22-Mec-B4 Integrated Manufacturing Systems · December 2016
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
Paper format. 07-Mec-B4 — Integrated Manufacturing Systems, National Exams December 2016. Three hours, open book, any non-communicating calculator permitted. Six questions are printed; any five constitute a complete paper and all questions are of equal value, so each is worth 20 marks on a five-question basis. Only the first five questions appearing in the answer book are marked. All six are solved here.
Reference texts. The paper draws on the operations and facilities side of manufacturing engineering rather than on process metal cutting, so the useful shelf is:
Canadian practice is assumed throughout: handling and lifting design is governed by the applicable provincial occupational health and safety regulation and by CSA standards (for example CSA B335 for lift trucks), and quality records are kept to satisfy ISO 9001 as adopted by CSA.
Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.
The three parts of this question span the three supporting systems that sit underneath any integrated manufacturing plant: the physical system that moves material, the accounting-and-decision system that decides how much of it to hold, and the predictive system that says how much will be wanted. Each is answered in turn.
Part (a) — objectives of materials handling. The governing fact about handling is that it adds cost but not value: a part is worth no more at the end of a move than at the beginning, yet in a typical batch plant handling absorbs somewhere between a fifth and a half of total manufacturing cost and the great majority of the elapsed time a part spends in the shop. Every objective below follows from that.
The first and largest objective is to reduce or eliminate handling altogether. The cheapest move is the one that is designed out, which is why handling analysis begins with the layout rather than with equipment selection: shortening flow paths, removing backtracking and combining operations at one station all remove moves permanently. Only once the flow is as short as it can be made does the second objective apply, which is to reduce the cost per unit moved by choosing the right equipment, moving in unit loads rather than in pieces, and using gravity where it is available.
A third objective is to increase productive capacity. Handling keeps machines fed; a well-designed system removes the idle time a machine spends waiting for work and the operator time spent fetching it, so the same capital produces more. Closely related is the objective of reducing work-in-process and shortening throughput time, achieved by moving in small transfer batches tied to the production plan rather than accumulating full lots between operations.
A fourth objective is to improve working conditions and safety. Manual handling is the largest single source of lost-time injury in Canadian manufacturing, and mechanised handling that removes lifting, twisting and carrying is both a legal obligation under the applicable provincial occupational health and safety regulation and a direct cost saving through lower compensation premiums. Equipment must in turn meet the relevant CSA standards, notably CSA B335 for powered lift trucks and their operator-training requirements.
The remaining objectives are quickly stated. Handling should protect the product, since damage in transit is a common and avoidable quality loss; it should improve space utilisation, particularly by using the building cube through stacking and vertical storage rather than spreading over floor area; it should support inventory control and traceability, because the handling system is where identification is applied and read, so bar-coded or radio-frequency-identified unit loads make the perpetual inventory record accurate as a by-product of movement; and it should improve delivery reliability, since a plant that cannot move material predictably cannot promise dates. Underlying all of them is standardisation of containers, pallets and equipment, which is what makes the system flexible enough to survive a change of product.
Part (b) — what an inventory control system should accomplish, and the vital areas. An effective inventory control system has one economic purpose: to provide the availability the business has decided to buy, at the lowest total of the costs that inventory decisions actually affect. Concretely it must maintain the agreed service level so that neither the production schedule nor the customer is stopped for want of material; it must minimise the sum of ordering or set-up cost, carrying cost and shortage cost rather than any one of them alone; it must decide both how much to order and when to order, and do so by rule rather than by argument; it must keep records accurate enough to be trusted, which in practice means a perpetual balance verified by cycle counting rather than an annual physical count; it must give visibility of on-hand, on-order and committed quantities so that planning can be done against real numbers; it must direct effort where the money is, so that a few high-value items receive close attention and the many trivial ones receive almost none; and it must surface slow-moving and obsolete stock early enough that something can be done about it.
The vital areas to be considered in developing a comprehensive system are the following. Demand comes first, and specifically the distinction between independent demand, which must be forecast, and dependent demand, which must be calculated from the bill of material by a requirements-planning logic; applying reorder-point rules to dependent demand is the classic and expensive mistake. Cost structure comes second: the ordering or set-up cost per order, the carrying cost rate, and some estimate of the cost of a shortage must be established, because every replenishment rule is a trade-off among them. Lead time and its variability is third, since safety stock exists to cover lead-time demand uncertainty and nothing else. Service-level policy is fourth and is a management decision, not an engineering one; the system implements it, it does not choose it.
Item classification is fifth: an ABC analysis by annual dollar usage, modified for criticality and lead time, decides how much control each item deserves. Physical control and record accuracy is sixth, covering stores discipline, receipt and issue documentation, restricted access and cycle counting; a mathematically perfect rule fed by a wrong balance is worthless. Choice of replenishment rule is seventh, principally between a fixed-order-quantity system, which orders a computed quantity whenever the balance falls to a reorder point, and a fixed-order-interval system, which reviews at a fixed cycle and orders up to a target; the former suits high-value items under continuous review, the latter suits items bought jointly from one supplier. Information system integrity is eighth, covering the item master, bills of material and transaction processing. Organisation and measurement is ninth: someone must own the result, and turnover, fill rate and obsolescence write-off are the measures that show whether the system is working. Finally the system needs a periodic review, because carrying rates, lead times and demand patterns all drift and parameters set once are wrong within a year or two.
Part (c) — factors influencing the selection of a forecasting model. The choice is a matter of matching the model to the situation rather than of finding the best model in the abstract, and the factors that decide it are:
