Classification of Manufacturing / Operation System

Manufacturing
Manufacturing is the use of machines, tools and labour to make things for use or sale. The term may refer to a range of human activity, from handicraft to hi-tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale Examples:
o o o o o

Godrej Mahindra & Mahindra L&T Tata Steel ACC Cement

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Manufacturing Systems
1. 2. 3. 4. 5. 6. 7. 8. Craft Production Projects Job Production Batch Production Mass Production Continuous Production / Flow Production Lean Manufacturing (TPS) Computer Aided Manufacturing (CAM)

Types of production

Intermittent production

Continuous production

Project production

Batch production

Process production

Mass and flow production

Job production

Craft Production
Craft production is the process of manufacturing by hand with or without aid of tools (e.g handicraft, pottery) Characteristics
o o o o o o

Unique product High Quality Ownership Variability High Cost Low Volume

INTERMITTENT SYSTEM
Goods are manufactured specially to fulfill orders made by customers rather than for stock The flow of material is intermittent The production facilities are flexible enough to handle a wide variety of products and sizes Used to manufacture those products where the basic nature of inputs changes with the change in the design of the product and the production process requires continuous adjustments Examples: machine shops, hospitals, general office etc
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Projects
One of its kind with a defined start and end date (e.g. Bandra-Worli sea link, Oil rig construction, development of a software) Characteristics
o o o o o o

High capital high variety Low volume Effective project management & man management skills Mix of labour force Streamlined processes Clear objectives & decision making process to be set

Job Production
Producing one off product for a specific customer (e.g railings of a specific house, machine installation, Special purpose machines-SPM) Characteristics
o o o o o o

High level of customisation Flexibility Good Quality Higher cost of production Skilled Labour Slow process

Batch Production
All components are completed at one workstation before they move to the next work station (e.g Shoe factory, ink making factory, pharmaceutical ingredients) Characteristics
o o o o o

Reconfiguration, o/p testing & down time Use for seasonal items- difficult to forecast demand Low initial capital Trial run possible Traceability

CONTINUOUS SYSTEM
The items are produced for the stocks and not for specific orders Before planning manufacturing to stock, a sales forecast is made to estimate likely demand of the product and a master schedule is prepared to adjust the sales forecast according to past orders and level of inventory. Here the inputs are standardized and a standard set of processes and sequence of processes can be adopted & thus the entire manufacturing process can be standardized. Each production run manufactures in large lot sizes and the production process is carried on in a definite sequence of operations in a pre-determined order
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Mass / Flow Production

Production of large amount of standardised products (e.g Food, Automobile, Chemicals) Characteristics
o o o o o o o o

20th century Henry Ford Ford Motor Company Assembly lines conveyor belts huge pipes motors Capital & energy intensive Automated fewer labours faster rate of production Low variability interchangeability standardisation of spares Low skill labour Huge quantities Lower per unit cost Higher initial cost lower cost of production Low flexibility in design & production process

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Process Production
Manufacture, produce or process material without interruption (e.g Oil, Glass, Cement) Characteristics
o o o o o o o o

No idle time low skilled labour Improved work & material flow higher quantities Substantially constant demand Product must be standardised low variety Material specification & on time delivery Every operation, defined & recorded Quality check for o/p at each stage Considerable planning & investment

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Lean Production System / Toyota Production System

Getting right things, at right place in right quantity & time achieve perfect work flow minimise waste be flexible. Characteristics
o o o

More value Less work Simplify work to do & understand Eliminate waste

Computer Aided Manufacturing (CAM) Characteristics

o o o o o

Skilled Labour Low Variability High capital investment Standardisation Less time for operations

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Factors influencing process selection decision

Make to order or Make for stock Volume / Variety Flexibility Market demand Environment Industry technological growth

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Make to order v/s Make for stock

Choice largely depends on the nature of product and its market
o o o

o
o

Cheap Ball pens & other stationary items FMCG & FMCD Aircraft & ship manufacturer Supermarket Turnkey projects Fast food outlet General purpose machinery

Intermediate category assemble to order

o o

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Volume Variety Matrix

Low Low

Variety

High

Projects

Job

Volume

Batch

Area of application of productivity techniques

Mass High Continuous

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Flexibility
Ability of the company to satisfy varied customers requirements. Flexibility and product variety are inter-related Intermittent manufacturing which is associated with higher inventories, large manufacturing lead times and elaborate planning and control

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Market demand & Environment

Environment brings in new technologies and forces the adoption of new process of manufacturing. For example, wooden furniture is gradually being replaced by metals and plastic. A furniture manufacturing unit will have to change its technology (i.e. change from one off production to batch production) to fall in line with changing times. Similarly, as market preferences change due fashions or other reasons, the manufacturing process has to be changed accordingly.

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Service Process Matrix By Schemmer

About the matrix (Service Process)

X Axis: Degree of interaction & customisation
Interaction:
o

Degree to which customer can intervene in the process (e.g. restaurant) Duration of contact does not effect this feature, it is degree of intervention (Almost nil in college lectures)

Customisation:
o

Degree to which service is tailored specifically to suit the needs of an individual customer

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About the matrix (Service Process) . . contd

Y Axis: Degree of labour intensity
Ratio of Labour cost to replacement cost of plant & equipment
o o o o o o o o

Electric utilities = 14.21 (least labour intensive) Communication facilities = 5.31 Amusement Parks = 2.49 Hospitals = 1.63 Banking = 1.20 Hotels = 1.01 Retail = 0.62 Business Services = 0.42

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Service Process Matrix (Schemmer)

Degree of Interaction & Customisation
Low High Low

Degree of labour intensity

Service Factories
Airlines Hotels

Service Shops
Hospitals Auto Repairs

Resorts

Mass Service
Retailers Schools Commercial Banks High

Professional Services
Doctors Lawyers Chartered Accountants

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Labour Intensity issues

Low Labour Intensity
o
o o o

Capital intensive Technological advances Yield Management (managing demand in peak / off seasons) Scheduling delivery service (e.g Octroi naka)

High Labour Intensity

o o o

Hiring, Training & Welfare issues Methods development & control Scheduling workforce

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Interaction & Customisation - issues

Low interaction & customization
o
o o o

Marketing Making service appear warm Attention to physical surroundings too clean or too dirty Managing fairly rigid hierarchy Need for standardized procedures
Fighting expenses due to customers whims & fancies Reacting to customer intervention in the process Gaining employee (High attrition continuous training) Managing Flat Hierarchy

High interaction & customization

o o o o

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Benefit of Schemmer Matrix

Possibility to move across the diagonal?
o
o o o

banking and retailing becoming more automated restaurants with more standardised menus professional service firms to specialise pursuit is for controls and reduced costs

Helps companies assess their competitive stance and means by which they can provide services

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