Course Objectives

The objective of the course is to impart knowledge on the

application in resource planning, process planning and data
communication networks.

Understand production planning, inventory and shop floor

control concepts in production.

Understand the working of automated process plans using

variant and generative approaches.

Introduction to production support machines and systems.

 ASSESSMENT INFO
One Hour Class Tests wtg: 15% x 02 = 30%
Quizzes wtg: 3.3% x 3 = 10%
Assignments wtg: 3.3% x 3 = 10%
Final wtg: 50% x 1 = 50%

Course Material: 1. Lecture Slides

2. Reference Books
3. Journals / Case studies
4. Internet
Introduction to CIM & the
Manufacturing Enterprise
Basic Terminologies w.r.t ‘TIME’

Lead Time:

Lead time is the amount of time that elapses between

when a process starts and its completion.

For example, the lead time between the placement of

an order and delivery of a new car from a manufacturer
may be anywhere from 2 weeks to 6 months.

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Basic Terminologies w.r.t ‘TIME’

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Basic Terminologies w.r.t ‘TIME’
Example

A restaurant opens up and a customer walks in. A waiter guides

him to a table, gives him the menu and asks what he would like to
order. The customer selects a dish and the waiter writes it in his
notepad. At that moment the customer has made an order which
the restaurant has accepted – Order Lead Time and Order
Handling Time have begun. Now the waiter marks the order in the
cash register, rips the paper from the notepad, takes it into the
kitchen and puts into the order queue. The order has been
handled and is waiting in the factory (kitchen) for manufacturing.
As there are no other customers, the waiter decides to stand
outside the kitchen, by the door, waiting for the dish to be
prepared and begins calculating Manufacturing Lead Time.

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Basic Terminologies w.r.t ‘TIME’
Example

Meanwhile, the chef finishes what he was doing, takes the order
from the queue, starts his clock as a mark for the start of
Production Lead Time and begins cooking. The chef chops the
vegetables, fries the meat and boils the pasta. When the dish is
ready, the chef rings a bell and stops his clock. At the same time
the waiter stops calculating Manufacturing Lead Time and rushes
through the kitchen door to get the food while it is hot.

When he picks it up, begins counting of Delivery Lead Time that

ends when the dish is served to the customer, who can now
happily say that the Order Lead Time was shorter or longer than
he had expected.

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Basic Terminologies w.r.t ‘TIME’
Cycle time (time / unit produced) is the total time from
the beginning to the end of the process.

Throughput or rate of production (units produced /

time) is reciprocal of Cycle Time.

Cycle time is a more mechanical measure of process

capability. Lead time is what the customer sees. Units
are different.

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Basic Terminologies w.r.t ‘TIME’

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Basic Terminologies w.r.t ‘TIME’

Takt time sets the pace of the production and is the

average unit production time needed to meet customer
demand. Calculated quantity.

Takt time = Net time available for production /

Customer daily demand

Takt Time (amount of time per unit) is the reciprocal of

customer demand rate (units per period of time).

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Basic Terminologies w.r.t ‘TIME’

Lead Time and Cycle Time are related by Work-in-

process (WIP) in the entire process, in a relationship
described by the Little’s Law:

Lead Time = Cycle Time (time / units ) * WIP (units)

Cycle Times of individual steps cannot be used alone

to calculate the manufacturing Lead Time without
knowing the WIP.

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Suppliers: price changes, delivery time, defect level – can be addressed
through supply chain management

Partnerships: two companies with low market share can move ahead of
the nearest competitor through their combination of customer count.

Customers: If a manufacturer cannot meet all the needs of the customer,

another manufacturer is ready to step in for the sale.

Internet: It is providing companies with direct access to customer

households. e.g. Amazon.com initiated the sale of books over web, now
every major booksellers are scrambling for web presence because %age
of books purchased on the internet continues to increase.

Cost: money needs to be borrowed at low interest rates. Methods that

reduce the cost of doing business such as inventory reduction become
the tool for survival.
The Great Manufacturing Divide:

The marketing area seldom considers what the order

product mix will do to production efficiency because it is
not measured against that standard but by sales dollars.

In contrast, the production area is often judged on capacity

utilization and shop productivity measures and not on total
order value.
The Great Manufacturing Divide:

Business units need a strategy that integrates different

departments within the organization.

It is important to develop collaboration between departments in

order to achieve one common goal, which is set from the
corporate strategy.

A great example is the linkage between manufacturing and

marketing, both departments need to agree and intend to serve
the same markets, in order to achieve an effective strategy.
 TERRY
HILL
MODEL

In order to achieve a linkage between

marketing and manufacturing strategy,
Hill (2000) presents a five step
procedure that can be used;
External focus Common language Internal focus
Example - Order Winning Criteria:

The order winning criteria change during the life cycle of the
product.

e.g. In early days of transistor radio, RCA was one of the

dominant companies because it had research and design talent
to satisfy the dominant order-winning criteria i.e. innovation.

When a product reaches maturity, price frequently becomes the

key order winning criteria.

Which products have relatively constant market share?

Product exhibiting the characteristics of commodities like

breakfast cereal, soft-drinks etc.
Example - Order Winning vs. Order Qualifying Criteria:

e.g. In 1970, the order winning criterion for the color TV market in
UK was price. When Japanese entered the market with superior
quality and reliable products, the buyers of TVs in the UK
established a new quality and reliability standard for TV
purchase. The price could not drop low enough for the UK
companies to sell their TVs that were below the new standard.
Therefore, quality and reliability became new order-qualifying
criteria for selling TVs in the UK market. By 1980s, UK companies
matched the quality and reliability standards set by the Japanese
and the order winning criteria reverted back to price.
Manufacturing cost is the sum of costs of all resources consumed in the
process of making a product.

Burden Rate is the cost per hour to have the machine in the production.
.
and 15 parts for warranty quality
▪ Inventory turn is a measure of the number of times inventory is sold or used in a time period such
as a year.

COGS is the direct costs attributable to the production of the goods sold by a company. This amount includes
the cost of the materials used in creating the good along with the direct labor costs used to produce the good. It
excludes indirect expenses such as distribution and sales costs.
Number of Units Sold

In your chocolate milk factory, suppose that you started the year with 400 gallons of
finished goods. Another 3,900 gallons were completed during the year. By the end of
the year, you counted 100 gallons of finished goods:

Therefore, you must have sold 4,200 gallons of chocolate milk.

Cost of goods sold (COGS)

To compute cost of goods sold, start with the cost of beginning inventory of
finished goods, add the cost of goods manufactured, and then subtract the cost
of ending inventory of finished goods.

Suppose your chocolate milk factory started out with $2,000 worth of beginning
inventory of finished goods. Your cost of goods manufactured was $18,000, and
your ending inventory of finished goods was $500:

You have $19,500 in cost of goods sold. To figure out the cost per unit, divide the
COGS by total number of units sold: $4.64 ($19,500 ÷ 4,200 gallons). Therefore;

COGS = total sales volume * cost per unit

Computer Integrated Manufacturing
CIM is the integration of the total manufacturing enterprise
through the use of integrated systems and data
communications coupled with new managerial philosophies
that improve organizational and personnel efficiency.

CIM is the manufacturing approach of using computers

to control the entire production process.

The manufacturing enterprise wheel (Figure 1-7) illustrates

the integration (called for in the definition) and shows the
interrelationship among all parts of an enterprise.
SME 1993
The Enterprise Areas:
Human resource
management

Design

Finance Purchasing

Manufacturing
Production planning and
control (MPC)

Three process segments Marketing and Enterprise management and

with overlapping areas sales strategic planning
indicate shared data and
resources Figure A
The Enterprise Areas:

Design: The development of a new product usually starts

in the design circle and moves in the direction of the
arrows as shown in Figure A.

MPC: It includes all the process planning, production

scheduling, inventory management and capacity
planning required for efficient manufacturing.

Production: It includes all the activity associated with

the production or shop floor.

CIM concepts associated with each segment will be

covered in upcoming lectures.
Subsystems in Computer Integrated
Manufacturing
Computer-aided techniques: Devices and equipment required:
CAD (computer aided design) CNC (Computer numerical
CAE (computer aided engineering) controlled machine tools)
CAM (computer aided manufacturing) DNC (Direct numerical control
CAPP (computer aided process planning) machine tools)
CAQ (computer aided quality assurance) PLC (Programmable logic
MPC (manufacturing planning and control) controllers)
ERP (enterprise resource planning) Robotics
Software
Technologies: Controllers
FMS (flexible manufacturing system) Networks
ASRS (automated storage and retrieval Monitoring equipment
system)
AGV (automated guided vehicle)
Robotics
Lean manufacturing
Enterprise Organization:

The manufacturing enterprise

model in Figure Z shows the
functional blocks generally
found in most manufacturing
organization.

The lines connecting the areas

indicate formal communications
that occur regularly between
enterprise functions.

A CIM implementation affects

every part of an enterprise,
therefore, every block in the
organizational model is affected.
Figure Z