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Previously…
Chapter 5: Project (II) Critical Path Method (CPM)
Critical Path: the sequence(s) of activities in a
project that forms the longest chain in term of their
– Network-planning completion time.
Models Immediate Predecessors: activities that need to be
completed immediately before another activity.

Slack Time: The time that an activity can be delayed

without delaying the entire project; the difference Slack of Activities on CP is 0
between the late and early start times of an activity.
𝒂 + 𝟒𝒎 + 𝒃
a = Optimistic time;
𝑬𝑻 =
CPM with Three Activity m = Most likely time;
𝟔
𝟐
Time Estimates b = Pessimistic time;
𝝈𝟐 =
𝒃−𝒂
∑ 𝜎 : Sum of the variances along the critical path; 𝟔
𝐷−𝑇
𝑍=
∑𝜎
Project Crashing Time–cost models: extension of the CPM Shorten the critical path at the
that considers the trade-off between the
time required to complete an activity least cost
and the cost. This is often referred to as
“crashing” the project.

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OPERATIONS MANAGEMENT
Lecture - 3

Chapter 6: MANUFACTURING PROCESSES

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Learning Objectives

1. Understand what a manufacturing process is.

2. Understand production process mapping and Little’s law.
3. Explain how manufacturing processes are organized.
4. Understand how to design and analyze an assembly line.

Production Processes

 Production processes are

Positioning inventory in the supply chain
used to make any
manufactured item
 Step 1 – Source the parts
needed
 Step 2 – Make the
product
 Step 3 – Deliver the
product
Exhibit 6.1

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Production Process Terms

 Lead time – the time needed to respond to a customer order

 Customer order decoupling point – where inventory is positioned
to allow entities in the supply chain to operate independently
 Lean manufacturing – a means of achieving high levels of
customer service with minimal inventory investment

Type of Firms

Make-to-Stock
• A production environment where the customer is served “on-demand”
from finished goods inventory
Assemble-to-Order
• Preassembled components, subassemblies, and modules are put together in
response to a specific customer order
Make-to-Order
• The product is built directly from raw materials and components in response
to a specific customer order
Engineer-to-Order
• Firm works with the customer to design and then make the product

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Make-to-Stock

 Examples of products
 Televisions
 Clothing
 Packaged food products
 Essential issue in satisfying customers is to balance the level of
inventory against the level of customer service
 Easy with unlimited inventory, but inventory costs money
 Trade-off between the costs of inventory and level of customer service must
be made
 Use lean manufacturing to achieve higher service levels for a given
inventory investment

Assemble-to-Order

 A primary task is to define a customer’s order in terms of alternative

components, since these are carried in inventory
 An example is the way Dell Computer makes their desktop computers
 One capability required is a design that enables as much flexibility as
possible in combining components
 There are significant advantages from moving the customer order
decoupling point from finished goods to components
 Wide variety of finished goods combinations can be built from a set
of components
𝑻𝒐𝒕𝒂𝒍 𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑪𝒐𝒎𝒃𝒊𝒏𝒂𝒕𝒊𝒐𝒏𝒔 = 𝑵𝟏 × 𝑵𝟐 × ⋯ × 𝑵𝒏 𝟏 × 𝑵𝒏
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Make-to-Order / Engineer-to-Order

Boeing’s process for making commercial aircraft is an example

Customer order decoupling point could be in either raw materials at the
manufacturing site or the supplier inventory
Depending on how similar the products are it might not even be
possible to pre-order parts

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written consent of McGraw-Hill Education.

Production Process Mapping

Develop a high-level map of a supply chain process

Useful to understand how material flows and where inventory is held
First step in analyzing the flow of material through a production
process

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Inventory Measures

 Total average value of inventory - the sum of the value (at

cost) of the raw material, work-in process, and finished
goods inventory
 Commonly tracked in accounting systems and reported in financial
statements
 Not particularly useful for evaluating the performance of a process
 Inventory turn - the cost of goods sold divided by the
average inventory value
 Days of supply - the inverse of inventory turns scaled to
days

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Little’s Law

The flow of items through a production process can be

described using Little’s Law
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦=𝑇ℎ𝑟𝑜𝑢𝑔ℎ𝑝𝑢𝑡 𝑟𝑎𝑡𝑒 𝑥 𝐹𝑙𝑜𝑤 𝑡𝑖𝑚𝑒
Throughput – long term average rate of flow through the
process, e.g. demand
Flow time – time for a single unit to traverse the entire
process
Inventory – materials held by the firm for future use

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Example - 1

A firm has redesigned its production process so that it now takes

10 hours for a unit to be made. Using the old process, it took 15
hours to make a unit. If the process makes one unit each hour on
average and each unit is worth $1,500, what is the reduction in
work-in-process value?

Answer:
Using Little’s Law we know that Inventory = Throughput * Flowtime
Before change: Inventory = 1 per hour * 15 hours = 15 * $1500 = $22,500
After change: Inventory = 1 per hour * 10 hours = 10 * $1500 = $15,000
Reduction in WIP = $22,500 - $15,000 = $7,500

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Example - 2

Safety regulations require that the time between airplane

takeoffs (on the same runway) will be at least 3 minutes.
When taking off, the run time of an airplane on the runway
is 45 seconds. Planes are on average waiting 4 minutes
and 15 seconds for take-off. On average there are 15
planes taking off per hour. How many planes are either on
the runway or waiting to take off?

Solution:
Throughput rate = 15 planes per hour.
Flow time = (0.75 +4.25)/60 = 1/12 of an hour.
Inventory = TR*TT = 15 * 1/12 = 1.25 airplanes in line or taking off.

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Organization of Production Processes

Manufacturing cell - a
Project – the product Workcenter (job shop) - dedicated area where
remains in a fixed similar equipment or products that are similar
location, equipment is functions are grouped in processing
moved to the product together requirements are
produced

Assembly line - work Continuous process –

processes are arranged (assembly line only) the
according to the flow is continuous, such as
progressive steps by with liquids
which the product is made

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Product-Process Matrix

16

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Production System Design

Project Layout
• The product remains in a fixed location
• Labor, material, and equipment are moved to the product
• A project layout may be developed by arranging materials according to their
assembly priority

Workcenter Layout
• Most common approach to developing this type of layout is to arrange
workcenters in a way that optimizes the movement of material
• Optimal placement often means placing workcenters with high levels of
interdepartmental traffic adjacent to each other
• Sometimes is referred to as a job shop and is focused on a particular type of
operation

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Production System Design

Manufacturing Cell Layout

• A dedicated area where products that are similar in process requirements are
produced
• Cells are designed to perform a specific set of processes
• Dedicated to a limited range of products
Assembly Line and Continuous Process
• Area where an item is produced through a fixed sequence of workstations,
designed to achieve a specific production rate
• A process that converts raw materials into finished product in one contiguous
process

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Manufacturing Cell Development

1. Group parts into

families that follow a
common sequence of
steps.
2. Identify dominant flow
patterns for each part
family
3. Machines and the
associated processes
are physically
regrouped into cells

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Regrouping Machines

Manufacturing cells are

formed according to part
family processing
requirements

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Assembly Line Design

 Workstation cycle time - a uniform time interval in which a

moving conveyor passes a series of workstations
 Also the time between successive units coming off the line
 Assembly-line balancing - assigning tasks to a series of
workstations so that the required cycle time is met and idle
time is minimized
 Precedence relationship - the order in which tasks must be
performed in an assembly process

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Assembly-Line Balancing

1. Specify the sequential relationships among tasks using a precedence diagram.

2. Determine the required workstation cycle time (C).
𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟 𝑑𝑎𝑦
𝐶=
𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑜𝑢𝑡𝑝𝑢𝑡 𝑝𝑒𝑟 𝑑𝑎𝑦 (𝑖𝑛 𝑢𝑛𝑖𝑡𝑠)

3. Determine the theoretical minimum number of workstations (𝑁 ).

𝑆𝑢𝑚 𝑜𝑓 𝑡𝑎𝑠𝑘 𝑡𝑖𝑚𝑒𝑠 (𝑇)
𝑁 =
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 (𝐶)
4. Select a primary rule to assign tasks to workstations and a secondary rule to break ties.
5. Assign tasks (one at a time) to the first workstation until no more tasks can be added (due to cycle
time or sequencing constraints). Repeat for all subsequent workstations until all tasks are assigned.
6. Evaluate the efficiency of the balance
𝑆𝑢𝑚 𝑜𝑓 𝑡𝑎𝑠𝑘 𝑡𝑖𝑚𝑒𝑠 (𝑇)
𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 =
𝐴𝑐𝑡𝑢𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑠 𝑁 × 𝑊𝑜𝑟𝑘𝑠𝑡𝑎𝑡𝑖𝑜𝑛 𝑐𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 (𝐶)

7. If efficiency is unsatisfactory, rebalance using a different rule.

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Example 6.2 – Assembly-Line Balancing

(a) Draw the schematic diagram.

(b) What is the required cycle time to meet
500 wagons per day based on 420-
minute work days?
(c) What is the theoretical minimum number of
workstations required to meet 500
wagons per day based on 420-minute
work days?
(d) Use the largest number of following tasks as
the primary rule, and as a tie breaker use
the longest-task-time rule to balance the
line in the minimum number of workstations
to produce 500 wagons per day.
(e) What is the efficiency of the line balance
derived in question (d)?

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Example 6.2 – Assembly-Line Balancing (Cont.)

Production Time per Day 60 sec min × 420 min. 25,200 sec
𝐶= = = = 50.4 sec wagon
Output per Day 500 wagons 500 wagons

𝑇 195 seconds
𝑁 = = = 3.87 ⟹ 4
𝐶 50.4 seconds

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Example 6.2 – Assign Workstations

Prioritize tasks based on the Prioritize tasks in order of

largest number of following longest task time.
tasks.

25

Example 6.2: Efficiency

𝑇 195 seconds
Efficiency = = = 0.77 = 77%
𝑁 𝐶 5(50.4 seconds)

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Reducing Task Time

• Split the task – Can we split the task so that complete units are
processed in two workstations?
• Share the task – Can the task be shared so an adjacent workstation
does part of the work?
• Use parallel workstations
• Use a more skilled worker
• Work overtime
• Redesign – It may be possible to redesign the product to reduce the task
time

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27

Flexible Line Layouts

Problem: Operators caged. No chance Solution: Operators can trade elements of

to trade elements of work between work. Can add and subtract operators.
them.

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Flexible Line Layouts (Cont.)

Problem: Operators birdcaged. No

chance to increase output with a third
operator.

Solution: Operators can help each

other. Might increase output with a
third operator.

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29

Flexible Line Layouts (Cont.)

Problem: Straight line is difficult

to balance.
Solution – U-line gives better operator
access and may reduce number of
operators.

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Next Week…

1. Finish reading chapter 6

2. Work on the Tutorial Question (Tutorial video will be posted):
1) Chapter 1: Obj Question 1 and 3
2) Chapter 2: Obj Question 15 and 19
3) Chapter 5: Obj Question 8, 10, 15, 18, and 20
4) Chapter 6: Obj Question 16, 17, and 20
3. Start Chapter 7: Service Processes

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