Ch 5. Capacity Management Flashcards
What is capacity
What if capacity is too low:
1) bad service (Delays)
2) loss of sales and goowill
3) higher costs (overtime)
4) overworked employees
5) threat of new entrants
what if capacity is too high
1) customers are uncomfrotable
2) bored employees
3) idle equipment/facilities
4) higher costs (fixed costs, layoffs)
short range planning for adjusting capacity
schedule people better
What external factors affect Capacity
1) government regulations
-what is allowed and what isnt (operating hours/facility size)
2)supplier capabilities
-do you have enough of the supply you need
what internal factors affect capacity
1) product and service design
2) personnel and jobs
3) plant layour and process flow
4) equipment capabilities/maintenance
5) materials management
6) quality control systems
7) quality of amangement
What is unmanagemed capcity look like graphically
A sin curve!!!
ABOVE X=0
-There is customers turned away because there is a capacity demanded more than maximum
-customers who are seved recieve bad service because too much demand
BELOW X=0
-When customer demand is declining, there is idle capacity
X=0
This is the optimal capacity
in the sin curve, what is the goal in capacity management?
to make the curve less curvy, make it all closer to the x=0 (optimal capacit line)
in the sin curve what does the line represent itself?
the demand!!!!
How do you adjust demand
REVENUE/YIELD MANAGEMENT
what companies do revenue/yield managemnt best
companies w high fixed costs and low variable cost
How to actually adjust the demand line
-have different prices!!!
-when demand is going high set higher prices, when demand is going low set lower prices
Is it important to have capacity flexibility?
YES
what are 6 strattegies to improve capacity flexibility:
1) flexible workers (multi skilled)
2) flexible facilities (Can produce a variety of products)
3) flexible processes (more than one way to make a good)
4) using external capacity temporarily
5) sharing capacity )w other businesses)
6) subcontracting (outsource some work when you are at capacity)
3 capacity strategies
Proactive Strategy
Reactive Strategy
Combiantion
Proactive strategy
-visual
-what is it
-why
-examples of who wants this
VISUAL: plant capacity looking like steps on top of the demand line!
Def: having extra capacity to make sure all customers are served
why: high opportunity cost of missed sales, competing on service, unreliable resources
EX: car dealerships
Reactive strategy
-visual
-what is it
-why
-examples of who wants this
VISUAL: plant capacity looks like steps below the demand line
Def: having less capacity then needed , because HIGH cost of having unused capacity
why: low opportunity cost of missed sales, competing on PRICE, EXPENSIVE resources
EX: consultatnts, grocery stores
Combination strategy
-visual
-what is it
Visual: having steps that are equally spread on both sides of demand curve
DEF: having too much capacity sometimes and not enough sometimes
proactive, reactive, combination
which has high cushin levels, which low, which medium
PROACTIVE
REACTIVIE
COMBINATION
2 measures of capacity
Design Capacity
Effective Capacity
Design Capacity
MAX THEORETICALLLL output
Utilization (%)= actual/design capacity
Effective Capacity
expected capacity in real life
Efficiency (%)= actual/effective capacity
2 layout alternatives:
1) process layout: layout by process function - similar machines/tasks grouped together
2) product layout: layout by product steps- “flow shop”
example of process layout
job shop (jumbled flows)
product layout example
assembly line (CONSISTENT FLOW)
When is process layout used
where the flow of material/customers
DIFFERS
depending on the customer order or REQUIRMENT
How do you design a process layout?
transportation cost estimates (can be used to minimize movements)
or
quantitative criteria (Closeness preferences)
How to calculate transportation cost estimate
C=– * – * –
C= (loads going directly from a to b) * (distance between a and b) * (cost per distance directly between a and b)
when working with the rectangle layouts. can you move diagonally
no!!!
how do you re design process labout!
1) calculate total daily distance travelled for the old model
2) identify the highest total daily distance (prioritize them)
3) place the highest total daily distances in close proximity
4) sum up the total daily distance afain, multiply it by the cost per walking, and see how much you saved
In product layouts, what is high and what is low
High volume of goods, low variet of goods
how are facilities organized around in a product layout system
accoridng to the flow of production or assembly of individual products
issue in the product layout system
not WHERE to locate coapcaity, but How much CAPACITY TO HVAE AT EACH STATION
What is another name for layour design
PRODUCTION ASSEMBLY LINE BALANCING
goal OF production assembly line balancing
assign tasks to workstations within a given cycle time and with minimum idle time
WHAT is the capacity in products layout
the area that handles the least number of units/hour
if you are given min/unit (average time to process a unit) how do you solve for the capcity of the project
use unit conversion
min/unit x hour/min = hours/unit
then swap em!!!
bottleneck= capacity
word
if there are parallel stations doing the SAME task, what is the capacity of THIS TASK?
of the entire task?
sum of both assembly stations
-> the lowest units/hour
WHAT IS THE CAPACITY?
LOWEST UNITS/HOUR
OR
HIGHEST MINS/UNIT
if you have parallel stations doing DIFFERENT TASKS!!!, what is the capacity of this section
what is the capacity of the whole process?
capacity of the slower task
capacity of the slowest station in the process
what is the impact of a balanced line
LOWER COST (lower # of employees)
HIGHER CAPACITY (UNITS/HOUR HIGHER, or lower min/unit)
how to balance the assembly line
1) draw the precedence diagram
2) determine the cycle time (C) needed to meet demand
(how many mins per unit possible)
3) determine TOTAL WORK TIME (sum of all the tasks needed to be done)
4) Calculate Nt(number of workstations needed)
Nt= Total work per unit/ required cycle time
5) assign tasks to stations (make sure you consider precdence, and keep every station under cycle time)
6) evaluate efficiency
How to calculate Nt (number of stations)
Total work time/ Required cycle time
SUM OF ALL THE TABLES/ cycle time
Is the number of stations in theory same as the # in practice
not always
Na might be different
In Nt= T/C formula what is T and C
T= total time needed in this project
C= cycle time (available time /demand)
In Nt= T/C formula
IS C THE CYCLE TIME, THE LONGEST STATION TIME???
yes! but calculate C like
number of seconds per work day/desired output per work day
In Nt= T/C formula
wHAT DOES C TELL YOU
the longest amount of time one station can be
How to calculate efficiency after you did the product line
T divided by Na*C
Total Time/ (number of actual stations * Cycle time required)
how to calcualte idle time
1- efficiency %
Traditional assembly line layouts vs improved
Trad: operators are caged in one area, or straight line
Improved: flexible, they can move, easily add a new person (U shaped or facing each other)
what are some physical restrictions in assigning tasks to workstations
1_ is fixed equipment too far?
2_ is the position of workers safe
3 issues in real worl dline abalncing
1) phsyicial restirictions
2) indidvidual task scan take longer than cycle time
3) behaviourla cosniderations
4) variability in times
5) mixed model lines require setups
how can individual tasks take longer than cycle time
2 sols
if one task itself is too long!!
split tasks and share them, or add resoruces to go faster
behavioural consideration issues in line balancing
job rotation is needed or mor emix of tasks
how can there be variability in times to accomplish one task
inconsistency in the timing!!! station working too slowly and another has idle time, then some work ahead blhablah confusing
real world issues in capacity management:
mixed-model lines require what?
-> what should we do?
require set up time!
we should minimize this time since it is non productive
medium range planning for adjusting capcaity
subcontract & build or use inventory
long range planning for adjusting capcity
design new production proceses
