????? Output
  ?????????????? Input ???????

9
Productivity cont.

• ???????? ??????????????????? 500 ????/??? ??? 8
  ??????????????? ??????????????????? 2 ??????????
  ?????? 30 ????????????? ?????????? ? 760
  ????????? ???????????????????????????????????????
  ?????????????????????? 8 ????????????? ???? 11
  ????????????? (????????????????????????)
  ??????????????????????????????????????????????????
  ???????? 800 ?????????? ?????????? ? ??????????
  760 ????????????? 870 ?????????

10
Productivity cont.

• Single Factor Productivity
• Productivity ????
• Labor cost Productivity 500/(830)
• 
  2.08 units/baht
• Productivity ????
• Labor cost Productivity
  800/(1130)
• 
  2.42 units/baht
• Productivity ??????????????? 16.36

11
Productivity cont.

• Multi- Factor Productivity
• Productivity ????
• Labor cost Productivity 500/(8305002760
  )
• 
  0.25 units/baht
• Productivity ????
• Labor cost Productivity
  800/(11308002870)
• 
  0.286 units/baht
• Productivity ??????????????? 14.3

12
Productivity cont.

• Productivity ??????????????????????
• ??????????????????? ?????????????????????????????
  ?????????????????????????? 2 ?????????????? 3
  ?????????? ?????????????????????????????????
• Productivity ????
• Labor cost Productivity
  800/(11308003870)
• 
  0.222 units/baht
• Productivity ?????????? 11.1

13
Value Chain

• set of activities that create and deliver
  products to customer

14
Strategic Decisions ??????????????????????

• Goods and service design
• Quality
• Process and capacity design
• Location selection
• Layout design
• Human resource and job design
• Supply-chain management
• Inventory
• Scheduling
• Maintenance

15
?????????????????????????
16
????????????????????????? cont.
17
????????????????????????? cont.
18
?????????????????????Demand Forecast
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What is Forecasting?

• Process of predicting a future event
• ?????????????????????????????????????

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Forecasting Time Horizons

• Short-range forecast
• Up to 1 year, generally less than 3 months
• Purchasing, job scheduling, workforce levels, job
  assignments, production levels
• Medium-range forecast
• 3 months to 3 years
• Sales and production planning, budgeting
• Long-range forecast
• 3 years
• New product planning, facility location, research
  and development

21
Distinguishing Differences

• Medium/long range forecasts deal with more
  comprehensive issues and support management
  decisions regarding planning and products,
  plants and processes
• Short-term forecasting usually employs different
  methodologies than longer-term forecasting
• Short-term forecasts tend to be more accurate
  than longer-term forecasts

22
???????????????????????????????????????

• Human Resources Hiring, training, laying off
  workers
• Capacity Capacity shortages can result in
  undependable delivery, loss of customers, loss of
  market share
• Supply-Chain Management Good supplier relations
  and price advance

23
The Realities!

• Forecasts are seldom perfect
• Most techniques assume an underlying stability in
  the system
• Product family and aggregated forecasts are more
  accurate than individual product forecasts

24
Forecasting Approaches
Qualitative Methods

• Used when situation is vague and little data
  exist
• New products
• New technology
• Involves intuition, experience
• e.g., forecasting sales on Internet

25
Forecasting Approaches
Quantitative Methods

• Used when situation is stable and historical
  data exist
• Existing products
• Current technology
• Involves mathematical techniques
• e.g., forecasting sales of color televisions

26
Forecasting Approaches
Quantitative Methods

• Used when situation is stable and historical
  data exist
• Existing products
• Current technology
• Involves mathematical techniques
• e.g., forecasting sales of color televisions

27
Overview of Qualitative Methods

• Jury of executive opinion
• Pool opinions of high-level executives, sometimes
  augment by statistical models
• Delphi method
• Panel of experts, queried iteratively

28
Overview of Qualitative Methods

• Sales force composite
• Estimates from individual salespersons are
  reviewed for reasonableness, then aggregated
• Consumer Market Survey
• Ask the customer

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Jury of Executive Opinion

• Involves small group of high-level managers
• Group estimates demand by working together
• Combines managerial experience with statistical
  models
• Relatively quick
• Group-thinkdisadvantage

30
Overview of Quantitative Approaches

1. Naive approach
2. Moving averages
3. Exponential smoothing
4. Trend projection
5. Linear regression

31
Time Series Forecasting

• Set of evenly spaced numerical data
• Obtained by observing response variable at
  regular time periods
• Forecast based only on past values
• Assumes that factors influencing past and present
  will continue influence in future

32
Moving Average Example
(12 13 16)/3 13 2/3 (13
16 19)/3 16 (16 19 23)/3 19 1/3
33
Exponential Smoothing
New forecast last periods forecast a (last
periods actual demand last periods
forecast)
Ft Ft 1 a(At 1 - Ft 1)
where Ft new forecast Ft 1 previous
forecast a smoothing (or weighting)
constant (0 ? a ? 1)
34
Exponential Smoothing Example
Predicted demand 142 Ford Mustangs Actual
demand 153 Smoothing constant a .20
35
Exponential Smoothing Example
Predicted demand 142 Ford Mustangs Actual
demand 153 Smoothing constant a .20
36
Exponential Smoothing Example
Predicted demand 142 Ford Mustangs Actual
demand 153 Smoothing constant a .20
New forecast 142 .2(153 142) 142
2.2 144.2 144 cars
37
Trend Projections
Fitting a trend line to historical data points to
project into the medium-to-long-range
Linear trends can be found using the least
squares technique
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Common Measures of Error
39
??????????????????? (Aggregate Planning)
40
???????????????????

• ??????????????????????????????????????????????????
  ??????????????????????????????????????????????????
  ?????? ???????????????????????????????????????????
  ???????????????????????? ?????????????????????????
  ???????????????????????????????????
• Production rates
• Labor levels
• Inventory levels
• Overtime work
• Subcontracting
• Other controllable variables

41
Inputs and Outputs to APP
42
???????????????????????????
????????????????????????? 100 per
worker ?????????????????????? 500 per
worker Inventory carrying cost 0.50 pound per
quarter ?????????????????????? 1 ?? 1,000
pounds per quarter ???????????????????? 100
workers
43
APP Using Pure Strategies
44
Level Production Strategy
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Demand Matching Strategy
Cost (100 workers hired x 100) (50 workers
fired x 500) 10,000 25,000 35,000
46
Master Production Scheduling

• ??????????????????????????????????????????????????
  ????????? ????????????????????????????????????????
  ??? ???????????????????????????????????

47
?????????????????????????????????????????????????
48
?????????????????????????????????????????????????
49
ERPs Central Database
50
ERP and MRP

• MRP (material requirements planning) was the
  precursor to ERP
• Primarily a production planning and control
  system
• MRP evolved to MRP II (manufacturing resource
  planning)
• ERP and ERP II continue to extend the links
  through all business processes

51
Material Requirements Planning

• Computerized inventory control production
  planning system
• Schedules component items when they are needed -
  no earlier and no later

52
Material Requirements Planning
53
Capacity Requirements Planning (CRP)

• Computerized system that projects load from
  material plan
• Creates load profile
• Identifies underloads and overloads

54
Capacity
Usually expressed as standard machine hours or
labor hours
Capacity (no. machines or workers) x (no.
shifts) x (utilization) x (efficiency)
55
Capacity Terms

• Load profile
• Compares released and planned orders with work
  center capacity
• Capacity
• Productive capability includes utilization and
  efficiency
• Utilization
• of available working time spent working

56
More Capacity Terms

• Efficiency
• Load
• The standard hours of work assigned to a facility
• Load percent
• The ratio of load to capacityLoad
  (load/capacity)x100

57
Capacity Requirements Planning
58
Determining Loads and Capacities
2 copiers, 2 operators 5 days/wk, 8 hr/day 1/2 hr
meals, 1/2 hr maintenance per day Efficiency
100 Utilization 7/8 87.5 Daily capacity 2
machines x 2 shifts x 8 hours/shift x 100
efficiency x 87.5 utilization 28 hours or
1,680 minutes
59
Determining Loads and Capacities
Load percent 2,385.7 / 1,680 1.42 x 100
142
Add another shift Daily capacity 2 machines x
3 shifts x 8 hours/shift x 100 efficiency x
87.5 utilization 42 hours or 2,520
minutes Revised load percent 2,385.7 / 2,520
0.9467 x 100 94.67
60
Initial Load Profile
61
Adjusted Load Profile
62
????????????????????
63
Inventory

• One of the most expensive assets of many
  companies representing as much as 50 of total
  invested capital
• Operations managers must balance inventory
  investment and customer service

64
The Material Flow Cycle
65
Inventory Management

• How inventory items can be classified
• How accurate inventory records can be maintained

66
ABC Analysis

• Divides inventory into three classes based on
  annual dollar volume
• Class A - high annual dollar volume
• Class B - medium annual dollar volume
• Class C - low annual dollar volume
• Used to establish policies that focus on the few
  critical parts and not the many trivial ones

67
ABC Analysis
Item Stock Number Percent of Number of Items Stocked Annual Volume (units) x Unit Cost Annual Dollar Volume Percent of Annual Dollar Volume Class
10286 20 1,000 90.00 90,000 38.8 72 A
11526 500 154.00 77,000 33.2 A
12760 1,550 17.00 26,350 11.3 B
10867 30 350 42.86 15,001 6.4 23 B
10500 1,000 12.50 12,500 5.4 B
68
ABC Analysis
Item Stock Number Percent of Number of Items Stocked Annual Volume (units) x Unit Cost Annual Dollar Volume Percent of Annual Dollar Volume Class
12572 600 14.17 8,502 3.7 C
14075 2,000 .60 1,200 .5 C
01036 50 100 8.50 850 .4 5 C
01307 1,200 .42 504 .2 C
10572 250 .60 150 .1 C
69
ABC Analysis
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Record Accuracy

• Accurate records are a critical ingredient in
  production and inventory systems
• Allows organization to focus on what is needed
• Necessary to make precise decisions about
  ordering, scheduling, and shipping
• Incoming and outgoing record keeping must be
  accurate
• Stockrooms should be secure

71
Cycle Counting

• Items are counted and records updated on a
  periodic basis
• Often used with ABC analysis to determine cycle
• Has several advantages
• Eliminates shutdowns and interruptions
• Eliminates annual inventory adjustment
• Trained personnel audit inventory accuracy
• Allows causes of errors to be identified and
  corrected
• Maintains accurate inventory records

72
Cycle Counting Example
5,000 items in inventory, 500 A items, 1,750 B
items, 2,750 C items Policy is to count A items
every month (20 working days), B items every
quarter (60 days), and C items every six months
(120 days)
Item Class Quantity Cycle Counting Policy Number of Items Counted per Day
A 500 Each month 500/20 25/day
B 1,750 Each quarter 1,750/60 29/day
C 2,750 Every 6 months 2,750/120 23/day
77/day
73
Holding, Ordering, and Setup Costs

• Holding costs - the costs of holding or
  carrying inventory over time
• Ordering costs - the costs of placing an order
  and receiving goods
• Setup costs - cost to prepare a machine or
  process for manufacturing an order

74
Minimizing Costs
Objective is to minimize total costs
75
Production Order Quantity Model

• Used when inventory builds up over a period of
  time after an order is placed
• Used when units are produced and sold
  simultaneously

76
Production Order Quantity Model
77
Production Order Quantity Model
Q Number of pieces per order p Daily
production rate H Holding cost per unit per
year d Daily demand/usage rate D Annual
demand
Setup cost (D/Q)S Holding cost 1/2 HQ1 -
(d/p)
(D/Q)S 1/2 HQ1 - (d/p)
78
Production Order Quantity Example
D 1,000 units p 8 units per day S 10 d
4 units per day H 0.50 per unit per year
79
Probabilistic Models and Safety Stock

• Used when demand is not constant or certain
• Use safety stock to achieve a desired service
  level and avoid stockouts

ROP d x L ss
Annual stockout costs the sum of the units
short x the probability x the stockout cost/unit
x the number of orders per year
80
Probabilistic Demand
81
Probabilistic Demand
82
??????????????????????????????
83
Scheduling Issues

• Scheduling deals with the timing of operations
• The task is the allocation and prioritization of
  demand
• Significant issues are
• The type of scheduling, forward or backward
• The criteria for priorities

84
Scheduling Criteria

1. Minimize completion time
2. Maximize utilization of facilities
3. Minimize work-in-process (WIP) inventory
4. Minimize customer waiting time

Optimize the use of resources so that production
objectives are met
85
Assignment Method

• A special class of linear programming models that
  assign tasks or jobs to resources
• Objective is to minimize cost or time
• Only one job (or worker) is assigned to one
  machine (or project)

86
Assignment Method

• ?????????? job ?? ?????????????????
  ?????????????????????????

87
Sequencing Jobs

• Specifies the order in which jobs should be
  performed at work centers
• Priority rules are used to dispatch or sequence
  jobs
• FCFS First come, first served
• SPT Shortest processing time
• EDD Earliest due date
• LPT Longest processing time

88
Sequencing Example
Apply the four popular sequencing rules to these
five jobs
Job Job Work (Processing) Time(Days) Job Due Date(Days)
A 6 8
B 2 6
C 8 18
D 3 15
E 9 23
89
Sequencing Example
FCFS Sequence A-B-C-D-E
Job Sequence Job Work (Processing) Time Flow Time Job Due Date Job Lateness
A 6 6 8 0
B 2 8 6 2
C 8 16 18 0
D 3 19 15 4
E 9 28 23 5
28 77 11
90
Sequencing Example
SPT Sequence B-D-A-C-E
Job Sequence Job Work (Processing) Time Flow Time Job Due Date Job Lateness
B 2 2 6 0
D 3 5 15 0
A 6 11 8 3
C 8 19 18 1
E 9 28 23 5
28 65 9
91
Sequencing Example
EDD Sequence B-A-D-C-E
Job Sequence Job Work (Processing) Time Flow Time Job Due Date Job Lateness
B 2 2 6 0
A 6 8 8 0
D 3 11 15 0
C 8 19 18 1
E 9 28 23 5
28 68 6
92
Sequencing Example
LPT Sequence E-C-A-D-B
Job Sequence Job Work (Processing) Time Flow Time Job Due Date Job Lateness
E 9 9 23 0
C 8 17 18 0
A 6 23 8 15
D 3 26 15 11
B 2 28 6 22
28 103 48
93
Johnsons Rule Example
Job Work Center 1 (Drill Press) Work Center 2 (Lathe)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12
94
Johnsons Rule Example
Job Work Center 1 (Drill Press) Work Center 2 (Lathe)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12
D
A
B
C
E
95
Johnsons Rule Example
Job Work Center 1 (Drill Press) Work Center 2 (Lathe)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12
B
A
C
D
E
Time 0 3 10 20 28 33
96
Johnsons Rule Example
Job Work Center 1 (Drill Press) Work Center 2 (Lathe)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12
B
A
C
D
E
Time 0 3 10 20 28 33
Time? 0 1 3 5 7 9 10 11 12 13 17 19 21 22
23 25 27 29 31 33 35
97
???????????????
98
??????????????

• ?????? ????????????????????????????????????
  ??????????????????????????????????????????????????
  ???????????????????????????? ?????????????????????
  ??????????????????????????? ??????????????????????
  ????????????????????????????????????
  ???????????????????????????????????????
  ???????????????????????????????
  ??????????????????????????????????????????????????
  ?????? ??????????????????????????????????

99
???????????????

• ?????????????????? (Quality of Design)???????????
  ????????????????????????
• ????????????????????????????? (Quality of
  Conformance)
• ?????????????????????????????????????????????????
  ??????????????????????????????????????????????????
  

100
??????????????

• ????????????????? (Traditional Definition)
• ?????? ?????????? ??????????????????????(Qualit
  y means fitness for use)

101
??????????????

• ?????? ??? ??????????????????????????????????
  (Quality is inversely proportional to
  variability)

102
Quality Improvement

• ?????????????????????? (Quality Improvement) ???
  ?????????????????????????????????????????????????
  (Quality improvement is the reduction of
  variability in processes and products)
• ????????????? ????????????????????????????????????
  ????????????????????????????????????????????
  (Waste)

103
Quality Improvement

• ??????????????????????????????????????????????????
  ?????
• ??????????????????????????????????????????????????
  ????????????????? (Variance, ?2)
  ??????????????????????? (Standard Deviation, ?
  ???????? ?????)
• ????????????????????????????????????????????
  ?????????

104
????????????????????

• ?????????????????????????????????????????????????
  ??????????

105
?????????????????????????

• ???????????????????????????????? (Total Quality
  Management, TQM
• ?????????? (Six Sigma, 6?)

106

• ????????????????????????????

107
????????????????? (Lean Manufacturing)
108
?????????

• ????????????????? (Lean Manufacturing System) ???
  ??????????????????????????????????? (Flow)
  ?????????????? ???????????????????????????????????
  ???? (Waste) ??????????? ?????????????? (Value)
  ??????????????? ????????????????????????????????
  ???????????????????????????? (Productivity)
  ???????????????????????????????
• ??????????????????????????????? 2 ?????? ??????
• 1. ???????????????? (Increase Productivity)
• 2. ?????????????????????? (Cost Reduction)

109
Lean Production

• ?????????????????????????????????(Waste)
• ????????????????????????????, ????????????????????
  , ????????? ?????????????????

110
Lean Production Motivation

• ?????????????? ?????? ?????????? ?????????
  ????????????????? ???????????????
  ???????????????? (Profit) ??? ????????????????????
  ???????????? (Customer Royalty)

111
Lean Production Motivation

• ????????? profit
• American concept (???????????)
• Japanese concept
• -

????
??????
????
????
??????
????
112
Lean Production Motivation

• ???????? ???? ?????? (??) ?????? ????? (????????)
  ??????, ???????????, ????????????, ??????
  ??????????????
• ????? ????????

113
Lean Production Motivation

• ??????????????????????????? ???????????????
  ???????????????? ????????
• ?????????? ???????????? 1 ????
  ????????????????????????????????????? ? ??????
• ?????????? ???????????? 1 ??? ???????????????????
  ?????????????????? ? ??????

Just-in-Time
Lean Make One, Check One, Move One On
114

• JIT ??????????????????????????????????? ?
  .........
• No room for error

115
???????????????????

• ?????????????????????????
• ?????????????????????
• ?????????
• ??????????????????
• suppliers ?????????????????
• ???????????????????/????????????????
• ?????????????????

116
10-Step Methodology
1. ????????/??????????????????? One-piece flow, manufacturing cell, U-shape
2. ??/????? setups Single-minute exchange of dies (SMED)
3. ??????????????????????? Inspect to prevent defects/Quality at a source/ use seven QC tools
4. ???????????????????? TPM/ improve capability and reliability
5. ???????? ???????? ??????? ??????? Cells Mixed model assembly line/ balance cell output with demand of next station/ sequencing/ JIT
117
10-Step Methodology
6. ????????????????????????? ??????? pull kanban
7. ??????????????????????? ???? ? ??????? WIP ???????????????? ????????
8. ???????? Vendors (Technology Transfer) ????????????????? 1 7 ?????? vendors
9. ????????????????? ?????????/??????????????????????????????????????????????????????
10. ???????????????????????? ??? Concurrent Engineering
118
????????????

• ??????????????????
• ???????????????????
• ?????????????????????
• ???????????????????
• ??????? ??????????????
• ?????
• ????????????????????????? (Motion)

119
???????? ????????????
120
???????? ????????????
121
???????? ????????????
122
Inventory ???? ?????
123
?? Inventory ?????????
124

• ?????????????