DAO2703 OTM

Week 2
Operations Processes
and Technologies

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 Course Structure
Introduction to OTM;
Managing the Overview
Transformation Process

Process Types; Advanced Recognizing

Operations Technologies;
Process Analysis the Plant
Aggregate
Production Planning Planning for
the Plant;
Inventory Material Require- Operations PP&C Cycle
Management ments Planning Scheduling

Just-In-Time Theory of Improving the

Systems Constraints Plant
Strategic
Operations Strategic
Considerations
Supply Chain
Management
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 What are manufacturing processes?
Any part of an organization that takes inputs and transforms
them into outputs ideally of greater value to the organization
than the original inputs
The high-level view of manufacturing
Source: procure parts from suppliers
Make: manufacturing the items
Deliver: ship the items to the customers
Customer order decoupling point
Determines where inventory is positioned to allow processes in the
supply chain to operate independently
Selection of decoupling points: costs versus lead times

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 Types of firms
Make-to-stock
Serve customers from finished goods inventory
Examples: electronic goods, clothing, packaged food products
Essential issue: balance inventory level against customer service level
Use lean manufacturing to achieve higher service levels for a given
inventory investment
Assemble-to-order
Combine a number of preassembled modules to meet a customer’s
specifications
Examples: Dell Technologies, SAP ERP software
Required capability: a design that enables as much flexibility as
possible in combining components/modules
Applied lean manufacturing principles
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 Types of firms
Make-to-order
Make the customer’s product from raw materials, parts, and
components
Examples: commercial aircrafts, luxury cars
Allows for the customization of manufactured items from pre-designed
components
Engineer-to-order
Work with the customer to design and then make the product
Examples: Aerospace manufacturing, defense and security industry
Entails creating a product to a customer's precise specifications;
depending on how similar the products are, it might not even be
possible to preorder parts

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 Positioning Inventory in the Supply Chain

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 Process Selection
Process selection
refers to deciding on the way
production of goods or
services will be organized
Has major implications for
Capacity planning
Layout of facilities
Equipment
Design of work systems

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 Types of Operations Processes
Volume vs. flexibility
Project (management)
Nonroutine; one of a kind
Job Shop (worker center)
Low volume; high variety
Batch (manufacturing cell)
Mid volume; mid variety
Repetitive (assembly line)
High volume; low variety
Continuous (production)
Very high volume; very little variety

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 Project
A project is used for work that is nonroutine, with a unique set
of objectives to be accomplished in a limited time frame
Often a once-in-a-lifetime process management normally not repeated
Equipment flexibility and worker skills range from low to high
Examples:
Manufacturing: Building a bridge/custom home/dam, publishing a book,
Service: Making a movie, new product/service launching, consulting
Major challenge
To achieve all the project goals within the given constraints
Tools
CPM (Critical Path Method)
PERT (Program Evaluation Review Technique)
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 Job Shop
A job shop is used when a low volume of high-variety goods or
services are needed
Most highly customized goods and consumer services are
produced/provided in a ‘job shop’ setting
Not arranged according to a particular production/service sequence
Organizes similar skills, activities, and technologies into separate steps
with products/customers moving from one step to another with flexibility
Process focus; processing is intermittent; work using general-purpose
equipment and skilled workers
Can handle various processing requirements
Can also do jobs of same requirements in batches
Examples:
Manufacturing: A machine shop producing parts/components for machinery
Service: A vet clinic, treating different animals with different injuries/diseases
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 Job Shop
Major challenges
Assigning workers to steps/tasks/activities/machines
Sequencing jobs (e.g., customer orders) to meet delivery requirements
Tools used in scheduling (e.g., assigning and sequencing)
Analytical tools in optimization
Heuristics: trial-and-error, rule of thumb
Trade-off
Flexibility vs. cost (e.g., idle time, labor skills, inventory)

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 Batch
Batch processing is used when a moderate volume of goods
and services is desired, and it can handle a moderate variety in
products or services
Batch production involves the production of identical products made in
batches (group)
The equipment need not be as flexible as in a job shop, but processing
is still intermittent
The skill level of workers does not need to be as high as in a job shop
due to lesser variety in the jobs being processed
Examples:
Manufacturing: Automotive spare-part manufacturers, bakeries; paint
manufacturers
Service: Airlines, movie theaters

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 Batch
Major challenges
Balance between variety and volume (batch size)
Reduce changeover/setup times
Tools
Optimized batch size
Product & process technology innovation
Trade-off
Variety (batch size) vs. cost (e.g., batch size decides the economy of
scale and inventory)

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 Repetitive
A repetitive processing is used when higher volumes of more
standardized goods or services are needed
Most consumer goods are made from a repetitive production line (e.g.,
assembly line)
It is normally arranged according to a particular production step
sequence (e.g., based on the product and process technology
requirements)
It can produce high quantity of a single (or low variety) product at high
speed; only slight flexibility of equipment is needed
Repetitive focus; skills of workers is generally low
It can either be worker-paced or machine-paced line (a conveyor belt)
Examples:
Manufacturing: An automobile manufacturer; an electronics manufacturer
Service: Cafeteria lines; tickets collectors at concerts or sports events
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 Repetitive
Major challenge
Activity design
Line can be balanced
Cycle time can be optimized
Tools to balance the line
Analytics using optimization tools
Heuristics: trial-and-error, rule of thumb
Trade-off
Speed vs. cost (e.g., inventory)

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 Continuous
A continuous system is used when a very high volume of
nondiscrete, highly standardized output is desired
Product-focus; almost no variety in output; no need for equipment flexibility
Depending on the complexity of the system and the expertise needed,
workers’ skill requirements range from low to high
Major challenge
To ensure continuous maintenance and supply
Petroleum processing
Steel making
Tool
Process and product technology breakthrough
Recycling and process technology advancement in steel making has cut energy
consumption by at least 50%
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 Product-Process Matrix

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 Product-Process Matrix

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 Processes vs. Activities/Functions
Process
Activity/Function Project Job Shop Batch Repetitive Continuous
Cost estimation Simple to complex Difficult Somewhat routine Routine Routine

Cost per unit Very high High Moderate Low Low

Equipment used Varied General purpose General purpose Special purpose Special purpose

Fixed costs Varied Low Moderate High Very high

Variable costs High High Moderate Low Very low

Labor skills Low to high High Moderate Low Low to high

Promote capabilities;
Promote standardized Promote standardized
Marketing Promote capabilities Promote capabilities semi-standardized
goods and services goods and services
goods and services
Complex, subject to
Scheduling Complex Moderately complex Routine Routine
change
Work-in-process
Varied High High Low Low
inventory
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 Technologies
Technology and technological innovation often have a major
influence on business processes
Technology (both physical and information) refers to applications of
scientific knowledge to the development and improvement of goods and
services and/or the processes that produce or provide them
Hard technology: Equipment/devices that perform a variety of tasks in the
creation and delivery of goods and services. E.g., actuators, computers,
microprocessors, optical switches, satellites, sensors, etc.
Soft technology: Application of the Internet, computer software, and information
systems that helps provide data, information, and analysis to facilitate the
creation and delivery of goods and service. E.g., database systems, artificial
intelligence programs, and voice-recognition software
Technological innovation (a competitive necessity) refers to the
discovery and development of new or improved products, services, or
processes for producing or providing
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 Technologies
Automation is machinery that has sensing and control devices
that enable it to operate automatically
Three kinds of automation
Fixed automation (hard automation) uses high-cost, specialized
equipment for a fixed sequence of operations
An automated production facility in which the sequence of processing
operations is fixed by the equipment configuration
Suitable for products that are made in large volumes
Limitation: minimal variety and high cost of making major changes in either
product or process
Examples: machining transfer lines in the automotive industry, automatic
bottle-filling system in the beverage industry, automatic car parking system,
etc.

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 Technologies
Programmable automation (soft automation) involves the use of general-
purpose equipment controlled by a computer program that provides both
the sequence of operations and specific details about each operation
Products are made in batch quantities ranging from several dozen to several
thousand units at a time
For each new batch, the production equipment must be reprogrammed and
changed over to accommodate the new product style -- a period of
nonproductive time followed by a production run for each new batch
Production rates are generally lower than in fixed automation -- designed to
facilitate product changeover rather than for product specialization

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 Programmable Automation
Has the capability to produce a wide variety of low-volume products in
small batches economically
Computer-Aided Design (CAD)
Provides high resolution interactive graphics
Assists in development of product designs
Computer-Aided Engineering (CAE)
Provides computational engineering analysis of designs generated through CAD
Can complete thousands of analytical simulations, equivalent to thousands of
computing hours, speeding up production process

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 Programmable Automation
Computer-Aided Manufacturing (CAM)
Use of computers directly to control processing or material handling equipment
Indirectly to support operations (Capacity Planning, Scheduling, Purchasing,
Inventory Control, MRP, etc.)
Computer-Aided Process Planning (CAPP)
Use of computer technology to aid in the process planning of a part or product, in
manufacturing
Determines processing steps required to make a part; CAPP programs develop
process plans or route sheets
Significant link between CAD and CAM
CAD-CAM Integration
Design specifications translated to manufacturing specifications electronically and
automatically
Evaluates designs in terms of functionality and manufacturability

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 CAPP: a Bridge between CAD & CAM

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 Programmable Automation
Benefits of CAD/CAM
Design flexibility
Improvement in productivity
Shorter manufacturing lead times; shorter time to market
Fast and accurate drawing; better product quality

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 Programmable Automation
Numerical Control (NC) machine is
used in metal fabrication process
Milling, drilling, boring, sanding and
sawing, punch presses and thermal
cutting machines
Controlled by a set of instructions in
the form of numbers, letters, and
symbols called a program
Does not have memory of its own
A picture containing text, device, tool, miller

Description automatically generated

Computer Numerical Control (CNC)

machine
Controlled by a computer program
written in alphanumeric data
Has its own computer memory
Higher accuracy and precision

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 Programmable Automation
Direct (Distributed) Numerical Control (DNC) machines are linked to a remote
central computer that supplies instructions to each machine

Pro: best used in cases where parts are processed frequently and in small
batches, where part geometry is complex, mistakes are costly, and there is a
possibility of frequent changes in design
Limitations: higher skill levels are needed to program the machines; inability to
detect tool wear and material variation
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 Programmable Automation
Robots
Mechanical manipulators under computer
control; provide material handling functions
and actual operations
Types of robots
Robots that follow a fixed set of instructions
Programmable robots: repeat a set of
movements after being led through a
sequence; follow instructions from a computer
Collaborative robots (cobots) are designed to
work collaboratively with humans
Optimize operations
Relieve monotonous stages
Relieve stages in the assembly line that are
repetitive and tedious
Increase safety
Take over tasks that were previously
dangerous for human workers to carry out
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 Programmable Automation
3D Printer: industrial robot that is controlled
using CAD
3D printing (additive manufacturing) is a
process that creates a three-dimensional
object by adding successive layers of material
(See Table 6.4 on page 263 of the textbook)
Materials used in 3D printing:
Thermoplastics
Metals
Resins
Ceramics
Earliest 3D printing manufacturing equipment
was developed by Hideo Kodama of the
Nagoya Municipal Industrial Research Institute
in 1981
Enable quick and customized product design,
and optimize manufacturing processes
E.g., Ford uses 3D printing is to produce
automobile parts which are much lighter and
reduce assembly time of vehicles
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 Programmable Automation
Automated Guided Vehicles (AGVs)
Computer guided and controlled carts used to move parts and equipment
Widely used in industries such as automotive, production, packaging, healthcare &
pharmaceutical

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 Technologies
Drones
Unmanned aircraft, usually small, and remotely controlled or
programmed to fly to a specific location
Applications:
Military: used as target decoys, for combat missions, research and
development, and for supervision, drones have been part and parcel of the
military forces worldwide
According to data from Globe Newswire, the global military drone market size is
projected to reach $23.78 billion by 2027
Commercial: fertilizing crop fields on an automated basis, monitoring traffic
incidents, surveying hard-to-reach places, or even delivering pizzas
According to Insider Intelligence, the drone services market size is expected to grow
from $4.4 billion in 2018 to $63.6 billion by 2025
Personal: used for film-making, recording, still photography and gaming by
common tech-savvy enthusiasts
Insider Intelligence expects sales of drones to top $12 billion in 2021
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 Technologies
Flexible automation uses equipment that is more customized than that of
programmable automation
An extension of programmable automation
Variety of products is sufficiently limited so that the changeover of the
equipment can be done very quickly and automatically
Reprogramming of the equipment in flexible automation is done off-line -- the
programming is accomplished at a computer terminal without using the
production equipment itself
No need to group identical products into batches; instead, a mixture of different
products can be produced one right after another
Advantage: requires significantly less changeover time relative to
programmable automation; allows almost continuous operation of equipment
and product variety without the need to produce in batches

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 Flexible Automation
Evolved from programmable automation; uses equipment that is more
customized than that of programmable automation, thus requires
significantly less changeover time
Flexible Manufacturing System (FMS)
A group of machines with programmable controllers linked by an Automated
Material Handling System and integrated through a central computer
Can produce a variety of parts that have similar processing requirements
Automated Storage and Retrieval System (AS/RS)
Computer controlled storage and retrieval of raw materials, components, parts, etc.
Linked to the rest of production system by robots, AGVs and other material handling
systems
Advantages
Faster/lower-cost part changes
Lower direct labor cost
Reduced inventory
Consistent/better quality
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 Flexible Automation
Disadvantages
Limited ability to respond to product or product mix changes
Requires substantial preplanning and capital
Technological problems of exact part positioning and precise timing
Computer Integrated Manufacturing (CIM)
Computer integration of information from core manufacturing activities such as
engineering design, FMS, etc. with information from marketing, order entry,
maintenance, accounting and shipping (share a common database)
Computer Integrated Enterprise (CIE)
Orders; CAD/CAE/CAPP/CAM; FMS (DNC, robots, Planning and Scheduling
Systems); maintenance of machines; shipping of inputs/outputs; accounting and cost
data from workstations
The overall goal of CIM is to link various parts of an organization to achieve rapid
response to customer orders and/or product changes, to allow rapid production, and
to reduce indirect labor costs
Internet of Things (IoT) further enhances connectivity of devices (cell phones,
vehicles, audio and video device, and many more) through internet
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 CIM System Components

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 Technologies
Augmented reality
Enhances remote work capabilities and on-site efficiency by overlaying digital
information onto the physical environment
Allows workers interact with real-time data and virtual representations of their
workspace, increasing productivity and work efficiency
Enables hands-on training without disrupting the actual production
Digital twins
Create precise virtual models of physical objects, ranging from individual
components to entire manufacturing systems
Allows the monitoring and analysis of data across the entire lifespan of a
product or process
By mirroring the real world in a virtual space, digital twins enable enhanced
decision making through near real-time insights, allowing for early issue
detection and resolution
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 Technologies
Blockchain technology
A distributed, tamper-proof ledger of transactions or other data, referring
to the fact that the transactions are stored in a chain of linked blocks
Applications in Supply Chain
Supply Chain Management: a group of manufacturers and their suppliers
operating within a specific industry sector may create a blockchain to
track the movement of components across the supply chains
Tracking the authenticity of supplies: Tracking of materials through every
step of their journey from the original supplier can help manufacturers
ensure that the components they're using are genuine
Equipment maintenance: Blockchain can help automate scheduled
maintenance and improve asset utilization by reducing costly downtime.
Blockchain smart contracts can be used to trigger maintenance based on
the machine's condition and existing service agreements
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 Technologies
Product life-cycle monitoring: can be used to track products and their
components throughout their entire life cycle, including after they've been
delivered to customers. The information can also help manufacturers
improve sourcing, because it provides information on the historical
reliability and performance of components from different suppliers
Inventory management: can track which products are in warehouses at
any given time, determine delivery dates and reorder stock based on
demand and availability. This helps to avoid accumulating costly excess
inventory, arrange for the delivery of supplies at the right time, and
monitor whether suppliers are meeting promised delivery schedules
Quality control: can be used to provide an immutable record of quality
throughout the entire production process, including the quality of inbound
materials and the results of quality inspections during manufacturing. This
information can also help track down the source of any problems after
products have been delivered to customers
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 Benefits of Manufacturing Technology
Improves maintenance efficacy
IoT-enabled sensors monitor equipment conditions in real time to predict machinery failures
before they happen; streamlines maintenance, making it more efficient and less disruptive
Enhances productivity
Robotics technology are used to sort, store, and retrieve products with high accuracy,
reducing manual errors in inventory counts and speeding up picking and packing processes
Boosts operational flexibility
Robots can be swiftly reprogrammed to switch from production of one to another item
Increases business agility in response to changing market trends, reducing their time-to-
market for new products
Reduce errors
Continuous monitoring of production processes by AI-driven systems enables identification
and correction of deviations in real time
Enhances product quality and reduces manufacturing waste by ensuring that products meet
standards the first time
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 Technologies

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