Prefinals Reviewer Tags Status Not started Capacity Planning Upper limit or ceiling on the load that an operating unit can handle Capacity What are the considerations? Ability to meet future demand Capacity and operating costs Initial cost involved Stems from the often required long term commitment of resources Defining and Measuring Capacity The maximum output that can be achieved Design Capacity The maximum possible output given product mix, scheduling difficulties, machine factors and so on Effective Capacity It is the rate of output actually achieved. Cannot exceed effective capacity. Actual Output Measures Efficiency Actual Output over Effective Capacity Utilization Actual output over Design capacity Prefinals Reviewer 1 Determinants of Effective Capacity 1. Facilities 2. Products and Services 3. Processes 4. Human considerations 5. Operations 6. External Forces It is less concerned with cycles or trends than with seasonal variations and other variations from average. Short-term capacity It is determined by forecasting demand over a time horizon and then converting those forecasts into capacity requirements. Long term capacity Process Selection It is deciding on the way production of goods or services will be organized — it refers to the way productions of goods or services is organized. Process selection Process Strategies The extent to which the organization will produce goods or provide services inhouse as opposed to relying on outside organization to produce or provide them Make or buy decisions The mix of equipment and labor that will be used by the organization Capital intensity The degree to which the system can be adjusted to changes in processing requirements due to such factors as changes in product or service design, changes in volume processed, and changes in technology. Process flexibility Prefinals Reviewer 2 💡 Capital intensity and process flexibility are major factors if the organization chooses to make rather than buy Make or Buy Decision Considerations Available capacity — If an organization has available the equipment, necessary skills, and time, it often makes sense to produce an item or perform a service in-house. The additional costs would be relatively small compared with those required to buy items or subcontract services. Expertise — If a firm lacks the expertise to do a job satisfactorily, buying might be a reasonable alternative. 3. Quality considerations. Firms that specialize can usually offer higher quality than an organization can attain itself. Conversely, unique quality requirements or the desire to closely monitor quality may cause an organization to perform a job itself. Quality considerations Nature of demand — high and steady vs. low and seasonal — When demand for an item is high and steady, the organization is often better off doing the work itself. However, wide fluctuations in demand or small orders are usually better handled by specialists who are able to combine orders from multiple sources, which results in higher volume and tends to offset individual buyer fluctuations. Cost — Any cost savings achieved from buying or making must be weighed against the preceding factors. Cost savings might come from the item itself or from transportation cost savings. If there are fixed costs associated with making an item that cannot be reallocated if the item is purchased, that has to be recognized in the analysis. Process Types Projects Special case — non routine job Job shop Small scale — A job shop usually operates on a relatively small scale. Prefinals Reviewer 3 Batch Moderate volume — Batch processing is used when a moderate volume of goods or services is desired, and it can handle a moderate variety in products or services. Repetitive/assembly line High volumes of standardized goods or services — When higher volumes of more standardized goods or services are needed, repetitive processing is used. Continuous. When a very high volume of highly standardized output is desired, a continuous system is used. A project is used for work that is non routine, with a unique set of objectives to be accomplished in a limited time frame. Continuous Very high volumes of non-discrete goods It is the substitution of machinery for human labor; it involves sensing and control devices that enables it to operate: fixed automation and programmable automation. It is machinery that has sensing and control devices that enable it to operate automatically. Automation Sometimes referred to as Detroit-type automation, it uses high cost, specialized equipment for a fixed sequence of operations. Fixed Automation Is at the opposite end of the spectrum. It involves the use of high-cost, generalpurpose equipment controlled by a computer program that provides both the sequence of operations and specific details about each operation. Programmable Automation It is the use of computers in process control, replacing human functions with machine functions Computer-Aided Manufacturing Machines that perform operations by following mathematical processing instructions Numerically Controlled Machines Individual Machines having their own computer Prefinals Reviewer 4 Computerized Numerical Control (CNC). One computer which controls a number of N/C machines Direct Numerical Control (DNC) What are three parts of a Robot? Mechanical Arm, a Power Supply, and a Controller It evolved from programmable automation. It uses equipment that is more customized than that of programmable automation. Flexible Automation Group of machines designed to handle intermittent processing requirements and produce a variety of similar products Flexible Manufacturing System Computer Integrated Manufacturing System of linking a broad range of manufacturing activities, through an integrating computer system Service Process Design It focuses on the service delivery system (i.e., the facilities, processes, and personnel requirements needed to provide the service). Service Process Design It is a method for describing and analyzing a service process. Service Blueprinting Facility Layout It is the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or material) through the system. Layout Are used to achieve a smooth and rapid flow of large volumes of goods or customers through a system. Process Layout Prefinals Reviewer 5 Importance of Layout Decisions … Requires substantial investments of money and effort Involves long-term commitments Has significant impact on cost and efficiency of short-term operations The Need for Layout Design … Inefficient Operations Changes in the design of products or services The introduction of new products or services Accidents & Safety Hazards Changes in environmental or other legal requirements Changes in volume of output or mix of products Changes in method and equipment Morale problems Basic Layout Types … Product Layout Process Layout Fixed-Position Layout Combination Layout Product Layout layout that uses standardized processing operations to achieve smooth, rapid, highvolume flow Standardized layout arranged according to a fixed sequence of production tasks. Product Line Prefinals Reviewer 6 Standardized layout arranged according to a fixed sequence of assembly tasks Assembly line Advantages of Product Layout High rate of output Low unit cost Labor specialization Low material handling cost High utilization of labor and equipment Established routing and scheduling Routing accounting and purchasing Disadvantages of Product Layout Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume Highly susceptible to shutdowns Needs preventive maintenance Individual incentive plans are impractical Process Layout Layouts that can handle varied processing requirements. Advantages of Process Layout Can handle a variety of processing requirements Not particularly vulnerable to equipment failures Equipment used is less costly Possible to use individual incentive plans Disadvantages of Process Layouts In-process inventor costs can be high Prefinals Reviewer 7 Challenging routing and scheduling Equipment utilization rates are low Material handling slow and inefficient Complexities often reduce span of supervision Special attention for each product or customer Accounting and purchasing are more involved Fixed Position Layout Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed. Combination Layout Cellular Layout — Layout in which machines are grouped into a cell that can process items that have similar processing requirements. Is a type of layout in which machines are grouped into what is referred to as a cell. Cellular Manufacturing Group Technology The grouping into part families of items with similar design but manufacturing characteristics Primary Methods for Accomplishing conversion to GT and Cellular Manufacturing 1. Visual Inspection 2. Examination of Design and Production 3. Production Flow Analysis It is the process of assigning to tasks to workstations in such a way that the workstations have approximately equal time requirements. Prefinals Reviewer 8 Line Balancing It is a tool used in line balancing to display elemental tasks and sequence requirements Precedence Diagram It is the maximum time allowed at each workstation to complete its set of tasks on a unit. Cycle time Prefinals Reviewer 9
