Collage of Business
BUSI 3321: Operations Management
Assignment 1: Case Study 2 (15%)
Selection Of A Layout Configuration For Reconfigurable Manufacturing Systems Using
The AHP
Submitted to: Dr. Dalia Younis
Section: 201
Done By:
Latifa Al-Shammari
200900329
Fatima Al-Bagshi
200800928
Bashayr Al-Nahdi
200700531
Submitted: November 9, 2012
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Abstract:
As each customer has his own requirements and preferences of products, that creates
need for new design manufacturing system for manufacturing organizations in order to sustain
competitiveness in market. In addition, manufacturing organizations should provide the
sufficient flexibility to produce a variety of products on the same system with lower prices
and good quality. Furthermore, Reconfigurable Manufacturing Systems are designed to
produce different product types in shortest time, lower prices, and good quality, also to rapidly
respond to changing market requirements. Moreover, RMS may require different layout
configurations while switching from one product to the other. Besides, there are some
criteria’s, which can influence on choosing layout configurations, so this paper investigates
the criteria, which can influence layout configuration selection. In particular, an Analytical
Hierarchical Process (AHP) model is developed to structure the criteria for the selection of the
most appropriate layout for configuration stage. The purpose of this paper is to summarize the
article, identifying the operations/techniques (that we took in OM class) that the organization uses,
and how did they use them. Also, explain the concepts/techniques, discus if the techniques
were effective for the company, identifying problems faced in their operations, and giving
some suggestions for improvement.
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Table of Contents:
Abstract……………...………………………………………………………………...2
Summary of the Case...….....………………………………………………………....4
Identifying the Techniques……………………………………………………….......6
Explanation of the Techniques:
a. Productivity and competitiveness…………………………………………………..6
b. Product Design……………………………………………………………………..8
c. Forecasting………………………………………………………………………...10
Analysis and Recommendations ……………………………………………………13
Conclusion……………………………………………………………………………16
References…………………………………………………………………………….17
Appendix………………………………………………………………………...……18
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Summary:
Manufacturing organizations must provide the sufficient flexibility to produce variety
of products depending on consumers preferences, and to be a good competitive in the market.
Also, changes in customer requirements force a need for having new designs of
manufacturing systems. Accordingly, advanced manufacturing systems need to consider
engineering aspects and economical aspect to obtain a reasonable share of competitive market.
Reconfigurable manufacturing systems (RMSs) are designed to produce different
product types in shortest time and lower cost, but without lowering the quality. Besides, the
major characteristics of this system is called re-configurability, which means the ability of
rearranging and/or changing manufacturing elements to adjust with the improved
environmental and technological changes. Besides, there are many other meanings of RMS
according to different researchers, as Zhao who consider RMS as “a manufacturing system in
which a variety of products required by customers are classified into families, each of which
is a set of similar products that correspond to one configuration of the RMS”. Moreover, to
produce high product variety; manufacturing systems must use modularity characteristics
which is a basis for product/process design of an RMS, and it must be an objective, because it
enable RMSs to produce product variants.
As every system face some problems, also RMS design problems can be divided into
different sub-problems such as: measuring flexibility, system configuration, cost estimate, and
layout configuration. Hence, the measurement of tangible and intangible aspects of RMS
design needs a quantitative decision making process.
For preparing layout configuration for different types of manufacturing systems;
various researchers used mathematical programs. Besides, many researchers as Cheng and
Chen, Taboun, Bazargan-Lari, and Kirk and Tebaldi; proposed, discussed, and illustrated
different explanation and discovering for the mathematical programs.
In an RMS, products must be grouped into families and then appropriate product
family at each reconfiguration stage must be allocated to the corresponding layout
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configuration. Besides, a product family must visit different RMS departments, and letting
each department be easily accessible from any other department can do this.
Analytical hierarchical process (AHP) which developed by Thomas Saaty (1980); can
be used for selecting plant layout configuration for a RMS design such as transfer lines, and
functional layout with respect to the defined objective and their performance. Moreover, the
AHP model is hierarchically structured, and the main goal is to select the most preferred
layout configuration. Besides, there are some objectives for selecting layout configuration,
which are re-configurability, cost, quality, and reliability. Then, the next step after building
the model is to evaluate the elements by making pair-wise comparisons with respect to the
element(s) at the higher level(s) of the hierarchy. The last step is running the model; the
assessment process creates a synthesis judgment that combines all the separate judgments and
priorities leading to the defined alternative.
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Identifying the techniques:
This case study was including many efficient techniques; and after reading the case we select
the techniques related to Operation Management course, which are:
a. Productivity and competitiveness
b. Product design
c. Forecasting
a. Productivity and Competitiveness:
Productivity is the measurement of efficiency in production output exceeded with the exp
ected results by inputting the same amount of inputs. It is the ability of firm to produce the qu
ality products /services by having economics of scale in the country by in large. Competitiven
ess is recognizing the technical or economical drivers that help to sustain the unique quality of
the firm in order to keeping ahead of competition.
The RMS (Reconfigurable manufacturing system) had been introduced in the manufacturin
g unit in order effectively re-design the manufacturing layout for making adjustment in the pr
oduction process to accommodate the customer requirements for increasing in productivity. R
MSs are designed to produce the quality products in shortest possible time in order to accomm
odate the customer centric requirements to become more competitive with ever changing tech
nological and competitive environments without sacrificing product quality. The RMS imple
mentations had initially encountered many hurdles like measurability in the configuration layo
ut process and flexibility to adopt in new production process. But this system gives many adva
ntages as
 Increased the productivity and quality standards of the product.
 Easy to reconfigure for adopting into new production setup.
 Lead-time reduction, easy prototype development and new production system.
 Easy integration to new technologies to enhance manufacturing process by becoming
more competitive.
COMPETITIVENESS
The present day competitive world all the business firms are in race to become more competi
tive by focusing on effectively utilization of available company resources. The Competitivene
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ss of business firm can be achieved by variety of ways discussed below as
Effective Product Pricing:
The effective product pricing can be achieved throw lowering products cost by applying latest
manufacturing technologies and smart utilization of resources.
Improve Product Quality:
By improving the product quality that stands tall among the competitive products is the most
difficult task for the company for improving the productivity by reducing the cost and its abilit
y to bend the system to suit the customers’ needs.
Product differentiation.
The Productivity and competitiveness will helps the company by making little different again
st the competitors products by offering the extra feature in the product definitely helps the fir
m to become more competitive with control production cost.
Flexibility to change:
The firm ability to respond to business and environment changes for successful running of the
firm. The changes can be on product design. Diversification or production process changes are
real challenge for the company for adopting the latest technologies by adopting the RMS and
smartly implementing the AHP model for improving the production process.
Time Efficiency:
in business time worth money, time efficiency is measured by product delivery, lead time in
production and overall improvement in business process.
The productivity and competitiveness process is ongoing process to become the most compe
titive firm in the industry both in local markets and international markets. But there is certain
difference between them as productivity is a narrow concept that focus on getting the maximu
m benefits from the applied inputs in production process in order to get more profits by produ
ct selling; and the competitiveness is a broader concept that focus on effective use of all resou
rces like men, materials, money and machines by applying the proper methods pertains to effe
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ctive use of overall resources.
b. Product Design:
The product design processes is the method of creating new product/service to satisfy the cust
omer needs in accordance to market conditions. It is the long process of identifying the needs
and finding the ways to fulfill the needs by going through the process in order to earn profits.
It is a systematic approach where marketing, engineering and finance department involve co
nceptualizing and evaluating ideas, turning them into tangible products. The product designer'
s role is to combine art, science, and technology to create new products that other people can u
se. Their evolving role has been facilitated by digital tools that allow designers to communicat
e, visualize, and analyze ideas in a way that would have taken larger manpower in the past.
Product Design and Development Process
Identifiyi
ng Needs
Concept
Genereati
ons &
Product
Design &
Develop
Low
Scale
Introducti
Testing/S
ampling
Analysis
Prototype
Develop
ment
Marketin
g/Selling
Economic
/
Competio
Large
Scale
Manufact
The Product design process had involved above mentioned steps as:
1. Identifying Needs and Concept Generation & Development:
The first phase usually begins with an identifying the idea for a new product or changes made
in existing products in accordance to market needs by recognizing the financially viability tha
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t can generate money for the company. This strategy is to help the firm to be more competitiv
e and become the most productive company in the industry.
2. Production Detail Design/Prototype productions:
The second phase is to develop a product design, which is viable to the existing manufacturin
g process or totally developing the new production process. The designing process with the in
volvement of engineers by applying RMS and CAD programs for initial production process.
3. Testing and Sampling Analysis:
As the physical shape of the product is out in the market for testing and evaluation process w
here the product design and package acceptability is being evaluated by gathering data from pr
imary and secondary markets. The firm will face many difficulties for getting the Government
approvals, acceptability of customers and product pricing.
4. Low Scale Production
Once the product acceptability is encouraging then the RMS system can accommodate the n
ew product with the advantage of the firm to be able to competitive with improve productivity
in the manufacturing process. The AHP model helps to redesign the manufacturing process th
at available to channelize the materials flow for improving the manufacturing process by impr
oving in company’s productivity.
5. Marketing and Selling Process:
The initial success of products in the market encourages the firm to start focusing on marketi
ng and selling process in order to build the brand reputation in the market place.
6. Economic /Competitor Analysis and Large Scale Manufacturing Process:
The final phase is to go market the product in the countrywide and in the international mark
ets by beginning the large scale manufacturing process by encouraging response from custom
ers and increase in market share. By carefully analysis the competitor strategies, political and
economic analysis
The product design process will face all challenges in every stage where the company manage
ment, production team, customers and competitors had played their role before the successful
design of the successful products. Presently the ever-competitive world always offered new i
mproved products which forces company to design the new products or add new features to its
existing products portfolio in order to be most competitive firm in the industry.
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c. Forecasting
Forecasting is a planning tool that helps management in its attempts to cope with the
uncertainty of the future, relying mainly on data from the past and present and analysis of
trends. Forecasting starts with certain assumptions based on the management’s experience,
knowledge, and judgment. These estimates are projected into the coming months or years
using one or more techniques such as Box-Jenkins models, Delphi method, exponential
smoothing, moving averages, regression analysis, and trend projection. Since any error in the
assumptions will result in a similar or magnified error in forecasting, the technique of
sensitivity analysis is used this assigns a range of values to the uncertain factors.
Forecasting Process:
The company uses the forecasting technique by trying to predict the new design that
makes the customer satisfied in order to sustain competitiveness in dynamic markets. By
using the AHP model for the selection of best layout based on three main objectives:
flexibility, volume, and cost using a knowledge-based system. To select the most preferred
layout configuration by several criteria to obtain a further insight into the selection process. In
this respect, statistical data of quantitative parameters related to the criteria such as cost,
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reconfiguration time, and product volume and variety facilitate the validation of the ranking
procedure. The hybrid layout (CON3) is the most appropriate configuration for the case study.
The sensitivity analysis is a forecasting technique that is used in the case study to highlight the
configuration solutions with respect to layout re-configurability as the most important
criterion.
The company faces some problems in the RMS design, such as measuring flexibility,
system configuration, cost estimation, and layout configuration. Also, the same group of
machines under various forms led to different production system outputs, and on the same
layout determines the types and number of machines will affect the efficiency of the
manufacturing system. Therefore, the measurement aspects of tangible and intangible of an
RMS design needs to the quantity and quality of the decision-making process.
To overcome with these problems, we need to measure forecast accuracy if we wish to
improve. Measurements are used to make improvements to the specific forecast as well as to
the demand planning process. An effective demand planning process measures forecast
accuracy in different ways for different purposes. A detailed measure of forecast accuracy at
the item level identifies individual products that are outside an established tolerance. This
enables us to review and correct the individual product forecasts. The earlier a significant
forecast error is identified, the quicker we can respond to the real market demand.
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Forecasting has upon the ability of a company to satisfy its customers and to
simultaneously manage its resources. Effective forecasting helps management resolve the
dilemma of more demanding customer requirements and greater shareholder expectations. To
resolve this dilemma, managers are expected to provide better customer service with fewer
resources. In this environment, the importance of effective forecasting is elevated. In
manufacturing and distribution companies, a forecast is not simply a projection of future
business; it is a request for. With this concept of a forecast as a request for product, forecast
accuracy becomes crucial to ensuring satisfactory, or exemplary, customer service. Forecast
accuracy also becomes critical to the proper utilization of resources. When a product has not
been forecasted but the company must still meet the customer demand, often this is
accomplished at a considerably higher cost, a poor use of resources.
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Analysis and Recommendations:
In this case study we analyze three different techniques related to the Operations
Management course; they are productivity, competitiveness and forecasting techniques. The
company has applied these strategies to respseond to the costumer needs and achieve the
desired profit, which make the company maintain an outstanding position in the market with
good reputation. For increasing the productivity, the company has adjusted the production
process to re-design the manufacturing layout to accommodate the customer requirements.
Besides, the company uses the effective product pricing, to achieve the lower products cost by
applying latest manufacturing technologies, smart utilization of resources. Such as, proposing
the classical layout models to minimize material handling cost for a single product system.
Also, they use the time efficiency in produce different product families in the shortest
time and at the lowest cost without sacrificing quality. The working process of productivity
will produce product variants, which allows manufacturing systems to produce high product
variety. For the low scale production, the company uses the AHP model to help to redesign
the manufacturing process that available to channelize the materials flow for improving the
manufacturing process by improving in company’s productivity. The product design
technique (Prototype production) is applied when the company decided to create the new
design to respond to the customer requirements with the involvement of engineers by applying
RMS and CAD programs for initial production process.
Moreover, the organization uses the flexibility technique in trying to adjust the new
circumstances by rearranging and/or changing its hardware and software components in order
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to accommodate not only the production of a variety of products, which are grouped into
families, but also the new product introduction within each family. What is more, adjusting
capacity quickly whilst changing product types by upgradeable the RMS in process
technology with new operational requirements. The company has become more competitive
by focusing on utilization of its available resources. Therefore, they make new designs of
manufacturing systems to respond to the changes of customer requirements.
Besides, the Operation Management uses the forecasting in predicting the new design
that makes the customer satisfied. They make a quantitative and qualitative decision-making
process to measure the tangible and intangible aspects of an RMS design. As well, using the
knowledge-based system, for creating the AHP model is another forecasting technique that
will lead to the selection of the best layout which based on three main objectives: flexibility,
volume, and cost. Furthermore, the goal programming was one of the solution methodologies
on behalf of making decision for layout design.
Our recommendations to develop and improve the operating management process
besides overcome with the problems that the organization faced are; lower products cost by
applying latest manufacturing technologies, smart utilization of resources. Improve the
productivity by reducing the cost and its ability to bend the system to suit the customers’
needs. Make little different against the competitors' products by offering the extra feature in
the product definitely to helps the firm to become more competitive with control production
cost. Start focusing on marketing and selling process in order to build the brand reputation in
the market place.
Measure, review and correct the forecast accuracy if we wish to improve and to
overcome with the problems that the company may face such as; measuring flexibility, system
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configuration, cost estimation, and layout configuration. Use the technique of sensitivity
analysis since any error will result in a similar or magnified error in forecasting.
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Conclusion:
In conclusion, this assignment was about finalizing a case study; which was about
Reconfigurable Manufacturing Systems. Where these systems are designed to produce
different product types in shortest time and lower cost, but without lowering the quality of
products. Besides, the manufacturing organizations that are using these systems must provide
the sufficient flexibility to produce variety of products and related to the consumer
preferences. Also, the case mentioned some criteria’s, which can influence on choosing layout
configurations, and explained the AHP model.
In addition, the main purpose of doing this assignment was to understand the case study and
identify the techniques that were in the case and related to what we studied in Operations
Management class.
Moreover, the paper identifies some techniques; which we found that they are related to our
Operations Management course. So we select the most important techniques, which are
productivity and competitiveness, product design, and forecasting. And each of these
techniques were explained in details, and showed the importance and efficiency of using this
technique.
Finally, doing this assignment was somewhat interesting for us, because reading a new case
study with a new difficult topic, taught us many skills. Also, reading about a new topic and
system was challenging for us. Besides, looking for the techniques in the case and linking
them to what we study in our course was something new for us.
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References:
Business Dictionary.com. (N.D). Sensitivity Analysis. Retrieved Nov 1, 2012. From:
http://www.businessdictionary.com/definition/sensitivity-analysis.html
Bushman, Melissa. (Apr 12, 2007). Why is Forecasting Important to an Organization?.
Yahoo Voices. Retrieved Nov 1, 2012. From: http://voices.yahoo.com/why-forecastingimportant-organization-280514.html
Forecasting. (N.D). Forecasting. Wikipedia. Retrieved Nov 1, 2012. From:
http://en.wikipedia.org/wiki/Forecasting
Roozenburg , N. F. M., & Ekels , J. Product Design and Development
Buffa , S. Modern Production/Operation Management . (8th ed.)
Perkins , G. Turning Corporate Pain to Gain
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Appendix:
Identifiying Needs
Concept
Genereations &
Development
Product Design &
Development
Low Scale
Introduction
Testing/Sampling
Analysis
Prototype
Development
Marketing/Selling
Economic /
Competior
Analysis
Large Scale
Manufacturing
18
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