Product and process design
- 2. Organizations exist to provide goods or services to society Great products are the key to success Top organizations typically focus on core products Customers buy satisfaction, not just a physical good or particular service Fundamental to an organization's strategy with implications throughout the operations function Goods and Services Selection
- 3. Goods or services are the basis for an organization's existence Limited and predicable life cycles requires constantly looking for, designing, and developing new products New products generate substantial revenue Goods and Services Selection
- 4. Generating New Products 1. Understanding the customer 2. Economic change 3. Sociological and demographic change 4. Technological change 5. Political and legal change 6. Market practice, professional standards, suppliers, distributors New Product Opportunities
- 5. Product Life Cycles May be any length from a few days to decades The operations function must be able to introduce new products successfully
- 6. Product Life Cycle Negative cash flow Introduction Growth Maturity Decline Sales,cost,andcashflow Cost of development and production Cash flow Net revenue (profit) Sales revenue Loss
- 7. Differences between Different Stages of Product Life Cycle Steps Startup Growth Maturity Decline Product Variety Higher Varieties Increasing standardization Emergence of dominant design High standardization with ‘commodity’ characteristic Volume Low volume Increasing volume High volume High volume (Often Reducing) Industry structure Small competitors Fall out and consolidation Few large companies Survivors Form of Competition Product varieties Product quality and availability Dependability and price Price
- 8. Product Development Process Need Identification Feasibility Study Advance Design Product Development and Engineering Process Design and Development Product Evaluation and Improvement Product Use and Support
- 9. Issues for Product Design Robust design Modular design Computer-aided design (CAD) Computer-aided manufacturing (CAM) Virtual reality technology Value analysis Sustainability and Life Cycle Assessment (LCA)
- 10. Robust Design Robust product: A product that can perform under a wide range of environmental conditions without failing. Product is designed so that small variations in production or assembly do not adversely affect the product Typically results in lower cost and higher quality
- 11. Modular Design Modular design: The creation of products from some combination of basic, pre-existing subsystems (components). Products designed in easily segmented components Adds flexibility to both production and marketing Improved ability to satisfy customer requirements
- 12. Using computers to design products and prepare engineering documentation Shorter development cycles, improved accuracy, lower cost Information and designs can be deployed worldwide Computer Aided Design (CAD)
- 13. Computer-Aided Manufacturing (CAM) Computer-aided manufacturing (CAM): Manufacturing systems utilizing computer software programs that control the actual machine on the shop floor. Utilizing specialized computers and program to control manufacturing equipment Often driven by the CAD system (CAD/CAM)
- 14. Product quality Shorter design time Production cost reductions Database availability New range of capabilities Benefits of CAD/CAM
- 15. Virtual Reality Technology Computer technology used to develop an interactive, 3-D model of a product from the basic CAD data Allows people to ‘see’ the finished design before a physical model is built Very effective in large-scale designs such as plant layout
- 16. Value Analysis Focuses on design improvement during production Seeks improvements leading either to a better product or a product which can be produced more economically with less environmental impact
- 17. Sustainability and Life Cycle Assessment (LCA) Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their needs LCA is a formal evaluation of the environmental impact of a product
- 18. 7-18 Four Process Strategies Four process strategies 1. Process focused. 2. Product focused. 3. Repetitive focused. 4. Mass customization. Several strategies may be used within one facility. Process strategies follow a continuum.
- 19. Fit of Process, Volume, and Variety PROCESS FOCUS (job shops) REPETITIVE FOCUS (autos, motorcycles) PRODUCT FOCUS (steel, chemicals) High Variety (allows customization) Low Variety (standardization) MASS CUSTOMIZATION (Dell Computer) POOR STRATEGY Low Volume High Volume
- 20. 1. Process Focus Facilities organized by process. Similar processes or equipment grouped together. (Example: All drill presses are together.) Low volume, high variety products. 75% of all global products. Products follow many different paths. Other names: Intermittent process. Job shop. 1 3 4 2
- 22. Process Focus - Pros & Cons • Advantages: • Greater product flexibility. • More general purpose equipment. • Lower initial capital investment. • Disadvantages: • High variable cost per unit. • More highly trained personnel. • More difficult production planning & control. • Low equipment utilization (5% to 25%).
- 23. 2. Product Focus Facilities organized by product. High volume, low variety products. Long, continuous production runs. Discrete unit manufacturing. Continuous process manufacturing. Other names: Line flow production. Continuous production. 1 2 3 4
- 24. Product Focus Examples Light Bulbs (Discrete) Paper (Continuous) . Soft Drinks (Continuous, then Discrete)
- 25. Product Focus - Pros & Cons • Advantages: • Lower variable cost per unit. • Lower but more specialized labor skills. • Easier production planning and control. • Higher equipment utilization (70% to 90%). • Disadvantages: • Lower product flexibility. • More specialized equipment. • Higher capital investment.
- 26. 3. Repetitive Focus • Facilities often organized by assembly lines. • Characterized by modules. • Parts & assemblies made previously. • Modules combined for many output options. • Other names: • Assembly line. • Production line.
- 27. Repetitive Focus - Examples Truck Clothes Dryer Fast Food McDonald’s over 95 billion served
- 28. Repetitive Focus - Considerations More structured than process focus, less structured than product focus. Enables quasi-customization. Has advantages and disadvantages of process focus and product focus.
- 29. 7-29 Process Continuum Process Focused (intermittent process) Repetitive Focus (assembly line) Product Focused (continuous process) Continuum High variety, low volume Low utilization (5% - 25%) General-purpose equipment Low variety, high volume High utilization (70% - 90%) Specialized equipment Modular Flexible equipment
- 30. 4. Mass Customization Rapid, low-cost production to fulfill unique customer desires. Distinctions between process, repetitive and product focus blur, making variety and volume issues less significant. Very hard to achieve!
- 31. Mass Customization at Dell Computer Company • Sells custom-built PCs directly to consumer. • Builds computers rapidly, at low cost, and only when ordered. • Integrates the Web into every aspect of business. • Operates with six days inventory. • Research focus on software to make installation and configuration of PCs fast and simple.
- 32. 7-32 Process Analysis and Design • Process should: • Be designed to achieve competitive advantage - differentiation, response, or low cost. • Eliminate steps that do not add value. • Maximize customer value, as perceived by the customer.
- 33. Process Design Analysis The analysis stage of process design involves calculating the details of the process, in particular • its objectives, • sequence of activities, • allocation of tasks and capacity, and • its ability to incorporate the effects of variability. It is the complementary activity to the broad positioning of processes
- 34. The design factors that will influence the flow objectives • The variability of input arrival to the process • The configuration of the resources and activities within the process. • The capacity of the resources at each point in the process. • The variability of the activities with in the process.
- 35. Types of Processes According to different positions on the volume–variety spectrum. Manufacturing Process Types (Manufacturing Process Technology) 1.Project Processes 2.Jobbing Processes 3.Batch Processes 4.Mass processes 5.Continuous process Service Process types (Service Process Technology) 1.Professional service 2.Service shop 3.Mass service
- 37. Project Processes One-off, complex, large scale, high work content “products” Specially made, every one customized Defined start and finish: time, quality and cost objectives Many different skills have to be coordinated Fixed position layout
- 39. Jobbing Processes Very small quantities: “one-offs”, or only a few required Specially made. High variety, low repetition. Skill requirements are usually very broad Skilled jobber, or team of jobbers complete whole product Fixed position or process layout (routing decided by jobbers)
- 41. Batch Processes Higher volumes and lower variety than for jobbing Standard products, repeating demand. Specialized, narrower skills Set-ups (changeovers) at each stage of production
- 43. Mass processes(Assembly line process) Higher volumes than Batch Standard, repeat products Low and/or narrow skills No set-ups, or almost instantaneous ones
- 45. Continuous processes Extremely high volumes and low variety: often single product Standard, repeat products Highly capital-intensive and automated Few changeovers required Difficult and expensive to start and stop the process Product layout: usually flow along conveyors or pipes
- 49. Professional Services High contact with customers in the service process. High levels of customization More staff time is spent in servicing customers. Professional services tend to be people-based and process (how the service is delivered). Examples: management consultants, lawyers’ practices, architects, doctors’ surgeries, auditors etc.
- 50. Service Shop Service shops are characterized by levels of customer contact, customization, volumes of customers and staff discretion. Service is provided via mixes of front- and back-office activities. Examples: banks, high street shops, holiday tour operators, car rental companies, schools, most restaurants, hotels and travel agents.
- 51. Mass Services Mass services have many customer transactions. Equipment based and ‘product’-oriented, • with most value added in the back office • relatively little judgement applied by front-office staff. Closely defined division of labour and to follow set procedures. Examples: Supermarkets, a national rail network, an airport, telecommunications services, libraries, television stations, the police service and the enquiry desk at a utility.
- 52. The product–process matrix Important elements of process design are strongly related to the volume–variety position of the process. In any process, the tasks that it undertakes, the flow of items through the process, the layout of its resources, the technology it uses, and the design of jobs, are all strongly influenced by its volume–variety position.
- 54. Product Process Matrix (including service)
- 55. Moving off the natural diagonal A process lying on the natural diagonal of the matrix will normally have lower operating costs than one with the same volume–variety position that lies off the diagonal. Diagonal represents the most appropriate process design for any volume–variety.
- 58. What is Capacity? The maximum output of a system/organization in a given period. The throughput, or the number of units a facility can hold, receive, store, or produce in a period of time. Over and Under capacity are horrible.
- 59. Types of Capacity Design Capacity • The maximum capacity that can be achieved under ideal conditions. Effective Capacity • The expected capacity given the current operating environment and constraints like • Setups to replace the raw material • Adjustments, oiling, clearing • Quality tests may cause loss of units Actual Capacity • The maximum output rate which is actually achieved under the constraints of machine breakdown, labour inefficiencies and absenteeism, late delivery of materials.
- 60. Design Capacity > Effective Capacity >= Actual Capacity
- 61. Calculations Formulae • Utilization = 𝐴𝑐𝑡𝑢𝑎𝑙 𝑂𝑢𝑡𝑝𝑢𝑡 𝐷𝑒𝑠𝑖𝑔𝑛 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 * 100 • Efficiency = 𝐴𝑐𝑡𝑢𝑎𝑙 𝑂𝑢𝑡𝑝𝑢𝑡 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 ∗ 100
- 62. Determinants of Effective Capacity Facilities • Design • Location • Layout • Environment Process • Quantity capabilities • Quality capabilities Product/service • Design • Product or service mix Operational Policy • Scheduling • Materials management • Quality assurance • Maintenance policies
- 63. Human Factors • Job content • Job design • Training and experience • Motivation • Compensation • Learning rates • Absenteeism and turnover Supply Chain and External Factors • Product standards • Safety regulations, unions • Pollution control standards
- 64. Capacity Planning Process Assessing Existing Capacity Forecasting Capacity Needs Identifying Alternatives to Modify Capacity Evaluating Financial, Economical and Technical Aspects of Capacity Alternatives Selection of Alternatives
- 65. 1. Assessing Existing Capacity Measure the existing capacity of the firm Different organizations have different measures of capacity Organization Capacity measures Basis Steel Company Tonnes of steel Output Hospital No. of beds Input School No. of students enrollment Input Auto plant No. of cars Output
- 66. 2. Forecasting Capacity Needs Short term capacity needs • Up to 1 year Long term capacity needs • More than 1 year
- 67. 3. Identifying Alternatives to Modify Capacity Short Term Capacity Modification • In capital intensive system- higher or lesser machine hours, maintaining facilities, etc. • In labour intensive system- overtime working, laying of employees, immediate hiring. Long Term Capacity Modification • For long term capacity needs • Capacity modification option • Expansion- establishing new facilities • Contraction- selling existing facilities, firing employees • Permanent shut down
- 68. 4. Evaluating Financial, Economical and Technical Aspects of Capacity Alternatives Which capacity alternative is financially, economically and technically suitable Some techniques- NPV analysis, time value of investment, BEP analysis, etc.
- 69. 5. Selection of Alternative On the basis of need, vision of future business and suitability best alternative has to be selected.
- 70. Methods of Minimizing Non-sampling Errors • Checking the sampling process • Preparation of questionnaire • Pilot survey • Fix procedures • Use of competent manpower • Provide information • Provide training • Use of experts • Checking data processing and analysis