Operations Management Product Design and Process Selection Manufacturing

1. Operations ManagementProduct Design and Process SelectionManufacturing • The Product Design Process • Factors in Design Decision • Process Types • Process Flows • Product-Process Matrix • Break-Even Analysis

2. Prod. Design Proc. SelectionSteps in Product Design • Idea Development • customers, competitors, reverse engineering • Product Screening • ___________ on Operations, Marketing, and Finance • Preliminary Design and Testing • marketing testing; prototyping; • Final Design • finalize design

3. Product Design/Process Selection - Mfg.Opportunity for Product Design Change • Concept and Design expend about ___ percent of the total cost while committing almost ___ percent of the manufacturing cost....

4. Prod. Design Proc. SelectionFactors to Consider in Design • Design for Manufacturing • ____________ number of components • Product Life Cycle • introduction, growth, maturity, and decline • Concurrent Engineering • cross-functional teams vs. ______________________ • Remanufacturing • ease of ___________________

5. Product Design/Process Selection - Mfg.Process Selection • Selecting the type of production process to make the product is a ____________ decision. • A volume / variety sensitivity issue… • just a few  make them ____ ________ • many  ____________ ______

6. Process Selection.Types of Processes • Conversion • _____ ___________ into ingredients • Fabrication • ingredients into a specific form • Assembly • specific forms _____________ together • Testing • evaluation / performance procedures

7. Process Selection.Process Flow Structures • Project • Job Shop • Batch • Assembly • Process Degree of customization Product Volume

8. Process Flow ChoiceProject • Project Management • Demand - • production begins _________ customer order is received • Variety - • Unique, _____ of a kind • Volume - • ______ • Inventory - • _____ materials • Operations - • Product stationary during build; resources __________ to site

9. Process Flow ChoiceJob Shop • Make to Order ( _____ ) • Demand - • production begins _________ customer order is received • Variety - • _______ degree of customization • Volume - • ________ order quantities • Inventory - • _____ materials • Operations - • different, ________ , sequence of operatins - “___________”

10. Process Flow ChoiceBatch • Assemble to Order ( ______ ) • Demand - • assembly ________ customer selects options • Variety - • _______ number of final configurations • Volume - • _______ larger than job shop • Inventory - • components and ___________________ • Operations - • few, _______________ sequences of operations

11. Process Flow ChoiceAssembly Line • Make to Stock ( ____ ) - “mass production” • Demand - • production based on _________________ demand • Variety - • standard products with variety through _________ • Volume - • _______ volumes • Inventory - • ___________-_______ available for immediate delivery • Operations - • ______ sequence of operations - “repetitive”

12. Process Flow ChoiceProcess • Continuous - “ ________ ” industries • Demand - • ________________ , highly automated, 24 / 7 / 365 • Variety - • _____________ outputs; commodities • Volume - • ______ high volumes • Inventory - • ____ primary input material moves through without stopping • Operations - • dedicated, __________ intensive

13. Process Flow ChoiceProduct Life Cycle • Volume vs. Product Stage Volume Introduction Growth Maturity Decline

14. Process Flow ChoiceProcess Life Cycle • Rate of Innovation vs. Process Evolution Rate of Innovation Fluid Pattern Transitional Pattern Specific Pattern

15. Product Structure - Product life cycle stage Few Major Products, Higher Volume High Volume, High Standard- ization Low Volume One of a Kind Multiple Products, Low Volume Process StructureProcess life cyclestage I. Job Shop Commercial Printer French Restaurant Flexibility (High) Unit Cost (High) II. Batch Heavy Equipment Coffee Shop III. Assembly Line Automobile Assembly Burger King IV. Continuous Flow Sugar Refinery Flexibility (Low) Unit Cost (Low) Source: Modified from Robert Hayes and Steven Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New York: John Wiley & Sons, 1984). p. 209.

16. Process Flow ChoiceChoosing Among Alternative Processes • Break-Even Analysis • chart to represent alternative total costs due to the ___________ of units produced • suitable when initial investment and fixed cost are __________ and variable costs are _________________ to the number of units produced

17. Alternative ProcessesBreak-Even Analysis Chart Exhibit 5.12 in text

18. Alternative ProcessesBreak-Even Analysis Revenue = Total Cost P * Q = FCi + VCi * Q Total Cost 1 = Total Cost 2 FC 1 + VC 1* Q = FC 2 + VC 2 * Q FCi = fixed cost, P = price, VCi = variable cost, and Q = break even quantity

19. Break-Even AnalysisExample Problem A manufacturing process has a fixed cost of $150,000 per month. Each unit of product being produced contains $25 worth of material and takes $45 of labor. How many units are needed to break even if each completed unit has a value of $90? CAJ9; p.171; #7

20. Product Design/Process Selection - Mfg

21. Product Design/Process Selection - Mfg

22. Product Design/Process Selection - MfgChapter Wrap-Up • Read Chapter 5 • Concepts / Terminology • Review Lecture Notes • Recommended Problems