1. CLASSIFICATION
OF OPERATIONAL ACTIVITIES
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ARE
YOU FAMILIAR WITH VARIOUS OPERATIONAL ACTIVITIES?
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Effective managerial performance in production
and operations management requires an in-depth
understanding of various operational
activities.
All Operational Activities are classified into several
types, as illustrated below.
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CLASSIFICATION OF OPERATIONAL ACTIVITIES
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Manufacturing
Activities
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Non-Manufacturing
Activities
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Project
Management
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Contracting/
Contractors
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2.
WHERE DO YOU BELONG?
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WHERE DO YOU BELONG?
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Are you aware of the
type of operations to which your company belongs?
It is essential that you and your management
team become familiar with various types of operational
activities and identify which are most suited
to your type of operations.
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WHAT
TYPE OF BUSINESS ARE YOU IN?
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No.
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Details
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1
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If you are a
Manufacturer,
please refer to all manufacturing parts
in this program and ignore the rest.
This includes the traditional manufacturing
methods and the new world class manufacturing,
including Just-In-Time (JIT), KAIZEN, Total
Quality Management (TQM), and Supply Chain
Management.
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2
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If
you are a Service Provider,
please refer to all service management parts,
which you will find throughout this program.
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3
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If
you are a Wholesaler
or a Retailer,
please refer to all merchandising management
parts, which you will find throughout this
program.
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4
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If
you are involved in
Project Management, please refer to
all project management parts, which you will
find throughout this program.
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5
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If
you are a Contractor,
please refer to all contract management parts,
which you will find throughout this program.
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6
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If
you are a Student,
please read everything, since you never know
which part will be most beneficial to you
in the future.
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Note:
Try
to find time to familiarize yourself with the entire
contents of this Tutorial.
3.
TRADITIONAL MANUFACTURING ACTIVITIES
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WHAT IS A MANUFACTURING PROCESS?
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Manufacturing Activity entails the
process of converting raw materials into finished
products through the utilization of equipment,
tools, labor, and other production facilities.
This process
is known as the Manufacturing Process.
There are three basic production methods
used in the manufacturing process, as outlined
below.
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THREE TRADITIONAL MANUFACTURING ACTIVITIES
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Job Shop
Production
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Batch
Production *
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Flow (Mass)
Production
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Custom-designed products.
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Special purpose machinery.
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Tool making manufacturing.
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General engineering shop.
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Model manufacturing.
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Handmade products.
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Bakery.
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Clothing.
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Electrical products.
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Fasteners.
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Footwear.
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Furniture.
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Jewelry.
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Machinery.
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Metal products.
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Plastic products.
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Printing.
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Sheet metal products.
* Note:
Large
quantities of these products can be
manufactured in a flow production environment.
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Appliances.
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Brewery.
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Brick and tile.
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Cable and wire.
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Chemicals.
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Cosmetics.
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Food.
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Glass.
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Newspapers.
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Paint.
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Paper mill.
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Pharmaceuticals.
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Refinery.
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Soft drinks.
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Textile mill.
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Tobacco products.
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Vehicles.
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WORLD
CLASS MANUFACTURING METHODS
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Additional production methods took hold in the
manufacturing world in the last few decades.
These methods, also known as World Class
Manufacturing Methods, are influenced primarily
by such manufacturing methodologies, as Just-In-Time
(JIT), KAIZEN, and Total Quality
Management (TQM).
These methods
will be discussed in more detail later
in this program to enable you to appreciate
the differences and advantages of the above
mentioned methods, and to implement same
within your company.
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Note:
You
should become familiar with all relevant methods and
select the most cost-effective options in accordance
with your specific manufacturing needs. This
will help you to be successful in the existing highly
competitive manufacturing environment.
4.
COMPARATIVE EVALUATION OF TRADITIONAL MANUFACTURING
METHODS
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comparative evaluation of the three Traditional
Manufacturing Methods is presented below. |
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COMPARATIVE
EVALUATION OF TRADITIONAL MANUFACTURING METHODS
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Description
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Job Shop
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Batch Production
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Flow Production
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Type Of Order
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To customers'
orders only. Most orders are unique and non-repetitive.
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To customers'
orders and stock. Most orders are not unique
and repetitive.
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To stock and
sometimes to order. All orders are standard
and repetitive.
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Product Range
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There is no standard
range of products.
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There is a broad
range of standard and non-standard products.
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There is a limited
range of standard products.
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Product Unit
Cost
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Very high.
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Average.
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Very low.
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Production
Volume
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Very low, usually
one or few items.
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Average, in batches
of tens, hundreds, or even thousands.
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Very high.
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Production
Method
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Very diversified
and sometimes repetitive.
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Diversified but
usually repetitive.
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Standardized
and repetitive. (e.g. conveyor line).
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Equipment
Application
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Very general
application to various manufacturing processes.
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General and semi-specialized
application to various manufacturing processes.
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Very specialized
application to a limited number of manufacturing
processes.
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Operational
Capacity Planning
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Can be scheduled
at short notice only.
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Can be planned
and scheduled approximately one week in advance.
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Must be planned
and scheduled well in advance.
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Raw Material
Inventory
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Should be purchased
for every order on an individual basis.
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Should be purchased
in advance in optimal quantities.
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Must be pre-purchased
in optimal quantities.
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Work-In-Process
And Components Inventory
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No need.
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Buffer stock
should be kept in optimal quantities for selected
products.
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Buffer stocks
should be kept in optimal quantities for all
products.
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Finished Goods
Inventory
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No need.
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Optimal quantities
should be kept for selected products.
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Optimal quantities
should be kept for all finished goods.
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Sub-Contracting
Services
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Should be used
on an individual order basis.
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Should be pre-planned
and used on and individual batch basis
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Must be planned
well in advance for every production run.
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Employee Skills
Requirements
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Very high level
for a general application.
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Average level
for semi-standardized application.
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Average level
for a highly standardized application.
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5.
WHAT IS A JOB SHOP PRODUCTION?
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JOB SHOP PRODUCTION
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Job Shop Production, or an Open
Job Shop, is the intermittent manufacturing
process in which each assignment is performed
in accordance with a specific customer's order.
The
Job Shop,
in essence, offers manufacturing facilities
and skilled labor to customers at short notice. A
job shop operation, such as a general engineering
shop or a custom-designed furniture manufacturer,
maintains production capability but does not
offer a particular product for sale. Several
characteristics of a job shop production are
outlined below.
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JOB
SHOP PRODUCTION CHARACTERISTICS
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No.
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Details
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1
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Manufacturing
a broad range of non-standard products in
small quantities, often on a one-off basis,
according to specific customer requirements.
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2
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Job shop production
requires substantial capital investment in
general purpose plant and machinery and high
plant set-up costs.
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3
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Job shop production
requires highly skilled and versatile labor
and management supervision.
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4
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Irregular flow
of work and necessitates effective implementation
of production planning and control procedures.
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5
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Job shop production
requires to carry only those raw materials
inventory and supplies that are frequently
used.
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6.
WHAT IS BATCH PRODUCTION
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BATCH PRODUCTION
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Batch Production, or a Closed Job
Shop, is another intermittent manufacturing
process whereby various customers' requirements
are grouped into batches on a similar product
basis.
Batch production
remains a popular method utilized by many small
and medium-sized manufacturing companies. Several
characteristics of a batch production
are outlined below.
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BATCH
PRODUCTION CHARACTERISTICS
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No.
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Details
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1
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A batch production
operation is geared to produce small and average
quantities, or batches, of products on repetitive
and non-repetitive basis.
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2
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Batch production
method requires that specific raw materials
are purchased in advance, and certain components
and finished goods are kept in stock in optimal
quantities.
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3
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Batch production
combines versatile manufacturing capabilities
and offers operational capacity and skilled
labor to customers at a reasonable notice
period.
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4
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Products may
be manufactured in batches of tens, hundreds,
thousands, or more depending upon the specific
production requirements.
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5
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The length
of production runs may fluctuate in relation
to the quantities manufactured and the cost
per product unit may vary accordingly.
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6
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Batch production
may accommodate the manufacturing requirements
of a broad range of standard and non-standard
products.
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7
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Batch production
method requires a flexible approach and effective
planning and control of the manufacturing
operations.
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8
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Batch production
requires high capital investment in plant
and equipment, and average plant set-up costs.
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9
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Batch production
requires general and special purpose machinery
and skilled labor to operate them.
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7.
WHAT IS FLOW PRODUCTION?
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FLOW
PRODUCTION
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Flow
Production, also known as Continuous
Production or Mass Production, is
the manufacturing process during which the work
content of the product continually increases
with time.
A typical example
of flow production is a conveyor line
or an assembly line. Large companies
frequently utilize flow production methods to
manufacture standard products in a make-to-stock
operation.
However, the
arrival of JIT, KAIZEN, and TQM
methodologies and their influence in the manufacturing
environment caused substantial changes in the
flow production methodologies. This will be
discussed later.
Several characteristics
of flow production are outlined below.
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FLOW
PRODUCTION CHARACTERISTICS
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No.
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Details
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1
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In flow production
environment, as the work on each operation
is completed, the work-in-process is passed
to the next manufacturing stage without waiting
for completion of the entire batch.
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2
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Smooth performance
of flow production necessitates that all manufacturing
operations last the same period of time, known
as the cycle time, and that no deviation from
the standard manufacturing cycle is allowed.
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3
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The flow production method
is characterized by a large volume of identical
products that undergo repetitive and highly
mechanized manufacturing processes.
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4
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Flow production
is also characterized by specialized equipment,
long production runs, and average labor skill
requirements.
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5
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The flow production
method requires detailed planning of all operations
well in advance.
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6
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Production
control in a flow production environment remains
relatively simple since all operational instructions
are incorporated into the manufacturing process
at the planning stage.
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8.
WHAT MANUFACTURING METHOD SHOULD YOU USE?
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MANUFACTURING METHOD
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The job shop, batch production, and
flow production methods are not necessarily
associated with any particular manufacturing
volume. Some companies often start the
manufacturing process as a job shop, and proceed
to batch production methods as volume increases.
Finally, upon further increase of the production
demand, they may introduce flow production techniques,
if required.
The selection of the most suitable Manufacturing
Method may entail a number of steps, as
illustrated below.
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SELECTION
OF A SUITABLE MANUFACTURING METHOD
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Step 1:
Make Initial Selection Of A Suitable Manufacturing
Method.
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You and your
management team must decide on a specific
manufacturing or operational method which
will be most appropriate and cost-effective
for your types of products or services.
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Step 2:
Evaluate The Selected Method.
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Once you select
a particular method, it will need to be evaluated
in light of your company's ability to compete
in the existing marketplace.
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Step 3:
Select New Manufacturing Method If Necessary.
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If you find
that the selected method does not produce
the desired results, you should identify,
select, and implement more suitable methods
without delay
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CURRENT
TREND IN THE MANUFACTURING ENVIRONMENT
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The current trend in the manufacturing
environment is to maximize the advantages of
all available types of methodologies, including
Just-In-Time, KAIZEN, and
Total Quality Management, with the objective
to reduce costs, increase productivity, and
to ensure successful performance in a highly
competitive environment.
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9.
WHAT ARE NON-MANUFACTURING ACTIVITIES?
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NON-MANUFACTURING ACTIVITIES
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Non-Manufacturing Activities includes
four categories, as illustrated below. Some
examples of these activities are described below
to help you identify where you may belong.
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TYPES
OF NON-MANUFACTURING ACTIVITIES
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Service
Operations
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Merchandising
Operations
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Project
Management
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Contracting
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Note:
If your type
of business is not mentioned here, you may be
able to find a fit with a similar type
of business.
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EXAMPLES
OF NON-MANUFACTURING ACTIVITIES
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Service
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Merchandising
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Custom
Service
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Standard
Service
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Wholesale
Operation
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Retail
Operation
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Accounting.
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Architectural.
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Catering.
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Cleaning.
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Consulting.
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Electrical.
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Engineering.
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Financial.
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Health
care.
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Legal.
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Maintenance.
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Musicians
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Plumbing
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Psychotherapy
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Repair
shop
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Photography
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Secretarial
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Banking.
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Child
day care.
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Communication.
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Education.
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Electroplating.
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Entertainment.
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Equipment rental
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Insurance.
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Restaurant.
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Transportation
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Export
agency.
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Import
agency.
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Product
wholesaler
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Gas
station.
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Market.
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Shop.
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Supermarket.
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Travel
agency.
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PROJECT
MANAGEMENT AND CONTRACTING
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Special Projects
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Contractors
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