IE 271 Operations Analysis and Design

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IE 271Operations Analysis and Design

• Lecture 1
• Introduction

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What is Production?

• Production is transformation of inputs into
  outputs

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Production

• Production is transformation of inputs into
  outputs

• Cutting
• Drilling
• Casting
• Molding
• Assembling
• Painting
• ...

Some examples of the transformation processes in
manufacturing systems.
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Production vs Manufacturing?

• Production and Manufacturing are not equivalent
  terms

Production
Manufacturing

• Production is a broader term that corresponds to
  all activities required in a transformation
  process until a valuable good or service is
  obtained

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Manufacturing and Production Systems

• Manufacturing is the ability to make goods and
  services to satisfy societal needs
• Manufacturing processes are strung together to
  create a manufacturing system (MS)
• Production system is the total company and
  includes manufacturing systems

The manufacturing system converts inputs to
outputs using processes to add value to the goods
for the external customer.
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Manufacturing - Technologically
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The functions and systems of the production
system, which includes (and services) the
manufacturing system.
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Manufacturing Systems

• Raw material can be stored in the warehouse
• (Raw Materials Inventory)

• Subparts can be stored during the process,
• between the departments (Work-In-Process
  Inventory)

• Finished Goods can be stored at the warehouse
• (Finished Goods Inventory)

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Types of Manufacturing

• Manufacturing can be discrete or continuous.
• Continuous process industries involve the
  continuous production of product, often using
  chemical rather than physical or mechanical
  means, e.g. sugar, paper, glass
• Discrete parts production involves the production
  of individual items, e.g. cars, appliances, etc.

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Discrete Manufacturing Layout

• Product Layout (Flow Shop) arrange activities in
  a line according to the sequence of operations
  that need to be performed to assemble a
  particular product
• Process Layout (Job Shop) group similar
  activities, together in departments or work
  centers according to the process or function they
  perform
• Project Shop Immobile item being manufactured
  (e.g planes, ships, etc)

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P - Q Relationship in Plant Layout
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Process Layout

• Layout in which equipment is arranged according
  to function
• Suited to low and medium production quantities
  and medium to high product variety
• Different parts or products are processed through
  different operations in batches
• Each batch follows its own routing
• No common work flow followed by all work units
• Material handling activity is significant

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Process Layout
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Process Layout (Job Shop)
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Product Layout

• Layout in which workstations and equipment are
  located along the line of flow of the work units
• Suited to high production quantities and low
  product variety
• Work units typically moved by powered conveyor
• At each workstation, a small amount of the total
  work content is accomplished on each work unit
• Each station specializes in its task, thus
  achieving high efficiency

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Product Layout for Assembled Product
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Product Layout (Flow Shop)
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Flow Shop
Figure 1-8 The moving assembly line for cars is
an example of the flow shop.
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Assembly workers on an engine assembly line
(photo courtesy of Ford Motor Company).
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Fixed-Position Layout

• Layout in which product remains in one location
  during fabrication, and workers and equipment are
  brought to the product
• Suited to low production quantities and high
  product variety
• Reason for keeping product in one location
• Product is big and heavy
• Typical plants assembly and fabrication
• Much manual labor
• Equipment is portable or mobile

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Fixed-Position Layout
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Assembly operations on the Boeing 777 (photo
courtesy of Boeing Commercial Airplane Co.).
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Hybrid Layouts

• Cellular - attempts to combine the best features
  of process and product layouts
• Combinations of fixed position and either
• Process layout or
• Product layout

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Cellular Layout

• Layout in which work units flow between stations,
  as in a production line, but each station can
  cope with a variety of part styles without the
  need for time-consuming changeovers
• Combination of product and process layouts
• Tries to combine efficiency of product layout
  with versatility of process layout
• Neither objective is achieved perfectly, but it
  is more efficient than a process layout and more
  versatile than a product layout
• Based on principles of group technology

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Cellular Layout
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A machining cell consisting of two horizontal
machining centers supplied by an in-line pallet
shuttle (photo courtesy of Cincinnati Milacron).
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Cellular Layout
A robotic arm performs unloading and loading
operation in a turning center using a dual
gripper (photo courtesy of Cincinnati Milacron).
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Other Combination Layouts

• Fixed-position and process layout
• Shipyard - ships made in modules
• Parts fabricated in process layout
• Modules built in fixed-position layout
• Fixed-position and product layout
• Commercial airplanes (e.g., Boeing 747)
• Fabrication begins with fuselage and proceeds
  through 7 or so stations where specialized
  workers assemble parts and modules to airplane

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Layout Types for P-Q Combinations
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Project Layout

• Usually refers to construction project
• Work teams and equipment are brought to the work
  site
• Layout is temporary because project has scheduled
  completion date
• Project layout vs. fixed-position layout
• Product is large and heavy
• In fixed-position layout, when product is
  completed, it is transported away
• In project layout, product remains, workers and
  equipment are transported away

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Mass Production to Lean Production
The traditional subassembly lines can be
redesigned into U-shaped cells as part of the
conversion of mass production to lean production.
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New Manufacturing Systems

• Toyota Production System
• Lean manufacturing system
• 100 good units flow without interruption
• Integrated quality control
• Responsibility for quality is given to
  manufacturing
• Constant quality improvement

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Order Driven vs. Stock Driven Manufacturing
Systems

• Make to stock (MTS)
• Assemble to order (ATO)
• Make to order (MTO)
• Engineer to order (ETO)

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Order and Stock Driven Systems

• Make to Stock (MTS)
• Customer demand is forecasted for future periods.
• Finished goods are produced in large quantities
  and stored in a warehouse.
• When customer order is received, the item is sold
  from the stocks (warehouse).
• When the quantity remaining in the stocks falls
  down under critical levels, the item is produced
  again.
• Suitable when the demand is large and more or
  less predictable.
• Delivery of the product to the customer is
  determined by the availability in the warehouse
  and the stock replenishment mechanism.

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Order and Stock Driven Manuf. Systems

• Make to Order (MTO)
• Products are selected by the customers based on a
  catalog of available designs
• Manufacturing of the finished good starts only
  after the customer order is received
• Generally, there are time lags between the
  delivery time of the product to the customer and
  the time order is placed
• Kitchen Furniture

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Order and Stock Driven Systems

• Assemble to Order (ATO)
• Similar to MTO
• Products are configured or assembled to customer
  order from a set of core subassemblies or
  components
• Customer makes a contact with the manufacturer
  through their sales organization
• Laptop computer

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Order and Stock Driven Systems

• Engineer to Order (ETO)
• Customer order requires that a new engineering
  design be developed
• The product is designed specifically for the
  needs of the customer
• ETO products are one of a kind products

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New Manufacturing Environment

• Increased product diversity
• Greatly reduced product life cycles
• Environmental impact of manufacturing systems
• Changing cost patterns
• Changing social expectations

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Industrial Revolution

• Mechanization is the replacement of human labor
  by machine
• Automation is replacement of human control of
  machines by automatic control
• CNC (Computer Numerical Control) Machines
• Performs computerized manufacturing operations
• Computer Aided Drawing (CAD)
• ERP Systems
• Very large scaled information system software
  which automates various operational activities in
  the production system
• Robots
• Reprogrammable multi-functional manipulator,
  designed to move material, parts, tools or
  specialized devices through variable programmed
  motions for the performance of a variety of tasks.

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Industrial Engineering - Definitons

• The engineering approach applied to all factors,
  including the human factor, involved in the
  production and distribution of products or
  services
• Industrial Engineering is concerned with the
  design, improvement and installation of
  integrated systems of people, material, equipment
  and energy. It draws upon specialized knowledge
  and skills in the mathematical, physical and
  social sciences together with the principles and
  methods of enginering analysis and design to
  specify, predict and evaluate the results to be
  obtained from such systems

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Industrial Engineering

• Finding ways of utilizing input resources in a
  more cost-effective manner
• Has been originated out of the need of businesses
  and military organizations.

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History of Industrial Engineering

• Matthew Bolton and James Watt (around 1795)
• Modern, closely integrated factory to produce
  steam engines
• Standards for detecting waste and inefficiency
• Used methods for forecasting, plant location and
  layout, wage incentives
• 100-150 years ahead of their time

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History of Industrial Engineering

• Applied economists and industrialists in England
  around 1800
• Adam Smith specialization of labor
• Development of new skills when a single task is
  performed
• Saving of time lost in changing from one task to
  another
• Invention of new, special-purpose tools and
  equipment
• Charles Babbage
• Not necessary to pay for skill levels used only
  during a fraction of the total job

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History of Industrial Engineering

• Developments in America
• Frederick W. Taylor (early 1900s)
• The Principles of Scientific Management
• Frank and Lillian Gilbreth
• Henry Gantt
• Gantt chart still used by today as a preliminary
  scheduling aid.

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History of Operations Research

• World War II
• Groups of mathematicians, economists and other
  scientists formed in England and in the US
• Navy employing more than 70 scientists
• Variety of problems such as
• radar installations,
• search for enemy submarines,
• deploy aerial mines in the seas around Japan,
• determining optimal size of merchant convoy
  fleets,
• development of maneuver strategies for ships
  under attack
• ...

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History of Operations Research

• After World War II
• Industrial firms in England and the US attempting
  to apply it to their operational and managerial
  problems
• Issues attacked by people such as Taylor and
  Gantt being addressed using more quantitative and
  systems-oriented procedures
• George Dantzig
• Development of linear programming

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IE OR

• Traditional IE and OR can be considered as a
  continuum where IE is at one end and OR is at the
  other
• Traditional IE tends to be more applicable to
  problems in a manufacturing environment
• OR has a broader scope
• OR has more mathematical approaches than
  traditional IE

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IE vs OR

• Somewhat separate histories
• Common mission
• Providing effective, efficient answers to
  questions relating to design, analysis and
  evaluation.
• N. Barish says
• OR is the applied science for managerial systems,
  whereas IE is the engineering of managerial
  systems.
• Each student will develop their own philosophy of
  the relationship between the two areas in time.

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Examples of IE/OR Activities
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Examples of IE/OR Activities
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Industrial Engineering

• IE uses engineering concepts, mathematics,
  economics, and principles of human behavior to
  design and implement more efficient, more
  productive systems.
• What is more efficient?
• What is more productive?
• How can you quantify them?

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Work

• Is our primary means of livelihood
• Serves an important economic function in the
  global world of commerce
• Creates opportunities for social interactions and
  friendships
• Provides the products and services that sustain
  and improve our standard of living

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The Nature of Work

• Work is an activity in which one exerts physical
  and mental effort to accomplish a given task or
  perform a duty
• Task or duty has some useful objective
• Worker applies skills and knowledge for
  successful completion
• The activity has commercial value
• The worker is compensated

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The Pyramidal Structure of Work

• Work consists of tasks
• Tasks consist of work elements
• Work elements consist of basic motion elements

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Task

• An amount of work that is assigned to a worker or
  for which a worker is responsible
• Repetitive task as in mass production
• Time required 30 seconds to several minutes
• Non-repetitive task performed periodically,
  infrequently, or only once
• Time required usually much longer than for
  repetitive task

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Work Element

• A series of work activities that are logically
  grouped together because they have a unified
  function in the task
• Example assembling a component to a base part
  using several nuts and bolts
• Required time six seconds or longer

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A Work System as a Physical Entity
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Productivity

• The level of output of a given process relative
  to the level of input
• Process can refer to
• Individual production or service operations
• A national economy
• Productivity is an important metric in work
  systems because
• Improving productivity is the means by which
  worker compensation can be increased without
  increasing the costs of products and services
  they produce

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Labor Productivity

• The most common productivity measure is labor
  productivity, defined by the following ratio
• LPR
• where LPR labor productivity ratio, WU work
  units of output, LH labor hours of input

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Labor Factor in Productivity

• Labor itself does not contribute much to
  improving productivity
• More important factors
• Capital - substitution of machines for human
  labor
• Technology - fundamental change in the way some
  activity or function is accomplished

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Measuring Productivity

• Not as easy as it seems because of the following
  problems
• Non-homogeneous output units
• Multiple input factors
• Labor, capital, technology, materials, energy
• Price and cost changes due to economic forces
• Product mix changes
• Relative proportions of products that a company
  sells change over time

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Labor Productivity Index

• Measure that compares input/output ratio from one
  year to the next
• LPI
• where LPI labor productivity index,
• LPRt labor productivity ratio for period t, and
• LPRb labor productivity ratio for base period

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Example Productivity Measurement

• During the base year in a small steel mill,
  326,000 tons of steel were produced using 203,000
  labor hours. In the next year, the output was
  341,000 tons using 246,000 labor hours.
• Determine (a) the labor productivity ratio for
  the base year, (b) the labor productivity ratio
  for the second year, and (c) the productivity
  index for the second year.

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Example Solution

• (a) In the base year, LPR 326,000 / 203,000
• 1.606 tons per labor hour
• (b) In the second year, LPR 341,000 / 246,000
• 1.386 tons per labor hour
• (c) Productivity index for the second year
• LPI 1.386 / 1.606 0.863
• Comment No matter how its measured,
  productivity went down in the second year.

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Productive Work Content

• A given task performed by a worker can be
  considered to consist of
• Basic productive work content
• Theoretical minimum amount of work required to
  accomplish the task
• Excess nonproductive activities
• Extra physical and mental actions of worker
• Do not add value to the task
• Do not facilitate the productive work content
• Take time

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Excess Nonproductive Activities

• Can be classified into three categories
• Excess activities due to poor design of product
  or service
• Excess activities caused by inefficient methods,
  poor workplace layout, and interruptions
• Excessive activities cause by the human factor

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Productivity

• Productivity measures the capability of
  processing inputs to convert to outputs.
• It simply measures how much output is produced
  relative to the inputs of labor, capital (plant
  and equipment), and technology
• A process may be productive but may not be
  efficient

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Efficiency

• Efficiency denotes the maximum utilization on
  ones given resources
• Efficiency is generally a relative term, used for
  comparison. Its focus is on the best utilization
  of resources.
• Elimination of some adjacent bank branches as a
  result of merge of two banks would attain greater
  efficiency, while a termination of employment due
  to teller machines would cause greater
  productivity.

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Standard Time-Based Performance Index

• 100 employees produce 5000 units of a given
  product in one day. The productivity is 50
  units/employee per day.
• Standard time to assemble
• a grinder2min/unit
• an operator assembles 275 grinders/day,
• work duration is 8 hrs/day (480 min/day).
• Performance Index (2275)/480 114.6

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Factors that facilitate productivity improvement

• Technological Innovation
• faster machines, eliminate heavy physical work
  and repetitive operations
• increased capital investment, complex machinery,
  skilled operators
• Effective Management
• Employee motivation, better marketing, etc.

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Questions we will deal with in this course

• How is work done?
• What is a better way of doing it? (Setup times,
  loading/unloading, inspection, actual operations)
• How long does the work take to complete?
• What is the frequency of work?
• We will use
• Work Study Time Study (Taylor) and Motion Study
  (Gilbreths)
• Plant Layout

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Work Study for Increased Productivity

• Motion Study
• Eliminate unnecessary work
• Design efficient and effective methods and
  procedures most suitable to the employees
• Time Study
• Measurement of work to determine standard times.