VSB ENGINEEERING COLLEGE DEPARTMENT OF MANAGEMENT STUDIES OPERATIONS MANAGEMENT UNIT III Unit - II 1.

. Over view of MRP (or) Information Flow in Planning and controlling with MRP. MRP - It is a technique for determining the quantity and timing for the acquisition of dependent demand items needed to satisfy MPS
Information flow of planning and controlling with M RP
Business Plan
Forecast Current conditions

Production Plan T entative MPS Master Schedule

Rough cut Capacity check

Inventory status file

MRP Program
Make items

Product Structure file

Buy items

CRP Purchase Order Detailed Production Plans

V endor feed -back

Production Activity Control

2. Operation of MRP System

Operation of MRP System

Input
Inventory status file M File PS M Systems RP

Processing

Output
Inventory Transaction data Planned order schedule Exception reports

BOM File

3. Computational procedure of MRP

The MRP Computational Procedure

MPS File

Inventory Status File

MRP Processing Logic

BOM File

Order release requirements ( orders to be released now)

Order rescheduling ( expedite, deexpedite or cancel open order)

Planned order (future)

(a) BOM - A listing of all of the raw materials, parts, subassemblies, and assemblies

needed to produce one unit of a product

(b) Inventory status file It contains important information such as what items

should be ordered and when orders should be released

(c) Gross Requirements Project the use of the items (d) Schedule receipts indicates when the previously released orders if any are

scheduled to be received and available for use

(e) On hand inventory It indicate the number of units projected to be available at

the end of each time period.

(f) Net requirement Calculated by subtracting from the gross requirements for that

period.
(g) Planned order release- It indicate when orders should be placed ot meet the

requirements for the item. 4. Issues in MRP a. Lot Sizing b. Safety Stock c. Scrap allowance d. Pegging e. Cycle counting f. Updating g. Time fence 5. Lot- Sizing Rules 1. Fixed Order Quantity (FOQ) A rule that maintain the same order quantity each time an order is issued Formula: (Projected On-hand inventory balance at end of week t) = (Inventory on hand at end of week t-1) + (Scheduled (or) planned receipts in week t) Gross requirement in week t)

2. Periodic Order Quantity (POQ)A rule that allows a different order quantity for each order issued but tends to issue the order at predetermined time intervals. Formula: (POQ lot size to arrive in week t) = (Total gross requirements for P weeks, including week t ) (Projected on-hand inventory balance at end of week t-1) 3. Lot for lot (L4L) A rule under which the lot size ordered covers the gross requirement of a single week. Formula: (L4L lot size) = (Gross requirement in week t) (Projected on-hand inventory balance at the end of week t-1) 6. MRP II Manufacturing Resource Planning
Manufacturing (Materials, Capacity Production Schedules)

Business

Production

7. ERP Enterprise Resource Planning: General Model of ERP 8. Work Flow Electronic Mail Database Creation
Purchasing (Vendor orders) Strategic and business planning- Resources *Intelligent resource planning *Human Engineering (Process planning and product design)

MPS Strategic and business planning- Materials *New product introduction Rough cut *Product pricing capacity plan *BOM *Long range forecasting and capacity planning MRP *Engineering change management Detailed capacity plan

resource

Data Model

Imaging

ED I

*Order Management *Distribution Management

Organisation payroll/Employee cost accounting Accounts receivable General ledger Shop Job/Project Management floor control, purchase Fixed Assets Accounts Payable Budgeting Inventory Logistics/Distribution Materials

*Quality management (sales Marketing order entry, delivery projections) Finance (Capital requirements for capacity, working capital requirements *Facilities (Bills Accounting Maintenance payable, Accounts planning and receivable) implementati on

Operational planning and execution - Materials *Routing *Order processing *Supplier Management *Inventory/Warehouse management *Distribution management *Scheduling and WIP Management

Operational planning and execution - Materials *Pay roll *Recruitment *Costing and Budgeting *Job evaluation and performance appraisal *Quality control and planning *Maintenance engineering and scheduling *Fixed assets management *Resource MIS

Multi-

9.

Multi-

Multi-Mode Manufacturi ng

Multi-

Multi-

Features: 1. Accommodating variety 2. Integrated Management information 3. Seamless integration 4. Supply chain management 5. Resource management 6. Integrated data model Scope: Finance, Logistics, Human resource, Work flow Unit III - Product design: Product: A product is a bundle of physical services and symbolic particulars expected to yield satisfactions or benefits to the buyer by Phillip Kotler Product design: Product design in its broadest sense includes the whole development of the product through all the preliminary stages until actual manufacturing begins by C.S. Deverell New product development (Steps)
Needs identification Advance product Advance Design

Detailed Engineering Design

Production process design and development

Product Evaluation and improvement

Product use and support

Interrelationship (or) interaction (or) linkage of product design and process design

Product ideas Feasibility studies

Product design
Advance product planning, Advance design Production process design and development Product evaluation and improvement,

Process design
Organising the process flow Relation of process design to process flow Evaluating the process design

Continuous interaction

Produce and market new product/service Interrelationship (or) interaction (or) linkage of product planning and process planning

Product development Product Final New

Product planning system

Process R& D

Process Design

Work station Selection Operation

Work flow analysis

Operation Content

Operation method

Plant planning systems

1. Influencing factors for Product design:

Influencing factors

Customer perspectives 1. Functions 2. Aesthetics 3. User Friendliness 4. Esteem Associated with

Organisational perspectives 1. Intrinsic cost of material 2. Intrinsic cost of labour 3. Replacement, Exchange and disposal

2. Approaches to /Elements in Product design

Reverse Engineering Manufactura bility Approach es/Elemen ts in product design

Research and development Robust design

Standardizati on

Product life cycle

Modular design

Concurrent engineering

Computer aided design (CAD)

3. Legal, Ethical and Environmental issues in product design:

Legal issues: Product liability Intellectual Property Ethical issues: Assessing the impact of the design on consumer Protection of Intellectual Property Privacy Exposure to the undesirable Advertising of Design Right to alter natural order Whether designs should be tested on animals and humans Environmental impact Sustainable technology Minority groups Environmental issues: Green house effect or global warming Ozone layer Tropical Deforestation Waste Water pollution Resource Consumption

Process: I Steps in process planning: 1. Analysis part print 2. Consult with product engineer on product design changes 3. List the basic operation 4. Determine economical and practical manufacturing methods 5. Combine the operation and put them in to sequence 6. Specify the gauging required for process II Process Selection: Process Selection Decisions Processes by market orientation 1. Make to stock 2. Assemble to order 3. Make to order 4. Engineer to order Processes as production systems 1. Project 2. Job shop 3. Batch production 4. Assembly line 5. Continuous flow

 Processes and customer involvement 1. Self service 2. Produt selection 3. Partnership

Characteristics
Product

Make -to-Stock
Producer -specified Low variety Inexpensive Balance inventory, capacity, and service

Make -to-Order
Customer -specified High variety Expensive Manage delivery lead times and capacity

Objectives

Main operations problems

Forecasting Planning production Control of invenntory

Delivery promises Delivery time

III Types of process designs (or) Process Strategy (A) Product focused (production line or continuous production) - Organised according to the type of product/service being produced 2 general form 1. Discrete unit manufacturing 2. Process manufacturing

Product -Focused production

Product or material flow

Production operations

Raw materials

Components 4

Components

Subassemblies

Raw materials

1 Components

3 Subassemblies

Assemblies

7Finished product

Assemblies Purchased components 6 and subassemblies

4-17

(B) Process-Focused (Intermittent production or job shops) Production operations are

grouped according to type of processes.

Receiving and Foundry raw material

Rough machine

Fabrication

Painting

Packaging and shipping

4 1 2 3

Shear and punch

Finish Machine

Debur

Assembly

(C) Repetitive Focus system: It falls between product and process focuses system modules Classic assembly lineMass customization focus (D)Mass customization focus

Mass customization focus

Change Product Change
Repeat-Again Transparent Customization Sort-Through Adaptive Customization Either-Or Collaborative Customization Form-Of Cosmetic Customization

No Change Change Representation

(E) Group Technology/Cellular Manufacturing system

4-20

IV Major Factors affecting Process: 1. Process choice 2. Nature of product/Services 3. Vertical integration 4. Resource flexibility 5. Customer involvement 6. Capital intensity

Process Strategy Decisions

Process Structure Customer-contract position (services) Product-process position (manufacturing) Layout Customer Involvement Low involvement High involvement Capital Intensity Low automation High automation Resource Flexibility Specialized Enlarged

Strategy for Change Process reengineering Process improvement

Figure 3.1

Major Decisions for Effective Processes

Effective Process Design

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall.

1. 2. 3. 4. 5.

Process Choice it depends on volume and degree of customization Project Job Batch Line Continuous PRODUCT-PROCESS MATRIX (Figure
4.5)
Unique, one of a kind product Low volume, low standardization Low volume, Higher volume Multiple few major products products High volume, high standardization, commodity

Project

Building

NONE
Printing

Job Shop

Batch

Heavy Equipment Auto assembly

Assembly line

Continuous

NONE

Sugar Refinery

4-26

Vertical integration degree to which a firms own production system or service facility handles the entire supply chain 1. Backward integration firms movement upstream towards sources of raw material and parts 2. Forward integration downstream by acquiring more channels of distribution such as its own distribution centers and retail sources

Outsourcing Make-or-buy decision Flexible workforce A workforce whose members are capable of doing many tasks either at their own workstation or as they move form one workstation to another Workforce Equipment Customer involvement 1. Self service 2. Product selection 3. Time and location Capital Intensity Automation is one way to address the mix of capital and labor Fixed Automation Flexible Automation Service Operations: 1. Types of service operations: Production-line Approach/Quasi-manufacturing Self-service Approach/ Customer as participants Personal attention Approach/ customer as product 2. Service operation strategies: Generic strategies Customer-oriented focus Service-oriented focus Customer-and-service oriented focus 3. Scheduling service operations Pricing and promotion Appointment and reservation system Improving reservation system 4. Types of service scheduling: Scheduling the work force Multiple resource scheduling Cyclical scheduling