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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