Chapter 2: Product, Process and supply chain

network design

Lê Đức Đạo, Phd

Industrial System Enginerring Department
Faculty of Mechanical Engineering
Ho Chi Minh City University Of Science and Technology
Phone: 0937286746
Email: [email protected]
LECTURE OUTLINE
1. Introduction
2. Product design
3. Process design
4. Schedule design
5. Facilities design
6. Summary
 INTRODUCTION
 This chapter focuses on the product, process and schedule design (PP&S) functions as they
relate to facilities planning.
 Alternative facilities plans can be generated are the following:
1. What is to be produced?
2. How are the products to be produced?
3. When are the products to be produced?
4. How much of each product will be produced?
5. For how long will the products be produced?
6. Where are the products to be produced?

- The first five questions are obtained from PP&S.

- The 6th question is answered by:
 Facilities location, or
 Schedule design,
(If having existing factories)
Fig 2_1: Relationship between product, process, and
schedule (PP &S) design and facilities planning
 PRODUCT DESIGN
Product design involves both:
the determination of which products are to be produced
the detailed design of individual products

https://www.youtube.com/watch?v=ZZK3tlVeDC4
 PRODUCT DESIGN
Assemble chart

Presenting the assembling process

• one connected link circle: basic component
• Multiple connected link circle: (subassembly)
• Square: inspection
 PRODUCT DESIGN
Nut
Handle

Cap

Fiber Packing

Stem

Bushing

Body
 OPERATION PROCESS
CHART
https://www.youtube.com/watch?v=O6rlHOcslTs
PROCESS DESIGN
 Determination of how the product is to be produced
 ◦ Who should do the processing? (Which part of the products should be made?)
 ◦ How the part will be produced?
 ◦ Which equipment will be used? (for the parts which will be made in-house)
 ◦ How long will it take to perform the operation?

 Production methods are the most fundamental factor affecting the physical layout
 PROCESS DESIGN
 Within the process design, we need to consider following issues:

1. Process identification
- Make-or-buy analysis
- Parts identification

2. Process selection
- How the product will be made
(operations, equipment, raw material, etc.)

3. Process sequencing
- Production order.
 PROCESS DESIGN
Make-or-buy decisions
The scope of the facility depends on the level of
vertical integration

 How are the make-or-buy decisions made?

◦ Can the item be purchased?
◦ Should we go for subcontracting?
- Supplier
- Contractor
◦ Can we make the item?
◦ Is it cheaper for us to make than to
buy?
◦ Is the capital available so that we can
make it?

 Managerial decisions requiring input from

finance, industrial engineering, marketing,
process engineering, purchasing, human
resources, etc.
 PROCESS DESIGN
Bill of material
NEW PRODUCTS IN THE
FUTURE
 https://www.youtube.com/watch?v=5SIhlWFAJWk
https://www.youtube.com/watch?v=2-m1AL-fn1s
PROCESS DESIGN
 Disscussion (30 min)

Desgin the BOM for a specific product

SCHEDULE DESIGN
 Profit optimizing product selection layout design

Using Paretor chart (80-20)?

 Italian economists found that 85% of wealth is owned by 15% of the population
 Applying in facility design

-85% of product is volume is attributed to 15% of the product line

- 85% of movement in plant comes from 15% of material handling machine

 Production selection is analyzed through a quantitative relationship graph which is Also known as P-Q

(Product-Quantity) analysis
 SCHEDULE DESIGN
Volume-variety chart – Pareto law

Volume-variety chart – Pareto law

• 85% of the production volume is
attributed to 15% of the production
line
Fig 2_14: Volume-variety chart
• Therefore when facilities are for a facility when Pareto’s law
is applicable
designed, top 15% of the items that More general items
Items that are produced
are produced should be considered produced everyday:
maybe by special orders
the mos. Mass production area
etc.: Job shop area

Volume-variety chart – Pareto law does not apply

Fig 2_15: Volume-variety chart for a facility where

Pareto’s law is not applicable
CALCULATION OF PRODUCTION
REQUIREMENTS
CALCULATION OF PRODUCTION
REQUIREMENTS
CALCULATION OF PRODUCTION
REQUIREMENTS
 dk: the percentage of defective items produced on kth operation.

 Ok: the desired output without defects

 Ik: the production input

• For products with n sequential operations, the expected number of units to start into
production at the first operation is shown (On: the required production volume for the final
product):
CALCULATION OF PRODUCTION
REQUIREMENTS
 Hệ thống gồm 5 quá trình gia công nối tiếp
 Cần 2000 sản phẩm từ hệ thống
 Xác định năng suất đầu vào cho từng quá trình?
CALCULATION OF PRODUCTION
REQUIREMENTS
 Calculating production requirements for assembled products

The final products are 02 assemblies requiring 03 components). calculating components requirements for assembled
products. The calculations required are also shown in this figure.
 2. CALCULATIONS WITH REWORK.

I2: THE NUMBER OF DEFECTIVE ITEMS FROM THE FIRST OPERATION

𝐼2

Fig 2_16: Process chart for operations with rework

Thus

Since

21
EXERCISE
 CAPACITY PLANNING
ANALYSIS
 A local manufacturing plant has three work station (as shown in the following figure) with two
machines operating in parallel in station A. In other word before processding station B, the
product can be processed in either one of the two machines in Station A

Station A
12 min/1
unit Station B Station C 6
12 min/1 min/1 unit
Station A unit
12 min/1
unit
a) Which station among the three is the bottleneck workstations
b) If the company operate 8 hours per day, 7 days per week, what is the capacity of this work cell
c) if you could increase the capacity of any one of three workstations, which one could you focus on? By how
much would you increase capacity of this workstation in unit hours
 EXERCISES
 Capacity planning process
 4 ounces of meet per sandwich

25
200 24 loaves 5 min per
sandwich/p customer
ounces/hr in 4 hour
er hour

Cut meat Cut vegetables Make bread Assemble

a) Which station among the four is the bottleneck workstationsw

b) Which would increase the capacity of cell work the most
Increase making bread by 30%, assembly by 20% and meat cutting by 15%
 CALCULATION THE
REQUIRED MACHINE
M: number of machines required per shift
T: standard time (minutes) per unit produced
P: number of units to be produced per shift
M=
E: actual performance, expressed as a percentage of
standard time
C: amount of time (minutes) available per machine
R: reliability of machine, expressed as percent
uptime
CALCULATION THE
REQUIRED MACHINE Build the equation to caculate required machince
M2
M=
M: number of machines required per
shift
T: standard time (minutes) per unit
produced
P: number of units to be produced per
shift
E: actual performance, expressed as a
percentage of standard time
C: amount of time (minutes) available
per machine
R: reliability of machine, expressed as
percent uptime
REJECT ALLOWANCE
PROBLEM
x: Number of good units
p(x): Probability of producing exactly x good units
Q: Quantity of production
C(Q, x): Cost of producing Q units
R(Q, x): Revenue from producing Q units
P(Q, x): Profit from producing Q units P(Q, x) = R(Q, x) - C(Q, x)
E[P(Q)]: Expected profit when Q units are produced

E[P(Q)]

How do we actually decide Q?

The goal is having exactly x units of good items. No more, no less!
27
REJECT ALLOWANCE
PROBLEM

 To maximize expected profit, Q can be determined

by enumerating over various values of Q
 For most cost and revenue formulations the
equation is a concave function
 X and Q are discrete variables, therefore p(X) is a discrete
probability function
 If b is the number of defects then probability of each number of
defects may be different: P(b=1), P(b=2) etc

28
REJECT ALLOWANCE
PROBLEM
REJECT ALLOWANCE
PROBLEMCalculating production quantities that will maximize profit
Probability distributions for the number of good castings (x) out of Q

Therefore the expected profit can be given:

The expected profit expression can be shown to reduce to:

30
REJECT ALLOWANCE
PROBLEM
Profit from producing Q castings, with exactly x being good

Expected profit from producing Q castings

31
OPERATOR MACHINE CHART
0-0.5
0-0.1
1-1.5
1.5-2
1 min load 2-2.5
2.5-3
1 min unload 3-3.5
3.5-4
6 min automatic machince time 4-4.5
0,5 min inspection 4.5-5
5-5.5
0.5 min walking 5.5-6
6-6.5
6.5-7
7-7.5
7.5-8
OPERATOR MACHINE CHART
OPERATOR MACHINE CHART
a: concurrent activity time (e.g: loading and unloading
a machine)
b: independent operator activity time (e.g: walking,
inspecting, packing)
t: independent machine activity time (e.g: automatic
machining time)
n’: ideal number of identical machines to assign an
operator
m: number of identical machines assigned an operator
Tc: repeating cycle time
Io = idle operator time during a repeating cycle
Im = idle time for each machine during a repeating
cycle
34
OPERATOR MACHINE CHART
Machine chart operation

1 min load
𝑇 𝑐=
(( 𝑎 +𝑡 ) 𝑚 ≤𝑛 ′
𝑚 ( 𝑎 +𝑏 ) 𝑚 ≥𝑛 ′ 1 min unload
6 min automatic machince time
0,5 min inspection
0.5 min walking
 OPERATOR MACHINE CHART
Machince assigment problem

Co = cost per operator-hour; Cm = cost per machine-hour;  = Co / Cm

TC(m) = cost per unit produced based on an assignment of m machines per operator

1 min load
1 min unload
6 min automatic machince time
Let  : the ratio of TC(n) to TC(n+1)
0,5 min inspection
0.5 min walking

36
 1 min load

OPERATOR MACHINE CHART 1 min unload

6 min automatic machince time
Machince assigment problem
0,5 min inspection

If  <1: then TC(n) < TC(n+1), and n machines should be assigned; 0.5 min walking
If  >1: then TC(n + 1) < TC(n), and n + 1 machines should be assigned;
If  =1: then either n or n + 1 machines should be assigned.

E.x:
Suppose C0 = $15/ hour, Cm = $50/ hour.
Therefore,  = 0.30 and  = 0929.
Since  < 1, two machines should be assigned to
an operator (example in fig. 2-18: 3 machines).

37
OPERATOR MACHINE CHART