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Unit 2 Manufacturing Operations. Sections: Manufacturing Industries and Products Manufacturing Operations Production Facilities Product/Production Relationships Lean Production Manufacturing Metrics Manufacturing Lead Time Rate of Production Production Capacity Work in Progress

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unit 2 manufacturing operations
Unit 2 Manufacturing Operations

Sections:

  • Manufacturing Industries and Products
  • Manufacturing Operations
  • Production Facilities
  • Product/Production Relationships
  • Lean Production
  • Manufacturing Metrics
    • Manufacturing Lead Time
    • Rate of Production
    • Production Capacity
    • Work in Progress
    • Design Times
    • Utilisation/Availability
industrial automation architecture
Industrial AutomationArchitecture

Level 4

Business Information

(Business Office)

Level 3

Level 2

Level 1

Industrial Automation

(Shop Floor)

Level 0

manufacturing lead time
Manufacturing Lead Time

Raw

Materials

Work in

Progress

Finished

Goods

Machine

Group

Transport

Stores

Inspect

  • Operating Times
  • Non-operating Times
manufacturing lead time1
Manufacturing Lead Time

30%

Cutting

70%

Positioning, Loading

e.g.

Set-up Time

5%

On Machine

95%

Moving and Waiting

Time

1.5% of total time - adds value

manufacturing lead time2
Manufacturing Lead Time

n1

n2

n3

Time

Operation Time

Non-operation Time

To = Operation Time per Machine

Tno = Non-operation Time per Machine

nm = Number of Machines

MLT = nm ( To + Tno )

manufacturing lead time3
Manufacturing Lead Time

n1

n2

n3

Pallet of six parts

Q = Number of parts

MLT = nm ( QTo + Tno )

manufacturing lead time4
Manufacturing Lead Time

n1

n2

n3

Pallet of six parts

Tsu = Set-up Time

MLT = nm ( QTo + Tno + Tsu )

manufacturing lead time5
Manufacturing Lead Time

Order #1

Order #2

Process Plan (Routing)

manufacturing lead time6
Manufacturing Lead Time

In practice

Q, Tsu, To, Tno and nm will vary considerably

for different order quantities, process routing to find average or aggregate

values before carrying out analysis. e.g.:

operation times
Operation Times

Operation time has three elements:

Tm = Actual Machining Time

Th = Workpiece Handling Time

Tth = Tool Handling Time

To = Tm + Th + Tth

rate of production
Rate of Production
  • Total Batch Time per Machine

Tsu + QTo

  • Average Production Time per Part

Tp = Tsu + QTo

Q

  • Rate of Production

Rp = 1/Tp

lead times
Lead Times

Job Shop (Q -> 1)

Mass Production (Tsu + Tno -> 0)

production capacity
Production Capacity
  • Production Capacity, Pc
    • Pc = WSwHRp
  • W = number of work centres
  • Sw = Number of shifts per week
  • H = Hours per shift
  • Rp = Rate of production (units per hour)
  • If process plan requires Nm machines:
    • Pc = WSwHRp / Nm
demand rate
Demand Rate
  • Weekly Demand Rate
    • Dw = WSwHRp / Nm
    • WSwH = DwNm/ Rp
  • Three ways of adjusting capacity
    • W (number of work centres)
    • Sw (number of shifts per week)
    • H (number of hours per shift i.e. overtime)
work in progress
Work In Progress
  • WIP : Amount of product currently located
      • in the factory that is either being processed
      • or is in between processing operations
  • Generally:
  • WIP = PC U (MLT) / Sw H
wip ratio
WIP Ratio

WIP Ratio = WIP / Number of Machines Processing

PC U

Sw H

(MLT)

WIP Ratio =

QTo

Tsu + QTo

W U

Ideal ratio: 1:1

worked problem
Worked Problem

The average part produced in a certain batch manufacturing plant must be processed sequentially through six machines on average. Twenty (20) new batches of parts are launched each week. Average operation time = 6 min., average setup time = 5 hours, average batch size = 25 parts, and average non-operation time per batch = 10 hr/machine. There are 18 machines in the plant working in parallel. Each of the machines can be set up for any type of job processed in the plant. The plant operates an average of 70 production hours per week. Scrap rate is negligible. Determine (a) manufacturing lead time for an average part, (b) plant capacity, (c) plant utilization. (d) How would you expect the nonoperation time to be affected by the plant utilization?

solution
Solution

(a) MLT = 6(5 + 25(0.1) + 10) = 105 hr

(b) Tp = (5 + 25 x 0.1)/25 = 0.30 hr/pc, Rp = 3.333 pc/hr. PC = 70(18)(3.333)/6 = 700 pc/week

(c) Parts launched per week = 20 x 25 = 500 pc/week. Utilization U = 500/700 = 0.7143 = 71.43%

(d) As utilization increases towards 100%, we would expect the nonoperation time to increase. When the workload in the shop grows, the shop becomes busier, but it usually takes longer to get the jobs out. As utilization decreases, we would expect the nonoperation time to decrease.

utilisation
Utilisation, U = Output/Capacity

Utilization: U =

where

Q = quantity actually produced

PC = plant capacity

Utilisation
availability
Availability
  • Availability: A =

where MTBF = mean time between failures, and MTTR = mean time to repair

costs of manufacturing operations
Costs of Manufacturing Operations

Fixed costs - remain constant for any output level

Variable costs - vary in proportion to production output level

Adding fixed and variable costs

TC = FC + VC(Q)

where

TC = total costs

FC = fixed costs (e.g., building, equipment, taxes)

VC = variable costs (e.g., labor, materials, utilities)

Q = output level

breakeven point
Breakeven Point

Method 1:

Manual

Costs

Method 2:

Automated

VC2

FC2

VC1

Breakeven Point

FC1

Quantity, Q

manufacturing costs
Manufacturing Costs
  • Alternative classification of manufacturing costs:
    • Direct labor - wages and benefits paid to workers
    • Materials - costs of raw materials
    • Overhead - all of the other expenses associated with running the manufacturing firm
      • Factory overhead
      • Corporate overhead
overhead rates
Overhead Rates

Factory overhead rate:

FOHR =

Corporate overhead rate:

COHR =

where

DLC = direct labor costs

cost of equipment usage
Cost of Equipment Usage

Hourly cost of worker-machine system:

Co = CL(1 + FOHRL) + Cm(1 + FOHRm)

where

Co = hourly rate, €/hr

CL = labor rate, €/hr

FOHRL = labor factory overhead rate

Cm = machine rate, €/hr

FOHRm = machine factory overhead rate

worked problem1
Worked Problem
  • The break-even point is to be determined for two production methods, one a manual method and the other automated. The manual method requires two workers at €9.00/hr each. Together, they produce at a rate of 36 units/hr. The automated method has an initial cost of €125,000, a 4-year service life, no salvage value, and annual maintenance costs = €3000. No labour (except for maintenance) is required to operate the machine, but the power required to run the machine is 50 kW (when running). Cost of electric power is €0.05/kWh. If the production rate for the automated machine is 100 units/hr, determine the break-even point for the two methods, using a rate of return = 25%. The solution requires familiarity with the Uniform Annual Cost (UAC) method of determining an annual amount payable (A) on a principle sum (P).
solution1
Solution
  • Manual method: variable cost = (2 workers)(€9.00/hr)/(36 pc/hr) = €0.50/pc
  • Total cost as a function of Q is TC = 0.50 Q assuming no fixed costs.
  • Automated method: (A/P,25%,4) = = (0.4234)
  • UAC = 125,000(A/P,25%,4) + 3000 = 125,000(0.4234) + 3000 = €55,930/yr
  • Variable cost = = 0.025/pc
  • Total cost as a function of Q = 55,930 + 0.025 Q
  • Break even point: 0.50 Q = 55,930 + 0.025 Q, 0.475Q = 55,930, Q = 117,747 pc/yr
  • Hours of operation per year: Manual: H = = 3270.76 hr/yr.
  • Comment: This would require two shifts.
  • Automated: H = = 1177.47 hr/yr.
  • Comment: Plenty of additional capacity in one shift beyond the break-even point.