Mechanical Engineering 101

Transcription

1 Mechanical Engineering 101 University of California, Berkeley Lecture #2 Key: Period before title: lec version Period after title: handout version 2

2 Today s lecture... Process... WIP, flow Money Overhead, COGS, working capital Inventory Turns, throughput, Little s Law 3

3 Work In Process (WIP) Not raw material inventory Not finished products Everything that s partially finished Is WIP good? 4

4 Process Flow Diagram Process Flow Diagram Askin p.12 5

5 Today s lecture Process WIP, flow Money Overhead, COGS, working capital Inventory Turns, throughput, Little s Law 6

6 Overhead Factory E.g. equipment Corporate E.g. engineers 7

7 Allocating Overhead traditional costing assigns overhead as portion of direct labor for that activity Activities Based Costing (ABC) look at specific activities generating costs 10

8 Basic Mfg Accounting Per period, Total mfg cost = sum of costs of: materials consumed + direct labor + factory overhead Cost of Goods Manufactured = Total mfg cost + value of WIP consumed initial WIP value ending WIP value Cost of Goods Sold (COGS) = Cost of Goods Manufactured + decrease in inventory initial finished goods value final finished goods value 13

9 Working Capital includes inventories raw materials WIP finished goods + receivables payables 14

10 Working Capital Numbers Company Working capital in $M, 12/93 Per $ of revenue Quaker $399 $.07 Whirlpool $884 $.12 American Standard $525 $.14 Campbell $940 $.14 Du Pont $6,222 $.17 RJR Nabisco $3,041 $.20 ( F500 ave) GE $10,054 $.27 Eastman Kodak $4,639 $.28 McDonnell Douglas $4,139 $.29 (now Boeing) Source: S. Tully, Raiding a company s hidden cash, Fortune, Aug. 12, 1994, p

11 Working capital reducing working capital reduces initial investment forces efficiency costs for inventory, warehousing, associated labor decrease must produce and deliver faster can charge premium for speed 16

12 Administrivia Clickers Sections F am? Calculators Casio: all fx 115 models Hewlett Packard: all HP 33s and HP 35s models Texas Instruments: all TI 30X and TI 36X models 18

13 Inventory Turns (for FGI) (finished goods inventory) def: number times a year inventory replenished Given sales/year = $X average inventory = $I then turns = theof the above 20

14 Throughput. def: average time in system for inventory system, reciprocal of turns turns = throughput T= I= This formula is Little s Law 25

15 Inventory Turns. In general it is better to have: 26

16 Strategies Decrease inventory Reduce need for long term forecasts reduced lot size = manufacturable more quickly to fill orders for GE.found one extra inventory turn saves $1Billion Eliminate inventory (make products to order) e.g. Dell basically negative working capital they have your $$ before assembling product Let customer pull the mfg process (kanban) This is lean, HMLV mfg 29

17 Homework 1, due next Tues. 5pm Turn in to 3 rd floor south ME101 HW box Three HW problems: 0) Find a current periodical article from the popular press on a manufacturing systems topic productivity, economics, hardware, quality, comparison, etc. try business press business sections of NY Times, Wall Street Journal, Financial Times Morrison room magazines such as Economist, Forbes, etc. from a printed periodical, published this semester Turn in a copy & a short 1 paragraph summary THIS PROBLEM CAN BE TURNED IN ANY TIME BEFORE LAST CLASS OF THE SEMESTER 30

18 Homework 1 2) problem 2.15 (Askin ) Assume stable means continuous and constant demand 3) problem 1.9 (Askin p. 18) observe and document order fulfillment process for burger, shake, fries at a fast food restaurant 3 items at a local eating establishment E.g. Blondie s, Hummingbird, Stuffed Inn, etc. Choose 3 items that make it interesting use figure 1.6 for an example process flow diagram Show both physical flow and information flow Show decision points, buffers, as well as actions Include full key to all shapes, line/arrow types Reading: ch 1 & pp