Design and management of production system

D M P S

ESIGN AND ANAGEMENT OF RODUCTION YSTEM

Introduction ................................................................................................................................................................ 3

Classification of production systems ............................................................................................................................ 5

Classification by nature of process..........................................................................................................................11

Manufacturing systems ......................................................................................................................................11

Process system ..................................................................................................................................................12

Classification by production method (volume) ........................................................................................................12

Continuous production ......................................................................................................................................12

Batch/intermittent production ...........................................................................................................................12

Single/unitary production ..................................................................................................................................12

Classification by market interaction

........................................................................................................................13

To order.............................................................................................................................................................13

To stock .............................................................................................................................................................13

Wortmann classification

.........................................................................................................................................13

Some examples ......................................................................................................................................................14

Performance ..............................................................................................................................................................14

Performance Measuring System (PMS) ...................................................................................................................14

Key Performance Index ......................................................................................................................................15

Waterfall of time

....................................................................................................................................................18

Overall Equipment Effectiveness ............................................................................................................................19

Productivity measures

............................................................................................................................................20

Production Capability .............................................................................................................................................21

Warehouse productivity measure (materials management) ....................................................................................23

ABC (Pareto) analysis .........................................................................................................................................23

Service performance measurement

........................................................................................................................25

Quality performance measurement........................................................................................................................29

Flexibility performance measurement ....................................................................................................................30

Job Shop ....................................................................................................................................................................31

Reference production mix definition ......................................................................................................................33

Development of the routings of the products .........................................................................................................33

Identification of the needed machines ...................................................................................................................33

Summing up of the workload for machine/product-type ........................................................................................33

Computation of the product hours need ................................................................................................................33

Computation of available hours..............................................................................................................................34

1

Computation of the number of machine-types .......................................................................................................34

Computation of the number of shifts......................................................................................................................35

Manufacturing cell .....................................................................................................................................................36

Group Technology ..................................................................................................................................................38

Visual inspection, classification and coding.........................................................................................................39

Production Flow Analysis ...................................................................................................................................43

Transfer line ...............................................................................................................................................................45

Linear Programming ...............................................................................................................................................50

Maximum fixed saturation rate (heuristic)

..............................................................................................................50

Task Oriented ....................................................................................................................................................51

Station Oriented ................................................................................................................................................53

Multiproduct .....................................................................................................................................................54

Assembly lines............................................................................................................................................................55

Work sampling .......................................................................................................................................................57

Standard times

.......................................................................................................................................................57

MTM method.........................................................................................................................................................57

Layout configuration: fixed position .......................................................................................................................57

Layout configuration: Assembly shop .....................................................................................................................58

Layout configuration: Assembly cell .......................................................................................................................59

Layout configuration: Assembly line .......................................................................................................................59

Evolutions ..............................................................................................................................................................61

Line sectioning ...................................................................................................................................................61

Parallel workstation ...........................................................................................................................................62

Self-managed teams ..........................................................................................................................................62

Design....................................................................................................................................................................62

Maximum incompletion probability allowed (heuristic) ......................................................................................63

Kottas & Lau (heuristic) ......................................................................................................................................66

Automated assembly .............................................................................................................................................67

Buffer sizing ...............................................................................................................................................................67

Introduction to production planning ...........................................................................................................................70

Aggregate Planning: relevant production costs .......................................................................................................72

Stockout cost .....................................................................................................................................................72

Setup costs ........................................................................................................................................................72

Stock holding costs ............................................................................................................................................73

Demand Forecasting ..................................................................................................................................................74

Demand forecasting system and methodologies

.....................................................................................................76

Time series approach .........................................................................................................................................76

2

Causal approaches .............................................................................................................................................77

Qualitative approaches ......................................................................................................................................78

Forecasting process organization .......................................................................................................................78

Forecasting process accuracy .................................................................................................................................79

Demand vs Sales forecast .......................................................................................................................................80

Exponential smoothing models ..............................................................................................................................82

Brown

................................................................................................................................................................82

Winters..............................................................................................................................................................83

Initialization .......................................................................................................................................................83

Implementation process ........................................................................................................................................83

Aggregate planning ....................................................................................................................................................84

Multi-product planning ..........................................................................................................................................87

Considerations .......................................................................................................................................................87

Inventory management ..............................................................................................................................................88

Switch models

........................................................................................................................................................89

The Economic Order Quantity – Re-Order Point model ...........................................................................................90

Safety stock determination ................................................................................................................................93

Fixed-time period model ........................................................................................................................................95

Magee Boodman ........................................................................................................................................................96

On-demand management ..........................................................................................................................................98

Scheduling ............................................................................................................................................................... 102

Karg & Thompson’s algorithm .............................................................................................................................. 105

Hodgson’s algorithm ............................................................................................................................................ 105

Johnson’s algorithm ............................................................................................................................................. 105

Campbell, Dudek and Smith’s algorithm ............................................................................................................... 106

Dispatching rules.................................................................................................................................................. 107

Variables.......................................................................................................................................................... 107

I NTRODUCTION

Production: the processes and methods used to transform tangible inputs (raw materials, semi-finished goods,

subassemblies) and intangible inputs (ideas, information, knowledge) into goods or services. Resources are used in this

process to create an output that is suitable for use or has exchange value. 3

The crossing point in the growth phase is the break-even point (“punto di pareggio”): the starting point in getting profits.

Introduction: best period to increase market share; R&D engineering (product design and

 enhancement/optimization) is critical; frequent product design and process changes, short production runs

and high costs; limited models but high attention to quality. 4

Growth: practical to change price or quality image; product design begins to stabilize; forecasting of capacity

 becomes necessary; product and process reliability; competitive products improvement and options; increase

of capacity; enhance of distribution.

Maturity: standardization (fewer product changes, more minor changes); optimum capacity (high volume);

 increasing stability of process; long production runs (established competitors – defend market position through

competitive prices); product improvement and cost cutting (improved cost control is required).

Decline: critical cost control (minimization); plan to terminate offering (unless the product is a special

 contribution to the organization).

C LASSIFICATION OF PRODUCTION SYSTEMS

Production system design is the horizontal dimension. Vertical integration: when a company buys suppliers (production

and logistics).

A production system is a set of machines and assets that implements, through an industrial technology, an industrial

production process, to make goods. Or the set of resources and procedures involved in converting raw material into

products and delivering them to customers. Functions have value only if they enhance the ability to do this profitably.

A production system is the combination of the production process and all the management subsystems contributing to

make the transformations (production process). The transformation takes place by means of exchanges of energy

entailing changes in the physical and chemical characteristics of the materials. Technologically: the application of

physical and chemical processes to alter geometry, properties and/or appearance of a given starting material to make

products; economically: the transformation of materials into items of greater values by means of one or more

operations. 5

The production system is the collection of workstations that perform operations such as manufacturing (processing),

assembly, inspection, finishing, testing, etc. to create products; a workstation is a collection of machines/operators that

performs the same operations for the same set of products. A machine/operator may be: an automated or manual

machine but also a human operator performing a manual operation.

Production system design is the general arrangement of workstations, dictating the pattern of flow of the products,

and the resource requirements at each workstation.

Manufacturing engineer: designs/selects the processes and operations required to produce the product (fixturing,

tooling, feed rates, cutting speeds, etc). Human factors e