MET 4463
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MET 4463 – MANUFACTURING MANAGEMENT – Summer I 2000

(MINI-SESSION)

 Professor:  Dr. Larry Roderick    (254-968-9014), e-mail Roderick@tarleton.edu Text: “Operations Management” by Russell and Taylor, 3rd ed.   Class: Will meet from 5:00 pm to 8:00 pm on TTVN from May 17 to June 2. Course Objectives: To introduce the student to the elements of manufacturing operations, including such topics as quality, design for manufacturability, group technology, production control strategies, synchronous manufacturing, concurrent engineering, flexible manufacturing, utilized to effectively manage the manufacturing environment.

Session

Date

Topic

Chapter

Exam

1

5-17

Introduction & Quality Management

Notes & 1   

-

2

5-18

Quality Management

3

1

3

5-19

Product Design

5

-

4

5-22

Process Planning

6

2,3

5

5-23

Facility Layout

7

4

6

5-24

Work Design/Measurement

8

5

7

5-25

Aggregate Production & Capacity Planning

11

6

8

5-26

Inventory Management

12

-

9

5-29

Holiday

-

-

10

5-30

Materials Requirements Planning

13

7,8

11

5-31

Scheduling

14

9

12

6-01

JIT & Continuous Improvement

15

10

13

6-02

Final (4:00 pm)

ALL

 

 

Grading:

 

 

A       89.5–100

 

B       79.5–89.4

 

C       69.5–79.4

 

D       59.5–69.4

 

F        Below 59.5

Grade Calculation:          10 grades @ 10% each (the lowest grade will be dropped).

Criteria:  The goal is for 10 daily exams to be given. Each exam will cover material presented the previous night.  The (1) lowest grade will be dropped. Because of the compressed time and distances, no make-up exams will be given.  A missed exam will be the “dropped” grade.

 

 Final:   A comprehensive final (optional) will be given for those students desiring to raise their grade.  The final will count as 25% of the final grade, with the other 10 daily exams counting as 75% of the final grade. The final will not lower your grade.

Note: The chapter numbers are the same for both editions 2 & 3.

 

The exam scheduled for the 19th will be delayed until the 22nd. Both exams 2 and 3 will be given on the 22nd.

The exam scheduled for the 26th will be delayed until the 30th. Both exams 7 and 8 will be given on the 30th.

Chapter 12: Inventory Management (NOTES)

NOTE: Please read all sections of the chapter except:

The EOQ Model With Noninstantaneous Receipt

Computer solution of EOQ models with Excel

Quantity discounts

Quantity discounts with constant carrying cost

Quantity discount model solution with POM for windows

Reorder point with variable demand

Determining the reorder point with excel

Order quantity for a periodic inventory system

Order quantity with variable demand

Determining the order quantity for the fixed-order model with excel

 

INVENTORY

Stock of items held to meet future demand

Inventory Management answers 2 questions

  1.     How much to order

  2.     When to order 

TYPES OF INVENTORY

Raw materials

Purchased parts and supplies

Labor

In-process (partially completed) products

Component parts

Working capital

Tools, machinery, and equipment

Finished goods

REASONS TO HOLD INVENTORY

Meet unexpected demand

Smooth seasonal or cyclical demand

Meet variations in customer demand

Take advantage of price discounts

Hedge against price increases

Quantity discounts

 

ABC CLASSIFICATION SYSTEM

Demand vollume & value of items vary

Classify inventory into 3 categories

 

                                        Class              % of Units              % of Dollars

                                          A                      5-15                      70-80

                                          B                        30                          15

                                          C                      50-60                      5-10

(see example 12.1)

 

 

 

 

TWO FORMS OF DEMAND

Dependent (items used to produce final products)

Independent (items demanded by external customers)

 

 

 

INVENTORY COSTS

Carrying Cost (cost of holding an item in inventory)

Ordering Cost (cost of replenishing inventory)

Shortage Cost (temporary or permanent loss of sales when demand cannot be met)

 

 

 

 

 

INVENTORY CONTROL SYSTEMS

Fixed-Order-Quantity System (Continuous)

                - constant amount ordered when inventory declines to predetermined                       level

Fixed-Time-Period System (Periodic)

                - order placed for variable amount after fixed passage of time

 

 

 

THE INVENTORY ORDER CYCLE

(see figure 12.1)

 

 

 

 

ASSUMPTIONS OF BASIC EOQ MODEL

Demand is known with certainty

Demand is relatively constant over time

No shortages are allowed

Lead time for the receipt of orders is constant

The order quantity is received all at once

 

            let              Q= an order quantity (size)

                            D= annual demand

                            C(O)= cost of placing one order

                            C(C)= annual per-unit carrying cost

            then,                      the number of orders per year = D/Q

                                        the average order size = Q/2

                            (see figure 12.2)

 

(See Example 12.2)

 

 

 

 

SAFETY STOCKS

Safety Stock - buffer added to on hand inventory during lead time

Stockout - an inventory shortage

Service Level - probability that the inventory available during lead time will meet demand

(see figure 12.6)

 

 

CHAPTER 15

JUST-IN-TIME SYSTEMS

 

 

What is JIT?

Producing only what is needed, when it is needed

A philosophy

An integrated management system

JIT's mandate: Eliminate all waste!

 

"Waste is anything other than that which adds value to the product or service"

 

Basic Elements of JIT

  1. Flexible resources

  2. Cellular layouts

  3. Pull production system

  4. Kanban production control

  5. Small-lot production

  6. Quick setups

  7. Uniform production

  8. Quality at the source

  9. Total productive maintenance

  10. Supplier networks

Examples of Waste

Watching a machine run

Waiting for parts

Counting parts

Overproduction

Moving parts over long distances

Storing inventory

Looking for tools

Machine breakdown

Rework

 

Flexible Resources

Multifunctional workers

General purpose machines

Study operators & improve operations

 

Cellular Layouts

Group dissimilar machines in manufacturing cell to produce family of parts

Work flows in one direction through cell

Cycle time adjusted by changing worker paths

 

Kanban Production Control System

Kanban card indicates standard quantity of production

Derived from two-bin inventory system

Kanban maintains discipline of pull production

Production kanban authorizes production

Withdrawal kanban authorizes movement of goods

 

Types of Kanbans

Kanban Square: marked area designed to hold items

Signal Kanban: triangular kanban used to signal production at the previous workstation

Material Kanban: used to order material in advance of a process

Supplier Kanbans: rotate between the factory and suppliers

 

Small-Lot Production

Requires less space & capital investment

Moves processes closer together

Makes quality problems easier to detect

Makes processes more dependent on each other

 

SMED Principles

  1. Separate internal setup from external setup

  2. Convert internal setup to external setup

  3. Streamline all aspects of setup

  4. Perform setup activities in parallel or eliminate them entirely

 

Reducing Setup Time

Preset desired settings

Use quick fasteners

Use locator pins

Prevent misalignments

Eliminate tools

Make movements easier

 

Uniform Production

Results from smoothing production requirements

Kanban systems can handle +/- 10% demand changes

Smooths demand across planning horizon

Mixed-model assembly steadies component production

 

Mixed-Model Sequencing

 

Model           Monthly demand            Daily demand           

Small                     1200                                 40

Midsize                 2400                                 80

Luxury                   2400                                80

Sequence of L-M-S-M-L repeated 40 times per day maintains proper mix of models

 

Quality At The Source

Jidoka is authority to stop production line

Andon lights signal quality problem

Undercapacity scheduling allows for planning, problem solving & maintenance

Visual control makes problems visible

Poka-yoke prevents defects

 

Kaizen

Continuous improvement

Requires total employment involvement

Essence of JIT is willingness of workers to:

            spot quality problems

            halt production when necessary

            generate ideas for improvement

            analyze problems

            perform different functions

 

Total Productive Maintenance (TPM)

Breakdown maintenance: repairs to make failed machine operational

Preventive maintenance: system to periodic inspection & maintenance to keep machines operating

TPM combines preventive maintenance & total quality concepts

 

TPM Requires Management To

Design products that can be easily produced on existing machines

Design machines for easier operations, changeover, maintenance

Train & retrain workers to operate machines

Purchase machines that maximize productive potential

Design preventive maintenance plan spanning life of machines

 

Trends In Supplier Policies

  1. Locate near to the customer

  2. Use small, loaded trucks and ship mixed loads

  3. Consider establishing small warehouses near to the customer or consolidating warehouses with other suppliers

  4. Use standardized containers and make deliveries according to a precise delivery schedule

  5. Become a certified supplier and accept payment at regular intervals rather than upon delivery

 

Benefits of JIT

  1. Reduced inventory

  2. Improved quality

  3. Lower costs

  4. Reduced space requirements

  5. Shorter lead time

  6. Increased productivity

  7. Greated flexibility

  8. Better relations with suppliers

  9. Simplified scheduling and control activities

  10. Increased capacity

  11. Better use of human resources

  12. More product variety

 

JIT Implementation

Use JIT to finely tune an operating system

Somewhat different in USA than Japan

JIT is still evolving

JIT isn't for everyone