chap1－01 production system and operations strategy 王峻峰

8/13/2019 chap1 01 Production System and Operations Strategy

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Production Planning and Control

1

Junfeng Wang

Assoc. Prof. , PhD., [email protected]

Department of Industrial and Manufacturing System Engineering,

Huazhong University of Science and Technology

Chapter 1

Production System

and Operations Strategy


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Contents

Basic conception

Production system and its classification

Organization of production system

Operations Management &Operations Strategy

The Classical View of Operations Strategy

Modern Operations Strategy and Competition

Matching Process and Product Life CyclesCapacity Growth Planning


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1.1 Basic conception

Task of enterprise Through production activities,

with less inputs,

obtain more product outputs to gain economic and social benefits

Overall Business StrategyThe market in which the enterprise competes

The level of investment

The means of allocating resources to and integrating of

separate business units


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The activities of enterprises

1. Decision activities:

2. Technology activities:

3. Supply activities:4. Manufacturing activities:

5. Sales activities:

6. Financial activities:

2-4 is production activities


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Task of Production & Operations Management

Production activities in enterprises areDependent

connected mutually and tightly

Enterprise can hardly achieve its purpose without correctly

organizing activities . The task of Production and Operation Managements:

Organizing the production activities reasonably, making good useof the resources efficiently for the purposes as follows:

Complete the product productionAchieve the business objective

Reduce cost, improve quality and reduce production time(cycle)

Promote production systems flexibility


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1.2 Production system

System view:

An enterprise is a large system. A production

system is a subsystem of the whole enterprise

system, and its main function is producingproducts.

A production system: uses operations resourcesto transforms inputsinto some desired outputs.


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Production system

inputMaterials, CapitalDemand,

Information,Energy

transformManufacturingAssembling

Storing, ServiceTransportation

outputEnd products,

services

DecisionDecision

feedback feedback

Decision

feedback

Resource: People, Plants, Parts, Process, PPC

management

Supplier customer


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Inputs-transformation -outputs

System Primary

inputs

Resources Primary

transform

ation

Desired

outputs

automobile

plant

steel,

power

parts, other

materials

facilities,

and

workers

manufactur

ing and

assembling

cars

with high

quality

wholesale

center

goods storage

tools

distributio

n

instant

delivery

example


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Elements of production system

1. Structure Elementsframework of production system Technology, e.g. Process Technology and combination of

equipment

Facility, e.g. scale and layout of Facilities

Capacity, e.g. The capacity and flexibility of production Integratione.g. inner-integrationouter-integration

2. Non-structure elements: elements that support andcontrol system function Personnel organization

Production planning

Production control

Production inventory

Quality management


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Classification of production system

1. Classified based on production process continuity:

Continuous flow production system

Discrete production system

2. Classified based on customization: make to stock

production for order

3. Classified based on industry :

manufacturing industry

service industry


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The key ofContinuous flow production system :Emphasize on aggregate production planning and

facility maintenance.

Typical industry:chemistryindustry, plastics,pharmacy,

fossil oil, metallurgy, spinning,beverage

Continuous flow production system (1)


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Continuous flow production system (2)

Characteristics:1. The production process is relatively steady.

2. Customers are usually organizations,

3. The standardization of products is high

4. Few product sorts

5. The facility is highly automatized, highly

specialized and expensive6. The facility failurecan bring in great loss, so the

equipment maintenance is very important


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Discrete production system (1)

Characteristics:1. discrete products, affected by customers greatly, the

markets is not so steady.

2. The products is complex, many parts and components

3. Production process is required to cooperate with many

departments.

4. short product life cycle, products are changed quickly (since

customers demands change continually).

5. High customization proportion

6. production and operations management are complex.

Many methods in IE aimed at this type of production.


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Difficulties Different type of products needs different production

process, needs different layoutof equipments. Productchange, layout changes

The productionproportionof different type of productsoften changes, so workforceorganizing, equipmentsarranging , production schedulingare very difficult andneeds to adjust continuously.

The requirement of production capacityis dynamic, the

load-balance and the synchronization of production processare very difficult but necessary.

Discrete production system (2)

Annual plan is usually inaccurate,

while short plans (monthly/weekly) are the keys.


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Difference of two production systems

Primary

characteristic

Continuous

flow

Discrete

Customer amount

Product sorts

Product standardization

Customization

Demand

few

few

high

low

steady

many

many

low

high

Change


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Difference: facility and manufacturing aspects

Primary characteristic Continuous flow DiscreteProduction elements

Autoimmunization level

Logistic

facility failureequipment maintenance

The types of material

Energy consumption

WIP

Product inventoryOutput flexibility

product structure flexibility

operation information collecting

High dense Capital

high

continuous

great effectHigh requirement

few

high

low

highlow

Low

easy

High dense workforce

Low comparatively

discontinuous

effectLow

many

Low comparatively

high

lowhigh

high

difficulty


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Classified of discrete production system

Discrete production

system is classified into:

Mass production

Multi-products and low

volume production

One of a kind production


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Mass production (1)

Only a few types of products are produced repeatedly in a long period.

e.g. watches, bicycles, TV, refrigerator, DVD, screw

Characteristics:

(1) High productivity

workersare designated to a work withhigh specializationand equipmentsandprocessare high

specialized.

(2) Skilled workers: workers repeat the same operations.

(3) Simple production planning and scheduling: once aproduction line is set up properly, it will keep going on some

rhythm.


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Mass production (2)

(4) The products quality is easy to be guaranteed.

(5) Low production cost.

Management emphasis:

facility maintenance,

worker management,

quality management


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Multi-product and low volume production (1)

Characteristic: low volume, low production stability

the high productivity special equipments can notbe used

there are many products in production at the sametime so that the management is very complex.

e.g. bus , car, elevator


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Multi-product and low volume production (2)

Management emphasis : optimize product mix to pursue the largest

economic benefits after satisfying the marketdemand and production resources constraints.

use the GTproduction cell, and production line,

improve the connectionbetween processes.

arrange reasonably the product kind, quantity and

interval to produce products inbatchesand in turns. control and balance WIP, logistic and product

inventory


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One of a kind production (1)

organize production after receiving order.

e.g. shipbuilding, airplane making

Characteristics:

(1) different kind of products needs differentproduction process.

(2) every order has only one or several

quantity, with difference delivery time.

(3) general equipments are required, whichneed a long adjustment period with low

efficiency to different product

(4) workers are also required to be generalists.


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One of a kind production (2)

Management emphasis Effective cooperation (manufacture, distribution,

design, process and purchase)

to decide reasonable delivery date,

to improve the flexibility of manufacture system

to improve the generalization of parts.


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Classified based on customization :

make to stock

production for order



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Make to stock

Characteristic:

(1) production based on the forecasting

(2) mass production, in big batch

(3) high product inventory(4) high productivity

(5) simple production organization

Disadvantage:

high risk of excess inventory or order of stock


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Production for order

Characteristics:more and more popular(1) production based on the order

(2) different product has different specification, quantity,

quality and delivery time

(3) nearly zero inventory(4) delivery time is the key

(5) multi-product and low volume production

(6) complex production organization and management

(7) high customer satisfactionAccording to the level of customization,classified into:

assembly to order, make to order and engineer to order


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(1) assembly to order

firstproduce semi-finished products (parts and components) inadvance,

thenassemble them into different products according to customer

order. e.g. automobile manufacturing

the most mature production mode, the production of parts andcomponentsare with following properties:

high standardization and generalization parts or components

big production batch

high productivity

in many cases, use flow production line


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all products have been designed in advance

according to customer orders, buyraw materialsand parts, components,

manufactureand assemblythem into products thecustomer requires.

Some raw materials and standard parts areprepared based on the forecasting

forecastingshould be paid great attention

(2) Make to order


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design productsaccording to customers requirementafter receiving order,thenpurchase, and thenmakethem. Longproduction cycle

Pay more attention to reducing designcycle

Standard and general parts should be used as much aspossible,

using CAD, CAPP.

(3) Engineer to order


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design purchase manufacture assembly delivery

DeliveryEngineer to OrderETOOrder

Make to StockMTS order

Assembly to OrderATO

order

Make to OrderMTO

order

Overall view of production for order


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Product type

many

large

few

smallProduction batch

ATO

MTSETO

MTO

Product type and production batch


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Classified based on industry :

manufacturing industry

service industry


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Service industry (1)

Types of Service industry(1) High-touch typehotelclinicrestaurant

and shop

(2) low-touch typeaccounting, warehouse,

equipment maintenance, transportationService industry managementin

many aspects, methods in manufacturing

industry can be used here,

e.g. fast food restaurant (group technology)/

hospital (logistic management)


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Service industry (2)

Characteristics(1) Product is service, and it can not be stored.

(2) Labor denseness.

(3) The standard of quality: customer satisfaction degree.

(4) Some service is included in the manufacture industry.

e.g. sales, field support (service-after-sales) andaccounting.


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1.3 Organization of production system

A production system is usually divided into basic

units, e.g. workshop, workshop section, and working

team, and all these units can be organized on the

following three basic principles:

1. Processspecialization

2. Objectspecialization

3. Grouptechnology


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Object specialization (1)

Principle: the produce unit is organized according to a productkind ( or a part or a component kind)

Within one production unit: One products production( allprocesses) is completed by differenttype workersusing different

type equipments, e. g.

automobile assembling line

TV assembling line .


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Process specialization (1)

Principle: organize the production units according to aproductionprocess kind.

Within one production unit: the same type of workerscomplete the same processes using the same type equipments. e.g.

mechanical machining workshop,

lathe section,

drill section,

heat treatment,

anneal section,

assembly


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Process specialization (2)

Advantages(1) high equipment utilization rate, the failure of individual

equipment will bring little influence on production

(2) an employee do some fixed operations, which helps to

improve his skills(3) Units have high flexibility, can produce various of products

Disadvantages(1) long conveying routes

(2) great amount in-process inventory(3) WIP needs long waiting time, which increase the

production time

(4) frequently cooperation and interdependency among

production units, make management very difficulty


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Cellularallocate different equipments

into a production cell to work

on aproduct familythat have

similarshapes and process

requirements.

Within one cell:the production of a product

family can be completed by

different type workers using

different type equipments.

Group technology (1)


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Advantages

1better human relations. A work teamcomplete a whole task.

2improved operator expertise. Worker only make limited type

parts

repetition means quick learning.3Less in-process inventory and material handling. A cell

include several production stages, like a production line.

4faster production setup. similar products, fewer tool changes,

so fewer setup.

Group technology (2)


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warehouse

warehouse warehouse

warehouse

customer

customer

customer

Process specialization vs. GT production cell

Process

Group cell

interval flow line

Product??

P d ti Pl i d C t l


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Production Planning and Control

The End !

chap1－01 production system and operations strategy 王峻峰

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