Introduction To Operations And Supply Chain Managementfifth Editioncha ✓ Solved

Introduction to Operations and Supply Chain Management Fifth Edition Chapter 3 Process Choice and Layout Decisions in Manufacturing and Services ‹#› Chapter Objectives (1 of 2) Be able to: Describe the characteristics of the five classic types of manufacturing processes. Discuss how different manufacturing process choices support different market requirements. Explain how different manufacturing processes can be linked together via the supply chain. Describe the critical role of customization in manufacturing, including the degree and point of customization, as well as upstream versus downstream activities. Chapter Objectives (2 of 2) Be able to: Discuss the three dimensions that differentiate services from one another – the service package, customization, and customer contact – and explain the different managerial challenges driven by these dimensions.

Position a service on a conceptual model an explain the underlying managerial challenges. Explain how different service processes support different market requirements. Develop a product-based layout, using line balancing, and calculate basic performance measures for the line. Develop a functional layout based on total distance traveled. Introduction Manufacturing and Service processes are very important to firms because: They tend to be expensive and far reaching Process decisions deserve extra attention because different processes have different strengths and weaknesses.

Some processes are particularly good at supporting a wide variety of goods or services, while others are better at providing standardized products or services at the lowest possible cost. Managers must carefully consider the strengths and weaknesses of different processes and make sure that the process they choose best supports their overall business strategy and the needs of their targeted customers. Manufacturing Processes (1 of 17) Selecting an effective manufacturing process means much more than just choosing the right equipment. Manufacturing processes also include people, facilities and physical layouts, and information systems. Different manufacturing processes have different strengths and weaknesses.

Some are best suited to making small numbers of customized products, while others excel at producing large volumes of standard items. The manufacture of a particular item might require many different types of manufacturing processes, spread over multiple sites and organizations in the supply chain. Manufacturing Processes (2 of 17) Questions to ask when selecting a manufacturing process: What are the physical requirements of the company’s product? How similar to one another are the products the company makes? What are the company’s production volumes?

Where in the value chain does customization take place (if at all)? Manufacturing Processes (3 of 17) Product-based layout A type of layout where resources are arranged sequentially, according to the steps required to make a product. Functional layout A type of layout where resources are physically grouped by function. Manufacturing Processes (4 of 17) Continuous Flow Processes Production Line Batch Manufacturing Job Shop Fixed Position Layout Manufacturing Processes (5 of 17) Production Line – A type of manufacturing process used to produce a narrow range of standard items with identical or highly similar designs. Follows a product-based layout Steps are usually linked by some system that moves the items from one step to the next.

Items typically move through the production line at a predetermined pace. Suitable for high-volume production of product(s) characterized by similar design attributes. Manufacturing Processes (6 of 17) Need high volumes to justify the required investment in specialized equipment and labor. Are inflexible with regard to items that do not fit the design characteristics of the production line. Manufacturing Processes (7 of 17) Continuous Flow Processes – A type of manufacturing process that produces highly standardized products using a tightly linked, paced sequence of steps.

Closely resembles the production line process Form of product usually cannot be broken into discrete units. Examples include yarns and fabric, food products, and chemical products such as oil and gas Manufacturing Processes (8 of 17) Figure 3.1 Production Line and Continuous Flow Processes Manufacturing Processes (9 of 17) Job Shops – A type of manufacturing process used to make a wide variety of highly customized products in quantities as small as one. Characterized by general-purpose equipment and broadly skilled workers. Main emphasis is meeting a customer’s unique requirements. Product design is not standardized.

Typically follow a functional layout. Examples include custom furniture, specialized machine tools used by manufacturers, and restoration and refurbishing work. Manufacturing Processes (10 of 17) Figure 3.2 Job Shop Processes Manufacturing Processes (11 of 17) Batch Manufacturing – A type of manufacturing process where items are moved through the different manufacturing steps in groups or batches. Fits between job shops and lines in terms of production volumes and flexibility and strikes a balance between the flexibility of a job shop and the efficiency of a line. Are the most common type of manufacturing process.

The sequence of steps is not as tightly linked as a production line. Flexible Manufacturing Systems – Highly automated batch processes that can reduce the cost of making groups of similar products. Manufacturing Processes (12 of 17) Fixed-Position Layout – A type of manufacturing process in which the position of the product is fixed. Materials, equipment, and workers are transported to and from the product. Used in industries where the products are very bulky, massive, or heavy and movement is problematic.

Examples include shipbuilding, construction projects, and traditional home building. Manufacturing Processes (13 of 17) Hybrid Manufacturing Process – A term referring to a manufacturing process that seeks to combine the characteristics, and hence advantages, of more than one of the classic processes. Machining centers Group technology Flexible manufacturing systems Manufacturing Processes (14 of 17) Figure 3.3 Group Technology Work Cell Manufacturing Processes (15 of D Printing An additive manufacturing process that creates a physical object from a digital design A digital model is turned into a solid three-dimensional physical object by adding material layer by layer. It allows manufacturing to occur when and where the item is needed which can be a real advantage when time is of the essence or when shipping an item from a plant to its final destination is difficult.

Manufacturing Processes (16 of 17) Figure 3.4 Linking Processes Together to Make a Sweater Manufacturing Processes (17 of 17) Figure 3.5 The Product-Process Matrix Based on R. Hayes and S. Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New York: Wiley, 1984) Product Customization within the Supply Chain (1 of 4) Four Levels of Customization Make-to-stock (MTS) – Products that require no customization. Assemble-to-order (ATO) – Products that are customized only at the very end of the manufacturing process. Make-to-order (MTO) – Products that use standard components but have customer-specific final configuration of those components.

Engineer-to-order (ETO) – Products are designed and produced from the start to meet unusual customer needs or requirements. Product Customization within the Supply Chain (2 of 4) Figure 3.6 Where Does Customization Occur in the Supply Chain? Product Customization within the Supply Chain (3 of 4) Law of Variability - The greater the random variability either demanded of the process or inherent in the process itself or in the items processed, the less productive the process is. This law is relevant to customization because completing upstream activities offline helps isolate these activities from the variability caused by either the timing or the unique requirements of individual customers. © Schmenner and Swink (1998) Product Customization within the Supply Chain (4 of 4) When customization occurs early in the supply chain: Flexibility in response to unique customer needs will be greater.

Lead times to the customer will tend to be longer. Products will tend to be more costly. When customization occurs late in the supply chain: Flexibility in response to unique customer needs will be limited. Lead times to the customer will tend to be shorter. Products will tend to be less costly.

Service Processes (1 of 10) Three dimensions on which services can differ: The nature of the service package The degree of customization The level of customer contact Service Processes (2 of 10) Service Package – A package that includes all the value-added physical and intangible activities that a service organization provides to the customer. The greater the emphasis on physical activities, the more management’s attention will be directed to capital expenditures (buildings, planes, and trucks), material costs, and other tangible assets. The greater the emphasis on intangible activities, the more critical are the training and retention of skilled employees and the development and maintenance of the firm’s knowledge assets.

Service Processes (3 of 10) Service Customization – Ranges from highly customized to standardized. As the degree of customization decreases, the service package becomes more standardized. As the degree of customization increases, the service package becomes less predictable and more variable. Service Processes (4 of 10) Customer Contact – The degree of customer contact determines the relative importance of front room and back room operations in a service process Front Room – The physical or virtual point where the customer interfaces directly with the service organization. Examples: Sales floor in a retail store, Help desk for a software provider, Web page for a company.

Back Room – The part of a service operation that is completed without direct customer contact. Examples: Package sorting at FedEx or UPS, Testing medical samples Service Processes (5 of 10) Service Blueprinting – A specialized form of business process mapping that allows the user to better visualize the degree of customer contact. It lays out the service process from the viewpoint of the customer and parses out the organization’s service actions based on: The extent to which an action involves direct interaction with the customer. Whether an action takes place as a direct response to a customer’s needs. Service Processes (6 of 10) Table 3.2 Managerial Challenges in Service Environments Nature of the service Package Primarily physical activities → greater emphasis on managing physical assets (Airline, trucking firm).

Primarily intangible activities → greater emphasis on managing people and knowledge assets (Law firm, software developer). Degree of customization Lower customization → greater emphasis on closely controlling the process and improving productivity (Quick change oil shop). Higher customization → greater emphasis on being flexible and responsive to customers’ needs (Full service car repair shop). Degree of customer contact Lower contact → More of the service package can be performed in the back room. Service layout, location, and hours will be based more on cost and productivity concerns (Mail sorting).

Higher contact → More of the service package must be performed in the front room. Service layout, location, and hours must be designed with customer convenience in mind (Physical therapist). Service Processes (7 of 10) Figure 3.9 Service Blueprinting Template Service Processes (8 of 10) Service Positioning Service operations compete and position themselves in the marketplace based on the three dimensions: Nature of the Service Package Degree of Customization Degree of Customer Contact Figure 3.12 A Conceptual Model of Service Process Service Processes (9 of 10) Service Positioning Figure 3.13 Positioning a Typical Community Hospital Service Processes (10 of 10) Service Positioning Figure 3.14 Positioning a Birthing Center Layout Decision Models (1 of 4) Fixed position layout – Productive resources have to be moved to where the product is being made or the service is being provided.

Product-based layout – Arranges resources sequentially, according to the steps required to make a product or provide a service. Functional layout – Physically groups resources by function. Cellular layout – Production resources are dedicated to a subset of products with similar requirements, known as a product family. Layout Decision Models (2 of 4) Line balancing – A technique used in developing product-based layouts that works by assigning tasks to a series of linked workstations in a manner that minimizes the number of workstations and minimizes the total amount of idle time at all stations for a given output level. Layout Decision Models (3 of 4) The six basic steps of line balancing: Identify all the process steps required, their times for each task, the immediate predecessor for each task, and the total time for all tasks.

Draw a precedence diagram. Determine task time for the line. Compute the theoretical minimum number of workstations needed Use a decision rule to assign tasks to the workstations. Evaluate the performance of the proposed line by calculating some basic performance measures. Layout Decision Models (4 of 4) Line Balancing Performance Measures Example 3.2 – Blackhurst Engineering (1 of 10) Blackhurst Engineering, a small contract manufacturer, has just signed a contract to assemble, test, and package products for another company.

The contract states that Blackhurst must produce 500 units per 8-hour day. Example 3.2 – Blackhurst Engineering (2 of 10) The list of tasks, including time requirements and immediate predecessors is as follows: Task Time (in Seconds) Immediate Predecessor(S) A 15 None B 26 A C 15 A D 32 B, C E 25 D F 15 E G 18 E H 10 E I 22 F, G, H J 24 I Total 202 Blank Example 3.2 – Blackhurst Engineering (3 of 10) Figure 3.15 Precedence Diagram Example 3.2 – Blackhurst Engineering (4 of 10) Calculate task time and theoretical minimum number of workstations Example 3.2 – Blackhurst Engineering (5 of 10) Use the following decision rules to assign tasks to workstations: Assign the largest eligible task that can be added to the workstation without exceeding the task time.

If there is a tie, assign the eligible task with the most tasks directly dependent on it. If there is still a tie, randomly choose among any of the tasks that meet the above two criteria. Workstation 1 Task A 15 seconds Task B 26 seconds Task C 15 seconds Total 56 seconds Example 3.2 – Blackhurst Engineering (6 of 10) Workstation 1 Task A 15 seconds Task B 26 seconds Task C 15 seconds Total 56 seconds Workstation 2 Task D 32 seconds Task E 25 seconds Total 57 seconds Example 3.2 – Blackhurst Engineering (7 of 10) Workstation 3 Task G 18 seconds Task F 15 seconds Task H 10 seconds Total 43 seconds Workstation 4 Task I 22 seconds Task J 24 seconds Total 46 seconds Example 3.2 – Blackhurst Engineering (8 of 10) Figure 3.16 Workstation Assignments Example 3.2 – Blackhurst Engineering (9 of 10) Calculate idle time, percent idle time, and efficiency delay: Example 3.2 – Blackhurst Engineering (10 of 10) The resulting line is not perfectly balanced.

They will probably need to rotate employees across the workstations. Workstation Cycle Time − Actual Time = Idle Time 1 57 − 56 = 1 second 2 57 − 57 = 0 seconds 3 57 − 43 = 14 seconds 4 57 − 46 = 11 seconds Total 26 seconds of idle time Layout Decision Models Assigning Department Locations in Functional Layouts Arrange the different functional areas or departments in such a way that departments that should be close to one another are, while departments that don’t need to be or shouldn’t be near one another aren’t. Minimize the total distance traveled Example 3.3 – Blackhurst Engineering (1 of 5) Blackhurst Engineering is locating to a new facility. Figure 3.17 Layout of the New Facility Table 3.3 Distances (in meters) between Areas Area A B C D E A — Blank Blank Blank Blank B 30 — Blank Blank Blank C — Blank Blank D — Blank E — Example 3.3 – Blackhurst Engineering (2 of 5) Table 3.4 Number of Daily Interdepartmental Trips Department Accounting Marketing Production Engineering S&R Accounting — Blank Blank Blank Blank Marketing 80 — Blank Blank Blank Production — Blank Blank Engineering — Blank S&R — Example 3.3 – Blackhurst Engineering (3 of 5) Table 3.5 Ranked Number of Daily Interdepartmental Trips Departments Average Trips Per Day Production ↔ Marketing 110 S&R ↔ Production 90 Marketing ↔ Accounting 80 Engineering ↔ Accounting 60 Engineering ↔ Production 55 Engineering ↔ Marketing 40 Production ↔ Accounting 35 S&R ↔ Marketing 25 S&R ↔ Accounting 10 S&R ↔ Engineering 5 Example 3.3 – Blackhurst Engineering (4 of 5) Figure 3.18 Initial Layout Assignments and Distance Traveled Table 3.6 Total Distance Traveled per Day, Initial Solution Interdepartmental Travel Distance Traveled Per Day (Meters) Production ↔ Marketing 110 trips * 30 = 3,300 S&R ↔ Production 90 * 35 = 3,150 Marketing ↔ Accounting 80 * 50 = 4,000 Engineering ↔ Accounting 60 * 30 = 1,800 Engineering ↔ Production 55 * 50 = 2,750 Engineering ↔ Marketing 40 * 40 = 1,600 Production ↔ Accounting 35 * 40 = 1,400 S&R ↔ Marketing 25 * 35 = 875 S&R ↔ Accounting 10 * 70 = 700 S&R ↔ Engineering 5 * 70 = 350 Total distance traveled 19,925 meters Example 3.3 – Blackhurst Engineering (5 of 5) Figure 3.19 Revised Layout Assignments and Distance Traveled Table 3.7 Total Distance Traveled per Day, Revised Solution Interdepartmental Travel Distance Traveled Per Day (Meters) Production ↔ Marketing 110 trips * 30 = 3,300 Production ↔ S&R 90 * 35 = 3,150 Marketing ↔ Accounting 80 * 40 = 3,200 Engineering ↔ Accounting 60 * 30 = 1,800 Engineering ↔ Production 55 * 40 = 2,200 Engineering ↔ Marketing 40 * 50 = 2,000 Production ↔ Accounting 35 * 50 = 1,750 S&R ↔ Marketing 25 * 35 = 875 S&R ↔ Accounting 10 * 70 = 700 S&R ↔ Engineering 5 * 70 = 350 Total distance traveled 19,325 meters Process Choice and Layout Decisions in Manufacturing and Services Case Study Manufacturing and Service Processes: Loganville Window Treatments ‹#›

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Introduction

Operations and supply chain management are critical for the efficient functioning of any manufacturing or service organization. Among the key aspects of this field is the alignment of process choices and layouts to market demands. This essay consolidates the concepts outlined in the third chapter of the "Introduction to Operations and Supply Chain Management" textbook, focusing on process selection, layout decisions, and the reasons behind them in both manufacturing and service contexts.

Manufacturing Processes

Manufacturing processes can be categorized into five classic types: production lines, continuous flow processes, job shops, batch manufacturing, and fixed-position layouts. Each type has distinct characteristics that make them suitable for different production environments.

Production Lines

Production lines employ an assembly-line process to produce standardized goods in large volumes (Heizer et al., 2021). Products move sequentially through various workstations, which are assigned specific tasks. For example, automotive manufacturing utilizes production lines to ensure efficiency and reduce production costs. While they are effective for high-volume production, their inflexibility limits their use for diverse or customized products.

Continuous Flow Processes

Continuous flow processes resemble production lines but are suited for commodities that cannot be broken into discrete units, such as liquids and gases (Waters, 2019). These processes maintain a constant flow, leading to lower operational costs but less product customization. For instance, the petroleum industry operates using a continuous flow process to refine crude oil into gasoline.

Job Shops

Job shops serve a different market need, offering high customization and flexibility (Askin & Goldberg, 2002). Characterized by general-purpose equipment and versatile workers, job shops can produce small quantities of split-runners like custom furniture or specialized equipment. While they are capable of varied production, their scalability and cost-effectiveness decrease with increased volume.

Batch Manufacturing

Batch manufacturing bridges the gap between job shops and production lines by producing medium volumes of similar products in batches (Jacobs & Chase, 2018). This flexibility allows for customization while maintaining some level of efficiency. Bakery products serve as a perfect example of batch manufacturing where various types of bread are baked together but still have unique processes.

Fixed-Position Layouts

Applicable mainly in industries with bulky products, fixed-position layouts involve transporting workers and materials to the product's location, as seen in shipbuilding and construction (Stevenson, 2018). This layout is resource-intensive but aptly suits large, complex projects.

Hybrid and Emerging Processes

In modern manufacturing, hybrid processes (including Flexible Manufacturing Systems and 3D printing) have emerged, combining elements from traditional methods to achieve efficiency and customization (Keller et al., 2020). 3D printing offers significant advantages, allowing for specific on-demand production and customization at reduced costs.

Customization in Manufacturing Processes

Customization can occur at various levels: Make-to-Stock (MTS), Assemble-to-Order (ATO), Make-to-Order (MTO), and Engineer-to-Order (ETO) (Heizer et al., 2021). MTS involves standard products, while ETO denotes complete customization from product design to production. This stratification influences how companies manage their supply chains and inventory.
The point of customization also plays a crucial role. Customization near the end of the supply chain promotes shorter lead times but limits flexibility while early customization offers greater adaptability but often entails higher costs (Schmenner & Swink, 1998).

Service Processes

Conversely, service processes differ fundamentally from manufacturing processes in that they generally prioritize customer contact, service package, and degree of customization (Fitzsimmons & Fitzsimmons, 2019). The service package includes both tangible and intangible elements that satisfy customer needs.

Dimensions of Service

1. Service Package: This encompasses all activities (both physical and intangible) provided by a service organization. An example includes airline services, where the package contains both the transportation and customer service aspects (Zhang et al., 2020).
2. Customization: Services can be highly customized or standardized. A customized service might involve personal training, while a fast-food restaurant offers a more standard, predictable experience.
3. Customer Contact: The degree of customer contact required defines the relative proportions of front and back-stage operations. Service operations that necessitate high customer interaction tend to need more front-room employees than those that don’t (Shostack, 1984).

Service Blueprinting

Service blueprinting is a technique that allows organizations to visualize service processes from the customer's perspective (Bitner et al., 2008). This visualization helps to discern touchpoints requiring improvement, thereby enhancing customer satisfaction and operational efficiency.

Layout Decisions

Layout decisions can be categorized into fixed-position, product-based, functional, and cellular layouts. These decisions play a crucial role in operational efficiency. For example, a product-based layout minimizes idle time in assembly lines (Krajewski et al., 2013), while a functional layout may prioritize minimizing travel distances in office environments.

Line Balancing and Functional Layout

Line balancing ensures tasks are distributed among workstations to minimize idle time (Heizer et al., 2021). For instance, in Blackhurst Engineering's case, calculating theoretical maximum workstation times allows managers to determine optimal workloads and maintain operational flow.
In functional layouts, the focus is on arranging departments by function to save time on inter-departmental trips. For instance, engineering departments may need close proximity to production for quality control, emphasizing efficient organizational structure.

Conclusion

In conclusion, process choice and layout decisions are vital in ensuring operational efficiency and meeting market demands, encompassing both manufacturing and service environments. Different processes and layouts pose unique strengths and weaknesses, shaping how organizations strategize to stay competitive. A profound understanding of these dimensions is essential for managers seeking to align their operations with business goals effectively.

References

1. Askin, R. G., & Goldberg, J. B. (2002). Designing and Managing the Supply Chain. Wiley.
2. Bitner, M. J., Ostrom, A. L., & Morgan, F. N. (2008). "Service blueprinting: A practical technique for service innovation." California Management Review.
3. Fitzsimmons, J. A., & Fitzsimmons, M. J. (2019). Service Management: Operations, Strategy, Information Technology. McGraw-Hill.
4. Heizer, J., Render, B., & Munson, C. (2021). Operations Management. Pearson.
5. Jacobs, F. R., & Chase, R. B. (2018). Operations and Supply Chain Management. McGraw-Hill.
6. Keller, S., Barlow, C., & Lee, R. (2020). "The Future of Hybrid Manufacturing". Journal of Manufacturing Technology.
7. Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations Management: Processes and Supply Chains. Pearson.
8. Schmenner, R. W., & Swink, M. (1998). "On theory in operations management." Journal of Operations Management.
9. Stevenson, W. J. (2018). Operations Management. McGraw-Hill.
10. Waters, D. (2019). Operations Management. London: Kogan Page.
11. Zhang, X., Wei, S., & Li, Y. (2020). "Impact of Service Customization on Customer Satisfaction." Service Industry Journal.