Manufacturing System Design Decomposition™

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Explanations: Quality | Disruptions | Throughput | Delays | Costs


Operational Costs and Investment

The rightmost portion of the decomposition deals with reducing operation and investment costs. Elimination of non-value adding sources of cost (DP-12) is the means for reducing production costs (FR-12). Three sources of waste are considered: direct labor (FR-DP 121), indirect labor (FR-DP 122), and facilities (FR-DP 123). Note that other “wastes” in manufacturing systems such as storage, transportation, and overproduction have already been considered in the decomposition as they increase throughput time as well as cost. Decomposition of DP-121 and DP-122 focuses on the effective utilization of labor, rather than on elimination of labor content and headcount reductions.

The decomposition provides some detailed steps in designing efficient work loops for operators. Suggested means are multi-functional operators, autonomous operating equipment, balanced work loops. Factors such as training and mutual relief systems are discussed in the quality branch (FR-Q121) and the predicable resource branch (FR-P133). The layout of work loops and direct labor work content must consider the requirements from the left side of the decomposition according to the path dependency stated in the MSDD.

Finally, FR-13, minimizing investment over the system life cycle, is achieved by making investments based on a long-term system strategy. No further decomposition of this FR-DP pair is presented in the MSDD, as the specifics were found to be too dependent on the particular application. Decisions here might affect, for example, how flexible the system will be to changes in production volumes, or to changes in product design, or to the variety and mix of products demanded. There is no general answer as to how much flexibility is “the right amount,” instead, the desired flexibility must be evaluated based on the firm’s competitive environment and desired niche in the market.


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David S. Cochran, PhD.

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