DESIGNING, MANAGING & IMPROVING OPERATIONS Roy D. Shapiro, Core

DESIGNING, MANAGING & IMPROVING OPERATIONS Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

OUTLINE How to design a process to accomplish specific goals The critical challenges inherent in managing operations How to think effectively about learning and process improvement, and the implications for designing and running operations Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Operations Management 14-3

Design of products / services and design of processes are interrelated and should be treated together Designing the product or service Products and services should be designed in such a way that they can be created effectively Designing the process Product / service design has an impact on the process design and vice versa Processes should be designed so they can create all products and services which the operation is likely to introduce

Process design Process design Operations strategy Supply network design Layout and flow Process technology Design Job design Product/service design Operations management Planning and control Improvement

Process Design Designing successful processes and managing them effectively requires an understanding of how processes differ from one another. Processes that offer high flexibility, full customization, and superior customer service, for instance, are unlikely to be the lowest cost in their industry. And those that are low-cost probably do not allow for the flexibility and customization that some customers require. Two major process designs are: 1. Process-Focused, 2. Product-focused Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Process-Focused Operations (Job-Shops) Lathe Department L L L L L L L L L L Milling Department Drilling Department M M D D D D M M D D D D G G G P G G G P Grinding Department Receiving and Shipping Painting Department A A Assembly A

Product-Focused Operations Raw materials or customer Station 1 Station Station 22 Station Station 33 Material Material Material Material and/or labor and/or labor and/or labor and/or labor Station Station 44 Repetitive Manufacturing Finished item

Product-Focused Operations A product-focused operation is usually divided into several production lines. We will discuss three product-focused process types, each distinguished by the pacing of product flow: 1. Worker-paced line, 2. Machine-paced line, and 3. Continuous-flow process. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Taxonomy of Process Types Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Worker-Paced lines In a worker-paced line, workers themselves typically move products or components from one task to the next. Thus, the rate of product flow is paced by workers themselves. Many worker-paced lines are batch processes (that is, they produce not just one product at a time but multiples of the same product). A manufacturing cell is also a worker-paced line focused on an often narrow set of products. In it, products are not made in batches but instead are passed one at a time from worker to worker. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Single-Piece Flow versus Batch Flow Ten-step Sequential Process Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Single-Piece Flow If this process is run with single-piece flow (that is, as a cell), the first unit would take 3 10 30 minutes to complete. With a process cycle time of three minutes, the next items would be completed at minute 33, 36, 39, so on. The 50th unit would thus be completed at: 30 (49 3) 177 minutes (about three hours). WIP is at most 59 units. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

How do we measure WIP? Throughput Time: Average time that a unit takes to go through the entire process (including waiting time). Measured as time Work in Process(WIP): Average number of units in system over a time interval. Measured as units Key relationship WIP Throughput time Throughput rate (Little’s Law)

Batch Flow If this process is run instead with a batch flow— meaning that a batch isn’t moved from one task to the next until the entire batch is completed—with a batch size of 50 units: the throughput time for this process is 150 150 . . . 150 1,500 minutes, or 25 hours (more than three workdays). At each step, there will be a batch of product, so the line will have work-in-process (WIP) of 500 units. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Benefits of Single-Piece Flow Single-piece flow: The 50th unit would be completed at minute 177 (or a bit less than three hours) which is nearly 90% less than that of the batch flow (1500 min.). WIP is at most 59 units as compared to 500 units WIP of batch process, a reduction of more than 96%. Thus, if speed is important or inventory is expensive, single-piece flow is desirable. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Machine-Paced Lines When the product family is stable and narrow enough that tasks vary insignificantly between one product and another, additional efficiency may be gained by using a machinepaced line (also called a conveyor-paced line). Product is moved from one task to the next by a conveyor or other mechanism, and product flow is thereby paced by the speed of the conveyor. Work is broken into short, repetitive tasks that can be performed by workers with little training. The speed of the conveyor is then set by the bottleneck task(s). Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Toshiba with a conveyor-paced line Consider Toshiba, which produces its laptops using a machine-paced process. In one line, for example, a conveyor is divided into ten sections—each one meter in length and separated from the others by white lines—paced the line. A product or set of components is placed between the white lines. The work required to assemble a computer is divided into ten sets of tasks, as shown in Table 1. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Toshiba with a conveyor-paced line Each worker is assigned to a workstation. When a white line enters a workstation, the worker begins to work on the laptop and must finish all work by the time the next white line comes by. For smaller products, a worker might pick up the product and work on it but must still place it back between white lines. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Toshiba with a conveyor-paced line One of the central issues in designing a machinedpaced process is the conveyor speed. The faster the speed, the greater the output, but if the conveyor moves too fast, some workers will not be able to complete their tasks in the time it takes two white lines to pass by. At Toshiba’s conveyor, the space between white lines is one meter, and the longest task takes 114 seconds. Thus, we cannot run the line any faster than 1/114 0.00877 meters/second. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

A Slow Worker In what ways, a worker who works more slowly than the process cycle time will affect the performance of - a worker-paced lines and - machine-paced lines? What are the critical issues in designing worker and machine-paced lines? Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Continuous-Flow Processes Often only one standardized product—typically in very high volume is produced. Product is not something that flows in discrete units (such as a laptop); it is something that flows continuously. Output is denoted not in numbers of units, but in pounds or tons or liters or barrels. Examples include the production of cement, steel, petroleum, paper, chemicals, fabric, fruit juices, and many foods. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Continuous-Flow Processes (CFP) CFPs are typically highly capital-intensive, using technology that has been designed to produce one standardized product and nothing else. To amortize the high costs of capital, CFPs strive for high volume and high machine utilization. Indeed, many CFPs are run seven days a week, 24 hours a day, often for months at a time before a perhaps lengthy shutdown for cleaning and maintenance. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Many real-world processes, of course, are hybrids: combinations of one or more of the process types The challenge with hybrid operating systems is to design them so that the output rates of the different processes are as identical as possible. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Comparing Process Types Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Managerial Issues for Process Types:JobShop A job shop typically handles small orders for a wide variety of products, each of which may require a setup. The key managerial challenge is to finish production on time to meet delivery dates. This involves: Assigning jobs to people and/or machines (Loading) to improve resource utilization Scheduling the sequence of tasks to minimize the delays in product flow (Prioritizing) Controlling the progress of orders as they are being worked on Expediting the late and critical orders Revising the schedules in light of changes in order status Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Assignment Assignment model – A linear programming model for optimal assignment of tasks and resources Hungarian method – Method of assigning jobs by a one-for-one matching to identify the lowest cost solution 16-27

Hungarian Method (finds the lowest opportunity cost for each assignment) 1. Create zero opportunity costs by repeatedly subtracting the lowest costs from each row and column 2. Draw the minimum number of vertical and horizontal lines necessary to cover all the zeros in the table. If the number of lines equals either the number of rows or the number of columns, proceed to step 4. Otherwise proceed to step 3.

Assignment Method 3. Subtract the smallest number not covered by a line from all other uncovered numbers. Add the same number to any number at the intersection of two lines. Return to step 2. 4. Make the assignments a. Begin with rows or columns with only one zero b. Match items that have zeros, using only one match for each row and each column c. Eliminate both the row and the column after the match

Example A contractor pays his subcontractors a fixed fee plus mileage for work performed. On a given day the contractor is faced with three electrical jobs associated with various projects. Given below are the distances between the subcontractors and the projects. Project A B C Westside 50 36 16 Subcontractors Federated 28 30 18 Goliath 35 32 20 Universal 25 25 14 How should the contractors be assigned to minimize total distance (and total cost)?

LP Formulation – Decision Variables Defined xij 1 if subcontractor i is assigned to project j 0 otherwise where: i 1 (Westside), 2 (Federated), 3 (Goliath), and 4 (Universal) j 1 (A), 2 (B), and 3 (C)

LP Formulation Min Z 50x11 36x12 16x13 28x21 30x22 18x23 35x31 32x32 20x33 25x41 25x42 14x43 Subject to: x11 x12 x13 1 (no more than one x21 x22 x23 1 project assigned x31 x32 x33 1 to any one x41 x42 x43 1 subcontractor) x11 x21 x31 x41 1 (each project must x12 x22 x32 x42 1 be assigned to just x13 x23 x33 x43 1 one subcontractor) all xij : 0 or 1 (non-negativity)

Example: Hungarian Method Initial Tableau Setup Since the Hungarian algorithm requires that there be the same number of rows as columns, add a Dummy column so that the first tableau is: A B C Dummy Westside 50 36 16 0 Federated 28 30 18 0 Goliath 35 32 20 0 Universal 25 25 14 0

Example: Hungarian Method Step 1: Subtract minimum number in each row from all numbers in that row. Since each row has a zero, we would simply generate the same matrix above. Step 2: Subtract the minimum number in each column from all numbers in the column. For A it is 25, for B it is 25, for C it is 14, for Dummy it is 0. This yields: A Westside 25 Federated 3 Goliath 10 Universal 0 B 11 5 7 0 C Dummy 2 0 4 0 6 0 0 0

Example: Hungarian Method Step 3: Draw the minimum number of lines to cover all zeroes. A Westside Federated Goliath Universal B 25 3 10 0 C 11 5 7 0 Dummy 2 4 6 0 0 0 0 0 Step 4: The minimum uncovered number is 2 (circled).

Example: Hungarian Method Step 5: Subtract 2 from uncovered numbers; add 2 to all numbers covered by two lines. This gives: A B Westside 23 9 Federated 1 Goliath 8 5 Universal 0 C Dummy 0 0 3 2 0 4 0 0 0 2

Example: Hungarian Method Step 3: Draw the minimum number of lines to cover all zeroes. A B C Dummy Westside 23 9 0 0 Federated 1 3 2 0 Goliath 8 5 4 0 Universal 0 0 0 2 Step 4: The minimum uncovered number is 1 (circled).

Example: Hungarian Method Step 5: Subtract 1 from uncovered numbers. Add 1 to numbers covered by two lines. This gives: A B Westside 23 Federated 0 Goliath 7 Universal 0 C 9 2 4 0 Dummy 0 1 3 0 1 0 0 3

Example: Hungarian Method Step 4: The minimum number of lines to cover all 0's is four. Thus, there is a minimum-cost assignment of 0's with this tableau. The optimal assignment is: Subcontractor Project Distance Westside C 16 Federated A 28 Goliath (unassigned) Universal B 25 Total Distance 69 miles

Sequencing Sequencing – Determine the order in which jobs at a work center will be processed Priority rules – Simple heuristics such as FCFS - first come, first served, SPT- shortest processing time, EDD - earliest due date, CR - critical ratio are used to select the order in which jobs will be processed (N job, one machine problem) – These rules generally assume that: The set of jobs is known; no new orders arrive after processing begins and no jobs are canceled Setup time is independent of processing time Setup time is deterministic Processing times are deterministic There will be no interruptions in processing such as machine breakdowns or accidents 16-40

Performance Criteria to Evaluate These Rules Job flow time This is the amount of time it takes from when a job arrives until it is complete It includes not only processing time but also any time waiting to be processed Job lateness This is the amount of time the job completion time is expected to exceed the date the job was due or promised to a customer Makespan The total time needed to complete a group of jobs from the beginning of the first job to the completion of the last job Average number of jobs (WIP) Jobs that are in a shop are considered to be WIP inventory WIP Sum of total flow time/ Total job work time Instructor Slides 16-41

Sequencing Example Apply the three popular sequencing rules to these five jobs Job A B C D E Job Work (Processing) Time (Days) 6 2 8 3 9 Job Due Date (Days) 8 6 18 15 23

Sequencing Example FCFS: Sequence A-B-C-D-E Job Sequence Job Work (Processing) Time Flow Time Job Due Date Job Lateness A 6 6 8 0 B 2 8 6 2 C 8 16 18 0 D 3 19 15 4 E 9 28 23 5 28 77 11

Sequencing Example SPT: Sequence B-D-A-C-E Job Sequence B Job Work (Processing) Time 2 Flow Time 2 Job Due Date 6 Job Lateness 0 D 3 5 15 0 A C 6 8 11 19 8 18 3 1 E 9 28 23 5 28 65 9

Sequencing Example EDD: Sequence B-A-D-C-E Job Sequence B Job Work (Processing) Time 2 Flow Time 2 Job Due Date 6 Job Lateness 0 A 6 8 8 0 D 3 11 15 0 C 8 19 18 1 E 9 28 23 5 28 68 6

Sequencing Example Summary of Rules Rule Average Completion Time (Days) WIP Average Lateness (Days) FCFS 15.4 2.75 2.2 SPT 13.0 2.32 1.8 EDD 13.6 2.43 1.2

Two Work Center Sequencing Johnson’s Rule – Technique for minimizing makespan (minimizes total idle time) for a group of jobs to be processed on two machines or at two work centers. It assumes that: Job times are known and constant for each job at the work center Job times are independent of sequence Jobs follow same the two-step sequence All jobs are completed at the first work center before moving to the second work center Instructor Slides 16-47

Johnson’s Rule: Procedure 1. List the jobs and their times at each work center 2. Select the job with the shortest time a.If the shortest time is at the first work center, schedule that job first b.If the shortest time is at the second work center, schedule the job last. c. Break ties arbitrarily 3. Eliminate the job from further consideration 4. Repeat steps 2 and 3, working toward the center of the sequence, until all jobs have been scheduled Instructor Slides 16-48

Johnson’s Rule Example A group of six jobs is to be processed through a twomachine flow shop. The first operation involves cleaning and the second involves painting. Determine a sequence that will minimize the total completion time (makespan) for this group of jobs. Processing times are as follows: Processing Time (Hours) Job Work Center 1 Work Center 2 A 5 5 B 4 3 C 8 9 D 2 7 E 6 8 F 12 15

Johnson’s Rule Example a. Select the job with the shortest processing time. It is job D with a time of 2 hours. b. Since the time is at the first center, schedule job D first. Eliminate job D from further consideration. c. Job B has the next shortest time. Since it is at the second work center, schedule it last and eliminate job B from further consideration. We now have 1st D 2nd 3rd 4th 5th 6th B

Johnson’s Rule Example d. Processing Time (Hours) Jo Work Center b 1 Work Center 2 A 5 5 C 8 9 E 6 8 F 12 15 1st D 2nd 3rd 4th 5th 6th A B

Johnson’s Rule Example e. The shortest remaining time is 6 hours for job E at work center 1. Thus, schedule that job toward the beginning of the sequence (after job D). Thus, 1st 2nd D E 3rd 4th 5th 6th A B f. Job C has the shortest time of the remaining two jobs. Since it is for the first work center, place it third in the sequence. Finally, assign the remaining job (F) to the fourth position and the result is 1st 2nd 3rd 4th 5th 6th D E C F A B

Johnson’s Rule Example g. One way to determine the throughput time and idle times at the work centers is to construct a GANTT chart: Thus, the group of jobs will take 51 hours to complete. The second work center will wait 2 hours for its first job and also wait 2 hours after finishing job C. Center 1 will be finished in 37 hours.

Managerial Issues for Process Types:JobShop Job-Shops: Make-to-Order Manufacturers A managerial challenge in such a dynamic production environment is accurate cost and delivery time estimation in order to keep promises to customers about price and delivery date. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Managerial Issues for Process Types: Continuous Flow Process Goal: high utilization of labor and equipment since it is capital intensive. Downtime may be very expensive. How can management prevent downtime? it’s crucial to keep adequate supplies of raw materials. The cost of excess raw material inventory is typically small relative to the cost of a shutdown. it’s equally important to schedule sufficient maintenance to prevent machine breakdowns. Rapid repair when breakdown occurs require specialists as well as stocks of critical spare parts Minimization of quality problems will avoid production shutdown. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Managerial Issues for Process Types:Worker and Machine-Paced Lines An important managerial challenge is to minimize the delays, idle time, and work-inprocess inventories caused by bottlenecks. Typical issues are: Cross-traing of workers How much buffer stock to keep between the workstations Line Balancing Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Conveyor-Paced Assembly Lines (1) Consider a 40-foot conveyor-paced assembly line with ten workers placed along it. At any time, the line has ten units of product on it, spaced approximately evenly so that each of the ten workers can be working on one of the items. These workers are paid 9/hour for the normal 7.5 hours that they work on the line each day, with a 50% premium for any overtime work. The daily demand for the product being assembled on this line is 300 units; this demand is stable. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Conveyor-Paced Assembly Lines (1) (Each of the ten workers positioned in the middle of a four-foot section of the line) A natural layout for the line described would be as shown below, with W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 ---- ---- ----- ---- . 4 feet 4 feet 4 feet 4 feet Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Conveyor-Paced Assembly Lines (1): Questions 1. If management wants to run this line for a single shift each day, with no overtime, what should the target line speed be? Assume 100% utilization. 2. Assuming that the necessary tasks can be divided up so that the above target line speed is achievable, what is the labor cost per unit of product assembled on the line? Again, assume 100% utilization. 3. As we have seen, however, assembly lines may stop for a variety of reasons. If, on a particular day, the actual line utilization is 92%, and the lost production is made up by overtime, what is the average labor cost per unit for that day? (Again, assume that the line runs at the target line speed as defined above and that there are no line stoppages during overtime work.) Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Conveyor-Paced Assembly Lines (2) Years ago, when Texas Instruments first began to produce its line of digital watches, they were assembled on a traditional conveyor-paced assembly line with 12 workers. The assembly line, shown schematically below, consisted of a conveyor belt with perpendicular black lines painted on the belt every meter. The watches were placed on the black lines. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Conveyor-Paced Assembly Lines (2) Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Conveyor-Paced Assembly Lines (2) The belt moved continuously. A worker would pick up a watch from a black line, complete his or her tasks, and then replace the watch on the same black line. (The one-meter distance between black lines was small enough for workers to easily reach to the left to pick up a watch, complete his or her specified tasks, and then reach to the right to replace the watch on the same [moving] black line.) A list of the assembly operations is shown below, with the time required (all labor) to complete the tasks for that operation for a single watch. Each worker performed his or her tasks on every watch. Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Operation Description Processing Time (in seconds) 1 Prepare watch module; perform functional & frequency tests 57 2 Clip post from module; apply static-resistant tape 42 3 Heat-stake lens to watch cover; inspect watch cover 47 4 Clean switch holes; install switch set; install command switch 62 5 Clean inside watch cover; install module; install battery clip on module 43 6 Install battery clip on module; heat-stake battery clip on module 35 7 Install 2 batteries; switch check; date-code inside of watch back 41 8 Place O-ring seal on watch back; install back on watch 34 9 Perform functional test; install band on watch 57 10 Do cosmetic inspection and clean; perform final test 52 11 Place watch on cuff & buckle band; place watch and cuff in display box Place cover in display box base; place owner’s manual & box into tub 55 12 Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013). 44

Conveyor-Paced Assembly Lines (2) Questions 1. Which operation was the bottleneck? 2. To maximize the output of this line (and ensure that all tasks are completed), what is the speed at which you would run it? 3. What was the direct labor content per watch? 4. What was the labor utilization on this line? Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Objective in Line Balancing To minimize idle time along the line and increase utilization of equipment and labor by assigning tasks to workstations in such a way that the workstations have approximately equal time requirements. Perfect balance is not possible Why is line balancing important? – It allows us to use labor and equipment more efficiently. – It avoids chances that one workstation does not work harder than another. 2011 Pearson Education, Inc. publishing as Prentice Hall

Assembly-Line Balancing Start drawing the precedence diagram Determine cycle time Calculate theoretical minimum number of workstations Balance the line by assigning specific tasks to workstations Compute efficiency 2011 Pearson Education, Inc. publishing as Prentice Hall

Cycle Time – The maximum time allowed at each workstation to complete its set of tasks on a unit – Cycle time also establishes the output rate of a line Operating time per day Cycle time Desired output rate Operating time per day Output rate Cycle time

How Many Workstations are Needed? The required number of workstations is a function of – Desired output rate – Our ability to combine tasks into a workstation Theoretical minimum number of stations t N min Cycle time where N min theoretica l minimum number of stations t Sum of task time s

Measuring Efficiency Efficiency Balance Delay 100% - Efficiency Sum of task time s Efficiency 100 N actual Largest WS time where N actual Actual number of stations

Example 1:40 units are required to be produced per day (480 minutes) Task Task Time (minutes) A 10 B 11 C 5 D 4 E 12 F 3 G 7 H 11 I 3 Total time 66 min. Immediate Predecessors — A B B A C, D F E G, H This means that tasks B and E cannot be done until task A has been completed 2011 Pearson Education, Inc. publishing as Prentice Hall

Wing Component Example Task Task Time (minutes) A 10 B 11 C 5 D 4 E 12 F 3 G 7 H 11 I 3 Total time 66 Immediate Predecessors — A B B A C, D F E G, H 5 10 11 A B 4 12 E 2011 Pearson Education, Inc. publishing as Prentice Hall C D 3 7 F G 3 11 H Figure 9.13 I

Wing Component Example Task Task Time (minutes) A 10 B 11 C 5 D 4 E 12 F 3 G 7 H 11 I 3 Total time 66 480 available mins per day 40 units required Task Must Follow Task Listed Below — A Production time available B per day Cycle B time Units required per day A 480 / 40 5 C, D 12 minutes per unit C F 10 11 3 7 n E BTime for task i F A G Minimum G, H 4 number of i 1 Cycle time workstations 12 D 66 / 12 E 5.5 or 6 stations 2011 Pearson Education, Inc. publishing as Prentice Hall 11 H Figure 9.13 3 I

Heuristics WingLine-Balancing Component Example 1. Longest task time Choose the available 480 task available Performance Task Must Follow with the longest task time mins per day Time Task Listed 40 task units required Task2. Most (minutes) following tasksBelow Choose the available number of 12 mins A 10 —with the largestCycle time following tasks B 11 A Minimum 5.5 or 6 C 3. Ranked5 positional BChoose the available workstations task for D Bwhich the sum of following weight4 E 12 Atask times is the longest 5 F 3 C, D the available task C G 4. Shortest 7 task time FChoose 10 shortest 11 3 7 with the task time H 11 E A B G F I 5. Least number 3 G,Choose H of the available task 4 3 following tasks with the least number of Total time 66 D I 12 11 following tasks E 2011 Pearson Education, Inc. publishing as Prentice Hall H Table 9.4 Figure 9.13 9 - 73

Wing Component Example Performance Time Task (minutes) 480 available mins per day 40 units required Task Must Follow Task Listed Below A 10 B 11 Station C 52 D 4 11 E 10 12 B F A 3 G 7 H 11 I 3 12 Stationtime 66 Total E 1 Station 4 2011 Pearson Education, Inc. publishing as Prentice Hall — Cycle time 12 mins A Minimum 5 B workstations 5.5 or 6 C B 3 7 A F G C, D 4 3 F D E Station 3 I Station 3 G, H 11 H Station 5 Station 6 6 Station Figure 9.14 9 - 74

Wing Component Example Performance Time Task (minutes) Task Must Follow Task Listed Below 480 available mins per day 40 units required A 10 — Cycle time 12 mins B 11 A Minimum C 5 B workstations 5.5 or 6 D 4 B E 12 A F 3 C, D Task times G 7 F Efficiency (Actual number of H 11 E workstations) x (Largest WS time) I 3 G, H 66 minutes / (6 stations) x (12 minutes) Total time 66 91.7% 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 75

Wing Component Example Balance Delay 100% - Efficiency 1-0.917 0.083 or Balance Delay (2 1 1 2)/(12*6) 0.083 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 76

Measuring the Performance of a Process to improve Metrics to Measure Process Performance Capacity Efficiency Utilization Flexibility and Responsiveness Quality Roy D. Shapiro, Core Reading: Process Analysis, HBP No. 8007 (Boston: Harvard Business School Publishing, 2013).

Improving Operations to be more competitive Without customers, organizations would cease to exist Usually customers prefer: Lower prices High-quality products Quick service Tailored to their specific needs (customized) 14-78

Designing Production Systems to be Responsive to Customers Flexible manufacturing systems Customer Relationship Management (CRM): CRM is an approach to managing a company's interaction with current and future customers. CRM systems are designed to compile information on customers across different channels which could include the company's website, telephone, live chat, direct mail, marketing materials and social media with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth. 14-79

Improving Quality Concept of quality applies the products of both manufacturing and service firms A firm that provides higher quality than others at the same price is more responsive to customers Higher quality can also lead to better efficiency through lower waste levels and operating costs 14-80

Impact of Increased Quality on Organizational Performance 14-81

Improving Efficiency: Total Factor Productivity Measures how well an organization utilizes all of its resources—such as labor, capital, materials, or energy— to produce its outputs 14-82

Improving Efficiency: Partial Productivity Measures the efficiency of an individual unit Labor productivity is most commonly used to draw efficiency comparisons between different organizations 14-83

Facilities Layout, Flexible Manufacturing, and Efficiency Facilities layout: Technique whose goal is to design the machine-worker interface to increase production system efficiency Flexible manufacturing: Techniques that attempt to reduce the setup costs associated with a production system Redesigning the production system to be more productive Using easily replaced manufacturing equipment 14-84

Three Facilities Layouts 14-85

Just-in-Time Inventory and Efficiency Inventory: Stock of raw materials, inputs, and component parts that an organization has on hand at a particular time Just-in-Time (JIT) inventory: System in which parts arrive at an organization when they are needed, not before Advantage - Defective inputs can be quickly spotted Drawback - JIT systems is that they leave an organization without a buffer stock of inventory 14-86

Self-Managed Work Teams Use of empowered self-managed teams can increase productivity and efficiency Cost savings arise from eliminating supervisors and creating a flatter organizational hierarchy People often respond well to being given greater autonomy and responsibility Teams working together often become very skilled at enhancing productivity 14-87

Process Reengineering and Efficiency Process reengineering: Fundamental rethinking and radical redesign of the business process to achieve dramatic improvement in critical measures of performance such as cost, quality, service, and speed Boosts efficiency by eliminating the time devoted to activities that do not add value 14-88