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Words 2199

Pages 9

Session 4

Previous Class

Performance measures focusing on labor (labor utilization, cost of direct labor) Push P h vs pull processes ll

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Today’s lecture: goals

Theory:

What is the impact of setups and batching on process capacity? How can we determine what the best batch size is? Analysis of a real life process: Benihana

Case study:

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Quiz question 1

A. B. B C. D.

Turn your clicker to channel 25

Switching from a push to a pull system will generally

Increase the process capacity Increase the flow rate of the process Decrease the average flow time of the flow units Increase the utilization of some of the resources

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Batch process

A batch process is a process which produces multiple types of flow units in successive groups, or batches

This applies mostly to manufacturing make to stock processes manufacturing, make-to-stock

The equipment is usually highly flexible but often requires setups when switching production from type of flow unit to another

E.g. Shirts of different sizes and/or colors

A (production) batch is a set of production units that are (p ) p processed before the resource needs to go through another setup

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Definitions

Definition 1: Setups are down times, i.e. times during which no flow units can be worked on by the resource because the machine is being set up Definition 2 (more general) : Setups are activities for which the duration is independent of the number of flow units

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Back to Kristen’s Cookies Co.

Were there any setups involved in the process (using definition 2)?

What was the equivalent of batch size there?

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Setup time & Batch size

One machine does two tasks. A setup is required before switching tasks. g

Task 1 (Machine 1) Task 2 (Machine 1)

Task 1

Task 2

Task 1

Task 2

Machine 1

Batch 1 Batch 1 Batch 2 Batch 2

setup time productive time

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Quiz question 2

Compare a process with setups with the same process without setups. The process with setups has

A. A B. C. D.

Higher process capacity Same process capacity Lower process capacity It depends

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Assumptions

Every batch has the same size Each unit in a batch requires the same amount of time on a given machine The setups that precede a given task always take a fixed amount of time, which is independent of which batch is produced next The worker who does the setup cannot do anything else during that time Be careful, usually we use one flow unit = one production unit but sometimes we can also use one flow unit = one batch (it will always be clear).

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Example

In a car-manufacturing plant, suppose that a same machine is used to produce the doors for two different car models. Each model is produced in batches of 10 and it takes 1 minute per car door. Between every batch, the machine has to be set up for 10 minutes. Batch size: Setup time: Time per unit:

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Setup time & Batch size

Batch size 10 20 30 time 20 40 60 80 100 120

Capacity

setup time productive time

What happens to the capacity of the resources as we increase the batch size?

This is because

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Capacity

For a resource with a positive setup time*,

Batch size

Capacity of resource* =

Setup time + (Batch size time per unit)

*this formula assumes that at most one flow unit can be processed simultaneously by the resource

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Capacity

The most general formula for capacity is:

Capacity of a ( p y (set of) resource(s) = ) ( ) Batch size number of resources in parallel

Setup time + (Batch size time per unit)

If setup time = 0, activity time = time per unit so: number of resources in parallel

Capacity of a (set of) resource(s) = Activity time

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Capacity: example

Task 1

(Adam)

Task 2

(Bob) 0 2

Task 3

(Charles) 20 1

Setup time (mins): Time per unit (mins):

45 0.5

Capacity (in flow units per hour) Adam Bob Charles Bottleneck(s) Process

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Batch size = 10

Batch size = 30

Batch size = 60

Process capacity & batch size

70 60 50 Capacit ty 40 30 20 10 0 1 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 Batch size

Adam Charles Bob

What happens as we change the batch size? Process capacity can be found on the graph as

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Quiz question 3

What happens to process capacity as we increase the batch size for a process with setups?

A. A B. C. D.

It increases or stays the same It stays the same It decreases or stays the same It can increase, decrease or stay the same

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Rush order flow time & flow time

Time in the process is measured from when the setup up starts on the first machine, if there is one (otherwise from when production starts) until the flow unit is completed

Note that the setups on machines other than the first can be done while the units are being processed by another machine

Two assumptions: “whole batch”: The whole batch has to be processed before all the production units in the batch can move to the next resource

But the production units are ready as soon as they are done with the p y y last task (no need to wait for the whole batch at the end).

“one by one”: Each production unit moves to the next task as soon as it has been processed

Note: This is different from push vs pull!

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Rush order flow time

Task 1

(Adam)

Task 2

(Bob) 0 2

Task 3

(Charles) 20 1

Setup time (mins): Time per unit (mins):

45 0.5

Suppose that the batch size = 10 Under “whole batch” What is the minimum time to produce one production unit?

What is the minimum time to produce a batch?

Under “one by one”

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What is the minimum time to produce one production unit? What is the minimum time to produce a batch?

Rush order flow time

“whole batch”

25 50 75 100 125 150 175 200 225

Task 1 Task 2 Task 3

“one by one”

Task 1 Task 2 Task 3

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Note: We use “as early as possible” aka push

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Quiz question 4

Compare two processes with setups. In one, the flow units move as a “whole batch”. In the other, the flow units move “one by one”. Which one has the highest capacity? one one .

A. B. C. D.

The one where they move as a “whole batch” The one where they move “one by one” They will have the same capacity It depends on the process

25 50 75 100 125 150 175 200 225

“whole batch”

Task 1 Task 2 Task 3

“one by one”

Task 1 Task 2 Task 3

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“Whole batch” vs “one by one”

Whole batch Process capacity Flow rate Average flow time Average inventory One by one

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Batch size: Average flow time, average inventory

What happens as the batch size increases?

Flow rate

Average flow time

Average inventory

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Batch size: Average flow time, average inventory

“Whole batch”, batch size of 10:

25 50 75 100 125 150 175 200 225

Task 1 Task 2 Task 3

“Whole batch”, batch size of 30:

Task 1 Task 2 Task 3

“One by one”, batch size of 10:

Task 1 Task 2 Task 3

“One by one”, batch size of 30:

Task 1 Task 2 Task 3

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Note: We use “as early as possible” and assume that process is supply-constrained

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Summary: change in batch size

If the batch size increases,

The capacity of the resources that do setups increases The capacity of the resources that do not do setups remains the same Process capacity may increase (does not decrease)

Depending on whether or not the bottleneck(s) has(ve) setups Depending on whether or not process capacity increased and depending on the demand rate

Flow rate may increase (does not decrease)

The rush order flow time may increase (does not decrease) The average flow time and average inventory may increase (do not decrease)

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Choosing the batch size

Suppose the only thing we can change is the batch size There is a tradeoff between flow rate on one hand, and average inventory and average flow time on the other hand hand. Decision rule:

Our first priority is flow rate, which we should try to maximize Our second concern is average inventory and average flow time, which we want to minimize for a fixed value of flow rate.

So we want to find the smallest batch size which achieves the largest possible flow rate rate.

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Recommended batch size

Task 1

(Adam)

Task 2

(Bob) 0 4

Setup time (mins): Time per unit (mins):

45 1

What is the recommended batch size if the demand rate is

10 flow units per hour?

24 units per hour?

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Recommended batch size

Batch size 1 2 Capacity of Adam 1.30 2.55 3.75 4.90 6.00 7.06 8.08 9.06 10.00 10.91 11.79 11 79 12.63 13.45 14.24 15.00 15.74 16.45 Capacity of Bob 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Batch size 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Capacity of Adam 17.14 17.81 18.46 19.09 19.70 20.29 20.87 21.43 21.97 22.50 23.01 23 01 23.51 24.00 24.47 24.94 25.38 25.82 Capacity of Bob 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15

Capacity as a function of batch size

45 40 35 30 25 20 15 10 5 0 1 8 15 22 29 36 43 50 57 64 71 Batch size

3 4

Adam

5 6 7

Capacity

Bob

8 9 10 11

78

85

92

99

12 13 14 15 16 17

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Target flow rate

It is never possible to have a flow rate which is higher than The demand rate Th capacity of the resources that do not have setups The i f h h d h † by changing the batch So the flow rate we want to achieve size, called the target flow rate, is given by:

Target flow rate = Min {demand rate, lowest capacity among the resources that do not do setups }

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†In

some cases, this target flow rate may not be achievable.

Recommended batch size

The recommended batch size is the smallest batch size such that we obtain a flow rate equal to the target flow rate If there is only one resource with a setup in the process†, the y p p recommended batch size can be obtained by equating the capacity of the resource with a setup to the target flow rate, which is the same as using the following formula:

Target flow rate Setup time*

Recommended batch size = 1- (Target flow rate time per unit*)

†If

not, then finding the recommended batch size is much more difficult! *Setup time and activity time per unit for the resource with a setup

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Recommended batch size

Task 1

(Adam)

Task 2

(Bob) 0 4

Setup time (mins): Time per unit (mins):

45 1

What is the recommended batch size if the demand rate is

10 flow units per hour?

24 units per hour?

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Recommended batch size: case 1

Case 1: If the process is supply-constrained and the (only) bottleneck involves a setup, we should

Capacity Current batch size

Demand rate

Batch size

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Quiz question 5

Case 2: If the process is supply-constrained and the bottleneck does not involve a setup but other resources do, we should

A. B. C.

Increase the batch size Decrease the batch size Keep it as is

Capacity Current batch size

Demand rate

Batch size

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Quiz question 6

A. A B. C.

Case 3: If the process is demand-constrained and some resources have a setup, we should

Increase the batch size Decrease the batch size Keep it as is

Capacity

Current batch size

Demand rate

Batch size

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Benihana Case study: goals

Analyzing a real life process and its design Showing an example of a service process as opposed to a production process Showing that good operating strategy can give a competitive advantage

Benihana

http://www.benihana.com/about/video/

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Benihana

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Benihana: advertising campaigns

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Benihana: Customer reviews

“It was quite amusing to watch the Hibachi chef make volcanoes out of onions and toss veggie slices into his hat. That's it. Spicy tuna sushi was very good, but the tempura sushi was rubbery. (…) But the teriyaki chicken and steak were tasteless, and so was the vegetable fried rice. B i perfume, or else, you'll leave smelling like a hib hi stove. If i Bring f l 'll l lli lik hibachi t you're going as a group