CHAPTER 1

Define Operations Management:

Operations Management (OM): the set of activities that creates value in the form of goods and services
by transforming inputs into outputs.
In manufacturing firms, the production of activities that create goods are usually quite obvious
In an organization that does not create a tangible good or product, the production function may
be less obvious. We often call these activities services.
o May take on such forms as transfer of funds from a savings account to a chequing
account, the transplant of a liver, the filling of an empty seat on an airplane, the
education of a student.
Regardless of whether the end product is a good or service, the production activities that go on
in the organization are often referred to as operations, or operations management.

Organizing to Produce Goods and Services:

To create goods and services, all organizations perform three functions:
1. Marketing, which generates demand, or at least takes the order for a product or service
(nothing happens until there is a sale)
2. Production/operations, which creates the product
3. Finance/accounting, which tracks how well the organization is doing, pays the bills and
collects the money
Why Study OM?
OM is one of the three major functions of any organization and is integrally related to all the
other business functions. Therefore, we study how people organize themselves for productive
enterprise.
We want to know how goods and services are produced. The production function is the segment
of our society that creates the products and services we use
To understand what operations managers do.
Because it is such a costly part of an organization. OM provides a major opportunity for an
organization to improve its profitability and enhance its service to society.

What Operations Managers Do:

Management Process: consists of planning, organizing, staffing, leading, and controlling.
The Top 10 Decisions of OM
1. Design of goods and services
a. What good or service should we offer
b. How should we design these products
2. Managing quality
a. How do we define the quality
b. Who is responsible for quality
3. Process and capacity design
a. What process and what capacity will these products require
b. What equipment and technology are necessary for these processes?
4. Location strategy
a. Where should we put the facility?
b. On what criteria should we base the location decision?
5. Layout strategy
 a. How should we arrange the facility
b. How large must the facility be to meet our plan?
6. Human resources and job design
a. How do we provide a reasonable work environment
b. How much can we expect our employees to produce
7. Supply-chain management
a. Should we make or buy this component
b. Who should be our suppliers and how can we integrate them into our strategy
8. Inventory, material requirements planning, and JIT
a. How much inventory of each item should we have
b. When do we reorder
9. Intermediate and short-term scheduling
a. Are we better off keeping people on the payroll during slowdowns
b. Which job do we perform next
10. Maintenance
a. Who is responsible for maintenance

Explain the distinction between goods and services:

Services are usually intangible, often produced and consumed simultaneously, unique, have high
customer interaction, have inconsistent product definition, are often knowledge based, and are
frequently dispersed
Service sector: the segment of the economy that includes trade, financial, lodging, education,
legal, medical, and other professional occupations.

Exciting New Trends in Operations Management:

Ethics: operations managers roles of buying from suppliers, transforming resources into
finished goods, and delivering to customers places them at critical junctures where they must
frequently make ethical decisions
Global focus: the rapid decline in communication and transportation costs has made markets
global. Similarly, resources in the form of capital, materials, talent, and labour are now also
global. As a result, countries throughout the world are contributing to globalization as they vie
for economic growth. Operations managers are rapidly responding with creative designs,
efficient production, and quality goods.
Rapid product development: rapid international communication of news, entertainment, and
lifestyles is dramatically chopping away at the lifespan of products. Operations managers are
responding with management structures, technology, and alliances that are more responsive
and effective
Environmentally sensitive production: means designing products and packaging that minimize
resource use, are biodegradable, can be recycled, and are generally environmentally friendly
Mass customization: the goal is to produce customized products, wherever and whenever
needed
Empowered employees: operations managers are responding by moving more decision making
to individual workers
Supply-chain management: because suppliers can contribute unique expertise, operations
managers are outsourcing and building long-term partnerships with critical players in the supply
chain
 Just-in-time performance: push operations managers to viciously cut inventories at every level,
from raw materials to finished goods

Explain the difference between production and productivity:

Productivity: the ratio of outputs (goods and services) divided by one or more inputs (such as labour,
capital, or management)
Improving productivity means improving efficiency
This improvement can be achieved in two ways: reducing inputs while keeping output constant
or increasing output while keeping inputs constant. Both represent an improvement in
productivity.
In an economic sense, inputs are labour, capital, and management, which are integrated into a
production system.
Management creates this production system, which provides the conversion of inputs into
outputs.
o Outputs are goods and services, including diverse items as guns, butter, education,
improved judicial systems, and ski resorts
Production: the making of goods and services
o high production may imply only that more people are working and that employment
levels are high (low unemployment), but it does not imply high productivity
Measurement of productivity is an excellent way to evaluate a countrys ability to provide an improving
standard of living for its people
only through increases in productivity can the standard of living improve
only through increases in productivity can labour, capital, and management receive additional
payments
if returns to labour, capital, or management are increased without increased productivity, prices
rise
downward pressure is placed on prices when productivity increases, because more is being
produced with the same resources

Compute single-factor productivity:

units produced
Productivity =
input used

For example, if units produced = 1000 and labour-hours used is 250, then:
1000
Productivity = = units per labour-hour
250
The use of just one resource input to measure productivity is known as single-factor productivity.

Compute multi-factor productivity:

A broader view of productivity is multi-factor productivity, which includes all inputs (e.g. capital, labour,
material, energy). Multi-factor productivity is also known as total factor productivity.

Output
Productivity =
labour+material+energy+capital+miscellaneous

To aid in the computation of multifactor productivity, the individual inputs (the denominator) can be
expressed in dollars and summed. (Page 14-15 for example)
Use of productivity measures aids managers in determining how well they are doing. But results from
the two measures can be expected to vary.
If labour productivity growth is entirely the result of capital spending, measuring just labour
distorts the results.
Multifactor productivity is usually better, but more complicated
Labour productivity is the more popular measure
The multifactor productivity measures provide better information about the trade-offs among
factors, but substantial measurement problems remain
o Quality may change while the quantity of inputs and outputs remain constant
o External elements may cause an increase or a decrease in productivity for which the
system under study may not be directly responsible
o Precise units of measure may be lacking.

Identify the critical variables in enhancing productivity:

Productivity Variables: the three factors critical to productivity improvementcapital, and the art and
science of management.
1. Labour, which contributes to 10% of the annual increase
2. Capital, which contributes about 38% of the annual increase
3. Management, which contributes about 52% of the annual increase

Labour Improvement: in the contribution of labour to productivity is the result of a healthier, better-
educated, and better-nourished labour force. Three key variables for improved labour productivity are:
1. Basic education appropriate for an effective labour force
2. Diet of the labour force
3. Social overhead that makes labour more available, such as transportation and sanitation

Capital: human beings are tool-using animals. Capital investments provide those tools. Inflation and
taxes increase the cost of capital, making capital investment increasingly expensive. The trade-off
between capital and labour is continually in flux. The higher the cost of capital, the more projects
requiring capital are squeezed out: they are not pursued because the potential return on investment
for a given risk has been reduced.

Management: is a factor of production and an economic resource. Management is responsible for

ensuring that labour and capital are effectively used to increase productivity. Using knowledge and
technology is critical in post-industrial societies. Post-industrial societies are also known as knowledge
societies: a society in which much of the labour force has migrated from manual work to work based on
knowledge. This requires that managers use technology and knowledge effectively. More effective use
of capital also contributes to productivity.

Productivity in the Service Sector:

Has proven difficult to improve because service-sector work is:
Typically labour intensive
Frequently focused on unique individual attributes or desires
Often an intellectual task performed by professionals
Often difficult to mechanize and automate
Often difficult to evaluate for quality
Ethics and Social Responsibility:
Identifying ethical and socially responsible responses while building productive systems is not always
clear-cut. Among the many ethical challenges facings operations managers are:
Efficiently developing and producing safe, quality products
Maintain a sustainable environment
Providing a safe workplace
Honouring stakeholder commitments

CHAPTER 7
Describe four production processes:
Process Strategy: an organizations approach to transforming resources into goods and services
The objective of a process strategy is to build a production process that meets customer
requirements and product specifications within cost and other managerial constraints
Virtually every good or service is made by using some variation of one of four process strategies:
Process focus
o A production facility organized around processes to facilitate low-volume, high-variety
production in places called job shops
o Such facilities have a process focus in terms of equipment, layout, and supervision
o They provide a high degree of flexibility as products move between processes.
o Each process is designed to perform a wide variety of activities and handle frequent
changes. Consequently, they are also called intermittent processes.
Repetitive focus
o A product-oriented production process that uses modules
o Is the classic assembly line
o Modules are parts or components of a product previously prepared, often in a
continuous process
o This type of production allows more customizing than a product-focused facility
Product focus
o A facility organized around products; a product-oriented, high-volume, low-variety
process
o The facilities are organized around products
o They are also called continuous processes, because they have a very long, continuous
production runs
o A product-focused facility produces high volume and low variety. The specialized nature
of the facility requires high fixed cost, but low variable costs reward high facility
utilization
Mass customization
o Rapid, low-cost production that caters to constantly changing unique customer desires
o Brings us the variety of products traditionally provided by low-volume manufacture (a
process focus) at the cost of standardized high-volume (product-focus) production
o Achieving mass-customization is a challenge that requires sophisticated operational
capabilities
o The service industry is also moving toward mass customization
o One essential ingredient in mass customization is a reliance on modular design

Making Mass Customization Work:

Mass customization suggests a high-volume system in which products are built-to-order. Built-to-order
means producing to customer orders, not forecasts. High volume build-to-order is difficult because:
Product design must be imaginative and fast
Process design must be flexible and able to accommodate changes in both design and
technology. For example, postponement: the delay of any modifications or customization to a
product as long as possible in the production process
Inventory management requires tight control
Tight schedules that track orders and material from design through delivery are another
requirement of mass customization
Responsive partners in the supply chain can yield effective collaboration

Comparison of Process Choices:

Process Focus Repetitive Focus Product Focus Mass Customization
(low-volume, high- (modular) (high-volume, low- (high-volume, high-
variety) variety) variety)

1.Small quantity and 1.Long runs, 1.Large quantity and 1.Large quantity and
large variety of usually a small variety of large variety of products
products are produced standardized products are produced are produced
product with
options, produced
from modules

2.Equipment used is 2.Special 2.Equipment used is 2.Rapid changeover on

general purpose equipment aids in special purpose flexible equipment
use of an
assembly line

3.Operators are 3.Employees are 3.Operators are less 3.Flexible operators are
broadly skilled modestly trained broadly skilled trained for the necessary
customization

4.There are many job 4.Repetitive 4.Work orders and job 4.Custom orders require
instructions because operations reduce instructions are few many job instructions
each job changes training and because they are
changes in job standardized
instructions

5.Raw-material 5.JIT procurement 5.Raw material 5.Raw material

inventories high techniques are inventories are low inventories are low
relative to the value of used relative to the value of relative to the value of
the product the product the product

6.Work-in-process is 6.JIT inventory 6.Work-in-process 6.Work-in-process

high compared to techniques are inventory is low inventory driven down
output used compared to output by JIT, kanban, lean
production

7.Units move slowly 7.Assembly is 7.Swift movement of 7.Goods move swiftly

through the facility measured in hours units through the through the facility
 and days facility is typical

8.Finished goods are 8.Finished goods 8.Finished goods are 8.Finished goods are
usually made to order made to frequent usually made to often build-to-order
and not stored forecast forecast and stored (BTO)

9.Scheduling is 9.Scheduling is 9.Scheduling is 9.Sophisticated

complex, concerned based on building relatively simple, scheduling is required to
with trade-offs various models concerned with accommodate custom
between inventory, from a variety of establishing output orders
capacity, and modules to rate sufficient to meet
customer service forecasts forecasts

10.Fixed costs tend to 10.Fixed costs 10.Fixed costs tend to 10.Fixed costs tend to be
be low and variable dependent on be high and variable high, variable costs must
costs high flexibility of the costs low be low
facility

Compute crossover points for different processes:

Crossover Charts: a chart of costs at the possible volumes for more than one process
Example:
Kleber Enterprises would like to evaluate three accounting software products (A, B, and C) to support
changes in its internal accounting processes. The costs of the software for these processes are:
Total Fixed Cost Dollars Required per Accounting
Report
Software A $200,000 $60
Software B $300,000 $25
Software C $400,000 $10
Approach: Solve for the crossover point for software A and B and then the crossover point for software
B and C
Solution: Software A yields a process that is most economical up to V1, but to exactly what number of
reports (volume)? To determine the volume at V1, we set the cost of software A equal to the cost of
software B. V1 is the unknown volume:

200,000 + (60)V1 = 300,000 + (25)V1

35V1 = 100,000
V1 = 2857

This means that software A is most economical from 0 reports to 2857 reports (V1).
Similarly, to determine the crossover point for V2, we set the cost of software B equal to the cost of
software C.

300,000 + (25)V2 = 400,000 + (10)V2

15V2 = 100,000
V2 = 6666
This means that software B is most economical if the number of reports is between 2857(V1) and
666(V2) and that software C is most economical if reports exceed 6666(V2).

Use the tools of process analysis:

Process Analysis and Design:
When analyzing and designing process, we ask questions such as the following:
Is the processed designed to achieve competitive advantage in terms of differentiation,
response, or low cost?
Does the process eliminate steps that do not add value?
Does the process maximize customer value as perceived by the customer?
Will the process win orders?

Flowchart: a drawing used to analyze the movement of people or material

Time-function mapping (process mapping): a flowchart with time added on the horizontal axis
Value-stream mapping: a process that helps managers understand how to add value in the flow of
material and information through the entire production process.
Process charts: charts that use symbols to analyze the movement of people or materials
Service blueprinting: a process analysis technique that lends itself to a focus on the customer and the
providers interaction with the customer

Each of these five process analysis tools has its strengths and variations:
Flowcharts are a quick way to view the big picture and try to make sense of the entire system
Time-function mapping adds some rigour and a time element to the macro analysis
Value-stream mapping extends beyond the immediate organization to customers and suppliers
Process charts are designed to provide a much more detailed view of the process, adding items
such as value-added time, delay, distance, storage, etc.
Service blueprinting is designed to help us focus on the customer interaction part of the process

Describe customer interaction in process design:

Interaction with the customer often affects process performance adversely. But a service by its
very nature, implies that some interaction and customization is needed
In the upper sections of mass service and professional service, where labour content is high, we
expect the manager to focus extensively on human resources. This is often done with
personalized services, requiring high labour involvement and therefore significant selection and
training issues in the human resources area. This is particularly true in the professional service
quadrant.
The quadrants with low customization tend to (1) standardize or restrict some offerings, as do
fast-food restaurants; (2) automate, as do airlines with ticket-vending machines; or (3) remove
some services, such as sea assignments, as in the case of some airlines. Offloading some aspect
of the service through automation may require innovation in process design as well as capital
investment.
Because customer feedback is lower in the quadrants with low customization, tight control may
be required to maintain quality standards
Operations with low labour intensity may lend themselves particularly well to innovations in
process technology and scheduling
Layout: Layout design is an integral part of many service processes, particularly in retailing, dining, and
banking. Because layout is such an integral part of many services, it provides continuing opportunity for
winning orders.
Human Resources: Because so many services involve direct interaction with the customer (as the upper
quadrants suggest) the human resource issues of recruiting and training can be particularly important
ingredients in service process. A committed workforce that exhibits flexibility when schedules are made
and is cross-trained to fill in when the process requires less than a full-time person, can have a
tremendous impact on overall process performance.

Identify recent advances in production technology:

Advances in technology that enhance production and productivity have a wide range of applications in
both manufacturing and services.
Machine Technology: Machinery with its own computer and memory is called computer numerical
control (CNC)
Automatic Identification Systems (AISs) and RFID: New equipment, from numerically controlled
manufacturing machinery to ATM machines, is controlled by digital electronic signals.
Automatic identification systems (AIS): a system for transforming data into electronic forms, for
example, bar codes
Radio frequency identification (RFID): a wireless system in which integrated circuits with
antennas send radio waves
Process control: the use of information technology to control physical processes
Vision systems: systems that use video cameras and computer technology in inspection roles
Robots: a flexible machine with the ability to hold, move, or grab items. It functions through electronic
impulses that activate motors and switches
Automated Store and Retrieval Systems (ASRSs): computer-controlled warehouses that provide for the
automatic placement of parts into and from designated places within a warehouse
Automated Guided Vehicles (AGVs): Electronically guided and controlled cart used to move materials
Flexible manufacturing systems: a system that uses an automated work cell controlled by electronic
signals from a common centralized computer facility
Computer-Integrated Manufacturing (CIM): a manufacturing system in which CAD, FMS, inventory
control, warehousing, and shipping are integrated

Process Redesign: the fundamental rethinking of business processes to bring about dramatic
improvements in performance.
Effective process design relies on re-evaluating the purpose of the process and questioning both
purpose and underlying assumptions.

Discuss the four Rs of sustainability:

Managers may find it helpful to think in terms of four Rs as they address sustainability.
Resources:
Operations is often the primary user of the firms resources
This puts special pressure on using human, financial, and material resources in a sustainable way
Recycle:
There are three things that can be done with waste: burn it, bury it, or reuse it.
While recycling begins at the design by specifying products and components that have recycle
potential, managers must build processes that facilitate disassembly and reuse those materials
Regulations:
Laws and regulations affecting transportation, waste, and nose are proliferating and can be as
much of a challenge as reducing resource use.
Another sustainability issue is evaluating and reducing the carbon footprint.
Reputation:
The marketplace may reward leadership in sustainability

CHAPTER 6
Define quality and TQM:
Quality: the ability of a product of service to meet customer needs.
The definitions of quality fall into several categories
o User-based: quality lies in the eyes of the beholder
o Manufacturing-based: quality means conforming to standards and making it right the
first time
o Product-based: views quality as a precise and measurable variable

Cost of quality (COQ): the cost of doing things wrongthat is, the price of non-conformance.

Total Quality Management: refers to a quality emphasis that encompasses the entire organization, from
supplier to customer.
Stresses a commitment by management to have a continuing companywide drive toward
excellence in all aspects of product and services that are important to the customer

Describe the ISO international quality standards:

ISO 9000: a set of quality standards developed by the International Organization for Standardization
(ISO)
ISO 14000: a series of environmental management standards established by the International
Organization for Standardization (ISO)

Explain what Six Sigma is:

Six Sigma: a program to save time, improve quality, and lower costs.
In a statistical sense, it describes a process, product, or service with an extremely high capability
(99.9997%)
the second TQM definition of Six Sigma is a program designed to reduce defects to help lower
costs, save time, and improve customer satisfaction.
o It is a strategy because it focuses on total customer satisfaction
o It is a discipline because it follows the formal Six Sigma Improvement Model known as
DMAIC. (Define the projects purpose, Measure the process and collect data, Analyze
the data, Improve, Control the new process)
Successful Six Sigma projects are clearly related to the strategic direction of a company. It is a
management-directed, team-based, and expert-lead approach.

Employee Empowerment: enlarging employee jobs so that the added responsibility and authority is
moved to the lowest level possible in the organization
Quality circle: a group of employees meeting regularly with a facilitator to solve work-related problems
in their work area.

Explain how benchmarking is used in TQM:

Benchmarking: selecting a demonstrated standard of performance that represents the very best
performance for a process or an activity.
The steps for developing benchmarks are:
Determine what to benchmark
Form a benchmark team
Identify benchmarking partners
Collect and analyzes benchmarking information
Take action to match or exceed the benchmark

Internal Benchmarking: when an organization is large enough to have many divisions or business units,
a natural approach is the internal benchmark.
Just-in-time (JIT): JIT systems are designed to produce or deliver goods just as they are needed. JIT is
related to quality in three ways:
JIT cuts the cost of quality
JIT improves quality
Better quality means less inventory and a better, easier-to-employ JIT system

Explain quality robust products and Taguchi concepts:

Quality robust: products that are consistently built to meet customer needs in spite of adverse
conditions in the production process
Quality loss function (QLF): a mathematical function that identifies all costs connected with poor quality
and shows how these costs increase as product quality moves from what the customer wants.
Target-oriented quality: a philosophy of continuous improvements to bring a product exactly on target.

Use the seven tools of TQM:

Check Sheets: any kind of form that is designed for recording data. Check sheets help analysts find the
facts or patterns that may aid subsequent analysis.
Scatter Diagrams: show the relationship between to measurements.
Cause-and-Effect Diagrams: a schematic technique used to discover possible locations of quality
problems.
Pareto Charts: graphics that identify the few critical items as opposed to many less important ones.
Flowcharts: block diagrams that graphically describe a process or system
Histograms: show the range of values of a measurement and the frequency with which each value
occurs. They show the most frequently occurring readings as well as the variations in the
measurements.
Statistical Process Control (SPC): a process used to monitor standards, make measurements, and take
corrective action as a product or service is being produced. Control charts are a graphic presentation of
process data over time, with predetermined control limits.

Inspection: A means of ensuring that an operation is producing at the quality level expected
Source Inspection: controlling or monitoring at the point of production or purchaseat the source
Poka-yoke: literally translated foolproof, it has come to mean a device or technique that ensures the
production of a good unit every time

CHAPTER 9
Types of Layout:
1. Office layout: positions workers, their equipment, and spaces/offices to provide for movement
of information
2. Retail layout: allocates shelf space and responds to customer behaviour
3. Warehouse layout: addresses trade-offs between space and material handling
4. Fixed-position layout: addresses the layout requirements of large, bulky projects such as ships
and buildings
5. Process-oriented layout: deals with low-volume, high-variety production (also called job shop or
intermittent production)
6. Work-cell layout: arranges machinery and equipment to focus on production of a single product
or group of related products
7. Product-oriented layout: seeks the best personnel and machine utilization in repetitive or
continuous production

A good layout requires determining the following:

Material and handling equipment
Capacity and space requirements
Environment and aesthetics
Flows of information
Cost of moving between various work areas

Discuss importance issues in office layout:

Office layout: the grouping of workers, their equipment, and spaces/offices to provide for comfort,
safety, and movement of information
Define the objectives of retail layout:
Retail Layout: an approach that addresses flow, allocates space, and responds to customer behaviour.
Five ideas are helpful for determining the overall arrangement of many stores:
1. Locate the high-draw items around the periphery of the store
2. Use prominent locations for high-impulse and high-margin items
3. Distribute what are known in the trade as power items
4. Use end-aisle locations because they have a very high exposure rate
5. Convey the mission of the store by carefully selecting the position of the lead-off department
The main objective of retail layout is to maximize profitability per square foot of floor space.

Slotting fees: fees manufacturers pay to get shelf space for their products
Servicescape: the physical surroundings in which a service takes place, and how they affect customers
and employees
Ambient conditions
Spatial layout and functionality
Signs, symbols, and artifacts

Discuss modern warehouse management and terms such as ASRS, cross-docking, and random
stocking:
Warehouse layout: a design that attempts to minimize total cost by addressing trade-offs between
space and material handling.
Managements task is to maximize the utilization of the total cube of the warehouse.
We define material handling costs as all the costs related to the transaction
Management minimizes the sum of the resources spent on finding and moving material plus the
deterioration and damage to the material itself

Cross-docking: avoiding the placement of materials or supplies in storage by processing the as they are
received for shipment.

Random Stocking: used in warehousing to locate stock wherever there is an open location.
 Computerized random stocking systems often include the following tasks:
Maintaining a list of open locations
Maintaining accurate records of existing inventory and its locations
Sequencing items to minimize the travel time required to pick orders
Combining orders to reduce picking time
Assigning certain items or classes of items, such as high-usage items, to particular warehouse
areas so that the total distance travelled within the warehouse is minimized.

Customizing: using warehousing to add value to a product through component modification, repair,
labelling, and packaging.

Identify when fixed-position layouts are appropriate:

Fixed-position layout: a system that addresses the layout requirements of stationary projects

The techniques for addressing the fixed-position layout are complicated by three factors:
Limited space at virtually all sites
At different stages of a project, different materials are needed
The volume of materials needed is dynamic

Explain how to achieve a good process-oriented facility layout:

Process-oriented layout: a layout that deals with low-volume, high-variety production in which like
machines and equipment are grouped together.
Is most efficient when making products with different requirements or when handling
customers, patients, or clients with different needs.
Advantage: its flexibility in equipment and labour assignments. Is also especially good for
handling the manufacture of parts in small batches, or job lots, and for the production of a wide
variety of parts in different sizes or forms.
Disadvantages: the general-purpose use of the equipment. In addition, the general-purpose
equipment requires high labour skills, and work-in-process inventories are higher because of
imbalances in the production process.

When designing a process layout, the most common tactic is to arrange departments or work centres so
as to minimize the costs of material handling.
n n

Minimize cost = Xij Cij

i=1 j=1

Where :
o n = total number of work centers or departments
o i, j = individual departments
o Xij = number of loads moved from department i to department j
o Cij = costs to move a load between department i and department j

Define work cell and the requirements of a work cell:

Work cell: an arrangement of machines and personnel that focuses on making a single product or family
of related products

Reorganize people and machines into groups to focus on single products or product groups
Group technology identifies products that have similar characteristics for particular cells
Volume must justify cells
Cells can be reconfigured as designs or volume changes
Advantages of Work Cells
1. Reduce work-in-process inventory
2. Less floor space is required
3. Reduced raw material and finished goods inventory
4. Reduced direct labour
5. Heightened sense of employee participation
6. Increased use of equipment and machinery
7. Reduced investment in machinery and equipment
Requirements of Work Cells
1. Identification of families of products
2. A high level of training, flexibility, and empowerment of employees
3. Being self-contained, with its own equipment and resources
4. Test (poka-yoke) at each station in the cell

Takt time: pace of production to meet customer demands

Takt time = total work time available/Units required

Workers required = total operation time/Takt time

Define product-oriented layout:

Product-oriented layouts are organized around products or families of similar high-volume, low variety-
products
Fabrication line: a machine-paced, product-oriented facility for building components
o Builds components on a series of machines
o Machine-paced
o Require mechanical or engineering changes to balance
Assembly line: an approach that puts fabricated parts together at a series of workstations, used in
repetitive processes
o Puts fabricated parts together at a series of workstations
o Pace by work tasks
o Balanced by moving tasks
Both types of lines must be balanced so that the time to perform the work at each station is the same
Advantages
o Low variable cost per unit
o Low material handling costs
o Reduced work-in-process inventories
o Easier training and supervision
o Rapid throughput
Disadvantages
o High volume is required
o Work stoppage at any point ties up the whole operation
 o Lack of flexibility in production rates

Explain how to balance production flow in a repetitive or product-oriented facility:

Assembly-Line Balancing: obtaining output at each workstation on a production line so delay is
minimized
Objective is to minimize the imbalance between machines or personnel while meeting required
output
Starts with the precedence relationships
o Determine cycle time
o Calculate theoretical minimum number of workstations
o Balance the line by assigning specific tasks to workstations

The objective of the product oriented layout is to minimize imbalance in the fabrication or assembly
line. The main advantages of product-oriented layouts are:
the low variable cost per unit usually associated with high-volume, standardized products
low material handling costs
reduce work-in-process inventories
easier training and supervision
rapid throughput
The disadvantages of product layout are:
the high volume required because of the large investment needed to establish the process
work stoppage at any one point ties up the whole operation
a lack of flexibility when handling a variety of products or production rates