Process Choice and Layout Decisions in Manufacturing and Services

Chapter Objectives
Be able to:
Describe the five classic types of manufacturing processes. Discuss how different manufacturing and service process choices support different market requirements. Explain how different processes can be linked together via the supply chain. Describe the critical role of customization in manufacturing, including the degree and point of customization, and upstream versus downstream activities. Discuss the three dimensions that differentiate services from one another and explain the different managerial challenges driven by these dimensions. Create and interpret a service blueprint. Position a service on a conceptual model and explain the underlying managerial challenges. Develop a product-based layout using line balancing and calculate basic performance measures for the line. Develop a functional layout based on total distance traveled.

Manufacturing Processes
Engineering and business perspectives Classic manufacturing processes Choosing between classic types The role of customization

Engineering and Business Perspectives

Solid Wood Seat for a Kitchen Chair:

Process A Saddle Machine Shaper Machine Sander A Sander B Inspection
Setup Time: 6 hours Time/Seat 1.1 min. Yield Rate: 92%

Process B 5-Axis Router --- Sander A Sander B Inspection

Setup Time: 10 min. Time / Seat: 3.5 min. Yield Rate: 99%

Classic Engineering Viewpoint

Four

Transformation Processes

Conversion Fabrication Assembly Testing

Advances in Engineering increase and improve the alternatives available

Example: Making Windows

Conversion Raw lumber Molten glass

Fabrication Frame wood Window panes

Assembly Assembled Windows

Business View
What conversion steps must be done? What are the production volumes like? How similar are the various products we make (can we standardize)? If the product is customized, how late in the process does it occur?

Classic Manufacturing Processes

Process Types
(in order of decreasing volume)

Continuous Flow
Production Line Batch (High Volume) Batch (Low Volume) Job Shop

Project

Continuous Flow
Large production volumes High level of automation Basic material passed along, converted as it moves Usually cannot be broken into discrete units Usually very high fixed costs, inflexible
Oil refinery, fiber formation, public utilities, automotive manufacturing

Production Line
High-volume production of standard products or design window

Processes arranged by product flow Often paced (takt time discussed later) Highly efficient, but not too flexible

Batch I
Somewhere in between job shop and line processes Moderate volumes, multiple products Production occurs in batches Can manufacturing, carton makers, advertising mailers, etc.

Batch II
Layout is a cross between that found in a line and that found in a job shop:

Group Technology

Some Examples of Batch Manufacturing

Numerical control (NC) machines
Automated processing of entire batch Machining center - multiple NC machines

Flexible manufacturing systems (FMS)

Dedicated to families of parts NC and automated handling

Group technology
Similar in concept to FMS, but not as much automation

Job Shop
Low volume, one-of-a-kind products
Job shops sell their capability

Highly flexible equipment, skilled workers

Equipment arranged by function

Project
Used when a product is:
one-of-a-kind too large to be moved

Resources moved to where needed Equipment, people, etc. are highly flexible Finite duration, often with deadline
Construction projects, equipment installation

Mixing Together the Process Types Hybrid Process

Spindles Arms and Legs BATCH for fabricating parts ...

ASSEMBLY LINE for putting together final product

Seats

Choosing Between Classic Types

The product-process matrix

Product and process life cycles

Comparing Process Types...

Job Shop
Volume Variety Skills Advantage Very Low Very High Broad Flexibility

Batch

Line
High Low Limited Price and Delivery

Product Process Matrix

One of a Kind Low Volume Multiple Products Moderate Volumes Few Major Products High Volume Commodity Products

Job Shop

Very Poor Fit

Batch

Line

Very Poor Fit

The Role of Customization

What is Customization?
An operations-centric view:
Customization occurs when a customers unique requirements directly affect the timing and nature of operations and supply chain activities

Customization Point Model I

ETO SOURCING MATERIALS MTO ATO ASSEMBLY/ FINISHING MTS

DESIGN

FABRICATION

DISTRIBUTION

Definitions: ETO engineer to order MTO make to order ATO assemble-to-order MTS make to stock Upstream: before the customization point, off-line activities Downstream: after the customization point, on-line activities

Make-to-Order Windows
Off-line Activities
Design Buy Materials Fabricate parts Assemble

On-Line Activities
Lead times? Customizability? Price? What type of manufacturing? Sell windows

Ship windows

Customization Point Model II

Manufacturing Systems Design
Performance objectives Technology Investment Organization structure Job differentiation Integration Discretion

Upstream
Efficiency Productivity, consistency Mechanistic High Formal Low

Downstream
Responsiveness Flexibility Organic Low Informal High

Difficulty versus Customization

MANUFACTURING VIEW
LOWER DIFFICULTY HIGHER DIFFICULTY
BASEBALL CAP WITH ARKANSAS RAZORBACKS LOGO AND SCHOOL COLORS ON IT (ETO)

HIGHER CUSTOMIZATION

BASEBALL CAP WITH SCHOOL NAME ON IT (MTO)

MARKETING VIEW
LOWER CUSTOMIZATION
PLAIN BASEBALL CAP (MTS) PLAIN BASEBALL CAP IN DIFFERENT COLORS (ATO)

An Operations-Centric View
Customization becomes relevant to operations and supply chain managers when a customers unique requirements directly affect the timing and nature of operations and supply chain activities
Job Difficulty
Customization Job Routineness Operations and Supply Chain Design

Mass customization at Japans National Bicycle Co.

TUBE CUTTING
CAM

Marketing

FRONT ASSEMBLY CAD

CAM

ORDER DATA INCLUDING CUSTOMERS MEASUREMENTS AND OPTIONS

REAR ASSEMBLY
CAM

2-WEEK LEAD TIME

Quality Assurance

3-D MEASUREMENT

ASSEMBLY

PAINTING

COMPUTER INSTRUCTIONS

Law of Variability

The earlier customization is introduced in the supply chain, the greater the random variability of the process and the lower its productivity

Services
What makes them distinctive?
High-contact versus low-contact

Front room versus back room Service Blueprinting

Services . . .
Process and product are inseparable Marketing and sales often tightly integrated Customer often part of the process Performance metrics can be harder to define Nevertheless: Focus and process choices / trade-offs still apply

Degree of Customer Contact

Low Contact
off-line Can locate for efficiency Can smooth out the workload
Check clearing, mail sorting

High Contact
on-line Can locate for easy access Flexibility to respond to customers Harder to manage
Hospitals, food service

Classifying Services
Front Room versus Back Room
Front room what the customer can see Managed for flexibility and customer service Back room what the customer does not see Managed for efficiency and productivity

Customer lobbies, bank teller, receptionist

Package sorting, car repair, blood test analysis, accounting department

What is it? What is the performance objective?

Restaurant kitchen Software help desk Kinkos copy center Airline reservations Jet maintenance

Designing Services
Selecting a service focus
Like manufacturing processes, different services have strengths and weaknesses

Key is to design a service process that meets the needs of targeted customers
The service package

Service Blueprinting
Processes Customer actions Onstage activities Backstage activities Support Separations Line of interaction Line of visibility Line of internal interaction

Service Blueprint Template

(Note similarity to swim lane in Chapter 3?)

A Cubical Model of Services

(Three Dimensions)
Nature of the Service Package Primarily Physical Activities (Airline, trucking firm) Primarily Intangible Activities (Law firm, software developer) Higher Customization (Full-service car repair shop) Higher Contact (Physical therapist)

Degree of Customization Lower Customization (Quick-change oil shop) Degree of Customer Contact Lower Contact (Mail sorting)

Community Hospital

PHYSICAL

Public Hospital

SERVICE PACKAGE

HIGH

CONTACT
INTANGIBLE LOW HIGH LOW

CUSTOMIZATION

Birthing Center

PHYSICAL

Public Hospital

SERVICE PACKAGE

HIGH

CONTACT
INTANGIBLE LOW HIGH LOW

CUSTOMIZATION

Layout Decision Models

Product-based layout
Usually best for a line operation Cycle time a primary measure

Functional layout
Usually best for a job shop Distance between steps a measure

Cellular layout
Usually best for batch processes

Product-Based Layout
Line Balancing Improve Takt time:
Use minimum number of workstations Reduce idle time Reduce setup time Reduce unnecessary movement Identify bottlenecks

available production time Takt time required output rate

Process Layout Steps

1) 2) 3) Identify all steps, their relationships, and times required. Draw a precedence diagram Determine takt time (time available divided by desired output rate) Determine minimum number of workstations required (total process time divided by takt time) Assign tasks to workstations according to precedence and total time for each to not exceed takt time. Evaluate solution for times per workstation, % idle time, and efficiency delay (100% - % idle time)

4)
5)

6)

Precedence Diagram Example

(with workstation task assignments)

Functional Layout Improvement

A. Minimize the total distance traveled
Determine distances between functional units Determine numbers of interactions between units Multiply distances times respective number of interactions Revise original layout for minimum total distance after first locating functions best for process material flows

B. Minimize information flow for decisions C. Use electronic data interchange (EDI) to allow more flexibility for accomplishing A and B

Case Study in Manufacturing and Service Processes

Loganville Window Treatments