Manufacturing Systems II Chris Hicks Chris Hicksnewcastle ac

Manufacturing Systems II Chris Hicks Chris. Hicks@newcastle. ac. uk http: //www. staff. ncl. ac. uk/chris. hicks MMM 256/1 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Topics • Group Technology (Cellular Manufacture) • Inventory Management • Material Requirements Planning • Just-in-Time Manufacture MMM 256/2 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Cellular Manufacturing MMM 256/3 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

References • Apple J. M. (1977) Plant Layout and Material Handling, Wiley, New York. • Askin G. G & Standridge C. R. (1993) Modelling and Analysis of Manufacturing Systems, John Wiley ISBN 0 -471 -57369 -8 • Black J. T. (1991) “The Design of a Factory with a Future”, Mc. Graw-Hill, New York, ISBN 0 -07 -005550 -5 MMM 256/4 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

References (cont. ) • Burbidge J. L. (1978) Principles of Production Control Mac. Donald and Evans, England ISBN 0 -7121 -1676 • Gallagher C. C. and Knight W. A. (1986) Group Technology Production Methods in Manufacture E. Horwood, England ISBN 0 -47108755 -6 • Hyde W. F. (1981) Data Analysis for Database Design Marcel Dekker Inc ISBN 8247 -1407 -0 MMM 256/5 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Manufacturing Layout • Process (functional) layout, like resources placed together. • Group (cellular) layout, resources to produce like products placed together. MMM 256/6 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

MMM 256/7 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Scientific Management • F. W. Taylor 1907 • Division of labour - functional specialism • Separation of “doing” and “thinking” • Workers should have exact instructions • Working methods should be standardised • Specialisation led to functional layouts MMM 256/8 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Process Layout • • • Like machines placed together Labour demarcation / common skills Robust wrt machine breakdown Common jigs / fixtures etc. Sometimes high utilisation Components travel large distances High work in progress Long lead times Poor throughput efficiency Often hard to control MMM 256/9 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Group Technology (Cellular Manufacturing) • Group Technology is a manufacturing philosophy with far reaching implications. • The basic concept is to identify and bring together similar parts and processes to take advantage of all the similarities which exist during all stages of design and manufacture. • A cellular manufacturing system is a manufacturing system based upon groups of processes, people and machines to produce a specific family of products with similar manufacturing characteristics (Apple 1977). MMM 256/10 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Cellular Manufacturing • Can be viewed as an attempt to obtain the advantages of flow line systems in previously process based, job shop environments. • First developed in the Soviet Union in 1930 s by Mitrofanov. • Early examples referred to as Group Technology. • Promoted by government in 1960 s, but very little take up. • In 1978, Burbidge asked “What happened to Group Technology? ” • Involves the standardisation of design and process plans. MMM 256/11 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Group (Cellular) Layout • • • Product focused layout. Components travel small distances. Prospect of low work in progress. Prospect of shorter lead times. Reduced set-up times. Design - variety reduction, increased standardisation, easier drawing retrieval. • Control simplified and easier to delegate. • Local storage of tooling. MMM 256/12 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Group (Cellular) Layout • Flexible labour required. • Sometimes lower resource utilisation due to resource duplication. • Organisation should be focused upon the group e. g. planning, control, labour reporting, accounting, performance incentives etc. • Often implemented as a component of JIT with team working, SPC, Quality, TPM etc. • Worker empowerment is important need people to be dedicated to team success. Cell members should assist decision making. MMM 256/13 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Characteristics of Successful Groups Characteristic Description Team Specified team of workers Products Specified set of products & no others Dedicated machines / equipment Dedicated space Common group goal for period Groups can reach goals independently Typically 6 -15 workers Facilities Group layout Target Independence Size MMM 256/14 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Adapted from Black (1991) MMM 256/15 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Implementation of Cellular Manufacturing • Grouping - identifying which machines to put into each cell. • Cell / layout design - identifying where to put to place machines. • Justification • Human issues MMM 256/16 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Types of Problem • Brown field problem - existing layout, transport, building and infrastructure should be taken into account. • Green field problem - designers are free to select processes, machines, transport, layout, building and infrastructure. • Brown field problems are more constrained, whilst green field problems offer more design choice. MMM 256/17 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Grouping Methods • • “Eyeballing” Classification of parts Product Flow Analysis Cluster Analysis – Matrix methods (e. g. King 1980) – Similarity Coefficient methods • Layout generation without grouping Beware: • Different methods can give different answers • There may not be clear clusters • Cellular manufacturing not always appropriate MMM 256/18 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Classification of Parts • Based upon coding. • Many schemes available. • Basic idea is to classify according to geometry, similar shapes require similar processes. • Grouping codes together is synonymous with grouping together like parts. • Very prevalent in 1960 s and 70 s. • Many schemes aimed at particular sectors. MMM 256/19 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Coding issues • Part / component population – inclusive should cover all parts. – flexible should deal with future parts / modifications. – should discriminate between parts with different values for key attributes. • Code detail - too much and the code becomes cumbersome - too little and it becomes useless. • Code structure - hierarchical (monocode), chain (polycode) or hybrid. • Digital representation - numeric, alphabetical, combined. MMM 256/20 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Product Flow Analysis • Developed by Jack Burbidge (1979). • Uses process routings. • Components with similar routings identified. Three stages • Factory flow analysis. • Group analysis • Line analysis (See Askin and Standridge p 177 -179) MMM 256/22 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Factory Flow Analysis • Link together processes (e. g. machining, welding, pressing) and subprocesses (turning, milling, boring) used by a significant number of parts. • Large departments are formed by combining all related processes. • These are essentially independent plants that manufacture dissimilar products. MMM 256/23 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Group Analysis • Breaks down departments into smaller units that are easier to administer and control. • The objective is to assign machines to groups so as to minimise the amount of material flow between the groups. • Small inexpensive machines are ignored, since they can be replicated if necessary. MMM 256/24 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Group Analysis • Construct a list of parts that require each machine. The machine with fewest part types is the key machine. • A subgroup is formed from all the parts that need this machine plus all the other machines required to make the parts. • A check is then made to see if the subgroup can be subdivided. • If any machine is used by just one part it can be termed “exceptional” and may be removed. MMM 256/25 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Group Analysis • Subgroups with the greatest number of common machine types may be combined to get groups of the desired size. • The combination rule reduces the number of extra machines required and makes it easier to balance machine loads. • Each group must be assigned sufficient machines and staff to produce its assigned parts. MMM 256/26 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Process Plan Example MMM 256/27 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Applying Grouping Steps 1. Identify a key machine. Either E or F. Create a subgroup to D, E and F. 2. Check for subgroup division. All parts visit F and so subgroup cannot be subdivided. Only part 7 visits machine D so it is exceptional and is removed. 1. Identify an new key machine for remaining 6 parts. A is the new key machine with subgroup A, B, C producing parts 1, 2 & 3. 2. Subgroup division - C only used for part 3, therefore exceptional and can be removed. MMM 256/28 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Applying Grouping 1. Identify next key machine. Only parts 4, 5, & 6 remain as well as machines C and D. 2. All parts use all machines - no subdivision possible. 3. Cell designer can now recombine three subgroups into a set of workable groups of desired size. 4. The final solution must provide adequate machine resources in each group for the assigned parts. If exceptional parts exist, or if groups are not self contained, then plans must be made for transport. MMM 256/29 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Rank Order Clustering 1. Evaluate binary value of each row. 2. Swap rows over to get them in rank order. MMM 256/30 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Rank Order Clustering Next apply same method to the columns MMM 256/31 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Rank Order Clustering Next swap over columns to get in rank order. MMM 256/32 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Rank Order Clustering ROC has got a solution close to a block diagonal structure. The process can be repeated iteratively until a stable solution is found. MMM 256/33 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Similarity Coefficients Consider a pair of machines I, j, ni = number of parts visiting machine i nj = number of parts visiting machine j nij = number of parts visiting i and j. Define similarity coefficient as: sij = max(nij/ni, nij/nj) Values near 1 denote high levels of interaction. Values near 0 denote little or no interaction. MMM 256/35 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Similarity Coefficients MMM 256/36 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Clustering • We start with 6 clusters, one for each machine. • With a threshold of T = 1 machines A and B can be grouped. Likewise E and F. • There are several methods for updating similarity coefficients between newly formed clusters and existing clusters. • The single linkage approach uses the maximum Sij for any machine i in the first cluster and any machine j in the second cluster. Therefore any single pair of machines can cause groups to be combined MMM 256/38 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Updating Similarity Coefficients (Using Single Linkage) Next consider the highest value of T possible. This gives the cluster CD at T = 0. 75. The coefficients then need to be updated again. MMM 256/39 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Dendogram MMM 256/40 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Variety Reduction Basic principle: always use common designs and components wherever possible. • Modular design. • Standardisation. • Redundant features. • Can base upon geometric series. • Imperial / metric series. • Reduced estimated & work planning. • Simplified stock control. • Less problems with spares. MMM 256/42 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Variety Reduction • May use slightly more expensive parts than necessary. • Increases the volume of production of items. • Reduced planning / jigs and fixtures etc. • Reduced lead times. MMM 256/43 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Product Family Analysis There a number of different ways of identifying part families. The following factors should always be considered: • How wide is the range of components? • How static is workload? • What changes are anticipated? • Is Group Technology aimed purely at manufacturing or is standardisation and modularisation of design a major issue? MMM 256/44 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Manufacturing Layout • Concerned with the relative location of major physical manufacturing resources. • A resource may be a machine, department, assembly line etc. • A block plan can be produced that shows the relative positioning of resources. • Evaluation criteria are required such as minimising transport costs, distance travelled etc. MMM 256/45 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Approaches • Many methods are based upon a static deterministic modelling approach. • Dynamic effects may be “guessed” by trying out a variety of scenarios. • Dynamic and stochastic effects may be evaluated by simulation. • A premium may be placed upon favourable attributes – Flexibility dealing with changes in design, demand etc. – Modularity the ability to change the system by adding or removing component parts to meet major changes in demand. – Reliability MMM 256/46 – Maintainability © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Line Layout MMM 256/47 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Spine Layout • Spine is central core for traffic. • Secondary aisles for traffic into departments • Each department has input /output storage areas along the spine. • Point of use storage reduces material flow. MMM 256/48 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Loop Structure Circular Structure MMM 256/49 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Layout Configurations • Eli Goldratt I, V, U, W • I layouts have linear flow with no direction changes, empty pallets may go in reverse direction. • V and U lines have more direction changes but may help with empty pallets. • Rectilinear layouts may restrict operators from working multiple machines. • Circular layouts may enable operators to work multiple machines. MMM 256/50 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Analysing Flow • Sting diagrams provide a very quick way to identify the pattern of flow. • Look at performance measures: – Distance travelled per component; – Material handling costs %; – Material handling time %; – Load / unload times; – Number of direction changes; – Number of moves per day; – Many, many more. • Looking at performance measures enables alternative layouts to be evaluated. MMM 256/51 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Measures of Performance • Resource Measures: – Resource utilisation; – Productivity. • Inventory: – work in progress; – queues. • Product: – lead times; – delivery performance; – Quality. • Financial, overhead recovery v. s. ABC costing. MMM 256/52 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Creating Layouts • If there is a dominant flow, such as all parts going from department 1 -> 2 -> 3 then the layout should reflect this. • At the other extreme, if the flow between departments is uniformly distributed, then any arrangement may be equally good. • However, most problems will lie between the extremes of dominant and equal flow. MMM 256/53 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Systematic Layout Planning 1. 2. 3 4. 5. 6. 7. 8. 9. Data collection. Flow analysis. Qualitative considerations. Relationship diagram. Space requirements. Space availability. Space relationship diagram. Modifying considerations and limitations. Evaluation. (Muther 1973) MMM 256/54 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

1. Data Collection • Products to be produced & volumes. • Routing, Bill of Materials, parts lists. • Resources for production, layout & geometrical information. • Timing information - set-up, processing & transfer durations. • Data determines loads & resource utilisation. • Quantity & variety determine appropriate layout type. • A Product-Quantity chart, which is a Pareto analysis of product importance can be used to determine items that justify their own lines or families of parts that justify a cell. MMM 256/55 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Product-Quantity Chart MMM 256/56 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

2. Flow Analysis • Operation process charts determine movement showing major operations, inspections, moves and storage. • Process charts, similar to operation process charts, but more detail. • Flow diagrams. • Flow data can be summarised in From. To charts (like mileage charts in maps) – Volumes – Distance travelled* – Costs* • String diagrams. MMM 256/57 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Operation Process Chart MMM 256/58 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Process Chart Symbols MMM 256/59 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

MMM 256/60 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Flow Diagram Material flow Process chart symbols Facility layout MMM 256/61 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

3. Qualitative Considerations REL Chart © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne MMM 256/62

4. Relationship Diagram • Combines quantitative and qualitative relationship data. • Provides a mechanism for visualising relationships. MMM 256/63 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

5. Space Requirements • Departmental space requirements need to be estimated. • May have standards that define space requirement for each machine type. • Can work from current space needs. • Can determine space requirement by considering tasks performed, tooling, access, flow of materials etc. MMM 256/64 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

6. Space Availability • Need to accommodate machines, material handling equipment, people, energy transmission, drainage, air lines, communications etc. • If an existing facility is to be used, the available space and constraints need to be accurately defined. • In the case of new facilities there are financial and often planning constraints. Need to consider possibility of future changes in demand or use. MMM 256/65 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

7. Space Relationship Diagram • Represents departments with templates that are proportional in size to space requirements. • Templates can be rearranged to find improved solutions. MMM 256/66 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

(a) (b) a) Relationship Diagram b) Space Relationship Diagram MMM 256/67 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

8. Modifying Considerations and Limitations • Steps 1 -7 have not taken into account implementation details. • Site specific or operations specific conditions may require adjustments to the layout. • Need to consider: – Utilities, power, heating, light, drainage compressed air etc. – Structural limitations, load-bearing capacity of floors, ceiling heights, columns. – Location of external connections e. g. roads. MMM 256/68 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

9. Evaluation • Several alternatives should be considered. • Drawings, flow diagrams etc form the basis of assessment of advantages and disadvantages of each. • Costs / benefits can be attributed to each alternative. • Quality of flow can be evaluated. • Flexibility, maintainability, expandability safety and ease of operations should be reviewed. MMM 256/69 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Computerised Layout Planning • Improvement algorithms are based upon an initial layout. They generate improvements by rearrangement. Suitable for brown field sites. Examples CRAFT (Armour & Buffa 1963) • Construction algorithms start with a blank shop floor and add machines to it. Suitable for green field sites. Example: ALDEP (Seehof & Evans 1967), CORELP (Parsaei et al 1987), SHAPE (Hassan et al 1986). • Hybrid algorithms include both construction and improvement algorithms. MMM 256/70 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Computerised Relative Allocation of Facilities (CRAFT) • Creates layouts by exchanging machine pairs and then evaluating the layout. • When all pairs of exchanges have been completed, the exchange with the best evaluation is chosen and a new layout in generated. • This process is repeated until no improvement can be made through exchanges. MMM 256/71 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Automated Layout Design Program (ALDEP) • A machine is randomly selected and added to the layout. • The closeness of all the remaining machines to it is calculated. The “closest” machine is added. This is repeated until all machines have been placed. • Once a machine has been placed, it is fixed. This makes it difficult to find good solutions. • Often use an improvement algorithm to improve layout produced. MMM 256/72 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Construction Algorithm Differences • Method for election of next machine and its placement. • Evaluation of the relationship between machines already located and the selected machine (e. g. by using different definitions of similarity coefficient). • How the layout is represented. MMM 256/73 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Synthetic Machine Concept • A group of machines form a synthetic machine. • Resource hierarchy flattened. • Framework to assist delegated responsibility. • Local planning, control and work organisation. • Concerned only with cell inputs and outputs. MMM 256/74 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Types of Cell • Highly automated - conveyers, robot handling, Flexible Manufacturing Systems (FMS). • Semi-automated - some automated material handling. • Simple cells without automated material handling. • Work grouped on a single machine using a multi-functional machine tool. NOTE: Need to find an appropriate mix for given production volumes. Increasing automation normally increases overheads and reduces flexibility. MMM 256/75 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Supporting Techniques • • Statistical process control. Quality Circles. Team working. Empowerment. Visible performance measures. Total preventative maintenance. Single minute exchange of dies. Simple machine concept. MMM 256/76 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Case Study 1 • World class automotive components supplier. • Adopted lean manufacturing practices yet productivity still 50% of Japanese sister plant. WHY? MMM 256/77 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Findings • • • Layout - rectilinear v. s clusters. Supervision of resources. Smallest machine concept. Flexible resource variable. Cost of capital and accounting philosophies. MMM 256/78 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Case Study 2 • SME supplier of orthotics (surgical appliances). • Very long delivery. • High work in progress. How can situation be improved? MMM 256/79 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Solution • Business process analysis: – Non physical processes; – Physical processes. • Target queuing by streamlining processes or increasing capacity. Result: • Lead time 14 weeks to 4; • Cash flow improved by £ 300 k on £ 2 M turnover. MMM 256/80 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Other Key Issues Batch sizes • Set-up • Machining • Transfer Effect on other measures of performance. MMM 256/81 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Hints • • • Look at the material flow Try to simplify Think about removing in-process inventory Think about the operators Consider other layout constraints MMM 256/85 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Inventory Management MMM 256/89 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Inventory • Money invested in materials 3 Types of inventory • Raw materials • Work in progress • Finished goods MMM 256/90 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Advantages of Inventory • Raw materials offset lead time • Work in progress offsets disturbances in the production system and may help keep resource utilisation high • Finished goods stocks enable fast delivery • Economic order quantity methods claim to claim • People feel busy • Process “decoupling” MMM 256/91 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Inventory: Disadvantages • Expensive to keep – Interest on capital – Storage costs • Adverse effect on cash flow and liquidity • Risk of obsolescence • Lack of flexibility • Masks problems with manufacturing system • Difficult to control MMM 256/92 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Types of Demand • Independent – Demand for an item is independent of the demand for another item • Dependant – Demand for an item is linked to the demand for another item – Product structure defines dependencies MMM 256/93 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Inventory Control “The activities and techniques of maintaining stock items at desired levels, whether they are raw materials, work in progress or finished products” MMM 256/94 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Inventory Control Decisions • How many? – (lot size or order quantity • When – timing or order point MMM 256/95 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Independent Demand • Fixed order quantity (FOQ) systems order a predetermined quantity of items when stock levels drop below a predetermined level e. g. 2 bin system • Economic order quantity systems aim to minimise the combination of ordering and carrying costs. They make a number of assumptions: – annual demand can be estimated – demand is uniform – no quantity discounts • Ignores the costs associated with stock outs MMM 256/96 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Dependent Demand • Demand for one item linked to the demand for another • Producing an assembly causes dependent demand for all the components that go into the assembly • Assembling a car requires one windscreen, 5 wheels, one engine etc. • One engine requires one crankshaft, one cylinder head etc. • One cylinder head requires …. MMM 256/97 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Product Structure MMM 256/98 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Product Structure A B D c E F G H MMM 256/99 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Material Requirements Planning • Method for planning dependent demand • Requirement for subassemblies and components based upon requirements for end items and product structure • Takes into account current stocks of each item to calculate net requirements MMM 256/100 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Material Requirements Planning End Item Requirements Stocks MRP Product Structure Net Requirements MMM 256/101 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

ABC Classification Break items into 3 groups: • A - the items that represent 75% of value and 20% volume • B - the items that represent 20% value and 30% volume • C - the items that represent 5% value and 50% volume This approach is based upon Parieto analysis MMM 256/102 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Just-in-Time MMM 256/103 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Just-in-Time • Approach to achieve excellence in manufacturing • Minimise waste: anything that adds cost but not value • Just the correct quantity • at just the right quality • at just the right time • in the right place MMM 256/104 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Push Scheduling Manufacturing Systems Inventory “PUSH” MMM 256/105 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Kanban • Japanese word for card • One card • Two card MMM 256/106 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

One Card Kanban Stock Area Item + Kanban MC 1 Machine 1 operates at a constant rate MC 2 Kanban MMM 256/107 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Two Card Kanban Item Stock Area Item + Kanban MC 1 MC 2 “P” Kanban “C” Kanban “P” Production Kanban “C” Conveyance Kanban MMM 256/108 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne

Pull scheduling 5 4 3 2 1 Manufacturing System PULL MMM 256/109 © Dr. C. Hicks, MMM Engineering University of Newcastle upon Tyne