Lecture 1

Question 1

Process design

Answer 1

• What is the best process/method for producing our products/services?

Question 2

Managing Quality

Answer 2

• How to ensure high quality products / services are produced?

Question 3

Location & Layout Strategy

Answer 3

• Where should we put a new manufacturing plant? New distribution center?
• How should we arrange the facility?

Question 4

Human Resources & Job Design

Answer 4

• How do we motivate our employees to have higher performance?
• How to design an appropriate reward/compensation package for our employees?

Question 5

Supply Chain management

Answer 5

• Should we make or buy this component?
• Who should be our suppliers and how can we integrate them into our strategy?

Question 6

Inventory management

Answer 6

• How much inventory of each item should we have?
• When do we reorder?

Question 7

Scheduling

Answer 7

• How to schedule our staff to minimize staffing cost and maximize customer service?
• Given a set of jobs to do, what is the sequence (order) that the jobs be done?

Question 8

Define strategy

Answer 8

Strategy is how the mission of a company is accomplished. It unites an organization, provides consistency in decisions and keeps organization moving in right direction.

Question 9

Defining a primary task of the company

Answer 9

• What is the firm in the business of doing?

E.g.,
Canadian Pacific Railway (www.cpr.ca) is in business of transportation, not railroads.

Question 10

Assessing core competencies

Answer 10

• Core competency is what a firm does better than anyone else.

E.g.,
Sony: Best in the world at electromechanical miniaturization design.

Question 11

Positioning the firm

Answer 11

• How will the firm compete? Cost, Speed, Quality, Flexibility.

Question 12

Positioning the firm: Cost

Answer 12

• Waste elimination - relentlessly pursuing the removal of all waste
• Examination of cost structure - looking at the entire cost structure for reduction potential
• Lean production - providing low costs through disciplined operations

Question 13

Positioning the firm: Speed

Answer 13

• Service organizations - always competed on speed (McDonald’s, LensCrafters, and Federal Express)
• Manufacturers - time-based competition: build-to-order production and efficient supply chains
• Fashion industry - two-week design-to-rack lead time of Spanish retailer, Zara

Question 14

Positioning the firm: Quality

Answer 14

• Minimizing defect rates or conforming to design specifications
• Employees empowerment, high performance work teams, e.g.,
• Ritz-Carlton: Employees empowered to satisfy a guest’s wish
• Each hotel has a quality leader

Question 15

Positioning the firm: Flexibility

Answer 15

• Ability to adjust to changes in product mix, production volume, or design
• Mass customization: the mass production of customized parts, e.g.,
• National Bicycle Industrial Company offers 11,231,862 variations
• delivers within two weeks at costs only 10% above standard models

Question 16

What is Manufacturing?

Answer 16

• Application of physical and chemical processes to alter geometry, properties, and/or appearance of a starting material to make parts or products.
• Manufacturing also includes assembly
• Almost always carried out as a sequence of operations

Question 17

Process industries

Answer 17

• Chemicals, petroleum, basic metals, power generation

Question 18

Discrete product

Answer 18

• Cars, aircraft, appliances, machinery, and their component parts

Question 19

Fixed-position layout

Answer 19

• If product is large and heavy (aircraft) product remains in fixed position workers and equipment are brought to product

Question 20

Process layout

Answer 20

• Equipment arranged according to function/type
  eg. mill dept, lathe dept.
• Different parts, each requiring a different operations sequence, are routed through the depts. in the order needed for processing, usually in batches.
• Highly flexible – can accommodate many alternative operation sequences for different part configuration.

Disadvantages:
* Machinery/methods to produce part not designed for high efficiency.
* Lots of material handling to move parts between depts., high WIP.

Question 21

Product Variety P

Answer 21

• Product variety P refers to different product types or models produced in the plant

1. Soft product variety - small differences between products
   e.g., between car models made on the same production line, with many common parts among models
2. Hard product variety - products differ substantially, e.g., between a small car and a large truck, with few common parts

Question 22

Production Quantity Q

Answer 22

• The quantity of products Q made by a factory has an important influence on the way its people, facilities, and procedures are organized

Annual production quantities can be classified into three ranges:
1. Low production → 1 to 100 units
2. Medium production → 100 to 10,000 units
3. High production → 10,000 to millions of
* Different production facilities are required for each of the 3 ranges

Question 23

Low Production Quantities

Answer 23

• This type of production facility is commonly call a Job Shop
• A job shop makes low quantities of specialized and customized products
• Products are typically complex, e.g., prototype aircraft, special machinery
• Equipment in a job shop is general purpose, Labor force is highly skilled, designed for maximum flexibility
• Can be Fixed Position Layout if product is large or Process Layout if product is smaller

Question 24

High Production Quantities

Answer 24

• Often referred to as mass production or Flow Production
• Manufacturing system dedicated to the production of that product
• Involves the use of production lines.

Question 25

Medium Production Quantities

Answer 25

1. Batch production: A batch of product is produced, and then facility is changed over to produce another product
   * Changeover takes time – setup time between batches
   * Usually uses a process layout
   * Used when you have hard product variety
2. Cellular manufacturing & Group Technology: A mixture of products is made without significant change-over time between products
   * Use when you have soft product variety
   * Determined by principles of Group Technology: a manufacturing philosophy in which similar parts are identified and grouped together to take advantage of their similarities in design and production
   * In each part family, processing steps are similar, e.g., ten parts are different in size, shape, and material, but quite similar in terms of manufacturing
   * Machines are grouped into cells, each cell specializing in the production of a part family called cellular manufacturing

Question 26

The product-process matrix

Answer 26

• a tool for analyzing the relationship between the product life cycle and the technological life cycle.
• The x-axis is the process life cycle and y-axis is product life cycle.
• Think about the launch of new product: Only sale a few units in beginning, then sell more and more of it over time.
• Use Job Shop to make product in beginning but will need to move towards processes that are more suited to produce larger quantities of the product over time.

Question 27

Limitations & Capabilities of a Manufacturing Plant

Answer 27

• Companies don’t produce everything in one factory.
  Manufacturing capability refers to the technical and physical limitations of a plant

3 dimensions of manufacturing capability:
1. Technological processing capability - the available set of manufacturing processes. Eg. Casting / CNC / injection mold
2. Physical size/weight of product plant can produce
3. Production capacity (plant capacity) - quantity that can be made in a given time

Question 28

Production & Manufacturing metrics

Answer 28

• Production & Manufacturing metrics help company track performance, compare alternative production methods (eg. different line layouts)

Two types of metrics:
(1) Production performance measures:
Production rate, cycle time, capacity, manufacturing lead time, utilization, productivity

(2) Manufacturing costs
Labor, material, overhead, cost to produce a unit of product

Question 29

Production Rates, Cycle Time, Manufacture lead time

Answer 29

★ Production Rate (Rp) - parts processed or assembled per hour.

★ Cycle Time (Tc) - time between one work unit completing and next unit completing in minutes

★ Manufacturing lead time: the total time required to process a given part or product through the plant.

Components of MTL: processing operations, assembly operations, material handling, lost time due to delays, time spent in storage, inspections, etc.