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Products and Processes

Introduction to

MATERIALS MANAGEMENT

CHAPTER

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Product Life Cycle

Introduction Phase

Expensive, risky with low sales volume

Growth Phase

Rapid increase in sales and profits, unsuccessful designs “forced out”

Maturity Phase

Sales “flatten”, prices/profits fall due to competition

Decline Phase

Both sales and profits tend to fall as product nears end of its “life”

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Life Cycle of a Product

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Product Development Principles

Simplification

Cut waste by eliminating needless varieties, sizes, and types

Remove unnecessary products and variations

Standardization

Develop a well-defined specification for material, configuration, etc.

Many products use modularization – standardized parts for flexibility and variety

Specialization – focus of efforts and design

Product or market focus – serve a defined customer group

Process focus – concentrate on a particular process

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Focused Factory

Narrow product mix for niche market

Repetiton and concentrated workforce and equipment in one area allow for advantages of specialization

“Factory within a factory”

An area in an existing factory set aside to specialize in a narrow product mix

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Other Product Design Issues

Product design: responsible for producing a set of specifications that manufacturing can use to make the product

Products must be designed to be

Functional

Designed to perform as specified in the marketplace

Capable of low-cost processing

Must create design to minimize manufacturing costs

Specifications, materials, tolerances, assembly

Standardization

Environmentally (“green”) sensitive

Efficiently use resources

Reduce consumption of energy

Easily separated for reuse and recycling

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Simultaneous Engineering

Concurrent (simultaneous) Engineering

Product and process engineering working together for:

Optimal functionality in the marketplace

Low cost manufacturing

Other cross functional engagement

Reduced time to market

Reduced cost to design

Better quality

Lower total cost

Collaboration with suppliers, customers

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Process Design

Process = means by which operations management reaches objectives of

Producing products and services customers want

When they want it

Required quality

Desired cost

High effectiveness and productivity

Nesting

Several small processes linked to form a larger process

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Mass Customization

Production of customized products at same cost as mass-produced product

Flexible and efficient operations

Quick redesign based on customer need

Can occur at the final stage of the production stage (Postponement)

Combines flexibility, agility, and knowledge of customer need

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Factors Influencing Process Designs

Product design and quality levels needed

Process much be capable of achieving the quality level

Demand patterns and flexibility needed for fluctuation

Quantity and capacity considerations

Degree of customer involvement

Environmental concerns – “green” sensitivity

Example: Water-based paints

Make or buy decisions

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Relationship Between Product Design, Process Design, and

Relationship Between Product Design, Process Design, and Capacity

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Reasons to Make In-house

Can produce at a lower cost

Utilization of existing equipment

Maintain control of confidential processes

Maintain better quality control

Maintain workforce

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Reasons to Buy

Less requirement for capital investment

Rely on specialized expertise of suppliers

Allow firm to concentrate on own area of specialization

Provide for competitive pricing

Can accommodate large volume changes

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Processing Equipment

General-purpose machinery

Used for a variety of operations or products

Less costly

More human input – Quality level more variable

Special-purpose machinery

Perform specific operations on small number of similar products

Less flexible

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Process Systems

Flow process

Product layout

Limited range of similar products flow from workstation to workstation at a nearly constant rate

Intermittent processes

Goods made at intervals in lots or batches

Process (functional) layout

Project or fixed position processes

Large, complex, unique

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Process Costing

Job Costing

Often used with multiple products produced within a time period

Labor, material, overhead allocated to the product

Process Costing

Often used for continuous processes

Costs consumed during a period allocated to departments or operations rather then a specific product

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Continuous Process Improvement

Improving productivity

Better and faster machinery and equipment

Designing or improving work methods to maximize productivity

Better use of existing resources

Removing work content

People involvement

Maximize potential of flexible, motivated workers

Participation of everyone

Improvement in methods requiring little capital

Team concept

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Continuous Process Improvement

Select the process to be studied

Record and collect data in a useful form

Analyze the data to generate improved methods

Evaluate alternatives and select method

Implement as standard practice

Maintain the new method

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Continuous Process Improvement

Economic considerations

Cost of improvement must be justified

One to two year payback is most common

Job size must justify the time working on it

Human factor

Governs the success

Resistance to change

Focus on pleasant or unsafe working conditions

Intangible benefits

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Pareto Analysis: Select problems with the greatest economic impact

Determine method of classifying data

Select unit of measure

Collect data for appropriate time interval

Summarize data by ranking in descending order

Calculate total cost

Calculate % of each item

Construct bar graph showing % for each item and line graph of cumulative %

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Pareto Diagram

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Cause-and-Effect Diagram (Fishbone or Ishikawa))

Identify problem to be studied

Generate ideas about main causes

Materials

Machines

People

Methods

Measurement

Environment

Brainstorm all possible causes for each main cause

Identify most likely root causes

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Cause and effect diagrams – and example

Cause-and-Effect Diagram

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Record Facts Related to Process

Process boundaries – starting and ending point

Process flow – what happens between start and end

Process inputs and outputs

Components – resources used in changing inputs to outputs

Customers – rates the effectiveness of the output

Suppliers – provide the inputs

Business environment – internal and external

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Schematic of a process

Schematic of Process

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Process Flow Charts – Classes of Activity

Classes of activity

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Operations Process Chart

Record in sequence only the main operations and inspections

High level view of the process

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Process Flow Diagram

Graphic and sequential representation of the various steps, events and operations that make up a process

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Analyze

Find root cause

Questioning attitude

Examining total process to define

What is accomplished

How

Why

Examining parts of process

Value added vs. non-value added activity

Analysis of relationship between production rate, item throughput and process inventory

Little’s Law

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Little’s Law

Can be applied to any process that includes time, inventory and throughput

I = RT, where

I = inventory in the process

R = production processing rate

T = throughput time through process

Dividing by R, the formula becomes T=I/R

Assuming that R is fairly stable, shows that each reduction in inventory is directly related to faster throughput

https://www.youtube.com/watch?v=JUszeJViSjU

Little’s Law

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Develop

Eliminate all unnecessary work

Combine operations wherever possible

Rearrange sequence of operations

Simply wherever possible

Less complex

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Principles of Motion Economy

Principles of motion economy

Locate materials, tools and workplace within working area

Locate work done most frequently within working area and maximum grasp area

Arrange work so motions are balanced

Reduce conditions contributing to operator fatigue

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Human and Environmental Factors

Job design improvements

Job enlargement – expand a worker’s job

Job enrichment – add more meaningful tasks

Job rotation – perform several different jobs

Cross-training

Empowerment and self-directed work teams

Allow the teams to have more responsibility and decision making authority

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Implement and Maintain

Implement the improved actions/changes

Equipment, tooling, information and people available

Dry run

Proper training

Learning curve

Maintain

Be sure new method is being done correctly

Evaluate change to be sure benefits are accomplished

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive

Sample Learning curve

Sample Learning Curve

Over time, speed will increase and errors will decrease

Introduction to Materials Management, 8e

Chapman, Arnold, Gatewood, and Clive