PRODUCTIONS

AND
OPERATIONS
MANAGEMENT
MBA 1-B

Process Selection

refers to deciding on the way production of goods or

services will be organized

Process selection is primarily used during the planning of

new products or services that is subject to technological
advances and competition.

Major Implications

Capacity planning

Layout of facilities

Equipment

Design of work systems

Process Selection

Process selection is dependent on the company's process

strategy, which has three main components:

Capital Intensityis simply the combination of equipment

and labor that an organization uses to accomplish some
objective.

Process Flexibilityis as its name implies: how well a system

can be adjusted to meet changes in processing requirements
that are interdependent on variables such as product or
service design, volume of production, and technology.

Technology is the application of scientific discoveries to the

development and improvement of products and services and
operations processes

Operations management is primarily concerned with three kinds of

technology:
1. Product and service technology (discovery and development of
new or improved products/services)
2. Process technology (methods, procedures, and equipments, used
to produce goods/services)
3. Information technology (science, and use of computers and other
electronic equipment to store, process, and send information)
All three have a major impact on:

Costs

Productivity

Competitiveness

Competitive Advantage of Technology

Innovations in Products and services

Cell phones
PDAs
Wireless computing

Innovation in Processing technology

Increasing productivity

Increasing quality

Lowering costs

Risks of Technology

What technology will and will not do

Technical issues

Economic issues

Process Selection

Variety

How much?

Flexibility

Batch

What degree?

Repetitive

Volume

Expected output

Continuous

Process Types

Job shop
Small

scale

Batch
Moderate

volume

Repetitive/assembly line
High

volumes of standardized goods or

services

Continuous
Very

high volumes of non-discrete goods

Product Process Matrix

Product Process Matrix

Automation
Is a machinery that has sensing and control devices that
enable it to operate automatically

Fixed automation (uses high cost, specialized

equipment for a fixed sequence of operations, low
cost high volume) Detroit type automation

Programmable automation (use of high-cost, general

purpose equipment controlled by computer, both
sequence,& details)

Flexible automation (CAM, N/C)

Robot: A machine consisting of a mechanical arm, a

power supply and a controller

Facilities 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

Types of Layout
Product layout

Layout that uses standardized processing operations

to achieve smooth, rapid, high-volume flow

Advantages of Product Layout

High rate of output

Low unit cost

Labor specialization

Low material handling cost

High utilization of labor and equipment

Established routing and scheduling

Routing accounting and purchasing

Types of Layout
Disadvantages of Product Layout

Creates dull, repetitive jobs

Poorly skilled workers may not maintain equipment or

quality of output Fairly inflexible to changes in volume

Highly susceptible to shutdowns

Needs preventive maintenance

Individual incentive plans are impractical

Product Layout
Raw
materials
or customer

Station
1

Station
Station
22

Station
Station
33

Material

Material

Material

Material

and/or
labor

and/or
labor

and/or
labor

and/or
labor

Station
Station
44

Used for Repetitive or Continuous Processing

Finished
item

A U-Shaped Production Line

In

4
5

Workers

6
Out

10

Types of Layout
Process layouts

Layouts that can handle varied processing

requirements

Advantages of Process Layout

Can handle a variety of processing

requirements

Not particularly vulnerable to equipment

failures

Equipment used is less costly

Possible to use individual incentive plans

Types of Layout
Disadvantages of Process Layout

In-process inventory costs can be high

Challenging routing and scheduling

Equipment utilization rates are low

Material handling slow and inefficient

Complexities often reduce span of supervision

Special attention for each product or customer

Accounting and purchasing are more involved

Process Layout
Process Layout
(functional)
Dept. A

Dept. C

Dept. E

Dept. B

Dept. D

Dept. F

Used for Intermittent processing

Job Shop or Batch

Types of Layout
Fixed-position Layout

Layout in which the product or project remains

stationary, and workers, materials, and
equipment are moved as needed

Nature of the product dictates this type of layout

Weight

Size

Bulk

Types of Layout
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

Types of Layout
Cellular Layout

Cellular Production

Layout in which machines are grouped into a cell

that can process items that have similar
processing requirements

Group Technology

The grouping into part families of items with

similar design or manufacturing characteristics

Types of Layout
Flexible Manufacturing System <FMS>

A group of machines designed to handle

intermittent processing requirements and
produce a variety of similar products

Includes supervisory computer control,

automatic material handling, and robots or
other automated processing equipment

It is a more automated version of cellular

manufacturing

Types of Layout
Computer integrated Manufacturing <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

Types of Layout
Service Layout

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

Types of Layout
Line balancing

is the process of assigning tasks to workstations

in such a way that the workstations have
approximately equal time requirements.

Cycle time

is the maximum time allowed at each

workstation to complete its set of tasks on a
unit.

Determine Maximum Output

OT
Output capacity =
CT
OT operating time per day
D = Desired output rate
OT
CT = cycle time =
D

Calculate Percent Idle Time

Idle time per cycle
Percent idle time =
(N)(CT)

Efficiency = 1 Percent idle time

THANK YOU!