Manufacturing Chapter 2.1

CHAPTER 2.
1
SOURCES OF
INFORMATION
FOR
MANUFACTURING
FACILITIES
DESIGN
Marketing
Department
3
Marketing
Department
The marketing department is responsible for
identifying, anticipating, and satisfying customer
needs and wants profitably. The end goal is to
make more profit. Fostering long-term
relationships is also another task; thus, money
keeps flowing into the company.
Selling Price
Some of the Volume(How many

can we sell?)
information Seasonality(Is it
marketing summer or winter
product?)
provides
Replacement parts
that an older may
require
Determining the selling price is not an exclusive function
of the marketing department. The industrial engineering
organization may supply the cost data for pricing, but the
selling price has a direct influence on the number of units
“
the company sells. Every customer makes a value
analysis on each purchase. The lower the price is, the
more customers will choose the product. Pricing is very
complicated and the marketing, production, and finance
departments are all part of this decision, but marketing
needs that information before it can ask the customers,
“How many do you want to buy?”
6
Price. The marketing
division sets the right
pricing strategy for the
products sold. Various
pricing strategies include
cost-plus pricing,
competition-based pricing,
loss leader pricing,
penetration pricing, and
zone pricing. Which is the
right pricing strategy? It
depends on factors such as
market demand, production
costs, and competitor
pricing.
TAKT TIME
Takt time is the rate at which you need to complete a product to meet customer demand.
Takt time is your sell rate and can easily be categorized as the heartbeat of your work process. It
allows you to optimize your capacity in the most appropriate way to meet demand without
keeping too much inventory in reserve.
The term originates from the German word “takt”, which means a beat or a pulse. Takt time was
first used as a metric in the 1930s in Germany for airplane manufacturing. Twenty years later, it
contributed significantly to Toyota's rise from a small Japanese carmaker to the largest
automobile company in the world.
9
Example #1:
Let us assume that you need to produce and ship 1,000
units of product from
the plant in an 8-hour shift. Thirty minutes for lunch, 10
minutes for break, and 8 minutes
for team meetings are allotted during each shift.
Furthermore, let us assume that
the plant is operating at 90 percent efficiency.
(Calculating plant efficiency is beyond
the scope of this discussion; however, suffice it to say
that expectations of 100 percent
efficiency are unrealistic and in this example, 90 percent
efficiency is quite respectable).
Example #2:
Castro Accounting is a sole proprietorship
with one employee. The CPA works a
nine-hour day, with one hour for lunch. This
means that a total of eight hours, or 480
minutes, is available for production on an
average workday. During tax season, the CPA
averages six individual tax filings per day.
Using the takt formula, the CPA calculates the
daily takt time for Castro Accounting:
Calculating Scrap
Although undesirable, manufacturing operations do produce scrap or unusable parts.

Furthermore, often there is a need to redo an operation simply because the part was not
produced within the desired specifications the first time. This is called rework. Scrap
and rework result in an inefficient and wasteful use of the facilities’ resources. Every
effort should be made to eliminate such waste. However, as long as the plant has to
deal with scrap and rework, it cannot ignore their demand on production time.
To illustrate, let us assume in the preceding example the
press operation produces 3 percent scrap. Therefore, to
end up with 1,000 finished wagon bodies, you must start
with a larger number so that after scrapping 3 percent,
you will have 389 minutes Takt time OR R = 1,000
units = .389 minute per unit Takt time OR R (plant rate)
= .389 minute per unit 1 Unit Units per minute = .389
minute per unit = 2.57 units per minute 1,000 good
parts. If you designate the finished parts with the letter O
for output, you can calculate the input, I, as follows:
Product Design Department
Blueprints, a bill of materials, assembly drawings, and model shop samples

inform the facilities designer of the prime mission—a detailed description of what
needs to be accomplished. The product design department is the source of this
valuable information. The first question anyone would ask when assigning a new
facility design project is, “What are we going to make?” The output of the
product design department tells you exactly what you are going to manufacture.
16
Laptop Parts
Headphones
Parts
Bicycle Parts
Intended Bill of Materials
The indented bill of material is also an important aid in the design of the facility
and configuration of the work cells and assembly lines. An indented bill of
material provides the same basic information as the parts list. However, the
indented bill of material presents the hierarchical structure of the product by
identifying each assembly, subassembly, and the required or subordinate parts of
each assembly or subassembly. The highest level of the product, or the finished
assembly, appears on the top of the list and is given level number zero.
20
GodBless!
Life is a gift.
Never forget to enjoy
and bask in every
moment you are in.
-UNKNOWN

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CHAPTER 2.

Some of the Volume(How many

Although undesirable, manufacturing operations do produce scrap or unusable parts.

Blueprints, a bill of materials, assembly drawings, and model shop samples

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