Process Selection and Capacity Planning PDF

PROCESS SELECTION AND CAPACITY PLANNING Chapter 6 PROCESS Deciding on the way production of goods or SELECTIO services will be N organized KEY ASPECTS OF PROCESS STRATEGY 1. Make or Buy Decisions The very first step in process planning is to consider whether to make or buy...

PROCESS SELECTION AND CAPACITY PLANNING Chapter 6 PROCESS Deciding on the way production of goods or SELECTIO services will be N organized KEY ASPECTS OF PROCESS STRATEGY 1. Make or Buy Decisions 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 services. Factors to consider: Available capacity Expertise Quality considerations The nature of demand Cost Risks KEY ASPECTS OF PROCESS STRATEGY 2. Capital intensive – the mix of equipment and labor that will be used by the organization. 3. Process flexibility – the degree to which system can be adjusted to changes in processing requirements due to changes in design, volume and technology. PROCESS TYPES: 1. Job Shop – usually operates on a relatively small scale. Processing is intermittent; work shifts from one small job to the next, each with somewhat different processing requirements. PROCESS TYPES: 2. Batch Process – used when a moderate volume of goods and services is desired, and it can handle moderate variety in products and services. PROCESS TYPES: 3. Repetitive Process – repetitive processing is needed when higher volumes of more standardized goods and services are needed. PROCESS TYPES: 4. Continuous Process – used when a very high volume of highly standardized output is desired. PROCESS TYPES: 5. Project - used for work that is non- routine, with a unique set of objectives to be accomplished in a limited time frame. AUTOMATION It is machinery that has sensing and control devices that enables it to operate automatically.  KINDS OF AUTOMATIO N: 1. Fixed Automation It uses high-cost, specialized equipment for a fixed sequence of operations. Low cost and high volume are its primary advantages. Minimal variety and high cost of making changes in either product or process are its primary limitations.  KINDS OF AUTOMATIO N: 2. Programmable Automation Allows the production equipment and automation to be altered to changing needs. This is done by controlling the automation through a program, which can be coded in certain ways for the automation to change the sequence of automation. KINDS OF AUTOMATIO N: 3. Flexible Automation Evolved from programmable automation. This permits almost continuous operation of equipment and product variety without the need to produce in batches.  CAPACITY PLANNING CAPACITY The upper limit or ceiling on the load that an operating unit can handle. DIFFERENT CAPACITY Design capacity - The maximum output that can be possibly be attained. Effective capacity - The maximum possible output given a product mix, scheduling difficulties, machine maintenance, quality factors and so on. Actual output -The rate of output achieved. It cannot exceed effective capacity.  EFFICIENCY AND UTILIZATION (MEASURED AS PERCENTAGE) Effective Capacity = 40 trucks/day | Actual Output = 36 trucks/day | Design Capacity = 50 trucks/day Efficiency = (actual/effective) x 100 = (36/40) x 100 = 90% Utilization = (actual/design) x 100 = (36/50) x 100 = 72% CAPACITY CUSHION capacity used to offset demand uncertainty. Capacity cushion = 100% - Utilization DEVELOPING Things that can be done to enhance CAPACITY capacity management: ALTERNATIV Design flexibility into systems ES Take stage of life cycle into account Take a “big-picture” approach to capacity changes Prepare to deal with capacity “chunks” Attempt to smooth capacity requirements Identify the optimal operating level Choose a strategy if expansion is involved.