L2 - Introduction to Production and Manufacturing Systems...

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Unformatted text preview: Introduction to Production and Manufacturing Systems 05/07/09 Texas A&M Industrial Engineering 1 ISEN 220 Development of the Service Economy 30 150 Employment (millions) 25 20 15 10 5 0 Industrial production 125 100 75 50 25 0 Estimate 1950 1970 1990 2010 Figure 1.5 (B) Index: 1997 = 100 Manufacturing employment Productivity Challenge Productivity is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital) The objective is to improve this measure of efficiency Important Note! Production is a measure of output only and not a measure of efficiency Productivity Units produced Productivity = Input used Measure of process improvement Represents output relative to input Only through productivity increases can our standard of living improve Productivity Calculations Labor Productivity Units produced Productivity = Labor-hours used 1,000 = = 4 units/labor-hour 250 MultiFactor Productivity Output Productivity = Labor + Material + Energy + Capital + Miscellaneous Also known as total factor productivity Output and inputs are often expressed in dollars Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day 8 titles/day Overhead = $400/day Old labor productivity = Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day New System: 14 titles/day Old labor productivity = New labor productivity = 8 titles/day Overhead = $400/day Overhead = $800/day Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day New System: 14 titles/day Old multifactor productivity = 8 titles/day Overhead = $400/day Overhead = $800/day Collins Title Productivity Old System: Staff of 4 works 8 hrs/day Payroll cost = $640/day New System: 14 titles/day Old multifactor productivity = New multifactor productivity = 8 titles/day Overhead = $400/day Overhead = $800/day Productivity Measurement Problems Service Productivity Typically labor intensive Frequently focused on unique individual attributes or desires Often an intellectual task performed by professionals Often difficult to mechanize Often difficult to evaluate for quality Global Strategies Boeing sales and production are worldwide Benetton moves inventory to stores around the world faster than its competition by building flexibility into design, production, and distribution Sony purchases components from suppliers in Thailand, Malaysia, and around the world Global Strategies Volvo considered a Swedish company but it is controlled by an American company, Ford. The current Volvo S40 is built in Belgium and shares its platform with the Mazda 3 built in Japan and the Ford Focus built in Europe. Haier A Chinese company, produces compact refrigerators (it has onethird of the US market) and wine cabinets (it has half of the US market) in South Carolina Boeing Suppliers (787) Firm Dassault Messier-Bugatti Thales Country France France France Component Design and PLM software Landing gear Electrical power conversion system and integrated standby flight display Interior lighting Fuel pumps and valves Central computer system Diehl FR-HiTemp Smiths Aerospace Germany UK UK Boeing Suppliers (787) Firm BAE SYSTEMS Alenia Aeronautics Toray Industries Fuji Heavy Industries Kawasaki Heavy Industries Country UK Italy Japan Japan Japan Component Electronics Upper center fuselage & horizontal stabilizer Carbon fiber for wing and tail units Center wing box Forward fuselage, fixed section of wing, landing gear well Boeing Suppliers (787) Firm Teijin Seiki Mitsubishi Heavy Industries Chengdu Aircraft Group Hafei Aviation Country Japan Japan China China Component Hydraulic actuators Wing box Rudder Parts Reasons to Globalize Reduce Costs Foreign locations with lower wage rates can lower direct and indirect costs Improve the Supply Chain Locating facilities closer to unique resources Provide Better Goods and Services Objective and subjective characteristics of goods and services Understand Markets Interacting with foreign customer and suppliers can lead to new opportunities Learn to Improve Operations Remain open to the free flow of ideas Attract and Retain Global Talent Offer better employment opportunities Cultural and Ethical Issues Cultures can be quite different Attitudes can be quite different towards Punctuality Lunch breaks Environment Intellectual property Thievery Bribery Child labor Product Life Cycle Introduction Company Strategy/Issues Best period to increase market share R&D engineering is critical Growth Practical to change price or quality image Strengthen niche Maturity Poor time to change image, price, or quality Competitive costs become critical Defend market position Decline Cost control critical CD-ROM Internet Sales Color printers Drive-through restaurants Fax machines Flat-screen monitors DVD 3 1/2" Floppy disks Figure 2.5 Product Life Cycle Introduction Product design and development critical Frequent product and process design changes Short production runs High production costs Limited models Attention to quality Growth Forecasting critical Product and process reliability Competitive product improvements and options Increase capacity Shift toward product focus Enhance distribution Maturity Standardization Less rapid product changes more minor changes Optimum capacity Increasing stability of process Long production runs Product improvement and cost cutting Decline Little product differentiation Cost minimization Overcapacity in the industry Prune line to eliminate items not returning good margin Reduce capacity OM Strategy/Issues Figure 2.5 What is Forecasting? Process of predicting a future event Underlying basis of all business decisions Production Inventory Personnel Facilities ?? Forecasting Approaches Forecasting Approaches Overview of Qualitative Methods Overview of Quantitative Methods Forecasting Discussion Focus Timeseries Forecasting Decomposition of a Time Series Nave Approach Moving Averages Exponential Smoothing Exponential Smoothing with Trend Adjustment Trend Projections Seasonal Variations in Data Cyclical Variations in Data Forecasting Discussion Focus Associative Forecasting Methods: Regression And Correlation Analysis Using Regression Analysis to Forecast Forecasting Time Horizons Shortrange forecast Up to 1 year, generally less than 3 months Purchasing, job scheduling, workforce levels, job assignments, production levels 3 months to 3 years Sales and production planning, budgeting 3+ years New product planning, facility location, research and development Mediumrange forecast Longrange forecast Features of time horizons Medium/long range forecasts deal with more comprehensive issues and support management decisions regarding planning and products, plants and processes Shortterm forecasting usually employs different methodologies than longerterm forecasting Shortterm forecasts tend to be accurate than longerterm forecasts Types of Forecasts Economic forecasts Address business cycle inflation rate, money supply, housing starts, etc. Predict rate of technological progress Impacts development of new products Predict sales of existing product Technological forecasts Demand forecasts ...
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