Manufacturing

Question 1

Performance Parameters x7

Answer 1

Cost
Speed
Quality 
Reliability
Flexibility
Ethical 
Environmental

Question 2

product-process matrix

Answer 2

Hayes & Wheelright:

Standardization // Cost per unit matrix

Project –> Job –> Batch –> Line –> Continuous

Question 3

Economic Order Quantity

Answer 3

Minimise the cost tradeoffs between ordering and holding inventory

Question 4

Re-use

Answer 4

Simons (1922)

• It’s important to figure out the best way of doing something before ensuring everybody follows exactly the same methodology
• Re-use is the foundation of our whole society

Question 5

types of resource

Answer 5

transforming & transformed resources.

Question 6

continuous processes

Answer 6

• V little variety in product input and output
• Only one route through the process
• continous flow
• No buffering between stages
• E.g: sugar refinery, crisps,

Question 7

Line / Mass processes

Answer 7

• Products that move along a manufacturing line, with little variety of route
• some buffering between stages
• consists of necessary sequential stages
• car manufacturer, computer printer assembler

Question 8

Batch production

Answer 8

• High level of repetition in product range
• Each batch goes through the same production sequence
• Specialised components, semi-customised goods, baked goods

Question 9

Jobbing

Answer 9

• High variety and low volumes
• High variety in process sequence and route through facility
• Skilled labour

Question 10

Projects

Answer 10

• Highly complex, unique
• Multi-skilled, many organisations
• Time, budget requirements specified in advance
• Eg: construction, oil&gas, IT, mega-projects.

Question 11

Inventory Definitions

Answer 11

• The value of materials and goods held by an organisation (1) to support production (2) for support activities (3) for sale or customer service

Taiichi Ohno
‘Dead material’

Question 12

Types of inventory

Answer 12

Raw Materials
- Materials to which the manufacturer has not yet added value

Work in Progress (WIP)
- Materials to which the manufacturers has added some value, but still has more to add

Finished Goods
- Good ready for shipment to the customers, with no more value to be added

Safety and Cycle stock

• Safety stock: non-active component to protect against fluctuations of demand, production and supply
• Cycle stock: Active component that depletes over time, and is replenished cyclically

Question 13

EOQ assumption

Answer 13

• Fixed and always identifiable ordering costs
• Cost of stock holding expressible as a linear function
• Steady and stable demand
• All demand is treated as independent

Question 14

Arguments for Inventory

Answer 14

• Littles law
• Buffer against uncertainty
• Exploitation of price fluctuations
• Smoothing or levelling of production
• Enables economies of scale

Question 15

Arguments against inventory

Answer 15

Costs

• Cost of capital
• Opportunity cost
• Depreciation of goods
• Stock obsolescence
• Labour and handling
• Warehousing costs
• Overall costs estimated at 20-30%

Question 16

Littles Law

Answer 16

A relationship between inventories and lead time

I=rxT

I = Units of inventory in a system
r = Production rate (at which items arrive/leave)
T = Lead time

Question 17

The theory of constraints

Answer 17

Any management system is being prevented from meeting more of it’s goals through few constraints, these constraints can be internal or external.

The goal is to identify constraints, and then prioritise maximising value from the constraint. This is an ingoing process, and inertia can represent a constraint.