Process Selection and Facility Layout PDF

PROCESS SELECTION AND FACILITY LAYOUT 6 Intended Learning Outcomes By the end of the learning experience, students must be able to: 1. Discuss the term process selection and explain its strategic importance. 2. Explain the influence that process selection has on an organization. 3....

PROCESS SELECTION AND FACILITY LAYOUT 6 Intended Learning Outcomes By the end of the learning experience, students must be able to: 1. Discuss the term process selection and explain its strategic importance. 2. Explain the influence that process selection has on an organization. 3. Describe the basic processing types. 4. Discuss automated approaches to processing. 5. Explain the need for management of technology. 6. Describe the basic layout types. 7. List the main advantages and disadvantages of product layouts and process layouts. 8. Solve simple line-balancing problems. 9. Develop simple process layouts. PROCESS SELECTION Process selection refers to the way production of goods or services is organized. It has major implications for capacity planning, layout of facilities, equipment, and design of work systems. Process selection occurs as a matter of course when new products or services are being planned. However, it also occurs periodically due to technological changes in equipment. How an organization approaches process selection is determined by the organization's process strategy. Key aspects include:  Make or buy decisions: The extent to which the organization will produce goods or provide services in-house as opposed to relying on outside organizations to produce or provide them. o The very first step in process planning is to consider whether to make or buy (outsource) some or all of a product or some or all of a service. o In make or buy decisions, a number of factors are usually considered: 1) Available capacity 2) Expertise 3) Quality considerations 4) The nature of demand 5) Cost  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 changes in product or service design, changes in volume processed, and changes in technology.  Capital intensity and process flexibility are major factors if the organization chooses to make rather than buy. Three primary questions bear on process selection: 1) How much variety in products or services will the system need to handle? 2) What degree of equipment flexibility will be needed? 3) What is the expected volume of output? PROCESS TYPES There are five basic process types: job shop, batch, repetitive, continuous, and project. o Job Shop. A job shop usually operates on a relatively small scale. A job-shop comprises of general-purpose machines arranged into different departments. Each job demands unique technological requirements, demands processing on machines in a certain sequence. Job-shop Process is characterized by: 1) High variety of products and low volume. 2) Use of general purpose machines and facilities. Learning Module in Operations Management and TQM Page | 1  3) Highly skilled operators who can take up each job as a challenge because of uniqueness. 4) Large inventory of materials, tools, parts. 5) Detailed planning is essential for sequencing the requirements of each product, capacities for each work centre and order priorities. Advantages: 1) Because of general purpose machines and facilities variety of products can be produced. 2) Operators will become more skilled and competent, as each job gives them learning opportunities. 3) Full potential of operators can be utilised. 4) Opportunity exists for Creative methods and innovative ideas. Limitations: 1) Higher cost due to frequent set up changes. 2) Higher level of inventory at all levels and hence higher inventory cost. 3) Production planning is complicated. 4) Larger space requirements. o Batch. Batch processing is used when a moderate volume of goods or services is desired, and it can handle a moderate variety in products or services. Batch Production is characterised by: 1) Shorter production runs. 2) Plant and machinery are flexible. 3) Plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch. 4) Manufacturing lead-time and cost are lower as compared to job order production. Advantages: 1) Better utilisation of plant and machinery. 2) Promotes functional specialisation. 3) Cost per unit is lower as compared to job order production. 4) Lower investment in plant and machinery. 5) Flexibility to accommodate and process number of products. 6) Job satisfaction exists for operators. Limitations: 1) Material handling is complex because of irregular and longer flows. 2) Production planning and control is complex. 3) Work in process inventory is higher compared to continuous production. 4) Higher set up costs due to frequent changes in set up. o Repetitive. When higher volumes of more standardized goods or services are needed, repetitive processing is used. The standardized output means only slight flexibility of equipment is needed. Skill of workers is generally low. o Continuous. When a very high volume of highly standardized output is desired, a continuous system is used. These systems have almost no variety in output and, hence, no need for equipment flexibility. As in assembly systems, workers are generally low skilled. Note: All of these process types (job shop, batch, repetitive and continuous) are typically on-going operations. However, there are situations that are not on-going but instead are of limited durations. In such instances, the work is often organized as a project. A project is used for work that is non-routine, with a unique set of objectives to be accomplished in a limited time frame. Service Process Design Service process design focuses on the service delivery system (i.e., the facilities, processes, and personnel requirements needed to provide the service). The creation of a service and the delivery of the service frequently occur at the same time is of particular concern to service designers. Also, service required high degree of customer contact. Service design has important implications for cost, quality, productivity, customer satisfaction, and competitive advantage. Service process design (or redesign) often begins. Service design has important implications for cost, quality, productivity, customer satisfaction, and competitive advantage. Learning Module in Operations Management and TQM Page | 2  - Service process design (or redesign) often begins with service blueprinting, which is a method for describing and analyzing a service process. - A key aspect of service blueprinting is flowcharting the process. Flowcharting a process helps to understand the process, and the resulting flowchart provides a visual model of the process. AUTOMATION Automation is machinery that has sensing and control devices that enable it to operate automatically. Advantages: 1) It has low variability, whereas it is difficult for a human to perform a task in exactly the same way, in the same amount of time, and on a repetitive basis. 2) Machines do not get bored or distracted, nor do they go out on strike, ask for higher wages, or file labor grievances. 3) Reduction of variable costs. Disadvantages: 1) It can be costly. 2) Technology is expensive; usually it requires high volumes of output to offset high costs. 3) Automation is much less flexible than human labor. 4) Once a process has been automated, there is substantial reason for not changing it. 5) Workers sometimes fear automation because it might cause them to lose their jobs which can affect morale and productivity. Three kinds of automation: o Fixed automation is the most rigid of the three types. The concept was perfected by the Ford Motor Company in the early 1900s, and it has been the cornerstone of mass production in the auto industry. Sometimes referred to as Detroit-type automation, it uses high-cost, specialized equipment for a fixed sequence of operations. Low cost and high volumes are its primary advantages; minimal variety and the high cost of making major changes in either product or process are its primary limitations. o Programmable automation is at the opposite end of the spectrum. It 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. Changing the process is as easy (or difficult) as changing the computer program, and there is downtime while program changes are being made. This type of automation has the capability of economically producing a fairly wide variety of low-volume products in small batches. - Numerically Controlled (N/C) Machines are the machines that performed operations by following mathematical processing instruction. - Computer-aided Manufacturing (CAM) is the use of computers in process control. - Robot is a machine consisting of a mechanical arm, a power supply, and a controller. o 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. This permits almost continuous operation of equipment and product variety without the need to produce in batches. - Manufacturing cell consists of one or few computer-controlled machines that produce a wide variety of parts. - A flexible manufacturing system (FMS) is a group of machines that include supervisory computer control, automatic material handling, and robots or other automated processing equipment. Learning Module in Operations Management and TQM Page | 3  - Computer-integrated manufacturing (CIM) is a system that uses an integrating computer system to link a broad range of manufacturing activities, including engineering design, flexible manufacturing systems, and production planning and control. MANAGEMENT OF TECHNOLOGY Benefits of Technology:  Competitive advantages in improved quality  Increased productivity  Reduced costs  Reduced production or service times  Increased customer satisfaction Potential Risk of Technology:  Reduced flexibility  Increased fixed costs  Short-term disruptions with the new technology is installed  Training costs  Difficulties in integrating the new technology into the organization’s systems  Getting locked into a certain technology that may be inferior to another technology that is just over the horizon. Implication of benefits and risks in the management of technology:  Technology selection often requires engineering expertise.  Tend to delegate technical decisions to engineers.  In the long run, the solution may be to hire and promote managers who have both managerial and technical skills and expertise.  In the short run, managers must work with technical experts, asking questions and increasing their understanding of the benefits and limitations of sophisticated processing equipment and technology, and ultimately make decisions themselves. LAYOUT Layout refers to the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system. Systems design and layout decisions are important for three basic reasons: i. they require substantial investments of money and effort, ii. they involve long-term commitments, which makes mistakes difficult to overcome, iii. they have a significant impact on the cost and efficiency of operations. The need for layout planning arises both in the process of designing new facilities and in redesigning existing facilities. The most common reasons for redesign of layouts include:  inefficient operations (e.g. high cost, bottlenecks)  accidents or safety hazards  changes in the design of products or services  introduction of new products or services  changes in the volume of output or mix outputs  changes in methods or equipment  changes in environmental or other legal requirements  morale problems (e.g. lack of face-to-face contact)\ Three basic types of layout a. Product Layouts. This is the layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow. This is made possible by highly standardized goods or services that allow highly standardized, continual processing. The work is divided into a series of standardized tasks, permitting specialization of both labor and equipment. In manufacturing environments, the lines are referred to as production lines or assembly lines, depending on the type of activity involved.  Production line – standardized layout arranged according to a fixed sequence of production tasks. Learning Module in Operations Management and TQM Page | 4   Assembly line – standardize layout arranged according to a fixed sequence of assembly tasks. Product layouts achieve a high degree of labor and equipment utilization, which tends to offset their high equipment costs. The diagram below shows the example of process layout: The main advantages of product layouts are:  A high rate of output  Low unit cost due to high volume; the high cost of specialized equipment is spread over many units.  Labor specialization reduces training costs and time, and results in a wide span of supervision.  Low material-handling cost per unit; material handli.ng is simplified because units follow the same sequence of operations.  A high utilization of labor and equipment.  Routing and scheduling are established in the initial design of the system; they do not require much attention once the system is operating.  Accounting, purchasing, and inventory control are fairly routine. The primary disadvantages of product layouts include:  The intensive division of labor usually creates dull, repetitive jobs that provide little opportunity for advancement and may lead to morale problems and to repetitive stress injuries.  Poorly skilled workers may exhibit little interest in maintaining equipment or in the quality of output.  The system is fairly inflexible in response to changes in the volume of output or changes in product or process design.  The system is highly susceptible to shutdowns caused by equipment breakdowns or excessive absenteeism.  Preventive maintenance, the capacity for quick repairs, and spare-parts inventories are necessary expenses.  Incentive plans tied to individual output are impractical since they would cause variations among outputs of individual workers, which would adversely affect the smooth flow of work through the system. b. Process Layouts. Process layouts are designed to process items or provide services that involve a variety of processing requirements.  Intermittent Processing – the variety of jobs that are processed requires frequent adjustments to equipment which causes a discontinuous work flow.  General-purpose equipment –provides the flexibility necessary to handle a wide range of processing requirements. The diagram below shows the example of a typical product layout: Advantages of process layouts include:  Systems can handle a variety of processing requirements.  Systems are not particularly vulnerable to equipment failures.  General-purpose equipment is often less costly than the specialized equipment used in product layouts and is easier and less costly to maintain. The disadvantages of process layouts include: Learning Module in Operations Management and TQM Page | 5   In-process inventory costs can be high if batch processing is used in manufacturing systems.  Routing and scheduling pose continual challenges.  Equipment utilization rates are low.  Material handling is slow and inefficient, and more costly per unit than in product layouts.  Job complexities often reduce the span of supervision and result in higher supervisory costs than with product layouts.  Special attention necessary for each product or customer (e.g. routing, scheduling, machine setups) and low volumes result in higher unit costs than with product layouts.  Accounting, inventory control, and purchasing are much more involved than with product layouts. c. Fixed-Position Layouts. Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed.  Fixed-position layouts are used in large construction projects (buildings, power plants, dams), shipbuilding, and production of large aircraft and space mission rockets.  Fixed-position layouts are widely used for farming, firefighting, road building, home building, remodeling and repair, and drilling for oil. In each case, compelling reasons bring workers, materials, and equipment to the process location instead of the other way around. The Major Advantages of this type of layout:  Helps in job enlargement and upgrades the skills of the operators.  The works identify themselves with a product in which they take interest and pride in doing the job.  Greater flexibility with this type of layout.  Layout capital investment is lower. d. Combination Layout. A combination of process and product layouts combines the advantages of both types of layouts. A combination layout is possible where an item is being made in different types and sizes. The following diagram shows a combination type of layout from manufacturing different sized gears: e. Cellular Layout. Cellular manufacturing is a type of layout in which machines are grouped into what is referred to as a cell. Groupings are determined by the operations Learning Module in Operations Management and TQM Page | 6  needed to perform work for a set of similar items, or part families that require similar processing. Benefits of cellular manufacturing includes:  Faster processing time  Less material handling  Less work-in-process inventory  Reduced setup time Group Technology (GT) is the analysis and comparisons of items to group them into families with similar characteristics. GT can be used to develop a hybrid between pure process layout and pure flow line (product) layout. This technique is very useful for companies that produce variety of parts in small batches to enable them to take advantage and economics of flow line layout. The application of group technology involves two basic steps; 1) Determine component families or groups. 2) Arrange the plants equipment used to process a particular family of components. Group Layout is is a combination of the product layout and process layout. It combines the advantages of both layout systems. If there are m-machines and n- components, in a group layout (Group-Technology Layout), the m-machines and n- components will be divided into distinct number of machine-component cells (group) such that all the components assigned to a cell are almost processed within that cell itself. The basic aim of a group technology layout is to identify families of components that require similar of satisfying all the requirements of the machines are grouped into cells. Each cell is capable of satisfying all the requirements of the component family assigned to it. The layout design process considers mostly a single objective while designing layouts. In process layout, the objective is to minimize the total cost of materials handling. Because of the nature of the layout, the cost of equipment will be the minimum in this type of layout. In product layout, the cost of materials handling will be at the absolute minimum. But the cost of equipment would not be at the minimum if the equipment is not fully utilized. In-group technology layout, the objective is to minimize the sum of the cost of transportation and the cost of equipment. Advantages of Group Technology Layout: Group Technology layout can increase – 1) Component standardization and rationalization. 2) Reliability of estimates. 3) Effective machine operation and productivity. 4) Customer service. It can decrease the— 5) Paper work and overall production time. 6) Work-in-progress and work movement. 7) Overall cost. Learning Module in Operations Management and TQM Page | 7  Limitations of Group Technology Layout: This type of layout may not be feasible for all situations. If the product mix is completely dissimilar, then we may not have meaningful cell formation. Flexible manufacturing systems (FMSs) are more fully automated versions of cellular manufacturing: A computer controls the transfer of parts from machine to machine and the start of work at each machine. f. Other Service Layouts  Warehouse and Storage Layouts. The design of storage facilities presents a different set of factors than the design of factory layouts.  Retail Layout. Retail layouts such as department stores, supermarkets, and specialty stores, designers must take into account the presence of customers and the opportunity to influence sales volume and customer attitudes through carefully designed layouts. Traffic patterns and traffic flow are important factors to consider DESIGNING PRODUCT LAYOUTS: LINE BALANCING In product layout, equipment or departments are dedicated to a particular product line, duplicate equipment is employed to avoid backtracking, and a straight-line flow of material movement is achievable. Adopting a product layout makes sense when the batch size of a given product or part is large relative to the number of different products or parts produced. Assembly lines are a special case of product layout. In a general sense, the term assembly line refers to progressive assembly linked by some material-handling device. The usual assumption is that some form of pacing is present and the allowable processing time is equivalent for all workstations. Within this broad definition, there are important differences among line types. A few of these are material handling devices (belt or roller conveyor, overhead crane); line configuration (U-shape, straight, branching); pacing (mechanical, human); product mix (one product or multiple products); workstation characteristics (workers may sit, stand, walk with the line, or ride the line); and length of the line (few or many workers). Assembly-line systems work well when there is a low variance in the times required to perform the individual subassemblies. If the tasks are somewhat complex, thus resulting in a higher assembly-time variance, operators down the line may not be able to keep up with the flow of parts from the preceding workstation or may experience excessive idle time. An alternative to a conveyor-paced assembly-line is a sequence of workstations linked by gravity conveyors, which act as buffers between successive operations. a. Line Balancing. The most common assembly-line is a moving conveyor that passes a series of workstations in a uniform time interval called the workstation cycle time (which is also the time between successive units coming off the end of the line). At each workstation, work is performed on a product either by adding parts or by completing assembly operations. The work performed at each station is made up of many bits of work, termed tasks, elements, and work units. Such tasks are described by motion-time analysis. Generally, they are grouping that cannot be subdivided on the assembly-line without paying a penalty in extra motions. The total work to be performed at a workstation is equal to the sum of the tasks assigned to that workstation. The line-balancing problem is one of assigning all tasks to a series of workstations so that each workstation has no more than can be done in the workstation cycle time, and so that the unassigned (idle) time across all workstations is minimized. The problem is complicated by the relationships among tasks imposed by product design and process technologies. This is called the precedence relationship, which specifies the order in which tasks must be performed in the assembly process. Line Balancing Procedure: 1) Identify the cycle time and determine the minimum number of workstations. - Cycle Time. The maximum time allowed at each workstation to complete its set of tasks on a unit. Learning Module in Operations Management and TQM Page | 8  Cycle Time formula: CT = Where; D = Desired Output Rate OT = Operating Time per Day Or CT = 2) Make assignments to workstations in order, beginning with Station 1. Tasks are assigned to workstations moving from left to right through the precedence diagram. - Precedence Diagram. A diagram that shows elemental tasks and their precedence requirements. 3) Before each assignment, use the following criteria to determine which tasks are eligible to be assigned to a workstations:  All preceding tasks in the sequence have been assigned.  The task time does not exceed the time remaining at the workstation. If no tasks are eligible, move on to the next workstation. 4) After each task assignment, determine the time remaining at the current workstation by subtracting the sum of times for tasks already assigned to it from the cycle time. 5) Break ties that occur using one of these rules:  Assign the task with the largest task time.  Assign the task with the greatest number of followers. If there is still a tie, choose one task arbitrarily. 6) Continue until all tasks have been assigned to workstations. 7) Compute appropriate measures (e.g. percent idle time, efficiency) for the set of assignments. Percentage of Idle Time = Where Nactual = Actual number of station Efficiency = 100 – percent idle time Other Formula: Output Capacity = Where; D = Desired output rate ∑ Nmin = Where: Nmin = Theoretical Minimum number of stations D = Desired output rate ∑ = Sum of task times Sample Problem 6.1 Using the information contained in the table shown, do each ofthe following: 1) Draw a precedence diagram. 2) Assuming an eight-hour workday, compute the c;-tle time needed to obtain an output of 400 units per day. 3) Determine the minimum number of workstations required. 4) Assign tasks to workstations using this rule: Assign tasks according to greatest number of following tasks. In case of a tie, use the tiebreaker of assigning the task with the longest processing time first. Task Immediate Task Time Follower (in minutes) A b 0.2 B e 0.2 C d 0.8 D f 0.6 Learning Module in Operations Management and TQM Page | 9  E f 0.3 F g 1.0 G h 0.4 H end 0.3 D= 3.8 Solution: 1) Drawing a precedence diagram is a relatively straightforward task. Begin with activities with no predecessors. We see from the list of Immediate Followers that tasks a and c do not appear. Hence, they have no immediate predecessors. We build from here. 2) CT = = = 1.2 minutes per cycle ∑ 3) N = = = 3.17 stations (round to 4) 4) Beginning with station 1, make assignments following the procedure: determine from the precedents diagram which tasks are eligible for assignment. Then, determine which of the eligible tasks will fit the time remaining for the station. Use the tiebreaker if necessary. Once a task has been assigned, remove it from consideration. When a station cannot take any more assignments, go on to the next station. Continue until all tasks have been assigned. Learning Module in Operations Management and TQM Page | 10  *neither a nor c has predecessors, so both are eligible. Task a was assigned since it has more followers. **Once a is assigned, b and c are now eligible. Both will fit in the time remaining of 1.0 minute. The tie cannot be broken by the “most followers” rule, so the longer task is assigned. *** Although f is eligible, this task will not fit, so station 2 is left with 0.3 minute of idle time per 1.2 minute cycle. These assignments are shown in the following diagram. If you look carefully, at this solution, you may discover that it can be improved upon. Thus, this solution is not necessarily optimal. One should not expect that heuristics approaches will always produce optimal solutions; they merely provide a practical way to deal with complex problems that may not lend themselves to optimizing techniques. b. Other Factors.  Technical considerations include skill requirements of different tasks.  Developing a workable plan for balancing a line may also require consideration of human factors as well as equipment and space limitations.  It is more realistic to assume that whenever humans are involved, task completion times will be variable. For these reasons, lines that involve human tasks are more of an ideal than a reality.  Workstations that have slack can be used for new workers who may not be "up to speed." c. Other Approaches  One approach is to use parallel workstations. These are beneficial for bottleneck operations which would otherwise disrupt the flow of product as it moves down the line. The bottlenecks may be the result of difficult or very long tasks. Parallel workstations increase the work flow and provide flexibility. Sample Problem 6.2 A job has four tasks; task times are 1 minute, 1 minute, 2 minutes, and 1 minute. The cycle time for the line would be 2 minutes, and the output rate would be 30 units per hour: = 30 units per hour Learning Module in Operations Management and TQM Page | 11  Using parallel stations for the third task would result in a cycle time of 1 minute because the output rate at the parallel stations would be equal to that of a single station, and allow an output rate for the line of 60 minutes per hour.  Another approach to achieving a balanced line is to cross-train workers so that they are able to perform more than one task. Then, when bottlenecks occur, the workers with temporarily increased idle time can assist other workers who are temporarily overburdened, thereby maintaining an even flow of work along the line. This is sometimes referred to as dynamic line balancing, and it is used most often in lean production systems.  Another approach to design a line to hand more than one product on the same line is referred to as a mixed model line. This approach offers great flexibility in varying the amount of output of the products. DESIGNING PROCESS LAYOUTS The main issue in design of process layouts concerns the relative positioning of the departments involved. The problem is to develop a reasonably good layout; some combinations will be more desirable than others. Layouts can also be influenced by external factors such as the location of entrances, loading docks, elevators, windows, and areas of reinforced flooring. Also important are noise levels, safety, and the size and locations of restrooms. The majority of layout problems involve single rather than multiple locations and they present unique combinations of factors that do not lend themselves to a standardized approach. Consequently, these layouts require customized designs. A major obstacle to finding the most efficient layout of departments is the large number of possible assignments. Unfortunately, no algorithms exist to identify the best layout arrangement under all circumstances. Often planners must rely on heuristic rules to guide trial-and-error efforts for a satisfactory solution to each problem. a. Measures of Effectiveness.  Ability to satisfy a variety of processing requirements.  To minimize transportation cost, distance, or time. b. Information Requirements The design of process layouts requires the following information: 1) A list of departments or work centers to be arranged, their approximate dimensions, and the dimensions of the building or buildings that will house the departments. 2) A projection of future work flows between the various work centers. 3) The distance between locations and the cost per unit of distance to move loads between locations. 4) The amount of money to be invested in the layout. 5) A list of any special considerations (e.g., operations that must be close to each other or operations that must be separated). c. Minimizing Transportation Costs or Distances The most common goals in designing process layouts are minimization of transportation costs or distances traveled. Learning Module in Operations Management and TQM Page | 12 References Stevenson, W.J. 2012. Operations Management. McGraw-Hill Companies Inc. New York, 11th Edition Stevenson, W.J. 2002. Operations Management. McGraw-Hill Companies Inc. New York, 7th Edition Kumar, A. S. & Suresh, N. 2009. Operations Management. New Age International (P) Limited, Publishers. New Delhi Learning Module in Operations Management and TQM Page | 13