Course Structure:

Introduction:

Industry/ Industrial: from latin “Industria/e” which means “activity”, “laborious news”

-> DEF: Economic activity concerned with the processing of raw materials and manufacture of goods in factories.

INDUSTRY: work and processes involved in collecting raw materials, and making them into products in factories.

TECHNOLOGY: the application of knowledge for achieving practical goals in a reproducible way.

Industrial Engineering:

• Organizeing manufacturing of all kinds;
• Analyzing data and processes to understand problems and create optimized solutions;

The Industrial (R)evolutions

First IR (1780): Cartwright invented the first stream loom, first concept of “Factories”;

Second IR (1870): Electricity, assebly lines for mass production.

Third IR (1970s): Automation

Fourth IR (2000): Digitalization

Definitions:

• PRODUCTION (PROCESS): set of activities (process) required to produce goods or services delivered to the market by a company;
• PRODUCTION SYSTEM: subsystem of the company. It uses resources as inputs – raw materials, semi-finished goods, energy, information, knowledge, etc. – to provide products and services in order to satisfy the customer needs and the objectives established by the company’s strategy
• PRODUCTION PLAN: physical plant where the production system is established

How Define a Production System:

• Production Process – ASME Diagram;
• Bill of Materials;
• Cycle Times/ Production Programs;
• Flow sheet;
• Layout;
• Classifications.

Production Process – ASME Diagram

-> DEF PRODUCTION PROCESSES: are a multistage processes: a sequence of operations are required to realize the process that allows to obtain a product from a raw material.

TECHNOLOGY CYCLE (or TECHNOLOGY ROUTINE): set of data that describes the sequence of such operations.

ASME: American Society of Manufacturing Engineering

–> TECHNOLOGY DIAGRAM: used to descrive graphically the various processing steps of a tecnology routining.

• ASME symbology identify the different phases oa a process and for drawing technology diagrams

-> The Flow Process Chart

-> How design a process:

-> Example:

LIST of PARTS: list of the different parts used for a product;

TECHINCAL DRAWING: drawings about the product indifferent point of view:

Bill of materials (distinta base):

-> DEF: Describe the different part of a product

• Quantify what you need to produce

Cycle Time:

-> DEF: time it takes to complete a single manufacturing operation on one unit, or several at once, from start to finish.

Main Operational Perfomances:

• LEAD TIME (throughput time, flowing time): duration of time from start of production to finish [hours, minutes, seconds]
• SETUP TIME: the time it takes to set-up a production resource for processing a new work order [hours, minutes, seconds]
• WIP (Work In Progress): the amount of inventory that is being processed or is waiting on the shop floor [quantity of work orders, but also time needed to finish the quantity of work orders]
• PRODUCTION RATE(throughput, rhythm, production capacity): number of products that a production system is able to produce in a time unit [pieces / h, products / day, etc.]
• CYCLE TIME: the time period elapsing b/w the exit time of the precedent work-piece and exit time of the successive work-piece from a system, it is the inverse of production rate [time / piece]

-> In all our model and design sistem, all the variable are defined in base of the TIME!

Pieces/Time:

• RATE/RYTHM/THROUGHPUT: how many pieces for a day (portata);
• CAPACITY: how many pieces for a hour.

Time/Pieces:

• RAVE: pieces over time;
• Machining/ Processing/ Mining/ Flowing Time : we use more physical unit for the time that we assumed.

TOTAL LEAD TIME OF A WORK ORDER: time that is necessary to perform all the activities inside the factory from the customer order arrival to the moment in which the material is ready to be delivered  

-> Also Production Time can be no entirely Productive:

📌May also include quality control, setting up CNC programmes, machine breakdown, waiting for repair, repair, operator breaks, quality issues, shortages of parts, detailed planning and control, etc.

Status of production machine:

• Working
• In setup / change over
• Waiting (idle state) for pieces / for operators / for interventions
• Blocked for breakdowns
• Under maintenance / repair

-> Operator’s Tasks:

• Working on a machine / system (e.g. manual assembly)
• Preparing the production machine (setup), e.g. changing tools, cleaning, loading materials, etc.
• Doing maintenance and/or repairing machines
• Monitoring and supervising production
• Performing quality checks
• Load / unload materials

Flow Sheet of a Production:

Layout of a Production Plant

-> Different layout can guarantee different result/performances in production;

-> Layouts are different in terms of production volume (number of products) reachable in the amount of time and production variety (# different products)

Classifications:

Type of production System:

Type of Technologies:

WORTMANN Classification:

CLASSIFICATION of PRODUCTION SYSTEMS:

-> There are different ways to classificate production systems:

• nature of process: process production, discrete production (manufacturing)
• production method:  continuous production, intermittent production (BP), unitary production
• sales: stock production (forecast-based production), to order production

 

Classification > By Nature of Process:

Classification > By Nature of Process:

-> PROCESS PRODUCTION:

• Often concerned with liquids, powedrs, gases;
• Often very high levels of automation;
• Ex: cement, oil, sugal, paint;

-> DISCRETE PRODUCTION (manufacturing):

• Individual items produced and can be traked;
• Volumes can be high;
• Levels of automation are lower;
• Can be the fabrication of individual products and/or the assembly

  of several components;

• Ex: cars, machine tools, electronic goods

Process Production:

-> Characteristics

• Typically fixed technological route
• Considerable investment
• Advanced, centralised process control
• Highly automated (pumps, silos, etc.)
• Relatively low staffing
  • Staff often work in teams
  • Team contact may be low
• Often 24-hour operation
• Inefficient to stop and start
• May take time to get quality output
• Often supplier of manufacturing industries

-> Location is one of the main management decisions

• Significant volumes of raw material input required
• Need for cheap energy (e.g. aluminium production)

-> Technology

• Not-reversible chemical-physical transformation of raw materials
• Fixed technological route and mainly flow type
• Relevance and sensitivity of process technological parameters
• High level of automation
• Process flow can be: analytical, synthetic or linear

-> Management: Relative (slight) relevance of management parameters (as WIP, lead time, phase synch, …)

-> Cost Structure

• High investments for infrastructure, machinery and automation
• Low labour cost
• High energy and maintenance costs

Production System:

How Production System Works:

• Production is handled in Work Orders (also said production orders, manufacturing orders, job orders, etc.);
• Work orders are planned and scheduled in the production plan, and then “launched” and executed;
• Modifications to the production plan could happen (changes in priorities, problems, etc.);
• Work Orders are moved in the production system according to the production / process cycle.
• Production systems can be organised with different layouts (following reference cases, such as job-shops and cells)
• Production resources are normally grouped in production shops / departments (with different logics, e.g. job shops vs cells)

SHOP FLOOR: entire list of production resources (genba in Japanese)

Performance of Production System:

-> Distinguish between:

• PERFORMANCES: the result (measured against a multi-dimensional scale) of the logistic and productive process;
• OPERATIVE CONDITIONS: external and internal “context” in which this result is obtained, they are way of working or state of a process that can infuence a certain performance.

Cost of Production System:

-> The main costs:

• Costs of installation (most of the time in CAPEX)
• Operating costs (in OPEX)

-> Costs to be considered in design decisitions could be:

• Real costs (installation and operating costs)
• Opportunistic / figurative costs (e.g. depreciation, inefficiency costs, etc.)

Installation costs:

-> DEF: all the expenses that the company has to invest in a plant to enable production;

• Must be estimated in the design phase for evaluating the affordability and return of the related investment;

=> Importance of the capital.

-> TYPE:

• Installation costs in CAPEX
  • Feasibility study (preliminary economic analysis of the project)
  • Development of the project
  • Acquisition of the ground;
  • Building construction
  • Installation of plant services
  • Acquisition and installation of machinery and equipment
  • Intangible cost of knowledge assets (know-how, patent acquisition, payment of royalties)
  • Interest payable on any mortgages or loans for investment
• Installation costs in OPEX, they refer to the set of non-durable production assets and financial payable to start production, like inventories of finished products and raw materials, account receivable (deferred payment, typically 30-60 days), any cash for running start-up

Operating costs:

-> DEF: all costs to be sustained in a given period of time (typically one year), for the operation of the plant

• VARIABLE OPERATING COSTS: which include all costs of operation that depend on the volume of production

-> Es: raw materials, components, energy, commissions due to the sellers, transportation, etc.

• FIXED OPERATING COSTS: independent of the production volume, and shall include all those expenses that remain the same independently from the production level.

-> Ex: overhead (insurance, communication, building conditioning, etc), expenditure related to technical and administrative staff, rents.

• SEMI-VARIABLE OPERATING COSTS: related not only to the volume of production, but also have a fixed part, independent of the volume of production.

Inefficiency Cost:

-> DEF: loss of income resulting from inefficiency (of a machine or plant) with respect to a predefined standard.

• Not corresponding a real flow of money, but represent a loss of opportunity (e.g. in terms of reduction in production volume and thus in income loss).

-> Examples:

• overtime work costs
• subcontractors costs
• stockout costs
• stock holding costs
• setup costs

Relevant Cost:

-> DEF: to be “relevant” for the design of a production system a cost should be:

• future (past is already “sunk”)
• avoidable (if we do not follow a certain design / plan we do not sustain that cost)
• differential (with respect to other alternative designs / plans)

Deprecation:

-> DEF: process of allocating economic value of the asset (amortization amout) along all the periods in which it is used.

• Differ from other cost as it is not an actual financial flow, is only a charge (economic and tax purposes on an annual basis) of a cost already incurred for the acquisition of durable assets.
• Has to be intended as tax deprecation (if it’s calculated as a value to be subtracted from the comapny’s gross margin for calculating taxes that the comapny must pay).
• Due to taxation regimes, could be a cost relevant for the design decision.

How evaluate investment in production:

• Cost analysis
• Revenue / savings analysis
• Cash Flow analysis
• Discounted Cash Flow Analysis
• IRR / Payback time

Design and Engineering:

-> Typical activities:

• Demand planning (how many products and how many types of products we have to produce in the plant in the next x years?)
• Industrialization / Production engineering (which production technologies should be used, how should be the processing cycles?)
• Identification of production layout archetypes, based on production volumes, variety and expected performances (e.g. lines vs shops, material flows, etc.)
• Workload dimensioning and definition of the number of resources
• Design of the production areas, stations, machines  and services (including ergonomics, working conditions, safety, etc.)

-> Design is done in an iterative & recursive way.

-> Main PHASES:

• Feasibility plan (technical and economic), with the identification of the places and areas for installing the production system, as well as of the main type of solutions (layout archetypes)
• Approval (investment analysis, normative, regulations, etc.)
• Detailed design of the system (resources, services, providers, detailed layout, etc.)
• Construction and installation
• Testing and launch

• MATERIAL HANDLING DESIGN: From the sequence of operation of transformation (process/production cycle) that realize a product with a defined technology process, the tasks, fixtures and materials are assigned to a workplace (machine, operator…)
• FACILITY LAYOUT PLANNING: Workplace are available in the space to execute the process (factory/plant layout)
• WORKLOAD BALANCING: Timing for each workplace are defined based on the capability of the workplace (machine, fixture, etc.)