Production and Operations Management: Layout, Inventory, and Efficiency
To Determine Productivity, Work Sampling Is Often Used to measure productive and unproductive time. Sampling of Work: This statistical method suggests that the greater the number of measurements (n), the more representative the result will be. It is based on random observations of staff and the tasks performed (uptime, work time spent on accessories, non-productive time, absence from the observation area). The following should be provided beforehand: the universe to study, the variables investigated, and the sample design method. Errors: Observations are not random, observed aspects are undefined, and there is an impact on the operator that affects their behavior.
Line Balancing aims to level the production cycle of different workstations so that the system operates in a reasonable balance. This minimizes or eliminates bottlenecks (processes that limit the quantity produced), machine idle time, in-process inventories, etc. It aims to achieve a constant work rate throughout the entire production system, compatible with demand. The more intermittent the industry, the more complicated this becomes. Strategies for line balancing include:
- Increasing the capacity of (or replacing) equipment that generates bottlenecks, whose cycle is longer than the rest of the equipment or line.
- Adding workstations in parallel.
- Improving working methods to reduce cycle time.
- Improving employee performance: motivate, train, educate.
- Trying to adjust the pace of production to demand.
Types of Layout:
- Continuous or Product Layout: Consists of a sequential order on a production line for all equipment necessary to manufacture a product or part.
- Intermittent or Functional/Process Layout: Gathers all machinery related to a certain process in one department or sector.
- Cellular Layout: Applies to the production of families (in terms of production) of products or parts. Everything is within reach of the operator’s hand. Machines are placed together so that they can be operated simultaneously without the operator having to move.
- Fixed Position Layout: Facilities are distributed so that the resources needed converge toward the product being produced. Typically configured as concentric circles around the product or work area.
Dimensioning is a strategic, long-term decision. It refers to the installed capacity, which is the amount of product a process can develop per unit of time. Methodology for the decision:
- Estimate future capacity requirements based on forecasted demand and a defined planning horizon.
- Compare these requirements with the current installed capacity.
- Identify alternative ways to meet the incremental requirements.
- Evaluate each alternative from a technical and economic-financial standpoint, considering the flexibility to adapt to changes.
- Select and implement the best alternative.
Possible scenarios:
- Demand exceeds installed capacity, leading to lost customers.
- Demand is below installed capacity, but misuse generates delays, deterioration in quality, etc.
- Supply and demand are balanced.
- Demand is so low that there is underutilization of installed capacity.
Location is a strategic decision with a long-term horizon and a high tendency towards irreversibility. Geographic dispersion prevails, bringing improvements in transportation and communication technology and narrowing regional wage differences.
- Laws of industrial promotion: Intended for regional promotion, but often used as a tool for tax evasion.
- Attempts to move factories out of large cities to suburban areas and smaller towns.
- Unlike primary economic activities and services, location is not solely dependent on raw materials and customers.
Factors conditioning location:
- Availability of raw materials and intermediate products.
- Availability and rates of energy and other services.
- Possibility of having human resources and their associated costs.
- Proximity to the consumer market.
- Communications and transport.
- Industrial promotion laws, local laws, and unions.
- Labor climate of political and economic stability.
Industrial activity tends to concentrate around population centers of some importance – preferably in industrial areas or parks – because they provide the services and labor required for their development.
Inventory Decisions: The objective is to achieve the right balance between the benefits and costs of keeping inventory. Reasons for holding inventory:
- Creating finished goods inventories to improve customer service.
- Creating work-in-process inventories to increase manufacturing efficiency.
- Creating raw material inventories to take advantage of discounts for buying in large quantities.
Inventory decisions include:
- What items to keep in stock.
- Whether it is more convenient to buy or manufacture.
- At what point to make a purchase or start production.
- Lot size to buy or manufacture.
- Level of service to provide customers with inventory.
- Level of safety stock to maintain.
- Control system to use.
Types of Inventories:
- Cyclic: Permanent or continuous demand that is reiterated throughout time.
- Safety: Held as a reserve.
- In Advance: For seasonal demand or durable goods; accumulated in periods of low demand for use during high demand.
- Lot: Used for a single production run or several different ones.
- In Transit: Very accurate when goods are transported between production facilities, or when making deposits or imports.
The trend is towards high turnover and low inventories (stock trending towards 0) to make better use of applied resources and reduce financial constraints.
Standard Time: The time required to complete an operation when it is executed according to a specified method and a certain work rate, assuming reasonable performance from a typical worker.
Current design approach (since 1980):
- Production is set to demand to achieve process flexibility.
- Just-in-time: Produce and deliver only the quantities required by customers or by subsequent stages of the process.
- Finished goods and work-in-process inventories are reduced or eliminated, aiming for zero stock.
- Mobile containers accompanied by Kanban cards (requisitions) are used in assembly plants.
- Zero-defect production, just in time: 0 stock, 0 defects, 0 defaults, 0 failures, 0 paperwork.
Kanban cards are used for each workstation to request the necessary inputs from preceding stations, but only the amount needed for current production. Production Kanban cards (indicating the item and quantity to be produced) and transport Kanban cards (indicating the item and quantity required by the station) are used to activate and control the flow of material through the plant. Supplier Kanban cards are also used.
Efficiency: Implementing a set standard.
Productivity: The ratio of how effectively a resource is used.