Production Process

PRODUCTION PROCESS

Alfiler, Krishanicole Balgemino, Mikko Cabunyag, Warren Geron, Edna Guiang Mark Donnel Ramos, Adena Tan, Angel Queen Group 2

INTRODUCTION Tan, Angel Queen

Production Process ■ It is a method concerned with transforming a range of inputs into those outputs that are required by the market. ■ It involves a series of links that form a production line or chain at which each stage, value is added to the final product in the course of production. ■ This involves two main sets of resources - the transforming resources, and the transformed resources.

Production Process The main resources and stages that are involved to make up the production process:

INPUTS • Property • Machinery • Labour • Raw Materials • Consumables

PRODUCTION PROCESS • Transformation • Knowledge Gathering & Presentation

OUTPUTS • Saleable Goods & Services • Valuable Information

Production Process The production process of a manufacturer, in its simplest form, may consist of the following steps: 1. Fabrication 2. Assembling the raw materials into finished products 3. Quality Control 4. Testing of finished products

5. Packaging the finished products 6. Shipping the finished products to retailers, wholesalers, etc.

Production Process Computer-aided manufacturing (CAM) is sometimes employed within the production process to get the best overall equipment effectiveness and operations efficiency to keep the cost per unit to a minimum. ■ Overall Equipment Effectiveness (OEE) a manufacturing operation is utilized.

is

used

to

evaluate

how

effectively

■ Operations Efficiency encompasses several strategies and techniques used to accomplish the basic goal of delivering quality goods to customers in the most cost-effective and timely manner

Benefits of using CAM in a Production Process ■ ■ ■ ■

Improves Machining Capabilities Improves Client Accessibility Helps improve Productivity of CNC Machines Helps Reduce Material Wastage

Types of Production Process ■ ■ ■ ■ ■ ■

Job Production Batch Production Mass Production Mass Customization Craft Production Service Production

JOB PRODUCTION Geron, Edna

Job production is associated with bespoke production, where each product is made individually and to order; customised to the buyer's specification, such as buildings, paintings, designer clothes, meals and haircuts. Production is a highly skilled process and goods may be handmade and labour intensive.

Job production covers both small-scale, low technology projects as well as large, complex projects involving high technology. Products are one-off and often unique, such as portraits or tailor made suits, but may be produced singly to a repeated design, such as aircraft, luxury sports cars and yachts. The management of job production may be difficult, as the processes differ from job to job. Management of larger products need to place emphasis on cost control and cash flow because payments for products made to order, such as yachts and buildings, may not be made until completion and/or delivery. There may also be penalties for late delivery of large products, so management need to monitor progress.

The job production possesses the following characteristics. 1. A large number of general purpose machines are required. 2. A large number of workers conversant with different jobs will have to be employed.

3. There can be some variations in production. 4. Some flexibility in financing is required because of variations in work load. 5. A large inventory of materials, parts and tools will be required. 6. The machines and equipment setting will have to be adjusted and readjusted to the manufacturing requirements. 7. The movement of materials through the process is intermittent.

Job production has the following limitations: 1. The economies of large scale production may not be attained because production is done in short-runs. 2. The demand is irregular for some products. 3. The use of labour and equipment may be an inefficient. 4. The scientific assessment of costs is difficult.

JOB PRODUCTION EXAMPLES Cake Technology

Customization Prototypes Parts Bespoke

BATCH PRODUCTION

Ramos, Adena

BATCH PRODUCTION Is a method of production that creates several items at the same time in a series of production steps. The items that are created together are known as a batch. Producing a number of items together in a series of steps.

BATCH PRODUCTION EXAMPLES ■ Baked goods ■ Clothing ■ Computer chips

■ Computer software ■ Die- or mold-making ■ Electrical goods ■ Flat-pack furniture ■ Jet engine production

Advantages of Batch Production ■ It generally has lower capital costs. ■ It has the flexibility to produce a variety of different product variations, or different products.

■ It works well when small production runs are needed, such as individual sandwich shops baking only the cookies they need. ■ It is ideal for custom or seasonal orders, or trial runs of a new product. ■ It reduces inventory. This can be critical when spoilage or space are issues. ■ It allows a single production system to be used for making different seasonal items. ■ It makes sense when the demand for a product is not sufficient to keep a dedicated machine or production process operating continuously.

Disadvantages of Batch Production ■ Reconfiguring the production system to produce something different results in downtime. In lean manufacturing language, these are wasted resources. ■ The production equipment uses a lot of space. When it's idle, this space is not being utilized to make money. ■ Labor is required to move items from one stage of the batch process to another, in addition to the labor required for batch manufacturing. ■ High storage costs - If the prototype has an error all the rest of the same products will have that fault as the machine replicates exactly. This would waste valuable time and the loss of materials would be costly.

EVALUATION Overall the advantages definitely outweigh the disadvantages and if the prototype is properly tested the batch production is very effective and cost effective. Although, having said that, if the product doesn't sell well, high storage costs will be present and, at some points, industry will practically stop.

Mass Production

Balgemino, Mikko Gerald

DEFINITION ■ Mass production is the name given to the method of producing goods in large quantities at low cost per unit. ■The mass production of items is often done by using an assembly line, or another efficient means of production. ■ But mass production, although allowing lower prices, does not have to mean lowquality production.

■ The mass production process itself is characterized by ■ 1. mechanization to achieve high volume, 2.elaborate organization of materials flow through 3.various stages of manufacturing, ■ 4.careful supervision of quality standards, 5.minute division of labour

HISTORY ■ The system of manufacture involving production of many identical parts and their assembly into finished products came to be called the American System, because it achieved its fullest maturity in the United States. ■ Although Eli Whitney has been given credit for this development, his ideas had appeared earlier in Sweden, France, and Britain and were being practiced in arms factories in the United States.

■ By the third quarter of the 19th century, the American System was employed in making small arms, clocks, textile machinery, sewing machines, and a host of other industrial products. ■ The assembly line: Though prototypes of the assembly line can be traced to antiquity, the true ancestor of this industrial technique was the 19th- century meatpacking industry in Cincinnati, Ohio, and in Chicago, where overhead trolleys were employed to convey carcasses from worker to worker

Drawing upon observations of the meat-packing industry, the American automobile manufacturer Henry Ford designed an assembly line that began operation in 1913.

The result was a remarkable reduction of manufacturing time for magneto flywheels from 20 minutes to five minutes

Moving Assembly Line

One Day’s Production

EFFECTS ON THE ORGANISATION OF WORK 1. First, tasks were minutely subdivided and performed by unskilled workers, or at least semiskilled workers, since much of the skill was built into the machine. 2. Second, manufacturing concerns grew to such size that a large hierarchy of supervisors and managers became necessary. 3. Third, the increasing complexity of operations required employment of a large management staff of accountants, engineers, chemists, and, later, social psychologists, in addition to a large distribution and sales force.

ADVANTAGES 1. The time taken to manufacture a product using mass production is shorter than when using traditional methods. 2. The probability of human error and variation is also predominantly carried out by machinery. 3. A reduction in labour costs. 4. An increased rate of production

reduced, as tasks are

DISADVANTAGES 1. Mass production is inflexible because it is difficult to alter a design or production process after a production line is implemented. 2. All products produced on one production line will be identical or very similar, and introducing variety to satisfy individual tastes is not easy. 3. The starter cost for the machinery can be expensive.

CONCLUSION Mass production allowed the evolution of consumerism by lowering the unit cost of many goods used.

MASS CUSTOMIZATION

Abstract From a collaborative engineering perspective, mass customization can be viewed as collaborative efforts between customers and manufacturers, who have different sets of priorities.

Mass Customization - An Introduction  It aims to deliver product and services that best meet customers’ needs with near mass production efficiency  The paradigm shift to mass customization is made an imperative for many companies to survive in an increasingly diversified, fragmented and competitive market place  Currently, the focus of research in mass customization

is shifting from its

strategic viability to operational feasibility

What? Why?

How?

Mass Customization - An Introduction(cont.)  Despite its advances in academia and industry, mass customization

continues to be challenged by critics  One of the arguments against mass customization is that it has limited noveltyand restricted applicability  Engineering Collaboration via Negotiation (ECN) paradigm (Lu 2003) promises great potential to tame many of the challenges that are currently constraining many mass customizationprograms

Mass Customization Concept  ‘Future Shock’ by Toffler, 1970 - “future manufacturing enabled by

information technology would be able to provide customized products in a large scale with little or no extra cost”  Pine et al.’s Harvard Business Review article, 1993 – the ability to provide individually designed products and services to every customer through high process agility, flexibility, and integration  Hart 1995 et al. - Mass customization is a system that uses information technology, flexible processes, and organizational structures to deliver a wide range of products and services that meet specific needs of individual customers at a cost near that of mass-produced items

Mass Customization vs. Mass Production

*Mass Customization as a Collaborative Engineering Effort

Development of Mass Customization The paradigm shift propelled by three forces :

to

mass

customization

is mainly

Market demand - ‘the mass market is dead and segmentation has progressed to the era of mass customization’ – Kotler(1989)  Market competition - Product variety is exploding while product life cycle isshortening  Technological revolutions - Flexible manufacturing systems allow manufacturers to quickly adapt to changes without incurring high penalty in terms of cost and lead time

Mass Customization Economics  Huffman (1998) – “there’s a thin line between mass customization and

mass confusion”  Piller et al. (2004) – “with customers integrated into the value creation process, companies gain access to more accurate information about market demand and can postpone some activities” which add to cost pools  In general, the key issue in mass customization from an economic perspective is how to leverage economies of integration to compensate potential loss of economies of scale

Conflicts in Mass Customization  Conflicts in name :  Mass – Aggregation

 Customization – one-of-a-kind

 Conflicts in operability :

Customers’ demands are diverseand irregular which lead to high component variety, large numbersof suppliers, and high administrative complexity

Collaborative Engineering As a Tool for Conflict Resolution  Monplaisir and Salhieh (2002) – “collaborative engineering can be viewed as a process in which people working in teams according to engineering methodologies and supported by technical tools can share resources and knowledge to achieve common goals”  Lu (2003) proposes Engineering Collaboration via Negotiation (ECN) as a

new paradigm for collaborative engineering. ECN is defined as “a sociotechnical decision making activity where a team of stakeholders with different expertise and mixed motives engage in interactive and joint conflict resolutions to co- construct consensual agreements of some engineering matter”

Mass Customization

- In Collaborative Engineering Perspective  Conceptually, mass customization can be taken as a

collaborative engineering activity, where customers and manufacturers with asymmetric information and different preferences engage in interactive and joint conflict resolutions to co-create an artefact

 How such collaboration can be carried out effectively and efficiently is an

ideal research topic for collaborative engineering

Mass Customization ■ - The Generic model* ■

Spring et

al. (2000) proposed a generic model of product customization:

*Adapted from Spring et al. 2002

Mass Customization - The Generic model* (cont.)  Problem Solving : The product customization concepts and design schemes are determined and agreed between customers and

manufacturers  Design Specification : This

stage determinesthe firm’s performance on some of the operational objectives

Mass Customization - The Generic model* (cont.)  Transfer :

Convert designspecifications into actual products A limitation of this3-stage

generic model is that customer – manufacturer interaction is confined to the problem solving stage only

Application scenarios  Scenario I : Co-Innovation  The manufacturer-centric view holds that innovations result

from intentional research while the user-centric (or customer-centric) view contents that many innovations actually come from users  Problem solving in mass customization is collaborative in nature and designated as collaborative innovation (co- innovation)*  Family Architecture (PFA) - As a framework for co-innovation PFA allows customers, product engineers, and process engineers can work under a unified framework with their interdependent relationships explicitly mappedout * Songlin Chen, Yue Wang, Mitchell M. Tseng

Application scenarios (contd.)  Scenario II : Co-Configuration  The stage where customers and manufacturers come to agree upon

the specifications of a specific product offering or customization type  In a typical organization setting, co-configuration often involves customers and sales engineers (sometimes design engineers)

Besides product configuration systems, personal recommendation systems (Stolze and Strobel 2004) are proposed to facilitate customers in product configuration enabled by techniques like data mining, recommendation system

Application scenarios (contd.)  Scenario III : Co-Production  Co-production corresponds to the transfer stage (Spring et al. 2000)

by including material conversion, material transportation, shop floor control, procurement, inventory management etc.  By sharing demand and supply information, supply chain partners

can better utilize production resources in response to volatile market demand

Conclusion  Mass customization defies the contradiction between

mass and customization and aims to deliver products and services that best meet individual customers’ needs with near mass production efficiency  It is important that all parties concerned can engage in collaboration with sufficient trust and only then collaborative engineering can play a significant role  The Economist: “Mass Customization a Result of the Third Industrial Revolution”

CRAFT PRODUCTION Marc Donnel Guiang

Craft Production It is the process of manufacturing by hand or with tool but without automation. The term is associated with the work of skilled artisans that add tangible and intangible value to a product. In advanced economies, the term implies the work of a skilled artisan or trade person.

Common Types of Craft Production ■ Job Production ■ Batch Production ■ Production Line

Job Production The one-by-one production of unique items that may be customized for the customer. For example, a carpenter who constructs wooden canoes one at a time that each have a unique design.

Batch Production Producing a batch of items by taking them through a series of steps together. For example, an artisan who produces handmade shoes in batches of 8. Each batch is taken through a series of 11 steps together that result in a finished product.

Production Line Producing items one by one in a series of steps whereby items are at different stages at the same time.

Common Examples of Craft Industry ■ Artisinal Foods ■ Baked Goods ■ Craft Beer ■ Fashion

■ Textiles Traditional Clothing ■ Jewelry ■ Decorative arts ■ Traditional Crafts

■ Models and Prototypes ■ Papermaking and Papercraft ■ Printmaking ■ Woodcraft ■ Toys

■ Workers – Know the whole process – Skilled – Self-reliant

■ Social Organization – Workshop clusters – Stationary platform – Horizontal networks

■ Spatial Organization – Industrial district – Concentrated activity

■ Skills – In workers

■ Product – Customized – Individual

■ Advantages – Flexible – Rewarding work

■ Disadvantages – Expensive – Long apprenticeship

SERVICE PRODUCTION Cabunyag, Warren

Definition: ■ Service Production - process of delivering a service to customers. It is a common term in many industries that's analogous to product production by an assembly line. The following are illustrative examples of service production.

Difference between service and manufacturing industry 1. Tangibility of Output - The key difference between service firms and manufacturers is the tangibility of their output. The output of a service firm, such as consultancy, training or maintenance, for example, is intangible. Manufacturers produce physical goods that customers can see and touch.

Difference between service and manufacturing industry 2. Production on Demand - Service firms, unlike manufacturers, do not hold inventory; they create a service when a client requires it. Manufacturers produce goods for stock, with inventory levels aligned to forecasts of market demand. Some manufacturers maintain minimum stock levels, relying on the accuracy of demand forecasts and their production capacity to meet demand on a just-in-time basis. Inventory also represents a cost for a manufacturing organization.

Difference between service and manufacturing industry 3. Customer Specific Production - Service firms do not produce a service unless a customer requires it, although they design and develop the scope and content of services in advance of any orders. Service firms generally produce a service tailored to customers’ needs, such as 12 hours of consultancy, plus 14 hours of design and 10 hours of installation. Manufacturers can produce goods without a customer order or forecast of customer demand. However, producing goods that do not meet market needs is a poor strategy.

Difference between service and manufacturing industry 4. Labor Requirements and Automated Processes - A service firm recruits people with specific knowledge and skills in the service disciplines that it offers. Service delivery is labor intensive and cannot be easily automated, although knowledge management systems enable a degree of knowledge capture and sharing. Manufacturers can automate many of their production processes to reduce their labor requirements, although some manufacturing organizations are labor intensive, particularly in countries where labor costs are low.

Difference between service and manufacturing industry 5.Physical Production Location - Service firms do not require a physical production site. The people creating and delivering the service can be located anywhere. For example, global firms such as consultants Deloitte use communication networks to access the most appropriate service skills and knowledge from offices around the world.

Manufacturers must have a physical location for their production and stock holding operations. Production does not necessarily take place on the manufacturer's own site; it can take place at any point in the supply chain.

Financial Service A bank offers a network of 24/7 bank machines to customers as a service. The production of the service involves replenishment, customer service, maintenance, monitoring, delivery of information technology and security.

Information Technology A software-as-a-service company offers business software to corporate customers using cloud servers and mobile clients. Service production involves deployment, operation, maintenance, monitoring, information security, capacity management, facility management, service level management and customer support.

Hospitality A catering company offers food services for business events and weddings that often have hundreds of guests. They view their kitchen as a batch production line with each meal going through a series of 6-8 steps and a quality control inspection before being served.

What types of production processes do manufacturers and service firms use? Alfiler, Krishanicole

In general there are three types of production processes used in manufacturing and service industry:

■ MASS PRODUCTION ■ MASS CUSTOMIZATION ■ CUSTOMIZATION

Mass Production The emphasis in mass production is on keeping manufacturing costs and service cost low by producing uniform products using repetitive and standardized processes.

Examples: ■ Fast food industry uses mass production to provide consistent experiences from one location to another. ■ Appliance manufacturer produces new designed refrigerator.

Mass Customization In mass customization, goods are produced using mass-production techniques, but only up to a point. At that point, the product or service is custom-tailored to the needs or desires of individual customers.

Examples: ■ A mobile device is mass produced but it includes software that allows users to customize its interface and functionality. ■ Travel company offers another set of tour package.

Customization In customization, the firm produces goods or services one at a time according to the specific needs or wants of individual customers. Example:

■ A salon shop offers haircut based on customer preferences. ■ A construction company designs and builds a house from customer requirements.