Module 3 SCM ch.3
Key Issues to Consider in Choosing a Manufacturing Location.
Labor – Wages, technical skills, work ethic, culture, language.
Facility, Infrastructure and Utilities
Laws – Labor, Intellectual property, environmental regulations, criminal
Resource Availability
Local Risks – Crime, law enforcement, politics,
Climate – Will the temperature and weather conditions be appropriate for the product, machines, and employees?
Transportation and Transportation Infrastructure:
Trade Agreements, Tariffs, and Quotas
Channels of distribution represent the chain of organizations that help bring a product into the hands of the end user.
A company’s supplier base is the collection of companies from which an organization presently purchases products and/or services.
-An established supplier base implies that an organization has a group of companies with which they have developed a working
relationship.
Hypercompetitive Markets: industry that is heavily concentrated in a particular region, where the companies compete fiercely.=
rapid innovation but short cycles of competitive advantage. Relationship management, relationship opportunies.
Relationship Between Design, Marketing and Supply Chain Management
-Marketing identifies a target market.
-designers and engineers work to develop products that satisfy the needs of the target market.
-Supply chains then buy parts, manufacture those end items, and then deliver them into the hands of the customer.
Without the coordination of marketing, design and supply chain, companies may manufacture a great product that is not valued by
their target market.
-coordination and integration are vital to long-term success.
Strategic Decisions: decisions made at the highest levels of the organization./long range goals
- Provides direction for the company by identifying target markets, business models and potential product or service categories
in which the company would like to compete.
Designers, Engineers,
supply chain-parts, labor, assembly line equipment
finance- acquiring capital, ROI
Marketing- consumer base, competition.
Design decisions: Decisions that seek to satisfy a target market in a particular product or service category. provide a more specific
roadmap to satisfying strategic goals.
Operating decisions: impact the organization in the short-term. Operating decisions related to the daily operations that are
performed in a company on a routine basis.
Operational decisions and activities that will impact the success of the establishment:
Process Considerations, Production Considerations, and Consumer variability
Line flow: a manufacturing strategy and layout that typically works well in producing end items (or services) that have relatively high
demand and that require very little (if any) customization. Make to stock.
-work centers are in a linear path; items begin on one end of the line and continue in a linear path to the last work center.
-Each work center performs the exact same work to every unit that passes through that work center.
2 types of line flow layouts/manufacturing strategies:
Assembly Line –can be stopped at any time without compromising the inventory flowing through the system.
Continuous Flow Systems – must run to completion once the process has been started. must finish their cycle.
Flexible Flow Strategy and Layout: A manufacturing strategy and layout that typically works well for producing end items (or
services) that have relatively low demand levels and that require a high level of customization. Make to order
Hybrid Strategy and Layout: A manufacturing layout that combines elements from both line flow and flexible flow layouts. strategy,
products pass through a layout in a linear fashion each workstation would have the ability to allow for some level of customization./
-Items of low degrees of customization. Assemble to order
-items requiring higher degrees of customization may only utilize line flow
GT (Group Technology) Cells: A type of hybrid strategy that utilizes a line-flow layout for low-volume processes.
- allows for a linear path through the layout, each work center may have the ability to offer some level of customization.
Fixed Position Layout; used for very large and hard to move items – airplanes, cruise ships, office buildings. workers and machines
come to the worksite and move around the item as needed.
assembly line considerations: Meet demand, make the product well, do it using the fewest resources possible, consider the worker
and the machine, be prepared for changes in demand and the assembly line.
Assembly Line Challenges:
Bottlenecks – A section of a supply chain that limits the overall output of the assembly line. the slowest and/or weakest workstation
Module 3 SCM ch.3
Too Many Employees and/or Workstations – Controlling cost and movement is key to the long-term efficiency of an assembly line.
Having more workers than required and/or more workstations thus requiring more material hand-offs.
Employee Inequities – Employees that work on assembly lines often compare their workload to those of their fellow employees.
Present Needs Versus Future Demands
Assembly Line Terminology:
Tasks or Work Elements – The smallest units of work that must be accomplished to complete an end item on the assembly line.
Actual Number of Workstations (n)
Total Task Time (t) – The sum of all the tasks on the precedence diagram. Add all the times
Cycle time= ( C) = operating time/demand= OT/D=
-To convert hours into seconds multiply by 3600
-Ex: (6*3600)/400d=
-Cycle time is the pace at which products must move through the assembly line in order for the assembly line to keep pace with
demand. Don’t round up
-tells a manager the maximum amount of task time that can be put into a single workstation.
# of workers/ Theoretical minimum # of workstations formula: TM= t/c= /round up
Even split is divide by # of workstations= the desired
Precedence Diagram – An illustration that shows the relationships between all the work elements in an assembly line process.
Workstation – A workstation is the collection of one or more work elements.
Line Balancing – The goals of assembly line balancing is to equitably group precedence diagram tasks into the fewest number of
workstations. (meet demand , be efficient, and consider future)
What’s Needed Before You Begin?
1. A list of all assembly line tasks and the time each takes to complete.
2. A precedence diagram illustrating the precedence relationships between all assembly line tasks.
3. Product demand for a given period./output rate
Line Balancing Rules
1. Identify workstation candidates.
2. Choose one of the candidates for placement into the workstation.
3. Test viability of candidate chosen
a. If this candidate brings total task time of that workstation above the cycle time (c), it will not fit.
b. If the candidate does fit, go back to step 1 and try and place a new task into this workstation.
Cycle Time Rule: For each workstation to be allowable, the workstation must have a total task time equal to or less the cycle time
(c). max time allowed for work on 1 unit at each unit
Precedence Rule: All tasks in the workstation must not violate precedence relationships illustrated in the precedence diagram.
Idle Time – Idle time is the amount of time that is not utilized at each workstation.
Idle time = nc – t = # of workstations * cycle time – the total task time
Efficiency = t / nc= Total task time Divided by # of stations * cycle time
- EX. Efficiency = 180 / [4 (54)] = 0.833 = 83.3%
1. Bottleneck: The largest workstation is your slowest workstation.
2. Effective Cycle Time
3. More Workstations
Outsourcing consideration:
Location, infrastructure, process design and management, materials, services, human elements, fiancé and accounting.
Location considerations:
Cost –Parts, Labor, Materials, Transportation, Storage, Taxes/Tariffs
Labor Issues -Quality of the Workforce, Labor laws, Unions, Ethics, Wages, Management Style, Cultural, Quality of Life
Location of Partners and Customers
Established supplier base and Established channels of distribution.
Infrastructure, Temperature, Geography
Manufacturing layout considerations:
Financial Responsibility: Meet demand, Maximize sales and profits.
Materials, People, Space/Area: Convenience, Utilization, Efficiency Information Flow and Communication Worker Safety and
Security
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