Process Manufacturing Overview

Production and Supply Chain Basics

• Production implies the creation of goods and services to satisfy human needs. It involves converting inputs (resources) into outputs (products).
• Production is a value addition process at each stage of the processing.
• Production is defined as the step-by-step conversion of one form of material into another form through chemical or mechanical processes to create or enhance the utility of the product for the user.
• The four factors of production are resources used for creating goods and services
  • Land: Natural resources like minerals, forests, and water
  • Labor: The effort and skills of workers
  • Capital: Tools, machinery, and other physical assets
  • Entrepreneurship: Combining the other factors to make a profit, identifying opportunities, organizing resources, and introducing new goods and services.

Production Function

• A process where inputs (resources) are converted into outputs(products).
• This includes raw materials to generate outputs (goods and services)

Production Vs Manufacturing

• Manufacturing: A process of producing merchandise using resources like labor, machines, tools, raw materials, chemicals, etc. This aims to generate output using raw materials.
• Production: Making something used for consumption by combining resources; this process converts inputs into outputs (goods and services)

Four Factors of Production (Inputs)

• Land: Natural resources such as minerals, forests, and water.
• Labor: The effort and skills of people who work to produce goods and services.
• Capital: The tools, machinery, and other physical assets used to produce goods and services.
• Entrepreneurship: Combining the other factors of production to make a profit, identify opportunities, organize resources & bring new products & services to the market.

Production System

• The part of an organization that produces products.
• Resources flow within a defined system and are combined and changed to add value, in line with management's policies

Characteristics of a Production System

• Production is a structured activity with a purpose.
• A system converts inputs into useful outputs.
• The system is not isolated from the larger organization.
• Feedback is essential for controlling and enhancing performance.

Production System Types

• Continuous Production (CTS Pdn.):

  • Production facilities arranged sequentially.
  • Constant, uninterrupted operation with standardized inputs and outputs.
  • High volume, standardized products like oil refineries, food and beverage industries and chemical plants.
  • Characteristics: Dedicated plant and equipment, fully automated material handling, consistent product quality, large production quantities, pre-defined operation sequence, can't identify component parts in the final product, planning is routine.
  • Advantages: Standardization of products, higher production rate, reduced cycle time, high capacity utilization, no manpower required for material handling, limited skilled persons needed, low unit cost.
  • Limitations: Inflexible, high investment in setting flow lines, breakdowns can cause losses, limited product differentiation, highly skilled technical staff for maintenance.

• Assembly Production (Amb Pdn.):

  • Step-by-step assembly of components.
  • Specific tasks for workers or machines ensures minimal delays.
  • Tailored machines for specific tasks, produces large quantities efficiently.
  • Examples include automobiles, household appliances, and electronics.
  • Advantages: Faster production speed, cost-effective, products can be inspected during assembly, workers become proficient.
  • Limitations: Adjusting the assembly line for new products is time consuming and costly, delays in components disrupt the workflow, a failure in one stage halts the entire production line and requires substantial investment.

• Process Production (Pcs Pdn.):

  • Raw materials undergo chemical or mechanical transformations in sequential stages to create a final product.
  • Bulk production of goods, unlike discrete units.
  • Examples include chemicals, food and beverage, gasoline, cement, paints, and pharmaceuticals.
  • Characteristics: Raw materials transformed into final product through multiple stages, consistent and uniform quality, equipment is specifically designed for each stage of the process, continuous workflow, significant financial resources needed for specialized equipment/infrastructure.
  • Advantages: Uniform standards, low cost per unit, Designed for bulk manufacturing, raw materials and energy managed effectively.
  • Limitations: Inflexible system, specialized equipment needs regular servicing, breakdowns can cause significant losses, waste management/disposal can be a challenge.

• Analytical Process: Raw material is broken into different products. e.g., crude oil into petrol, diesel, gas, naptha

• Synthetic Process: Two or more materials are mixed to manufacture a final product. e.g., soap manufacturing

• Intermittent Production (Intt Pdn.):

  • Flexible, adjusted to diverse product types and quantities.
  • Produces a range of products, but in smaller batches or on demand.
  • Example: Customized furniture, baking.
  • Characteristics: Low production volumes, high product variation, uses general-purpose machines for flexibility, adaptable operation sequences, suitable for low/medium demand or custom/different batches, process layout most suited.
  • Advantages: Adaptability to design changes, handling small/large batches, resource utilization, effective for low/medium demand or custom/different batches.
  • Limitations: High production costs per unit, frequent changes in setup, time-consuming machine adjustments, coordination problems, challenges in managing raw materials procurement, relies on skilled labor.

• Mass Production (Mass Pdn.):

  • Manufacturing discrete parts/assemblies through continuous processes.
  • High volume, standardized products using a continuous process.
  • Examples: Food and beverage industry, canned goods, consumer electronics.
  • Characteristics: Standardized product and process sequence, dedicated & specialized high-capacity machines, higher output rates, bulk production, short cycle time, balanced production lines, continuous flow of materials/components, easy to plan/control production.
  • Advantages: Higher production rate, lower cycle time/cost per unit, less skilled operators needed, lower process inventory.
  • Limitations: High set-up costs, entire production line can shut down due to one machine breakdown, change in product lines needs re-arrangement of the production line.

• Job Production (Job Pdn.):

  • Manufacturing a specific product based on individual customer order.
  • Low volume, high variety.
  • Example: tailoring, custom furniture, artwork.
  • Characteristics: High variety/low volume, use of general purpose machines, highly skilled operators, large inventory materials/tools/parts, detailed planning, sequencing requirements.
  • Advantages: Adaptability to customize a product, skilled/more competent operators, efficient use of operators, creative methods and innovative ideas.
  • Limitations: High costs due to frequent changes, higher level inventory, production planning complexities.

• Batch Production:

  • Manufacturing a limited number of products in fixed quantities/batches.
  • Example: Clothing manufacturing, print media.
  • Characteristics: Shorter production runs, flexible plant/machinery, production of various products in batches, periodical adjustments for different batches, process layout is most suitable.
  • Advantages: Lower lead time/cost than job order production, flexibility.
  • Limitations: High costs if frequently changing products/batches, frequent setup changes.

Resource Management

• Resource management is planning, scheduling and allocating production resources to maximize the value and potential of resources.
• Resource allocation is selecting and assigning available resources to production processes.
• Important reasons for resource allocation: Preventing staff burnout, empowering teams through training, optimization and matching the right resource to the right task.

Capacity Planning

• Capacity planning is predicting and determining long-term and short-term capacity requirements for an organization.
  • Includes demand forecasting, capacity decisions and facilities planning, implementation of decisions and evaluating alternative resource options.
• The most common capacity planning challenges: Imbalanced workload, lack of data, future uncertainties.
• Includes maximum, effective and actual capacity. Maximum capacity is the highest expected output, effective capacity is the achievable output rate given current conditions, and actual capacity is the output over a particular period.