Processes, Facilities, and Work Systems

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Process Selection and Facility Layout

Chapter 6

6-‹#›

You should be able to:

LO 6.1 Explain the strategic importance of process selection and the influence it has on the organization and its supply chain

LO 6.2 Name the two main factors that influence process selection

LO 6.3 Compare the four basic processing types

LO 6.4 Explain the need for management of technology

LO 6.5 List some reasons for redesign of layouts

LO 6.6 Describe product layouts and their main advantages and disadvantages

LO 6.7 Describe process layouts and their main advantages and disadvantages

LO 6.8 Solve simple line-balancing problems

LO 6.9 Develop simple process layouts

Chapter 6: Learning Objectives

6-‹#›

Process selection

Refers to deciding on the way production of goods or services will be organized

It has major implications for

Capacity planning

Layout of facilities

Equipment

Design of work systems

Process Selection

LO 6.1

6-‹#›

Process Selection and System Design

Forecasting

Product and Service Design

Technological Change

Capacity Planning

Process Selection

Facilities and Equipment

Layout

Work Design

LO 6.1

6-‹#›

Key aspects of process strategy:

Capital intensity

The mix of equipment and labor that will be used by the organization

Process flexibility

The degree to which the system can be adjusted to changes in processing requirements due to such factors as

Product and service design changes

Volume changes

Changes in technology

Process Strategy

LO 6.1

6-‹#›

Two key questions in process selection:

How much variety will the process need to be able to handle?

How much volume will the process need to be able to handle?

Process Selection

LO 6.2

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Job Shop

Repetitive

Batch

Continuous

	Job Shop	Batch	Repetitive/ Assembly	Continuous
Description	Customized goods or services	Semi- standardized goods or services	Standardized goods or services	Highly standardized Goods or services
Advantages	Able to handle a wide variety of work	Flexibility; easy to add or change products or services	Low unit cost, high volume, efficient	Very efficient, very high volume
Disadvantages	Slow, high cost per unit, complex planning and scheduling	Moderate cost per unit, moderate scheduling complexity	Low flexibility, high cost of downtime	Very rigid, lack of variety, costly to change, very high cost of downtime

Types of Processing

LO 6.3

6-‹#›

Sustainable Production of Goods and Services

There is increasing pressure for organizations to operate sustainable production processes

According to the Lowell Center for Sustainable Production:

“Sustainable Production is the creation of goods and services using processes and systems that are: non-polluting; conserving of energy and natural resources; economically efficient; safe and healthful for workers, communities, and consumers; and, socially and creatively rewarding for all working people.”

6-‹#›

Process and Information Technology

Process and information technology can have a major impact on costs, productivity and competitiveness:

Process technology

Methods, procedures, and equipment used to produce goods and provide services

Information technology

The science and use of computers and other electronic equipment to store, process, and send information

6-‹#›

Process technology and information technology can have a profound impact on:

Costs

Productivity

Competitiveness

The Need to Manage Technology

LO 6.4

6-‹#›

Automation

Machinery that has sensing and control devices that enable it to operate automatically

Fixed automation

Programmable automation

Flexible automation

Automation

6-‹#›

Programmable Automation

Programmable automation

Involves the use of high-cost, general-purpose equipment controlled by a computer program that provides both the sequence of operations and specific details about each operation

Computer-Aided Manufacturing (CAM)

The use of computers in process control, ranging from robots to automated quality control

Numerically Controlled (N/C) Machines

Machines that perform operations by following mathematical processing instructions

Robot

A machine consisting of a mechanical arm, a power supply, and a controller

6-‹#›

Flexible Automation

Flexible automation

Evolved from programmable automation. It uses equipment that is more customized than that of programmable automation. A key difference between the two is that flexible automation requires significantly less changeover time.

FMS (Flexible Manufacturing System)

A group of machines designed to handle intermittent processing requirements and produce a variety of similar products

CIM (Computer Integrated Manufacturing)

A system for linking a broad range of manufacturing activities through an integrated computer system

6-‹#›

Flexible Manufacturing System (FMS)

FMS

A group of machines designed to handle intermittent processing requirements and produce a variety of similar products

Have some of the benefits of automation and some of the flexibility of individual, or stand-alone, machines

Includes supervisory computer control, automatic material handling, and robots or other automated processing equipment

6-‹#›

CIM

A system for linking a broad range of manufacturing activities through an integrated computer system

Activities include

Engineering design

FMS

Purchasing

Order processing

Production planning and control

The overall goal of CIM is to link various parts of an organization to achieve rapid response to customer orders and/or product changes, to allow rapid production and to reduce indirect labor costs

Computer Integrated Manufacturing (CIM)

6-‹#›

Facilities Layout

Layout

The configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system

Facilities layout decisions arise when:

Designing new facilities

Re-designing existing facilities

6-‹#›

Inefficient operations

High cost

Bottlenecks

Accidents or safety hazards

Changes in product or service design

Introduction of new products or services

Changes in output volume or product mix

Changes in methods or equipment

Changes in environmental or other legal requirements

Morale problems

The Need for Layout Planning

LO 6.5

6-‹#›

Basic objective

Facilitate a smooth flow of work, material, and information through the system

Supporting objectives

Facilitate product or service quality

Use workers and space efficiently

Avoid bottlenecks

Minimize material handling costs

Eliminate unnecessary movement of workers or material

Minimize production time or customer service time

Design for safety

Layout Design Objectives

LO 6.5

6-‹#›

Basic Layout Types

Product layouts

Process layouts

Fixed-position layout

Combination layouts

6-‹#›

Product layout

Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow

Repetitive Processing: Product Layouts

Used for Repetitive Processing

Repetitive or Continuous

Raw materials

or customer

Finished item

Station

Material

and/or labor

Material

and/or labor

Material

and/or labor

Material

and/or labor

Station

LO 6.6

6-‹#›

Product Layouts: Advantages & Disadvantages

Advantages

High rate of output

Low unit cost

Labor specialization

Low material handling cost per unit

High utilization of labor and equipment

Established routing and scheduling

Routine accounting, purchasing, and inventory control

Disadvantages

Creates dull, repetitive jobs

Poorly skilled workers may not maintain equipment or quality

of output

Fairly inflexible to changes in volume or product or process design

Highly susceptible to shutdowns

Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses

Individual incentive plans are impractical

LO 6.6

6-‹#›

Process layouts

Layouts that can handle varied processing requirements

Non-repetitive Processing: Process Layouts

Used for Intermittent processing

Job Shop or Batch

Dept. A

Dept. B

Dept. D

Dept. C

Dept. F

Dept. E

LO 6.7

6-‹#›

Process Layouts: Advantages & Disadvantages

Advantages

Can handle a variety of processing requirements

Not particularly vulnerable to equipment failures

General-purpose equipment is often less costly and easier and less costly to maintain

It is possible to use individual incentive systems

Disadvantages

In-process inventories can be high

Routing and scheduling pose continual challenges

Equipment utilization rates are low

Material handling is slow and inefficient

Reduced spans of supervision

Special attention necessary for each product or customer

Accounting, inventory control, and purchasing are more involved

LO 6.7

6-‹#›

Fixed position layout

Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed

Fixed Position Layouts

6-‹#›

Combination Layouts

Some operational environments use a combination of the three basic layout types:

Hospitals

Supermarket

Shipyards

Some organizations are moving away from process layouts in an effort to capture the benefits of product layouts

Cellular manufacturing

Flexible manufacturing systems

6-‹#›

Service layouts can be categorized as: product, process, or fixed position

Service layout requirements are somewhat different due to such factors as:

Degree of customer contact

Degree of customization

Common service layouts:

Warehouse and storage layouts

Retail layouts

Office layouts

Service Layouts

6-‹#›

Cellular Layouts

Cellular production

Layout in which workstations are grouped into a cell that can process items that have similar processing requirements

Groupings are determined by the operations needed to perform the work for a set of similar items, part families, that require similar processing

The cells become, in effect, miniature versions of product layouts

6-‹#›

Group Technology

Group technology

The grouping into part families of items with similar design or manufacturing characteristics

Design characteristics:

Size

Shape

Function

Manufacturing or processing characteristics

Type of operations required

Sequence of operations required

Requires a systematic analysis of parts to identify the part families

6-‹#›

Service Layouts

Two key factors:

Customer contact

Degree of customization

Layouts:

Warehouse and storage layouts

Retail layouts

Office layouts

6-‹#›

The goal of a product layout is to arrange workers or machines in the sequence that operations need to be performed

Designing Product Layouts: Line Balancing

LO 6.8

6-‹#›

Line balancing

The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements

Goal:

Obtain task grouping that represent approximately equal time requirements since this minimizes idle time along the line and results in a high utilization of equipment and labor

Why is line balancing important?

It allows us to use labor and equipment more efficiently

To avoid fairness issues that arise when one workstation must work harder than another

Line Balancing

LO 6.8

6-‹#›

Cycle Time

Cycle time

The maximum time allowed at each workstation to complete its set of tasks on a unit

Cycle time also establishes the output rate of a line

LO 6.8

6-‹#›

The required number of workstations is a function of

Desired output rate

Our ability to combine tasks into a workstation

Theoretical minimum number of stations

How Many Workstations Are Needed?

LO 6.8

6-‹#›

Precedence Diagram

Precedence diagram

A diagram that shows elemental tasks and their precedence requirements

LO 6.8

6-‹#›

Assigning Tasks to Workstations

Some heuristic (intuitive) rules:

Assign tasks in order of most following tasks

Count the number of tasks that follow

Assign tasks in order of greatest positional weight

Positional weight is the sum of each task’s time and the times of all following tasks

LO 6.8

6-‹#›

Balance delay (percentage of idle time)

Percentage of idle time of a line

Efficiency

Percentage of busy time of a line

Measuring Effectiveness

LO 6.8

6-‹#›

Designing Process Layouts

The main issue in designing process layouts concerns the relative placement of the departments

Measuring effectiveness

A major objective in designing process layouts is to minimize transportation cost, distance, or time

LO 6.9

6-‹#›

Information Requirements

In designing process layouts, the following information is required:

A list of departments to be arranged and their dimensions

A projection of future work flows between the pairs of work centers

The distance between locations and the cost per unit of distance to move loads between them

The amount of money to be invested in the layout

A list of any special considerations

The location of key utilities, access and exit points, etc.

LO 6.9

6-‹#›

Distance between locations in meters
		To
		A	B	C
From	A		20	40
	B			30
	C

Process Layout Problem

Interdepartmental work flows (loads per day)
		To
		1	2	3
From	1		30	170
	2			100
	3

LO 6.9

6-‹#›

Process Layout Problem (cont.)

170

100

Dept.	Loads	Location	Distance (meters)	Load Distance Score
1 to 2	170	A to B	20	170 x 20 = 3,400
1 to 3	30	A to C	40	30 x 40 = 1,200
2 to 3	100	B to C	30	100 x 30 = 3,000
			Total	7,600

LO 6.9

6-‹#›

Work Design and Measurement

Chapter 7

6-‹#›

You should be able to:

LO 7.1 Explain the importance of work design

LO 7.2 Compare and contrast the two basic approaches to job design

LO 7.3 Discuss the advantages and disadvantages of standardization

LO 7.4 Describe behavioral approaches to job design

LO 7.5 Discuss the impact of working conditions on job design

LO 7.6 Compare the advantages and disadvantages of time-based and output-based pay systems

LO 7.7 Explain the purpose of methods analysis and describe how methods studies are performed

LO 7.8 Describe four commonly used techniques for motion study

LO 7.9 Define a standard time

LO 7.10 Describe and compare time study methods and perform calculations

LO 7.11 Describe work sampling and perform calculations

LO 7.12 Compare stopwatch time study and work sampling

Chapter 7: Learning Objectives

6-‹#›

Job Design

Job design

The act of specifying the contents and methods of jobs

What will be done in a job

Who will do the job

How the job will be done

Where the job will be done

Importance

Organization’s are dependent on human efforts to accomplish their goals

Many job design topics are relevant to continuous and productivity improvement

Objectives

Productivity

Safety

Quality of work life

LO 7.1

6-‹#›

Efficiency vs. Behavioral Job Design

Efficiency School

Emphasizes a systematic, logical approach to job design

A refinement of Frederick Winslow Taylor’s scientific management concepts

Behavioral School

Emphasizes satisfaction of needs and wants of employees

LO 7.2

6-‹#›

Specialization

Work that concentrates on some aspect of a product or service

Advantages
For management: Simplifies training High productivity Low wage costs	For employees: Low education and skill requirements Minimum responsibility Little mental effort needed
Disadvantages
For management: Difficult to motivate quality Worker dissatisfaction, possibly resulting in absenteeism, high turnover, disruptive tactics, poor attention to quality	For employees: Monotonous work Limited opportunities for advancement Little control over work Little opportunity for self-fulfillment

LO 7.3

6-‹#›

Behavioral Approaches to Job Design

Job Enlargement

Giving a worker a larger portion of the total task by horizontal loading

Job Rotation

Workers periodically exchange jobs

Job Enrichment

Increasing responsibility for planning and coordination tasks, by vertical loading

LO 7.4

6-‹#›

Motivation

Motivation is a key factor in many aspects of work life

Influences quality and productivity

Contributes to the work environment

Trust is an important factor that affects motivation

6-‹#›

Teams

Teams take a variety of forms:

Short-term team

Formed to collaborate on a topic or solve a problem

Long-term teams

Self-directed teams

Groups empowered to make certain changes in their work processes

6-‹#›

Benefits of teams

Higher quality

Higher productivity

Greater worker satisfaction

Team problems

Some managers feel threatened

Conflicts between team members

Teams

6-‹#›

Quality of Work Life

Quality of work life affects not only workers’ overall sense of well-being and contentment, but also their productivity

Important aspects of quality of work life:

How a worker gets along with co-workers

Quality of management

Working conditions

Compensation

LO 7.5

6-‹#›

Compensation

It is important for organizations to develop suitable compensation plans for their employees

Compensation approaches

Time-based systems

Output-based systems

Incentive systems

Knowledge-based systems

6-‹#›

Time-based system

Compensation based on time an employee has worked during the pay period

Output-based (incentive) system

Compensation based on amount of output an employee produced during the pay period

Compensation Systems

6-‹#›

Comparing Compensation Approaches

	Management	Worker
TIME-BASED Advantages	Stable labor costs Easy to administer Simple to compute pay Stable Output	Stable pay Less pressure to produce than under output system
Disadvantages	No incentive for workers to increase output	Extra efforts not rewarded
OUTPUT-BASED Advantages	Lower cost per unit Greater output	Pay related to efforts Opportunity to earn more
Disadvantages	Wage computation more difficult Need to measure output Quality may suffer Difficult to incorporate wage increases Increased problems with scheduling	Pay fluctuates Workers may be penalized because of factors beyond their control (e.g., machine breakdown)

LO 7.6

6-‹#›

Individual incentive plans

Straight piecework

Worker’s pay is a direct linear function of his or her output

Minimum wage legislation has reduced their popularity

Base rate + bonus

Worker is guaranteed a base rate, tied to an output standard, that serves as a minimum

A bonus is paid for output above the standard

Group incentive plans

Tend to stress sharing of productivity gains with employees

Individual and Group Incentive Plans

6-‹#›

Knowledge-based pay

A pay system used by organizations to reward workers who undergo training that increases their skills

Three dimensions:

Horizontal skills

Reflect the variety of tasks the worker is capable of performing

Vertical skills

Reflect the managerial skills the worker is capable of

Depth skills

Reflect quality and productivity results

Knowledge-Based Pay Systems

6-‹#›

Management Compensation

Many organizations used to reward managers based on output

New emphasis is being placed on other factors of performance

Customer service

Quality

Executive pay is increasingly being tied to the success of the company or division for which the executive is responsible

6-‹#›

Methods Analysis

Analyzing how a job gets done

It begins with an analysis of the overall operation

It then moves from general to specific details of the job concentrating on

Workplace arrangement

Movement of workers and/or materials

Methods Analysis

LO 7.7

6-‹#›

The need for methods analysis can arise from a variety of sources

Changes in tools and equipment

Changes in product design or introduction of new products

Changes in materials and procedures

Government regulations or contractual agreements

Accidents or quality problems

The Need for Methods Analysis

LO 7.7

6-‹#›

Methods Analysis Procedure

Identify the operation to be studied, and gather relevant data

Discuss the job with the operator and supervisor to get their input

Study and document the present methods

Analyze the job

Propose new methods

Install the new methods

Follow up implementation to assure improvements have been achieved

LO 7.7

6-‹#›

Consider jobs that:

Have a high labor content

Are done frequently

Are unsafe, tiring, unpleasant, and/or noisy

Are designated as problems

Quality problems

Processing bottlenecks

etc.

Guidelines for Selecting a Job to Study

LO 7.7

6-‹#›

Analyzing the Job: Flow Process Charts

Flow process chart

Chart used to examine the overall sequence of an operation by focusing on movements of the operator or flow of materials

LO 7.7

6-‹#›

Analyzing the Job: Worker-Machine Chart

Worker machine chart

Chart used to determine portions of a work cycle during which an operator and equipment are busy or idle

LO 7.7

6-‹#›

Motion study

Systematic study of the human motions used to perform an operation

Motion Study Techniques

Motion study principles– guidelines for designing motion-efficient work procedures

Analysis of therbligs– basic elemental motions into which a job can be broken down

Micromotion study– use of motion pictures and slow motion to study motions that otherwise would be too rapid to analyze

Charts– activity or process charts, simo charts (simultaneous motions)

Motion Study

LO 7.8

6-‹#›

Developing Work Methods

In developing work methods that are motion efficient, the analyst attempts to

Eliminate unnecessary motions

Combine activities

Reduce fatigue

Improve the arrangement of the workplace

Improve the design of tools and equipment

LO 7.8

6-‹#›

Work Measurement

Work measurement is concerned with how long it should take to complete a job.

It is not concerned with either job content or how the job is to be completed since these are considered a given when considering work measurement.

LO 7.9

6-‹#›

Work Measurement

Standard time

The amount of time it should take a qualified worker to complete a specified task, working at a sustainable rate, using given methods, tools and equipment, raw material inputs, and workplace arrangement.

Commonly used work measurement techniques

Stopwatch time study

Historical times

Predetermined data

Work sampling

LO 7.9

6-‹#›

Stopwatch Time Study

Used to develop a time standard based on observations of one worker taken over a number of cycles.

Standard Elemental Times

are derived from a firm’s own historical time study data.

Predetermined time standards

involve the use of published data on standard elemental times.

Work sampling

a technique for estimating the proportion of time that a worker or machine spends on various activities and idle time.

Work Measurement Techniques

LO 7.10

6-‹#›

Stopwatch Time Study

Used to develop a time standard based on observations of one worker taken over a number of cycles.

Basic steps in a time study:

Define the task to be studied and inform the worker who will be studied

Determine the number of cycles to observe

Time the job, and rate the worker’s performance

Compute the standard time

LO 7.10

6-‹#›

The number of observations to collect is a function of

Variability of the observed times

The desired level of accuracy

Desired level of confidence for the estimated job time

Number of Cycles to Observe

LO 7.10

6-‹#›

Observed Time

LO 7.10

6-‹#›

Normal Time

Assumes that a single performance rating has been made for the entire job

LO 7.10

6-‹#›

Normal Time

Assumes that performance ratings are made on an element-by-element basis

LO 7.10

6-‹#›

Standard Time

LO 7.10

6-‹#›

Historical Times

Standard Elemental Times are derived from a firm’s own historical time study data.

Over time, a file of accumulated elemental times that are common to many jobs will be collected.

In time, these standard elemental times can be retrieved from the file, eliminating the need to go through a new time study to acquire them.

LO 7.10

6-‹#›

Predetermined time standards involve the use of published data on standard elemental times.

Developed in the 1940s by the Methods Engineering Council.

The MTM (methods-time-measurement) tables are based on extensive research of basic elemental motions and times.

To use this approach, the analyst must divide the job into its basic elements (reach, move, turn, etc.) measure the distances involved, and rate the difficulty of the element, and then refer to the appropriate table of data to obtain the time for that element

Predetermined Time Standards

LO 7.10

6-‹#›

Work sampling is a technique for estimating the proportion of time that a worker or machine spends on various activities and the idle time.

Work sampling does not require timing an activity or involve continuous observation of the activity

Uses:

ratio-delay studies which concern the percentage of a worker’s time that involves unavoidable delays or the proportion of time a machine is idle.

analysis of non-repetitive jobs.

Work Sampling

LO 7.11

6-‹#›

Work Sampling

LO 7.11

6-‹#›

Work Sampling vs. Stopwatch Time Studies

Advantages
Observations are spread out over a period of time, making results less susceptible to short-term fluctuations There is little or no disruption of work Workers are less resentful Studies are less costly and less time-consuming, and the skill requirements of the analyst are much less Studies can be interrupted without affecting the results No timing device is required It is well suited for nonrepetitive tasks
Disadvantages
There is much less detail on the elements of a job Workers may alter their work patterns when they spot the observer, thereby invalidating the results In many cases, there is no record of the method used by the worker Observers may fail to adhere to a random schedule of observations It is not well suited for short, repetitive tasks Much time may be required to move from one workplace to another and back to satisfy the randomness requirement

LO 7.12

6-‹#›

Job Design Success

Success factors:

Carried out by personnel with appropriate training and background

Consistent with the goals of the organization

In written form

Understood and agreed to by both management and employees

6-‹#›

It is important to make design of work systems a key element of strategy:

People are still at the heart of the business

Workers can be valuable sources of insight and creativity

It can be beneficial to focus on quality of work life and instilling pride and respect among workers

Companies are reaping gains through worker empowerment

Operations Strategy

6-‹#›

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