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14. Products and Processes

Chapter 14  Products and Processes Introduction ·          The effect and efficiency of operations management, Just-in-Time manufacturing, a... thumbnail 1 summary

Chapter 14 

Products and Processes

·         The effect and efficiency of operations management, Just-in-Time manufacturing, and total quality management all depend on the way products are designed and the processes selected.  The way products are designed determines the processes that are available to make them.  The product design and the process determine the quality and cost of the product.  Quality and cost determine the profitability of the company.
Need for New Products
·         Products have a limited life span.  A product passes through several stages, known as the product life cycle.

Product Development Principles
·         There are two conflicting factors to be considered in establishing the range of products to supply.  If the product line is too narrow, customers may be lost.  If the product line is too wide, customers may be satisfied, but operating costs will increase because of the lack of specialization.  A balance can be obtained with good programs of product simplification, product standardization, and product specialization .
·         Simplification is the process of making something easier to do or make.  The emphasis is to remove unnecessary products and variations.
·         In product design, a standard is a carefully established specification covering the product’s material, configuration, measurements, and so on.  Thus, all products made to a given specification will be alike and interchangeable.  If the designs of assemblies are standardization so various models or products are assembled in the same way, then mass production is possible.  Modularization uses standardized parts for flexibility and variety.  By standardizing on component parts, a manufacturer can make a variety of finished goods.
·         Specialization is a concentration of effort in a particular area or occupation.  In product specialization, a firm may produce and market only one or a limited range of similar products.  This leads to process and labor specialization, which increases productivity and decreases costs.  Specialization is sometimes called focus and can be based either on product and market or on process.
·         Product and market focus can be based on characteristics such as customer grouping (serving similar customers), demand characteristics (volume), or degree of customization.  Process focus is based on the similarity of process.
·         Focused factories specialize in a narrow product mix for a niche market and are thought to produce more effectively and economically than more complex factories.  Repetition and concentration in one area allows the workforce and management to gain the advantages of specialization.  Specialization has the disadvantage of inflexibility.  Reducing part variety will create savings in raw material, work-in-process, and finished goods inventory.  It will allow longer production runs, improve quality because there are fewer parts, and improve opportunities for automation and mechanization.  Such a program contributes significantly to reducing cost.
Product Specification and Design
·         Products must be designed to be functional and capable of low-cost processing.  Functional means the product will be designed to perform as specified in the marketplace.  The product must be designed so it can be made at least cost.  Usually, many different designs will satisfy functional and appearance specifications.  The job then is to pick the design that will minimize manufacturing cost.  Poor design can add cost to processing.
·         To design products for low-cost manufacture requires close coordination between product design and process design, which is called simultaneous engineering.  Many organizations use a team with representatives from product design, process design, quality assurance, production planning and inventory control, purchasing, marketing, field service, and others, to concurrently develop the design for the product and the process.  Several advantages to this approach are the reduction in time to market, reduction in cost, improved quality, and lower total system cost.
Process Design
·         Operations management is responsible for producing the products and services the customer wants, when wanted, with the required quality, at minimum cost and maximum effectiveness and productivity.  Processes are the means by which operations management reaches those objectives.  A process is a method of doing something, generally involving a number of steps or operations.  Process design is the developing and designing of the steps.  Figure 14.3 illustrates the hierarchy of processes, nesting.  Small processes are linked to form a larger process.
Factors Influencing Process Design
·         Five basic factors must be considered when designing a process: (1) Product design and quality level - The product’s design determines the basic processes needed to convert the raw materials and components into the finished product.  The desired quality level affects the process design, because the process must be capable of achieving that quality level and doing it repeatedly.  (2) Demand patterns and flexibility needed – If there is a variation in demand for a product, the process and personnel must be flexible enough to respond to these changes quickly.  (3) Quantity/capacity considerations – Both product and process design depend on the quantity needed.  (4) Customer involvement – Process design will depend on which manufacturing strategy is chosen, engineer-to-order, make-to-order, assemble-to-order, and make-to-stock.  (5) Make or buy decision – A manufacturer has the alternative of making parts in-house or of buying them from an outside supplier.  A decision has to be made about which items to make and which to buy.  
Processing Equipment
·         General-purpose machinery can be used for a variety of operations or can work on a variety of products within its machine classification.  Usually less costly, more flexible, slower, and lower quality.  Special-purpose machinery is designed to perform specific operations on one work piece or a small number of similar work pieces.  Usually more costly, less flexible, produce parts more quickly with higher quality.
Process Systems
·         Based on material flow, processes can be organized in three ways: Flow, Intermittent, and Project (fixed position).  Understand the differences.  Look for definitions of flow processing, repetitive and continuous manufacturing, intermittent manufacturing, and Project, or fixed position manufacturing.
Selecting the Process
·         Generally, the larger the volume (quantity) to be produced, the greater the opportunity to use special-purpose processes.  The more special purpose an operation, the faster it will produce.  Capital costs are called fixed costs and the production, or run, costs are called variable costs. 
·         Cost equalization point (CEP) is the volume for which the total cost (and unit cost) of using one method is the same as another.  If the volume is less than the CEP, the method with the lower fixed cost will cost less.  If the volume is greater then the CEP, the method with the greater fixed cost will cost less. 
Continuous Process Improvement (CPI)
·         Continuous process improvement is a low-cost method of designing or improving work methods to maximize productivity.  The aim is to increase productivity by better use of existing resources.  Continuous process improvement is concerned with removing work content, not with spending money on better and faster machines.  Peter Drucker has said “efficiency is doing things right; effectiveness is doing the right things.”  CPI aims to do the right things and to do them efficiently.  Everyone in the workforce must be given the opportunity to improve the processes they work with.
·         The CPI system is based on the scientific method and the six steps are as follows: (1) Select the process to be studied.  (2) Record the existing method to collect the necessary data in a useful form.  (3) Analyze the recorded data to generate alternative improved methods.  (4) Evaluate the alternative to develop the best method of doing the work.  (5) Install the method as standard practice by training the operator.  (6) Maintain the new method.
·        Key points are:
1)      The important feature in observation is a questioning attitude.
2)      In selecting jobs or operations for method improvement, there are two major considerations: economic and human.
3)      Pareto analysis can be used to select problems with the greatest economic impact.  It separates the “vital few” from the “trivial many.”
4)      Cause-and-effect diagram (sometimes called a fishbone or an Ishikawa diagram)
5)      Properly defining the process.  Recording helps us consider all elements of the problem in a logical sequence and makes sure we do consider all the steps in the process.  The record of the present method also provides the basis for both the critical examination and the development of an improved method.
6)      Operations process chart and process flow diagram
7)      Finding the root cause ask what, why, when, how, where and who.  Ask the why question five times.
8)      When developing possible solutions, eliminate, combine, rearrange the sequence, and simplify.